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This is a guest post by Keith Henson.

Could Satellite Solar Power (SSP) solve worldwide energy problems and even sequester serious amounts of carbon dioxide? In this post, I look at SSP built with laser propulsion and a new Reusable Launch Vehicle (RLV) combination, since this approach seems to be lower cost than other approaches and still could produce a huge amount of electric power. If there is enough electric power, some of it might even be used to sequester carbon dioxide by converting it to synthetic oil.

In this post, I prepare a financial model (available as a spreadsheet in PDF form) of what this approach to SSP might cost. Based on my calculations, the total investment required would be $58 billion, spread over a little over eight years. The system would produce a huge amount of electricity, so that long-term, the cost per kWh would only be $ .02.

While this proposed approach may not come about, or could take 20 years, it does offer a way out, if it can be made to work. There have been two recent posts on SSP that may be of interest to readers - one by Darel Preble and another by Big Gav.

With substantial input from Jordin Kare, Spike Jones, Howard Davidson, Ron Clark and others, I have been working for the past year on a new approach to SSP’s primary problem - reducing launch cost to orbit. If power from space were abundant and low enough in cost, we could even put carbon dioxide back into empty oil fields as synthetic oil.1 The goal is to reduce the cost of transport to Geosynchronous Earth Orbit (GEO) by a factor of ~200 over current expendable rockets.

This work has been on "pop up and push," i.e., rocket boost to a few hundred km and a long ablation laser push for the rest of the delta V, (change in orbital velocity) to GEO. This takes advantage of the large thrust available from chemical rockets and the high exhaust velocity of lasers. The method allows much larger payloads than laser propulsion alone. It offers a substantial improvement over rockets. With chemical rockets, only one part in sixty of the lift off mass gets to GEO. It's 14 km/sec to GEO, (Figure 1), and 14/4.5 is about 3. As you can see from Figure 2, fuel is 20 times the rocket and payload together.

Figure 1

Figure 2
The combination of a mass ratio 3 rocket first stage (4 km/sec) and mass ratio 2 laser second stage (10 km/sec) could (according to the rocket equation) deliver one part in twelve of the lift-off mass to GEO, a significant 5 to one improvement.

The problem with that scheme is that many very expensive lasers must be in place before the first launch. I have not run a pro forma financial analysis because the rough numbers (well over $100 billion) are so daunting.

Recently another option came to my attention, the Skylon Spaceplane designed by Reaction Engines Ltd, in the UK.2 Performance, development and production cost of Skylon and SABRE (Synergic Air BReathing Engine) was obtained from Reaction Engines. By using air in place of oxygen to 26 km and Mach 5.5, then shifting SABRE to rocket mode, a Skylon is projected to place a modest (12 t) payload into LEO (Low Earth Orbit).

Figure 3

The April 2009 contract between PG&E and Solaren for 200 MW of space solar power generated many news stories and demonstrated the strong market for clean SSP energy - even though it has never been fully demonstrated (due to SSP’s intrinsically large scale).

A pro forma financial model was created using cost information provided by Reaction Engines, prior knowledge of laser propulsion, informal cost estimates for high kg/kW SSP and propulsion lasers and the 2016 delivery time for the PG&E/Solaren contract.

Pro Forma Model Assumptions (PDF spreadsheet here)

The model uses Reaction Engine's published development numbers. We doubled this to $21.7 B and compressed the development time in half to five years starting in 2010. First vehicle flies in 2015. Production Skylons in the pro forma model decline from $450 M to $292 M after 10,000 flights and vehicle life increases from 200 flights to 500.

Laser and GEO focusing mirror development is assumed to require $2 billion.

The proposed power satellite design is a very conservative 5 kg/kW or 5,000 tonnes per GW. (The project would still make money at 10,000 t per GW.) Development cost of $4 B seems reasonable by taking a low-tech approach and not being too concerned with mass. Four billion dollars should be enough money to rough design three (one PV and two solar dynamic cycles). A substantial fraction of this money will be for design of construction facilities at GEO. Other than being able to be broken down into loads that fit the transportation system, mass is even less of a factor for the "dockyard."

Working capital is also not included in the model because the time between purchasing parts for a power satellite and selling the new power satellite is under 90 days. The construction facility at GEO to build 1 GW power satellites is assumed in the model to be equal to the first power satellite mass (5000 tonnes). One GW is not optimal for power sats. As the increasing flow of materials makes larger-size power satellites practical, the model enlarges the construction facilities by 5000 tonnes per GW.

There is no provision in the financial model for robot assembly or teleoperators. The model assumes up to 1000 workers at GEO. Food and oxygen supply for the workers is not included because it is no more than 1 part in 240 (ten tons per day out of 2400). Wages for the workers in space is not included either because wages (at $500,000 per worker per year) would be one part in 365. (A GW turned out every two days and the net profit after transport cost and parts is a billion dollars per GW.)

Flights to orbit (sub-orbital as more lasers come on line) increase by three additional flights per day per quarter. I assumed the lasers to take over providing delta V in a linear way. As the lasers grow from a few MW to eight GW, payload per flight grows from six tonnes to twenty-five.3

Skylon's ability to go to LEO means that a single 6 MW laser built for $60 million (after development) can raise six tonnes of power sat parts from LEO to GEO in a day. This is a huge improvement over building $40 B of lasers.

Figure 4. This graph shows the trajectory resulting from a 290 tonne Skylon booster vehicle, carrying a 40 tonne laser stage sub-orbital. The stage is then boosted to GEO by 4 GW of ground based lasers. Payload to GEO is 14.5 tonnes. Laser stage mass rises to 50 t and payload to GEO to 25 t with 8 GW of laser. The vertical axis is nautical miles altitude; horizontal axis is downrange. The constant laser acceleration applied is 1.1 g , much less than the rocket burnout of 3.5 g.

We still build the lasers, but in this model, we buy the lasers over a long time with power-satellite sales. Each laser requires a focusing mirror in GEO. Only one mirror has to go to GEO the hard way (with rockets). We bootstrap the rest up at 50 mirrors a quarter with laser power from the first.

The model has been adjusted so that by the end of 2016, there is ~10,000 tonnes at GEO, enough for the construction facility and parts for the first 1 GW power sat. A linear ramp from zero over 18 months would put the first flight in mid-2015. The flight rate over the next year ramps up to 12 per day. The fleet size assumes flying 1.5 times a day.

Production of Skylons (counting the prototype) by the end of 2016 is 14 with a peak rate of five per quarter. Skylons are similar in size to 747s. Boeing built 747s at higher rates.

The focusing mirrors for the lasers reduce net cargo to GEO by 250 tonnes per quarter. We assume the lasers and focusing mirrors will cost $10/watt. Depending on how much laser power will fit into a standard shipping module, the project installs 50-250 laser modules per quarter.

This involves purchase or construction of 200-1000 "on the ground" laser modules per year. Scaling the factory size from locomotives, the plant making the lasers might be a square mile. The cost of this factory has not been included. In this model, we ramp up and install lasers at a GW per year for 8 years. The factory should reach excellent economy of scale with a production run this long. Financing for the factory could be based on a firm order of this size.

The model accounts for power satellites not sold but diverted internally to make Skylon propellants and to power the lasers. (The cost of the propellant plant and the laser infrastructure such as a refrigeration plant to cool the lasers has not been included.) By the beginning of 2018, the lasers and propellant plants in the model are using ten GW of the 84 GW produced by that date (split almost evenly between lasers and propellant).

Figure 5. A mature laser boost system as envisioned by Dr. Stuart Eves, Surrey Satellite Technology. The laser stage makes 1 1/2 orbits so the mirrors will be in the correct place to circularize the orbit at GEO.

The initial design capacity of the system builds up over 8 years. At that point of maturity, it is launching 50-ton laser stages and using 8 GW of lasers (1600 modules). There are 4 sub-orbital Skylon flights an hour, less than 100 flights per day. They lift about 800 million kg per year on sub-orbital flights. Not taking the Skylons into LEO might extend their life (though it may complicate recovery). The price per kg lifted to GEO falls from an initial $750/kg (based on twice the depreciation of the Skylons and mass ratio 2 laser stages) to $50/kg. This reduction is due to the cost per flight (lower cost, higher life) and the payload at GEO rising from six t per flight to 25 t per flight due to more lasers.

For a simple financial model, we have conservatively figured net profit for power satellites (not counting transportation otherwise covered) at $1 per watt. If power satellite parts cost $600/kw, then a 1 GW power satellite would sell for $1.6 B. This is 2 cents per kWh based on a ten-year recovery of capital. (It does not include the customer’s associated rectenna.) The market for power in the 1-2 cents per kWh range is close to unlimited because of the demand for low cost synthetic oil.

The model is full of feedback loops because of the bootstrapping. When it first starts, one laser/mirror lifts the cargo of one Skylon flown once a day. That is 12 tons per to LEO and six tons per day to GEO. Two lasers/mirrors allow the Skylon to fly twice a day for 12 tons per day to GEO. More Skylon and lasers rapidly build up the cargo capacity (the effects multiply). (Missing, the cost to boost the first mirror to GEO. IOSTAR's tug may be how we maneuver it into place.)

Figure 6. In this draft model the red line tracks cumulative profit / loss (in millions of dollars) each year and the black line shows annual sales - $1.5 - $2 Billion/Gigawatt. The debt bottoms out in 8.25 years at just over $58 billion dollars. That is about twice what the Chinese spent on Three Gorges Dam. For that they obtained 22 GW at a human cost of displacing 1.24 million people. Mature, this project would provide 22 GW of new generating capacity every 44 days.

At the peak investment, power satellite sales in the model are over $4B/year. Refining the model will cause this peak investment and timing to grow or shrink due to conceptual improvements, the minor items mentioned above, those cost items not yet considered and a more realistic (higher) initial sales price for power satellites.4

The current model shows repayment of the entire investment from selling power satellites only nine quarters after reaching the bottom at 8.25 years. (Interest on the capital investment has been included.) The delivery of power satellite parts and power satellite sales grows rapidly after that point.

Current world energy demand is around 15 TW. The "Manhattan Project" crash program outlined here has ~30 TW on line by 2043. World usage of fossil fuels beyond 2040 should be negligible. (Lower cost carbon neutral synthetic fuels would displace liquid fossil fuels.)

The model shows producing over four TW/year of new power satellites by 2040. Four years of power satellite production at this rate would be over 15 TW, enough to put 100 ppm of CO2 back in the ground as synthetic oil in two decades following 2040.

The proposed power satellite financial model makes considerable profit in addition to solving carbon dioxide and energy problems. How to finance it and who might finance this approach to solving the carbon dioxide and energy problems as well as potential military uses of the propulsion lasers are outside the scope of this analysis.

Notes

1 The area of the earth is ~5.1 x 1014 square meters; air pressure is ~100,000 N/m2. The force would be ~5.1 x 1019 and the mass (force/acceleration of 9.8 m/sec2) is ~5.2 x 1018kg or 5.2 x 1015 t. One ppm would be 5.2 x 109 t and 100 ppm would be ~520 billion tonnes.

It takes ~100kWh to remove a ton of CO2 from the atmosphere.

http://www.eurekalert.org/pub_releases/2008-09/uoc-cd092908.php

Removing 100 ppm of CO2 from the air would take 52000 billion kWh or 52,000 TWh, or since a year is about 8700 hours, about six TW years. A TW is about twice the installed power in the US.

It would take a 1000 1GW nuclear reactors 6 years to bring the CO2 level back to the level of 1960 if no new CO2 was being added.

The problem is what to do with the CO2? Liquid CO2 has a density of 1.1. As liquid, this much CO2 would occupy ~470 cubic km. It would cause a real problem downwind if it blew out of storage. We know that oil stayed in the ground for millions of years.

It takes ~50 times as much energy to convert CO2 to synthetic oil as it does to capture it. So to convert 100 ppm of CO2 to synthetic oil would take ~300 TW-years. If we are already feeding 15 TW into making synthetic oil, we could dedicate another 15 TW into making more and pumping it back into empty oil fields. It would take two decades at this rate to bring the current CO2 level back to that of 1960. We might be able to take the CO2 level down far enough to get the earth to go into an ice age (for those who like to ski).

For the details on the energy cost of making synthetic oil see www.htyp.org/dtc

2 http://en.wikipedia.org/wiki/Reaction_Engines_Skylon

3It is our economic judgment that lasers become useful when there is enough power to raise a 12-ton stage with mass ratio of two to GEO in a day. LEO to GEO is 4.1 km/sec. For a mass ratio of two, the exhaust velocity is 4,1/.69 which is ~six km/sec (ISP of only 600!). We assume multi impulse Hohmann transfer rather than spiral. Twenty-four hours is 86,000 sec.

V=at, a=v/t a 4100/86000 =~0.05 m/sec2. One m/sec2 is ~0.1 g so this is half a percent of a g.

How much mass must be blown off in one second to get 0.05 m/sec2

MV = mv where M is the current laser stage mass, V is 0.05 m/sec and m is the mass blown off in one second at velocity v, 6000 m/sec.

m/sec = 0.05M/v = 0.05m/sec2 x 12,000kg/6000m/sec

m/sec is 0.1k/sec

Ke (of exhaust) =1/2mv2

Ke = 1/2 (0.1) (6000)2 =1.8 x MJ

Laser efficiency of 30% increases this to six MJ.

Since this is over a second, the laser power to provide six MJ/sec is six MW.

The payload multiplier as a function of laser power is from this number and other work indicating delivery of 25 t of payload from a 50 t laser stage placed in a 300 km sub orbital flight.

4There may be resistance to paying a great deal more than the projected cost in a few years.

David Stahan: We need a stable oil price – but we're at the mercy of Opec BP famously "doesn't do" oil- price forecasts. After 18 months in which crude has ricocheted from just under $100 per barrel to an all-time high of $147, then down to less than $40, and now up to $73 again, you can see their point.

But at the launch of its annual Statistical Review of World Energy last week, its chief executive, Tony Hayward, came close when he ventured "there is a rational argument to say that somewhere between $60 to $90 a barrel is the right sort of level". At the same time, BP continued to claim that there is no geological shortage of oil, and sought to blame the recent volatility on Opec's refusal to open up to Western investment. These arguments are wrong, partial or beside the point.

Pemex May Drill 22 Wells at Sihil Through 2012, Triple Output (Bloomberg) -- Petroleos Mexicanos, the state-owned oil company, may drill 22 wells at Sihil through 2012, tripling output at the field that is part of the Cantarell complex.

From recovery to oil price surges Dubai: Last week Goldman Sachs' "Energy Watch" led with the headline: "As the financial crisis eases, an energy shortage lies ahead". For Goldman, the energy shortage will include a four-stage oil price rally over the period 2009 to 2010. More of that later.

For the thinking-man, experienced investor, Goldman's piece is further evidence of the sentiment now doing the rounds: global recovery will stimulate asset prices. The sub-message is: asset prices must have been at their bottom or remain at a "near-to-bottom" level. And, given the nature of the absolute historic bottoms, it leads to the question: where is the opportunity?

Aramco to speed up natural gas projects Saudi Arabian Oil Co may speed up natural gas projects in light of growing domestic demand especially from the industrial sector, Saudi-based Al Riyadh daily reported yesterday.

Too Poor to Make the News The deprivations of the formerly affluent Nouveau Poor are real enough, but the situation of the already poor suggests that they do not necessarily presage a greener, more harmonious future with a flatter distribution of wealth. There are no data yet on the effects of the recession on measures of inequality, but historically the effect of downturns is to increase, not decrease, class polarization.

Jesse Jackson: U.S. needs better industrial policy We need an industrial plan that helps forge new industry and new markets. Public investment in mass transit -- buses, subways, fast rail -- and subsidies for fuel-efficient cars help generate the market. Significant investment in research and development for the next generation of products helps capture the future. Resources to retool factories and retrain workers are needed to build the new generation of fuel-efficient cars or renewable energy sources.

Making Case for Climate as Driver of Migration NEW YORK — A new report on human migration and climate change, released as delegates from 182 countries gathered in Bonn over the past two weeks to continue hammering out some preliminary language for a new global climate treaty, made its case plainly:

“The impacts of climate change are already causing migration and displacement,” the document began, adding that by midcentury, “the prospects for the scope and scale could vastly exceed anything that has occurred before.”

Humans Intrude on Indonesian Park, Threatening Forests and Wildlife Forest rangers have been powerless in checking development inside the park as the local authorities have urged people to settle and open businesses there.

City Known for Its Water Turns to Tap to Cut Trash Italians are the leading consumers of bottled water in the world, drinking more than 40 gallons per person annually. But as their environmental consciousness deepens, officials here are avidly promoting what was previously unthinkable: that Italians should drink tap water.

Peak Coal, Global Warming Policy and Exponential Math Three reports say coal is not nearly so abundant, or cheap, as we think it is.

Departments to Toughen Standards for Mining WASHINGTON — The Obama administration said Thursday that it would toughen standards for mountaintop-removal coal mining but would not end the practice as some environmental groups had hoped.

Jon Wellinghoff, Obama’s energy futurist When giving his slide presentation on America’s new energy direction, Jon Wellinghoff sometimes sneaks in a picture of himself seated in a midnight blue, all-electric Tesla sports car.

It often wins a laugh, but makes a key point: The United States is accelerating in a new energy direction under President Obama’s newly appointed chairman of the Federal Energy Regulatory Commission (FERC). At the same time, FERC’s key role in the nation’s energy future is becoming more apparent.

Green 'supergrid' could plug Europe into renewable power by 2030, say scientists Europe could build an electricity supply based entirely on renewable energy by 2030, according to scientists making a presentation at the House of Commons this week.

MPs will hear that an electricity "supergrid" across Europe and North Africa could solve the problem of the intermittency of wind turbines and solar power and dispense with the need for nuclear and "clean coal" power stations altogether.

Harnessing underground energy An underground revolution in alternative energy is heating up the industry — and it comes a 30 percent tax credit.

Caltrans goes green A Marysville Caltrans maintenance yard will soon be greening up.

Caltrans announced plans Thursday to install $20 million in new solar energy systems at 70 of its facilities throughout the state. The installation is estimated to save taxpayers $52.5 million in avoided energy costs in the next 25 years.

Rush for ‘easiest oil in the world’ This month an Iraqi politician will appear on television to open envelopes and reveal the winners of a long and hard-fought contest. In the balance hangs the wellbeing of 28m people, tens of billions of dollars of contracts and how much you and I pay for everything from yoghurt pots to petrol.

It should make good viewing. For the hopeful contestants, it has been a long wait — since 1972 to be exact. That was when the Iraqi oil industry was nationalised and foreign operators were booted out.

Kurds lay claim to oil riches in Iraq as old hatreds flare Sitting on vast untapped oilfields, the northern Iraqi city of Kirkuk has the natural resources to become one of the wealthiest places in the Middle East. But a standoff has developed between local Kurdish leaders and Baghdad over rights of ownership. And in Kirkuk itself, ethnic tensions are rising.

Oil prices will be driven upwards by the needs of developing nations The "demand destruction" argument was always overdone. Across the Western world, oil demand is relatively "income inelastic", seeing as people want to get around, heat their homes in winter and keep cool in summer whether the economy is slowing or not. So Western oil use hasn't fallen that much.

But the main reason "demand destruction" is nonsense is that the populous emerging markets have, for the most part, continued to grow despite the credit-crunch. And, as more and more of their people get richer – buying cars, air-conditioners and white goods for the first time – per capita oil use in these nations is growing faster still.

Oil must reach $90 to stabilise market - Algeria ALGIERS (Reuters) - The global oil market could stabilise if crude prices rise to around $90 a barrel and that is likely to happen in the second half of 2010, Algerian Energy and Mines Minister Chakib Khelil said on Saturday.

"A price which ensures the stability of the oil market must evolve around $90 a barrel. It should be reached between the middle and the end of 2010," Algerian official news agency APS quoted him as saying.

How Much Oil Is In The Arctic? One way to know that the end of the Age of Oil will soon be upon us is the current excitement and chatter about going—literally—to the ends of the earth to find more oil.

The Arctic Circle, which circumscribes about 6% of the earth’s total surface, is one of the last regions of any significant size to be explored for oil, and for good reason: It’s locked in ice for much of the year, far from support and distribution lines, and is one of the most extreme environments on earth. Whatever oil and gas is extracted from the top cap of our planet will be the most expensive and difficult oil ever produced.

Interview with Nick Griffin Why do you want to give me £50k to leave?

Because this country is the most overcrowded in Europe. To some extent I would agree with the greens that its proper carrying capacity is about 30m. Particularly with the peak oil problem – which is the real problem that politicians should be addressing and not climate change which is either nothing to do with us or nothing we can do anything about or which won't strike for another 100 years anyway – the real problem is peak oil and the implications of running out of oil for a civilisation which is built on easily available oil and the benefits it brings that this country should not have the population it has and what's more we need the most stable, homogenous population possible because anything less than that once you subject a society to the stresses of the economic impact of the crisis which is very rapidly approaching people instead of pulling together tend to fall apart.

Forget the BNP. What about the planet? There have been two big media stories of the 2009 elections: the demise of Labour and the rise of the BNP. Both were trailed heavily throughout the six weeks of the campaign. Both have received a good deal of attention since. But behind the headlines there's another story, a story that I would suggest offers Britain rather more hope than the other two: the rise of the Green Party.

Nigerian militants say destroy Chevron oil wells LAGOS (AFP) – Nigeria's main militant group said it had destroyed three oil wells belonging to the US firm Chevron as it continues its campaign against foreign oil companies.

The Movement for the Emancipation of the Niger Delta (MEND) said in a statement its fighters had destroyed two of Chevron's oil wells at Makaraba and the Otunana oil well in Nigeria's southern Delta state.

Secret papers 'show how Shell targeted Nigeria oil protests' Serious questions over Shell Oil's alleged involvement in human rights abuses in Nigeria emerged last night after confidential internal documents and court statements revealed how the energy giant enlisted the help of the country's brutal former military government to deal with protesters.

Iran Calm After Vote Fraud Claims Trigger Clashes Tehran was mostly calm Sunday after election fraud claims triggered violent street clashes, but the government maintained fairly tight control of information flow and new details emerged of arrests of high-profile reformists.

The efforts seemed aimed at avoiding a repeat of the chaos that lasted past midnight Saturday. Opponents of President Mahmoud Ahmadinejad set buses and cars ablaze in the capital and threw rocks at police to protest what they viewed as his illegitimate victory.

Attack Demonstrates Pirates Expanding Reach DUBAI -- Pirates commandeered a cargo ship in the territorial waters of Oman, dramatically extending their area of operation and threatening for the first time shipping in and out of the oil-rich Persian Gulf.

The hijacking, reported over the weekend, took place Friday. It follows another failed attack nearby earlier last week.

Chavez's expropriation of oil service firms could spark labor unrest CIUDAD OJEDA, Venezuela -- Despite the recent sharp rise in oil prices, Venezuelan President Hugo Chavez last month expropriated 70 oil service companies in western Venezuela, putting some 10,000 Venezuelans out of work, turning local unions against him and forcing production cuts at important oilfields.

The action has drawn little international attention because Chavez stopped short of nationalizing big U.S.-based multinationals such as Halliburton or Schlumberger that carry out technical and highly skilled work in producing oil. Nor have the owners of the 70 Venezuelan firms - in addition to four foreign-owned firms - protested publicly, fearing that doing so might jeopardize settlement negotiations with the government.

OPEC Unlikely to Raise Oil Output in September, Qatar Says (Bloomberg) - OPEC, the supplier of 40 percent of the world’s oil, is unlikely to increase output when the group meets in Vienna in September, Qatar’s oil minister said.

“I don’t think so,” Abdullah bin-Hamad Al-Attiyah said today in an interview in Amsterdam when asked if the Organization of Petroleum Exporting Countries would need to raise production. “I would like to see where the real growth is, when the economic crisis reaches bottom and will take off again” before making a decision on oil output, he said.

Skills shortage may hit oil projects - expert A stabilising of oil prices above $70 is likely to expose a skills shortage at Gulf national oil companies (NOCs) which could lead to “bottlenecks” in completing projects designed to ramp up capacity, according to a leading energy consultant.

Pertamina suffers Rp 15b in losses in gas depot fire State-owned oil and gas firm PT Pertamina said Sunday it had suffered losses of Rp 15 billion (US$ 1.5 million) in the gas depot fire that happened in Makassar on Saturday.

Rosina Nurdin, a spokeswoman at Pertamina’s Makassar unit said the fire had destroyed four Liquefied Petroleum Gas (LGP) tankers and other equipment belonging to Pertamina's business partner.

Oman oil revenues drop 50% in 4 months (MENAFN) Non-OPEC producer Oman said that it posted a 50.5 percent drop in net oil revenues in the first four months of 2009 as oil prices weakened, but raised spending by 7.2 percent, Reuters reported.

Qatar, Shell Talk on Joint Projects Outside Country (Bloomberg) -- Qatar, the world’s biggest exporter of liquefied natural gas, is in talks with Royal Dutch Shell Plc to jointly invest in oil and gas projects outside the country, Qatar’s oil minister said.

Bartlett's 'eccentricity' is an acquired taste Bartlett, says the Sun, is "regarded as eccentric" by his fellow Republicans. Let that statement sink in for a moment. In a party currently defined by the level-headed likes of Newt Gingrich and Rush Limbaugh, if you're considered eccentric, you must be on one of Jupiter's moons.

But Bartlett begs to differ. The reason he was passed over has nothing to do with his peak-oil rants before an empty House chamber, or statements made through the years, including the assertion that not enough science fair winners have "normal names."

No, the reason is he does not raise gobs of cash for GOP fundraising efforts. In a statement, he wrote: "Not for the first time, big-state and big-money politics trumped experience, independent judgment and dedication to the legislative work of a committee."

Study: Harnessing of oil shale could aid energy solutions BOULDER, Colo. — The University of Colorado's Center of the American West released an online report Friday that examines the extensive history of oil shale and aims to "bring an impartial perspective to the debate" over its future.

World Bank withdraws loan to Brazilian cattle giant Sao Paulo, Brazil — The International Finance Corporation (IFC), the private lending arm of the World Bank, has withdrawn a USD 90 million loan to Brazil's cattle giant Bertin. The loan was used for the company to further expand into the Amazon region, which was causing destruction of the rainforest and fuelling global climate change.

US, Canada to update Great Lakes water agreement NIAGARA FALLS, Ontario – The United States and Canada say they will update a key agreement to protect the Great Lakes from invasive species, climate change and other established and emerging threats to the world's biggest surface freshwater system.

Secretary of State Hillary Rodham Clinton said Saturday that the Great Lakes Water Quality Agreement, which was last amended in 1987, is no longer sufficient.

Australia demands bushfire exemption in carbon treaty Peat bogs in Germany, New Zealand firs and North American forests will likely allow industrialized countries to lower carbon emissions while still burning coal and oil, according to a draft United Nations document.

Australia is demanding that emissions from natural disasters, such as bush fires, not be counted in its tally.

Met Office predict likelihood of climate change on your doorstep The most detailed set of climate change projections ever produced will show the risks of sea level rise, droughts and floods in Britain over the next 80 years to within 16 miles of your front door.

Korea moving toward a subtropical climate Global warming has increased temperature and precipitation and widened regional and seasonal weather differences on the Korea Peninsula, changing it closer to a subtropical climate, the state meteorological agency said yesterday.

The Korea Meteorological Administration yesterday released its analysis on climate change that occurred for the past 10 years.

White Rooftops May Help Slow Warming Chu has brought increased attention to an idea that -- depending on your perspective -- is either fairly new, or as old as Mediterranean villages, desert robes and Colonel Sanders's summer suit. Climate scientists say that the reflective properties of the color white, if applied on enough of the world's rooftops, might actually be a brake on global warming.

But if anybody is seriously considering a global whitewash, "simple" and "immediate" are probably not words that come to mind.

"I don't think that it could ever be done at a sufficient scale," said Ken Caldeira, a climate scientist at the Carnegie Institution in Stanford, Calif. He added: "It's hard enough, in many of the cities of the world, to keep the streets swept, much less to keep the city reflective."

[Editor's note by Super G] The Oil Drum staff consists of a diverse set of voices. The story that follows is one staff member's perspective. Other perspectives on this case may be posted in the future.

Recently, a fraudulent lawsuit against Dole was dismissed. According to the WSJ,

Court cases get dismissed all the time, but rarely are dismissals as significant as the two lawsuits against Dole Food and other companies that were tossed recently by a California judge. Among other good things, the ruling is a setback for tort lawyers who troll abroad seeking dubious claims to bring in U.S. courts.

The allegations against Dole, the world's largest fruit and vegetable producer, involved banana plantation workers in Nicaragua who alleged that exposure to the pesticide DBPC in the 1970s left them sterile. The only problem is that most of the plaintiffs had not worked at plantations and weren't sterile. In fact, there's no evidence that farm workers at Dole facilities were exposed to harmful levels of the chemical -- which was legal and widely used at the time -- or that the level of exposure they did experience even causes sterility.

I recently visited Ecuador, as a guest of Chevron. Based on what I learned during that visit, it seems to me that the suit against Chevron has a fair number of similarities to the Dole suit. In this post, I will explain why I think the Chevron case is as dubious as the Dole case.

The Chevron case has gotten widespread publicity in the US, as a result of publicity by the Amazon Defense Front, or, as it is known in the US, the Amazon Defense Coalition. If the plaintiffs win the case, the Amazon Defense Coalition (ADC) will be the recipients of any monies awarded. This is a photo of members of the ADC, assisting the allegedly "independent expert" in gathering soil samples for testing for the court. The independent expert is not in the photo shown below, although he is present in others in the series.

Figure 1. Click here for PDF with 18 similar photos

It seems to me that the Amazon lawsuit is filled with myths, misunderstandings, and out-and-out lies. Here are a few I have run across.

Myth 1. Pablo Fajardo, winner of the CNN hero award in 2007 and Goldman Environmental Prize is lead lawyer for the plaintiffs in the suit against Chevron.

It is certainly true that Pablo Fajardo is a lawyer for the case. Pablo Fajardo became a lawyer in 2004 after completing a correspondence law degree, and this is his first case ever. The question is whether he is really has been "spearheading the legal team for the plaintiffs for several years" as the article describing the Goldman award says, or is just a puppet, with other more experienced lawyers really in charge.

Who would these other lawyers be? The original lawyer when a similar case was brought in the US in 1993 was Cristóbal Bonifaz, a native Ecuadorian whose grandfather was president of the country in the 1930s. He is no longer on the case, but he was one of the leading lawyers when the case was first filed against Chevron in Ecuador in May 2003.

Another lawyer for the plaintiffs is Steven Donziger of New York. In a recent letter to the Econmist Magazine, he bills himself as "Lawyer representing Amazonian communities in legal action against Chevron". He has also been involved with the current suit in Ecuador since it was filed in 2003.

According to this article, Donsiger enlisted the help of the Philadelphia law firm of Kohn, Swift & Graf, which specializes in class-action suits. We also read on Kron, Swift, & Graf's web page:

Figure 2. Image from Kohn, Swift, and Graf website

So, in 2007, which is about the time when Fajardo was getting these awards, Kohn, Swift & Graf considered themselves "one of the lead plaintiffs' council" in the Amazon litigation.

We find others involved in the case as well. According to a July 2008 Newsweek article:

Just recently, Donziger and other trial lawyers in the case retained their own high-profile D.C. superlobbyist, Ben Barnes, a major Democratic fund-raiser. And they have tapped a capital connection that may pay off even more. Roughly two years ago, when Donziger first got wind that Chevron might take its case to Washington, he went to see Obama. The two were basketball buddies at Harvard Law School. In several meetings in Obama's office, Donziger showed his old friend graphic photos of toxic oil pits and runoffs. He also argued strongly that Chevron was trying to subvert the "rule of law" by doing an end run on an Ecuadoran legal case. Obama was "offended by that," said Donziger.

So there seem to be all kinds of high-profile folks involved in the case. We know that Ben Barnes is being paid by Kohn, Swift, & Graf, because his lobbying registration indicates that that is his employer.

Was Fajardo, on his first case after completing correspondence school for a law degree in 2004, really in charge? Maybe, maybe not.

Myth 2. The death of Pablo Fajardo's brother in 2004 was in some way connected to Texaco or Chevron.

These are a couple of typical quotes:

"In my case, in 2004 when we were starting the case, one of my brothers was killed. I cannot say Texaco is to be blamed for this, and neither can I say the opposite. This was never investigated. There have been a lot of things, a lot of pressure and persecution.” -- Pablo Fajardo, Ecuador TV, April 22, 2008

Fajardo affirmed that “in these 15 years we have received a lot of pressure, starting with threatening phone calls, and campaigns to damage the professional reputation of experts defending the FEDAM’S cause. Undoubtedly the most dramatic experience of these clashes is the death of Pablo Fajardo’s brother eight days prior to the beginning of the oral proceedings in this case. “I cannot prove Texaco was behind this, but the truth is my brother was killed,” said Fajardo. – Europa Press (Zaragoza), September 3, 2008

The death of Pablo's brother Wilson Fajardo most certainly has been investigated. There is no evidence whatsoever that Texaco was involved. Instead, it seems to an "execution" by FARC, related to drugs and the theft of "white gasoline" from pipelines for use in cocaine preparation. His brother was tortured and shot in the head at close range.

This is the complaint filed by Pablo Fajardo with the police at the time of his brother's death. At no point in the complaint does he mention Texaco. Instead, he asks that the friends who his brother had been drinking with that night be taken into protective custody.

This is an editorial from El Commercio talking about the 20 FARC deaths by hired assassins in the past year, which mentions Wilson Fajardo. He was a journalist working for Radio Ecuador, and seems to have offended FARC by talking about the link between drug trafficking and the theft of white gasoline.

There are numerous other documents available with respect to this case. These are a few (1, 2, 3, 4, 5, and 6 ). There are additional documents that are too large to be loaded on this server, including the forensics report, the police report, and the prosecutors' report. E-mail me at Gail Tverberg at comcast dot net if you would like these.

Myth 3. Chevron or Texaco has been harassing or intimidating Pablo Fajardo through threatening phone calls and break-ins to their office.

If the story of the death of Pablo's brother could be worked into an endless anti-Texaco publicity stunt, why not carry the whole process one step further? Accuse Texaco of threatening phone calls and break-ins. No one would ever be able to check these out. Letters to high level human rights organizations would be particularly impressive. According to an email I received from a contract at Chevron:

It is the same with their other public accusations [besides Wilson Fajardo death], which include attempted kidnapping and robbery, throughout this trial. In fact, in many of those purported cases they have not bothered to file police complaints, so there is actually no investigation. Instead, they have gone to the media or to international human rights groups with the sole intention of making false accusations to create the appearance of persecution without actually enduring any persecution whatsoever.

In each case that has been investigated you will find enormous holes. The robbery of computers, which they initialy blamed on Chevron personnel, were carried out by members of the FDA against their own technical team because their expert refused to submit a false report during the Judicial Inspections. The alleged "kidnapping" attempt against one of their family members was in fact a botched buglary attempt completely unrelated to the case, according to police who later investigated the incident. In this case, there actually was an investigation and we have the police report we can show you. Again, no mention of Chevron or anyone associated with Chevron.

While I don't have direct evidence to show that all of these allegations are false, I think one should categorize the statements regarding harassment as myths, unless Fajardo or the ADC can produce evidence to back them up.

Why would Pablo Fajardo and the ADC be so eager for favorable publicity? I think at least part of the reason is because they want the public to donate to their cause. They are collecting donations on their US web site. They are even offering tax receipts, suggesting that their activity is sanctioned by US tax officials. I wonder where their money is really going (pay US lawyers, pay US lobbyists, pay to "educate" journalists on their story, pay the "unbiased expert" in Ecuador), and who is auditing it. The ADC is a Non-Government Organization based in Ecuador.

Myth 4. When Texaco came to Ecuador, it had a huge negative impact on the lives of the people of Ecuador.

Texaco was granted a concession to look for and develop oil in Ecuador in 1964. Its first discovery of oil was in 1967, and oil began flowing about 1970.

Figure 3. Ecuador oil production, based on EIA data. Includes all companies producing oil in Ecuador, so in later years includes more than TexPet and Petroecuador.

Figure 3 gives show the history of oil production in Ecuador. Texaco (or really Texaco's subsidiary Texaco Petroleum, abbreviated "TexPet") started oil production about 1970, and by 1973 had ramped production up to the production plateau of about 200,000 bpd for the particular fields it developed. By 1976, the government of Ecuador through its company Petroecuador had taken over 62.5% owner of the consortium, and TexPet became minority owner with 37.5% ownership. After 1990, TexPet had 0% ownership of the consortium. Thus, TexPet's influence was greatest in the "blue" period, declining in the "red" period, and out by the "green" period.

So how did the people of Ecuador fare when TexPet began production?

Figure 4 Site Pozo Sacha 53 in 1975, after TexPet completed its physical infrastructure

Figure 4 shows an areal photograph of one of the well sites, taken in 1975, after production was ramped up by TexPet. As one can see, the footprint is very small. The surrounding land is still virgin forest. It is hard to see why the infrastructure by itself would have had huge impact on Indians living nearby.

Figure 5 Site Pozo Sacha 53 in 2001, after the government completed its resettlement to develop agriculture in the area

Figure 5 shows the same area, after the government of Ecuador completed its community resettlement plan. Families were given 50 hectacre (124 acre) plots to farm, with the requirement that they clear the trees on at least half of the land. The families moving to this land were farmers, not workers in petroleum fields. This activity was much more disruptive to native peoples than the oil drilling.

Life expectancies have risen dramatically over the years, and are now very close to US life expectancies. According to IndexMundi, the 2008 life expectancy at birth is estimated to be 76.81 years. The corresponding US life expectancy is 78.14 years.

If one looks back, there has been a huge improvement in life expectancy. According to Globalis, the life expectancy for men in Ecuador was 50.1 years in 1960; 55.4 in 1970; 59.7 in 1980 and 64.7 in 1990. If oil production was having a terribly detrimental impact on life expectancy, it is hard to see it from the data.

Myth 5. The pits shown on television and featured in magazine articles are Chevron's responsibility to remediate.

ADC has been taking reporters on tours and giving them the impression that the pits they are showing them are Chevron's responsibility to clean up. In every instance I am aware of, the pits that have been shown are those that are Petroecuador's responsibility to clean up, rather than the responsibility of Chevron.

Figure 6 Map of Well Sites

On the map above, the wells drilled prior to 1990 are shown in brown; the wells drilled subsequent to 1990 are shown in green. Since Chevron and TexPet had nothing whatsoever to do with the wells drilled since 1990--the green dots--there is no way the pits associated with these wells are Chevron's responsibility.

With respect to the pits associated with the brown dots, a Remediation Action Plan was developed in 1995, overseen by Petroecuador and the Republic of Ecuador. TexPet was assigned its share of the pits (about 37.5%, based on its participation in the consortium). TexPet remediated the pits it was assigned. The remediation of these pits took three years (1995 to 1998) and cost $40 million. Each of the pits was signed off individually. When the overall group was completed, TexPet was given a document releasing it from further liability. This is an English-language version of the document--the Spanish version was what was actually signed.

Petroecuador was still using many of the pits it was assigned, so elected not to clean them up at that time. It has since started the clean-up. Petorecuador posted this advertisement in a newspaper 2006, indicating it was looking for workers to work on its assigned brown dot sites.

Figure 7 Petroecuador Advertisement for Workers to Clean Up Assigned Sites - (Click for larger image)

When I was visiting in Ecuador, I had the opportunity to see a number of pits--some cleaned up by TexPet and some assigned to Petroecuador. The sites that TexPet had cleaned up were pretty much invisible.

Figure 8 Cattle grazing on one site cleaned up by TexPet in 1995- 1998

Figure 8 shows one site which had been cleaned up, and now had cattle grazing on it. We saw others as well--one pit was remediated to a palm oil plantation and another had been remediated back to rain forest. The type of remediation for each pit was determined by the needs of land owners. Without geographical coordinates to tell where the pits had been there, it would have been impossible to detect where the former pits had been.

Figure 9 - Unremediated sitefrom pre-1990 (Petroecuador's responsibililty to clean up)

We also had the opportunity to see an unremediated pit that dated from 1990. It was a site that had been assigned to Petroecuador to clean up. Petroecuador had chosen not to continue using the site, but had also failed to clean it up. In the 19 years since 1990, any volatile hydrocarbons had long since vaporized. What was left looked very much like asphalt. We threw a large stone so it hit the surface. It simply landed on top of the asphalt-like substance. We did not try to walk on it because we did not have boots, and did not know if there would be a spot that would not hold our weight and would have water underneath. We heard that others had walked on top.

Clearly neither of these types of sites would be helpful to the cause of the ADC for showing journalists. So what did the ADC do? It found pits that Petroecudor had been using more recently, and had not cleaned up. The journalists didn't know any better, and fell for their story. That is why one sees all of the photos of yukky looking Petroecuador pits in all of the journal articles and television articles about the lawsuit against Chevron. I expect the photos Ben Barnes showed Obama were also of recently used Petroecuador pits, that he represented as Chevron's responsibility to clean up.

Figure 10 Site where Petroecuador workers were cleaning up assigned pit

We also stopped and talked to Petroecuador workers at a site they were cleaning up. We asked them questions about how far out from the pit it was necessary to dig to get all the hydrocarbons, and about their general technique. Everything we were told indicated that they were using exactly the same clean-up technique that TexPet had used in 1995 to 1998, that ADC is now criticizing.

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I will have to finish the rest of the story later. There is at least this much more to tell, but the post is getting too long, and web page would never open if I kept adding graphics to this page.

This is a guest post from RogerK, a hardware engineer from San Jose California who thinks and writes about the finite world paradigms which will be needed to replace the 'no limits' paradigm which exists as the cultural norm of modern industrial society. Tonights post expands on a comment he made in last weeks guest essay from Herman Daly on a Steady State Economy. Roger previously has written a related essay on TOD here, and a follow up here.

Right Sizing the Economy: Can Herman Daly's Prescription for a Steady State Economy Accomplish this Task?

TOD recently published the text of a speech delivered by economist Herman Daly at the United States Society for Ecological Economics bi-annual conference (at American University near Washington DC). About half of this speech was dedicated to making the case for limits to economic growth, a subject on which Daly has written eloquently for years, most notably in his book Steady State Economics[1]. The second half of the speech was dedicated to presenting proposals for economic reforms which would keep in check the destructive tendencies of an economic system which is always trying to maximize short term income.

I am glad to see an economist with Herman Daly's credentials banging the drum for limits to growth. I read Steady State Economics several years ago, and I very much enjoyed Daly's debunking of the "growth men" as he refers to the conventional economists who insist that neither supplies of natural resources or of ecosystem services will put any limits on human economic expansion in the foreseeable future. I particularly like his description of "the myth of the angelized GDP"[2] in which it is claimed that the flow of dollars will increase exponentially forever, purchasing a continually increasing quality of life without requiring any increase in the throughput of materials and energy.

However, I found his proposed fixes to the growth problem to be less than convincing. It is clear that Daly has not stood still in the years since the original publication of Steady State Economics, and the reform proposals presented in his recent speech are more sophisticated and more well thought out than those presented in the earlier book. Nevertheless I am still unconvinced that the proposed reforms would be effective even if the political will to carry them out came into existence.

Daly presents a vision of a regulated, controlled, rationalized version of private finance capitalism. In my view this prescription for a steady state economy is addressed to the symptom of our problem rather than to the underlying fundamental cause. The symptom is that we strongly desire to use resources in a way that will maximize our current exchange income in dollars. The underlying cause is the structural emphasis of our economic system on the atomized accumulation of private financial wealth as the primary route to security and status for individuals and nuclear families.

Daily's vision of a steady state economy leaves in place the primary structures of our current economic system (e.g. capital markets, interest based banking, private savings, etc) and then proposes to control their destructive and depletionary tendencies by a series of rules and regulations. I am extremely skeptical about the potential for success of such a strategy. Yes, a cap and trade system and ecological taxes will work against the destructive tendencies of private finance capitalism, but the political pressure to let us go hammer and tongs after whatever resources will maximize our dollar income in the short term will be enormous and unrelenting. Conservative banking will prevent financial bubbles, but it will not alleviate the desire to squeeze as much short term growth out of the system as current resource flows allow.

I think that much more radical changes than those envisioned by Daily are required in order to create an ecologically sane economic system. I think that we should create an economic system in which we are attempting to minimize our current exchange income in dollars, consistent with the constraint of producing adequate levels of total income including psychic components. The psychic component of our income needs to be largely decoupled from the formal economy as measured by transactions in large scale exchange media like dollars.

The question of how to accomplish such a goal is a complex one. Maybe the often repeated claim that it is not culturally/genetically possible to create such a society is correct. However, I think that some structural features required to make such a society work are clear whether or not one believes that they can be implemented in practice.

First of all community finance is required. Clearly we need to go on investing in infrastructure. But if we wish to avoid a growth orientation, then the purpose of building such infrastructure should be to preserve the long term productivity of society and not to increase the stash of private financial investors. The return on such investment should be the goods and services produced and not excess purchasing power for people who already have excess purchasing power.

Secondly, mutual support has to be clearly and explicitly recognized as the normal path to long term material security. Of course mutual support is already an objective fact. Aside from some bags of flower or rice in your basement, private savings are largely a delusion. Land is sometimes referred as the most substantial and secure of all stores of value. But in point of fact land, in and of itself, is not a store of value. Suppose that you were a feudal land owner with vast estates, warehouses full of grain, fields full of sheep and cattle, dense woodlands, etc. One day you wake up and every human being besides yourself has vanished from the face of the earth. You are rich no longer. Within a comparatively short time your grain stores will be depleted by rodents and rot, and even in the meantime you will have to chop your own wood, haul your own water, grow and harvest your own vegetables, clean and repair your own dwelling etc. So called private stores of value are merely claims against the output of the economic community.

The only real store of value is the built up infrastructure of society, including, crucially, the skill and knowledge of the men and women who are the brains and hands of that society, and in the sustainable resource base which supports that infrastructure. In your prime working years you are supporting the aged and the sick, and when sickness or age reduces your productivity you will be supported in your turn by those who are still in the prime of their productivity (again I am speaking of objective physical fact, not of religious or political ideology). We need to create a society in which people who put their shoulder to the wheel, in however humble a capacity, and help to maintain the productivity of the community can have confidence that they will supported in their hour of need independent of the size of their private financial stash. If such mutual trust cannot be achieved outside of groups of a hundred or so people, then it is hard to see how large scale civilization can attain to long term stability in finite world.

Obviously I am not presenting a practical political program for achieving such objectives, but here are some questions to be considered by anyone hoping that new economic paradigms can ultimately be established.

1. What mechanism(s) should be used for community finance?

One possible answer, of course, is the Politburo and the five year plan. The often made claim that no other possible mechanisms exist strikes me a displaying an incredible poverty of imagination. The Chilean state copper company CODELCO has existed as a highly profitable enterprise for three decades, and I see no reason for comparing its operation to that of a Stalinist tractor factory.

2. What levels of organization of community finance should exist (e.g. village, bioregion, province, nation-state, international, global)?

In giving the example of the Chilean state copper company I did not mean to imply that I think that economic organization should all be concentrated at the level of the nation state. However, if we are not going to return all the way to neolithic technology some amount of specialized large scale manufacturing will be required and the financing decisions concerning such infrastructure should be made by the larger communities that are being served by these forms of manufacturing.

3. What specific mechanisms should be used to make it clear to everyone that a stable, right sized economic community is the real source of our long term security rather than private financial stashes? I have discussed this issue in more detail here.

4. If atomized wealth accumulation by individuals and families is abandoned as the driving force behind economic activity how can efficiency and productivity to be encouraged and rewarded?.

This discussion of this question would lead into a long and complex essay by itself, but I would like to point out one aspect of a possible answer. In a world in which continuous wealth accumulation has been abandoned as a goal one reward of greater efficiency/productivity is greater freedom. In your personal life the less time you spend cleaning, painting, repairing your personal property the more time you have to engage in more fulfilling activities. In our collective economic life the more efficiently we provide ourselves with essential products and services, the more toys we have to manufacture in order to make sure that everyone has a job. Long before I had any particular worries about peak oil this feature of private finance capitalism struck me as colossally stupid.

The task we are faced with is intelligently right sizing the economy. Today this task is virtually impossible because the perception of individual economic actors is: The more my business/ salary/ bank account/ investment portfolio grows, the better off I am. This simple perception is the driving engine behind the growth machine. We need to replace this perception with a new one: If I do my part to create and support a right sized economy (in however humble a role) I know that I will receive the wherewithal for a decent quality of life, and I can have confidence that in an hour of need the right sized economy that I helped to create and support will support me.

This task may appear impossibly difficult, but it is really the only game in town. If we cannot accomplish it then we are stuck with the doomer/cornucopian dichotomy.

[1] Daly, Herman. Steady State Economics. Washington D.C.: Island Press 1991.

[2] A Catechism of Growth Fallacies (Chapter 5 of Steady State Economics) can be found on line at: http://www.dieoff.org/page88.htm

I did a post last year on the potential for floating offshore wind power, which looked at a number of different prototypes at various stages of development.

StatoilHydro and Siemens have made some progress on their pilot project, installing the world's first large-scale floating offshore wind turbine off the coast of Karmøy, Norway. The 2.3 MW Hywind (see the link for a set of videos on the turbine being deployed) was built at a depth of 722 feet and will be tested over the next two years.

StatoilHydro is investing around NOK 400 million (US$62 million) in the pilot and related research and development. Enova SF, a company whose aim is to promote the transition to environmentally friendly energy use and energy production in Norway, has contributed NOK 59 million (US$9 million) in support for the project.

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The New York Times has a brief report on this - Wind Farming in Deep Waters.

Most existing offshore wind turbines are mounted firmly to the seabed. Now StatoilHydro of Norway and Siemens of Germany are installing what they say is the world’s first large-scale floating turbine to exploit the potential of the technology in deep waters.

Building foundations to attach turbines to the seabed becomes expensive at water depths of more than about 50 meters (164 feet), according to the companies. That has limited large-scale exploitation of offshore wind power, particularly in countries with little or no shallow water near the coast line, they said.

Expansion near coastlines can also be difficult because of restrictions on construction in fishing grounds and bird migration zones. And an advantage of building on the high seas is that winds are stronger and more consistent than near the coast. ...

The new turbine is designed to be suitable for installation in water depths between 120 and 700 meters (394-2,297 feet), allowing them to be “placed much more freely than before,” said Henrik Stiesdal of the wind power unit at Siemens. ...

Siemens is supplying the turbine, which will start delivering electricity in mid-July. StatoilHydro is providing the floating structure with a center of gravity deep below the water surface to reduce bobbing. That structure would then be fastened to the seabed by three anchor wires. Even so, the companies have developed an “advanced control system” to take “advantage of the turbine’s ability to dampen out part of the wave-induced motions of the floating system.”

US Gas Hydrates Find Has Worldwide Implications In a 21-day expedition led by Chevron, DOE's National Energy Technology Lab (NETL), the US Geological Survey, the Minerals Management Service, in addition to a host of other industry experts, the most prospective gas hydrates reservoirs yet found have been located and drilled.

"Gas hydrates for a long time have been the most elusive and confounding of hydrocarbon deposits to find," said Dan McConnell, vice president of AOA Geophysics, one of the companies selected for the site selection committee. "This is the very first time that thick hydrates accumulations have been drilled by design, that those hydrates were where they were predicted to be."

Mexico State Oil Co Optimistic on Two Largest Fields Mexico's state oil company has a sunnier outlook for its two largest fields, thanks to remediation programs to squeeze as much oil as possible from the crude-laden waters of the Campeche Sound, Petroleos Mexicanos executives said at an oil conference Thursday.

Pemex Expects Budget Increase Request to Be Approved (Bloomberg) -- Petroleos Mexicanos, Mexico’s state oil company, expects the country’s government to approve a request for 20 billion pesos ($1.5 billion) in extra financing to help it pay for oilfield investments after the peso plunged.

The financing will allow Pemex, as the Mexico City-based company is known, to help fund $19.5 billion in capital expenditures this year as it seeks to offset the fastest drop in output since 1942, Carlos Morales, director of exploration and production, said today at a conference in Veracruz.

Calderon: Pemex Must Be Freed From “Ideological” Prejudice MEXICO CITY – Mexican President Felipe Calderon said state oil company Petroleos Mexicanos must be freed from political and ideological “prejudice” and from interests that have prevented it from remaining in the vanguard in terms of technology and investment.

Petroleos Mexicanos will struggle with oil rate even with new water removal facilities The fundamental problem with Cantarell is that it has a bottom water drive on one side of the field. On the other side the bottom is impermeable. Bottom water moving up structure drowned the pay zone causing the loss of reserves. Discovered in 1976 and placed on production in 1979, crude oil production peaked in 1981 at 1.156 million bbl/day from 40 flowing wells. Production was then stabilized at 1 million bbl/day by drilling more wells. In 1995 production/well had fallen to 7,000 bbl/day and 150 wells were required. Pemex then installed gas lift which allowed production to rise to 1.4 million bbl/day in 1999. But reservoir pressure continued to decline.

Emirate must decide whether oil partners are worth keeping The production of oil in Abu Dhabi has always been a group effort.

International oil companies such as Shell and ExxonMobil deploy engineers in the emirate’s oil fields and help build the pipes and wells that generate the country’s wealth, in return for minority ownership stakes in subsidiaries of the Abu Dhabi National Oil Company (ADNOC).

But the Government faces a momentous decision as the expiry of concessions that form the basis of those partnerships nears: should it stick with modified agreements or abandon the international partners altogether?

Oil Explorers in Nigeria Raise Alarm over Safety of Facilities Oil explorers under the aegis of the Society of Petroleum Engineers (SPE) in Nigeria have expressed concern over the vandalism of oil facilities in the Niger Delta region, the News Agency of Nigeria reported on Thursday.

Bayo Ojulari, the SPE's chairman, was quoted as saying the destruction of the oil facilities by militants would adversely affect development in the region.

IPAA still leading the charge against policies harmful to oil and gas interests With the arrival of the Obama administration, a solid and somewhat hostile Democratic majority in Congress, and low commodity prices, US oil and gas producers have entered a challenging period.

Chesapeake CEO defends $75-million bonus The chief executive of Chesapeake Energy CHK-N, under fire for taking a $75-million (U.S.) bonus while the company was losing billions, defended his leadership at one of the nation's largest natural gas producers.

Jeff Rubin: Warming up to carbon tax Efforts in the developed world to restrict and replace coal-fired capacity seem downright quixotic when juxtaposed against China's (and other developing countries') coal-expansion plans. Whatever reduction in greenhouse gas emissions is achieved in the world's developed economies from switching away from coal will simply be overwhelmed by the increase in emissions from new coal-fired plants in China and the rest of the developing world.

Saving the world is a noble motive for going green. But there is another compelling reason to want a carbon-abatement regime in place as soon as possible. It is called good old-fashioned naked economic self-interest. If we can't agree to save the world for someone else's benefit, we might as well do it for our own.

Maker Of 'Fuel' Documentary Promotes Algae Energy For documentary film maker Josh Tickell, it's all about algae.

The micro organism's potential to deliver America from its dependence on foreign oil receives a big chunk of screen time in Tickell's movie "Fuel," which goes into national distribution this fall after winning awards at the Sundance Film Festival and others.

"Algae is the next step," said Tickell, who visited New York to receive the honor of Goodwill Ambassador from the United Nations. "We have to get away from propagating a system that's undermining the U.S. economy."

Please Take Your Seats Ladies and Gentlement, the Online Screening of ‘In Transition’ Starts Now… The film ‘In Transition’ is now available for viewing, for the next 72 hours. The version being screened is not the final version, it still has a sequence to add and some tidying up to do, but is almost there. We very much hope you enjoy it (you will need Quicktime on your computer)….

Indigenous 'genocide' in battle for oilfields Across the globe, as mining and oil firms race for dwindling resources, indigenous peoples are battling to defend their lands - often paying the ultimate price.

"Peru Oil Standoff" - Richard Heinberg interviewed on CBC The Current Richard Heinberg was interviewed on CBC radio in "Peru Oil Standoff", a segment of the CBC daily show The Current.

Chevron confirms damage to Nigerian oil pipelines ABUJA (Reuters) - U.S. oil major Chevron confirmed one of its Nigerian oil pipelines was damaged on Friday in the Niger Delta, but output was unaffected as the infrastructure had been shut down before the incident.

The Movement for the Emancipation of the Niger Delta (MEND) on Friday said it attacked the Chevron pipelines and threatened to sabotage another facility operated by the U.S. oil company.

Total says 1,200 workers walk out at UK refinery LONDON (Reuters) - France's Total said on Friday that 1,200 contractors have walked out on unofficial strike over planned redundancies at its British Lindsey refinery.

Total said in a statement that 600 workers were protesting outside the refinery, but production was not affected.

Surreal goings on in the commodities show When markets look like a surreal comedy, turn to Monty Python. Try to explain current goings on in the commodity market and two sketches might help.

Contours of Crisis III: Systemic Fear and Forward-Looking Finance By the middle of 2002, the crisis finally ended. Earnings staged a massive, V shaped recovery and, over the next five years, rose by nearly 350%. And yet, despite the surge, capitalists still found the future hard to envisage. The earnings boom certainly was real enough—but so were its limits. In the United States, the national income share of corporate profits was hitting record highs, so the prospect for further redistribution in favor of capitalists seemed increasingly dim. And those who pinned their hopes on “real” growth were running into doomsday scenarios of “peak oil” and “climate tipping.”

With the future looking disheartening at best, capitalists preferred to keep their eyes on the past. Share prices started to rise only in October 2002, a full six months after the earnings upswing began, and they continued to increase in tandem with profits (albeit at a lower rate) for the next five years.

And then all hell broke loose.

Your life is awash with oil Oil is filthy old stuff that causes nothing but pollution all the way through our use of it, but why, oh why do we keep going back for more. Pretty simply, we’re addicted. Whether it is good for us or not, and in the long term it undoubtedly is not, we are so totally addicted to the stuff that your life would not last more than a few days without a continuous stream of it being fed into your lifestyle.

The five horsemen of our apocalypse We're trained in school and business in linear-rational engineering thinking. Focus on one problem at a time. Find a solution to it. Don't look at externalized costs or the connectedness between things, because that's hard to put numbers on and doesn't help who is paying for the answer.

That isn't how things really work. Every real problem has multiple, intertwined causes, and needs multiple, intertwined solutions. Every real solution also solves multiple problems. Real economics has no bottom line. That's linear thinking, and puts out of our sight all the secondary costs and problems and linkages that always occur.

There are at least five major players in the transition we're in. They all interact - wildly - and all need to be tracked at the same time.

The best time to read chilling fiction and non-fiction is during the long, hot summer Some books represent their worlds as so dark and bleak that the best (or perhaps the only good) time to read them is in the middle of summer, when their chilling presentation can easily be countered by a pleasant walk outside in the blazing heat.

The Hundred-Octane Vision of Freedom - Hey, Bob Lutz and GM, can you make my nine-year-old love a thundering V-8 more than the environment? But frankly — and I love him like I love nobody and nothing else in the world — the lectures get obnoxious. He sees no contradiction in mooning over a million-buck road rocket and worrying about global warming and peak oil. When it comes to our cars — an Accord and an Element — what matters to him are miles per gallon, reliability, safety, and resale value. All he's ever known are Consumer Report-beloved imports.

Shell’s Cellulosic ‘First’ Is More of a Second Much fanfare attended the arrival in Ottawa earlier this week of Luis Scoffone, Royal Dutch Shell’s vice president of biofuels. Mr. Scuffone flew in from England and descended, along with John Baird, Canada’s transport minister, on a large Shell station at Merivale Road — an undistinguished avenue of strip malls and big box stores.

It was here, at a single pump, Shell said in a news release, where customers could become “the first in the world to fill their tanks with gasoline containing advanced biofuel made from wheat straw.”

That was news to MacEwen Petroleum, however — a small regional service station chain based in Maxville, Ontario.

We must stop overfishing now to save our empty oceans The hammour of the Arabian Gulf and the North Sea cod have an unenviable thing in common. They are both down to around three per cent of their former abundance and rank among the third of the world’s fish stocks that scientists consider to have collapsed. If the Arabian Gulf or the North Sea fell within United States jurisdiction, they would be declared fisheries disaster areas and spawning areas, and vital habitat would be closed by law to commercial fishing.

But neither the North Sea nor the Arabian Gulf is managed in the cutting-edge way that the United States now manages some of its domestic fisheries – which has come about as a result of a healthy enthusiasm among environmental bodies for using the law to sue the authorities. (The other side of the coin is that 70 per cent of fish the US now consumes is from fisheries around the world, many of them unsustainable. Ditto the EU.) We in Europe and the Middle East go on hoping that something will turn up, that nature will somehow solve the problem, while doing rather less than is needed to bring about recovery.

GOP slams Democrats' climate bill as an energy tax WASHINGTON – Republicans on Saturday slammed a Democratic bill before the House that seeks to address climate change, arguing that it amounts to an energy tax on consumers.

In the GOP's weekly radio and Internet address, Rep. Mike Pence said Congress should instead open the way for more domestic oil and natural gas production and ease regulatory barriers for building new nuclear power plants.

Oil, Gasoline, Fall on Record European Industrial Output Drop (Bloomberg) -- Crude oil and gasoline fell for the first time in four days as a record plunge in European industrial production prompted speculation that bets on an economic recovery are premature.

Rally in oil prices may be running on empty, but oh, what a ride! Meanwhile, despite all the apocalyptic talk about the implications of "peak oil," significant new oil supplies are coming onstream, notes King.

"The latest forecast (by the U. S. Department of Energy) shows a steadily increasing trend in effective spare capacity, driven primarily by capacity adds taking place in Saudi Arabia," he says.

Ahmadinejad Wins Iran Re-Election as Rivals See ‘Violations’ (Bloomberg) -- Iranian President Mahmoud Ahmadinejad won a second term after an election that his main challenger, former Prime Minister Mir Hossein Mousavi, said was blighted by “obvious violations.”

Ahmadinejad, 52, took 62.6 percent of the vote in final results of the presidential election, compared with 33.7 percent for Mousavi, Interior Minister Sadegh Mahsouli said on state television. Mousavi, 67, who said he was the winner shortly after the polls closed last night, said today he “won’t surrender” in the face of irregularities.

Canadian economist predicts a smaller future The short answer to the question implied by the title of this new book by former CIBC economist Jeff Rubin is that oil scarcity inevitably leads to higher transportation costs, curtailing global trade and travel. As we all learn to live local, the world is going to seem smaller.

The argument is based largely on the so-called "peak oil" theory, which in its most basic form just says that since oil is a non-renewable resource, sooner or later we are going to start running out. This drives the price of oil up -- though it can still drop, temporarily, in a recession -- and since the global economy runs on oil we are all going to feel the pinch.

Of course, some of us are going to feel it more than others.

Don't be in any hurry to write off suburbia A somewhat overblowing Kunstler decried suburbia as "the greatest miscalculation of resources in the history of the world." He went on to say, "We squandered our national treasure by constructing an infrastructure for daily life that has no future."

He cited a convergence of factors that will lead to the demise of not only suburbia but a homebuilding industry. He included reasons such as the current global economic crisis, the collapse of the housing market and the end of cheap energy.

Foreign land hot commodity as nations seek to grow food Much has been said in recent years about the implications of the world reaching Peak Oil -- when demand outstrips supply. However, the growing discussion these days is about Peak Soil.

Countries such as Saudi Arabia, China, Kuwait and Egypt, which import a lot of food, have apparently lost confidence in the international trading system since the ethanol boom in 2007-2008 and the flood of investment money that poured into the commodity markets, sending staple food prices through the roof.

It wasn't the spike in commodity prices that scared them; it was the decision by several exporting nations to stop selling at any price. So instead of buying commodities, they're buying or leasing farms, producing their own grain and shipping it home.

Even as Industry Slumps, Prius Inspires Waiting List TOYOTA CITY, Japan — Throughout Toyota’s global operations, managers are scrambling to cut costs in the wake of record losses.

But at Toyota’s Tsutsumi plant, managers have the opposite problem: meeting demand for the third generation of the Prius, which has become an instant hit in Japan and is rolling into American showrooms now.

Exelon to Add 1,300 Megawatts of Nuclear Generation (Bloomberg) -- Exelon Corp., the largest U.S. operator of nuclear power plants, plans reactor upgrades that will add 1,300 to 1,500 megawatts of generating capacity by 2017, equivalent to building a new unit.

As Wind Power Grows, a Push to Tear Down Dams The amount of wind power on the Bonneville transmission system quadrupled in the last three years and is expected to double again in another two. The turbines are making an electricity system with low carbon emissions even greener — already, in Seattle, more than 90 percent of the power comes from renewable sources.

Yet the shift of emphasis at the dam agencies is proving far from simple. It could end up pitting one environmental goal against another, a tension that is emerging in renewable-power projects across the country.

Seeking Growth Market, Chip Maker Eyes Solar Cells HSINCHU, Taiwan — Taiwan Semiconductor Manufacturing, or TSMC, has seen the light and now wants to make some.

The world’s largest for-hire chip maker could soon start manufacturing solar cells and LED lights. The company’s entry into these nascent industries will catch the attention of existing makers, which could find themselves battling one of the most formidable manufacturers on the planet. Taiwan Semiconductor could drive down prices, as it did for computer chips. But the lower prices could also stimulate demand for what are now expensive technologies.

Life May Extend Planet's 'Life': Billion-year Life Extension For Earth Also Doubles Odds Of Finding Life On Other Planets As the sun has matured over the past 4.5 billion years, it has become both brighter and hotter, increasing the amount of solar radiation received by Earth, along with surface temperatures. Earth has coped by reducing the amount of carbon dioxide in the atmosphere, thus reducing the warming effect. (Despite current concerns about rising carbon dioxide levels triggering detrimental climate change, the pressure of carbon dioxide in the atmosphere has dropped some 2,000-fold over the past 3.5 billion years; modern, man-made increases in atmospheric carbon dioxide offset a fraction of this overall decrease.)

The problem, says Joseph L. Kirschvink, the Nico and Marilyn Van Wingen Professor of Geobiology at Caltech and a coauthor of the PNAS paper, is that "we're nearing the point where there's not enough carbon dioxide left to regulate temperatures following the same procedures."

Climate Change Treaty, to Go Beyond the Kyoto Protocol, Is Expected by the Year’s End The world is on track to produce a new global climate treaty by December, the top United Nations climate official said Friday as delegates from more than 100 nations concluded 12 days of talks in Bonn, Germany.

The delegates issued a 200-page document that they said would serve as the starting point for treaty negotiations that open in Copenhagen in December.

A few days ago, Federal Legislation was introduced to regulate Hydraulic Fracturing. Dow Jones Newswire reported:

Industry Warns Bill May Halt Natural Gas Development

U.S. lawmakers Tuesday unveiled a bill that industry warns could prevent development of trillions of cubic feet of natural gas by putting regulation of a key production technique under federal oversight.

It is unclear how much support the proposal could get in Congress or from the White House, but the oil and natural-gas industry has already geared up for a fight to oppose the provision given its potential impact on the sector.

The legislation would repeal an exemption for the process of "hydraulic fracturing" in the Safe Drinking Water Act that requires disclosure of the chemicals used the production process.

By forcing hydraulic water, sand and a small percentage of lubricating chemicals into unconventional types of reservoirs called tight sand and shale gas, companies are able to fracture underground rocks and release the trapped gas not traditionally accessible. States' offices, such as Pennsylvania's Department of Environmental Protection, currently regulate the 60-year-old practice.

Arguments Against Federal Regulation

The industry arguments against stopping the current practice include:

1. The practice is already regulated by the states. Federal legislation would be duplicative, cause delays, and be expensive.

2. The practice has been used for more than 50 years, and seems to be safe.

3. The chemicals that are injected are injected thousands of feet below the water table. There is generally rock that acts as a barrier to keep the chemicals where they are re-injected. It would be very difficult for them to get back up to the water table again.

Arguments for Federal Regulation

The sponsors of the new legislation are concerned because drilling is being proposed near major urban areas, such as New York City. A small problem could be catastrophic. According to Senator Bob Casey (D-PA), who is one of the sponsors of the legislation:

Drilling for natural gas in the Marcellus Shale across much of Pennsylvania is part of our future. I believe that we have an obligation to develop that natural gas responsibly to safeguard the drinking water wells used by 3 million Pennsylvanians. We already have private wells contaminated by gas and fluids used in hydraulic fracturing. We need to make sure that this doesn’t become a state-wide problem over the next few decades as we extract natural gas.

According to the website of another sponsor of the legislation, Diana DeGette (D-CO),

Hydraulic fracturing – also known as “fracking”, which is used in almost all oil and gas wells, is a process whereby fluids are injected at high pressure into underground rock formations to blast them open and increase the flow of fossil fuels. This injection of unknown and potentially toxic chemicals often occurs near drinking water wells. Troubling incidents have occurred around the country where people became ill after fracking operations began in their communities. Some chemicals that are known to have been used in fracking include diesel fuel, benzene, industrial solvents, and other carcinogens and endocrine disrupters.

One issue I have not seen discussed too much is the quantity of water used in fracking--probably because the legislation is not aimed at addressing water use. Perhaps readers can add more on the issue of water use. At the recent hearing House Hearing on Hydrofracturing, testimony by Albert F. Appleton who is a consultant on 
Infrastructure and the Environment and a 
former Director of the New York City Water and Sewer System, does touch on the water withdrawal issue. According to a post by Heading Out, his testimony can be summarized as follows:

He has been, as one concerned with the NY water supply, a critical evaluator of what goes on in the watershed that feeds water to the city and the state. He spoke to the fact that we are supposed to be moving away from fossil fuels toward renewable ones, that there are concerns with the fluids that are used in hydrofracing, and the industry that says it can’t afford more regulation is the one that makes these huge profits. His main concern was that the fluids used are toxic and do not biodegrade, so that even though they are stored in deep wells, they are still there as a threat. But there are also concerns that there are not enough regulators to ensure compliance with the regulations, and that water withdrawal may have severe and negative impact on communities. And he returned to the point that the Government is now pouring billions into green energy but this will compete with natural gas, so that if we subsidize the gas by easing the regulations we are undercutting the green energy program. And we have to be concerned about global warming.

Results of Analysis for the American Petroleum Institute

According to a report (which can be downloaded here) prepared by IHS Global Insight commissioned by the American Petroleum Institute, elimination of hydraulic fracturing would have a huge impact on the industry. By 2104, the United States elimination of hydraulic fracturing could be expected to experience a 17% in oil production and a 45% reduction in natural gas production, relative to the reference case.

Of course, no one is really talking about eliminating hydraulic fracturing, just enacting federal regulation. The calculation of what happens if hydraulic fracturing is eliminated is really an intermediate result, in trying to figure out what would happen if regulation is enacted.

The report offers two regulation scenarios. If the new regulation results in only additional reporting, the report estimates that there will be a 20.5% reduction in the number of natural gas wells drilled over a five year period, and a 10% reduction in natural gas volumes. No estimate is given with respect to impact on oil production, but presumably it would be significantly less.

The report prepared for API also looks at a scenario where the types of fluids that can be used for hydrofracturing would be restricted. In this scenario, gas production would decrease by 22% and oil production by 8%, relative to baseline.

All of the analyses in the report prepared for API depend very much on the price of oil and of natural gas. If the price of natural gas remains low, there could be a big drop in production, with or without the proposed regulation.

Chemicals Used in Hydraulic Fracturing

Heading Out posted this general list of fracking fluids, introduced by Mr. Mike John of Chesapeake Energy at the House Hearings:

Other Thoughts

In many ways, the current legislation seems to reflect emotional concerns over what might happen, and what might be done to prevent what seems to be a fairly low chance of contamination. The problem is that if contamination did occur, the consequences could affect a huge number of people, and be difficult to resolve.

The issue of too much water use is not really addressed by current legislation. If the EPA regulates fracturing fluids, it may increase the cost of drilling wells, and thereby cause some wells which might have been economic without regulation to fall into the non-economic category. As a consequence, fewer wells will be drilled. This will reduce water use for hydraulic fracturing in proportion to the fewer wells drilled, but not otherwise.

The proposed legislation does not appear to have a good chance of passing. Supporters asked to get the legislation attached to energy packages, but were not successful in doing so. It seems to me that state legislation, in states like New York and Pennsylvania, will have a greater chance of passing.

‘Unprecedented oversupply’ of natural gas coming this summer, says Marshall Adkins OGFJ: Let me ask you to speculate. Do you see crude and natural gas prices going up enough this year to make a difference in project economics?

ADKINS: Well first, let’s separate out into crude versus gas. Gas – no. We have too big of a problem both in terms of supply and demand. Everyone pretty much knew by early 2008 that with all the shale gas coming on stream, we were going to have a supply problem. What was not evident at all was the demand problem. Either one is a big enough problem to cause gas prices to fall, but now we’ve layered on an economy-driven demand problem. This summer that’s going to create an unprecedented oversupply of gas. The way you solve that is to take the rig count down, let the decline rates kick in, and have supply fall enough to counteract and rebalance. That’s going to happen, but it’s going to take some time. Certainly the average gas price for the year is going to be pretty ugly. As far as recovery in 2010 is concerned, the jury is still out. I talk to a lot of really smart people, and there doesn’t seem to be a consensus yet on any direction on the global economy. An economic recovery in 2010 is critical to the performance of the industry. If the economy doesn’t perform better, I’m not sure we do get a bounce in gas prices.

Crude is almost just the opposite. Short term, very difficult to determine. It all hinges on global demand and OPEC’s ability to cut production. By the way, OPEC has done much better than any of us felt like they would do. So those are wild cards that, short term, could lead crude anywhere. Plus, some of the other wild cards would be geopolitical events, such as wars and acts of terrorism. These events could turn prices on a dime. Longer term though, I’m very confident in crude. Crude supplies are going to fall, and the economy will rebound and new demand will kick in at about the same time that supplies are falling. So when I look at crude in two, three, or four years, I think prices will be meaningfully higher. In the next six months, who knows? My gut says it’s probably going to drift higher, but my confidence level in that is very low.

US natgas rig count below 700, first time since '02 NEW YORK (Reuters) - The number of rigs drilling for natural gas in the United States fell 15 to 685 this week, the first time below the 700 benchmark since late November 2002, according to a report on Friday by oil services firm Baker Hughes in Houston.

U.S. natural gas drilling rigs have been in a steady decline since peaking above 1,600 in September, and now stand at about 819 rigs, or 54 percent, below the same week last year, the lowest level since late November 2002, when there were 679 gas rigs operating.

Cuba's energy woes in focus at oil partners meet Venezuela aims to expand its sales of oil to Cuba and other nations on highly preferential terms, putting politics over economics as it meets Friday with neighbors looking for more cheap fuel.

Cuba especially needs the help.

Dueling 'Clunker Car' Bills Congress is halfway home on passing a bill President Barack Obama asked for more than two months ago to give consumers thousands of dollars to trade in an old inefficient car, sport-utility vehicle, or truck for a less gas-thirsty one. The hang-up is between two versions in the Senate. One would require consumers to make more of a leap in fuel efficiency. Another Senate bill, similar to the one passed by the House last week, is less concerned with providing "green" incentives than clearing dealer lots of SUVs and pickups and giving a helping hand to Detroit automakers.

FutureGen ‘Clean Coal’ Plant Gets Federal Backing (Bloomberg) -- The stalled FutureGen “clean coal” project in Mattoon, Illinois, won the tentative backing of the Obama administration, setting the stage for engineers to begin designing a near zero-emission coal-fired power plant.

The U.S. Energy Department reached a provisional agreement for the government to provide $1.1 billion in funding, and industry sources to contribute as much as $600 million. The project must still clear cost and design reviews as well as fundraising goals before construction could start, according to a department statement today outlining a project timetable.

Norway output drops Norway's oil production fell to a preliminary 1.79 million barrels per day on average in May from 1.99 million in April, the Norwegian Petroleum Directorate said today.

OPEC says worst is over for the oil market Alistair Darling today sought to dampen hopes of an early end to the recession, arguing that high oil prices could hold back recovery. In an interview with the Financial Times the Chancellor said the volatile oil price, which hit a record high of $147 a barrel last July before plummeting amid the recession, had “the potential to be a huge problem as far as the recovery is concerned”.

OPEC said it believed its efforts to curb excess supply had helped turn the market around and would reduce global oil inventories.

Valero shuts Corpus coker for economic reasons NEW YORK (Reuters) - Valero Energy Corp said Friday it was shutting down the 20,000 barrel-per-day coking unit for planned work at the east plant of its Corpus Christi, Texas refinery for economic reasons.

"The unit is being shut down for economic reasons due to low margins and narrow light-heavy crude differentials, as well as to decoke the unit," said Bill Day, a spokesman for the refinery.

Q+A-Analysis on Russia's oil, mining sector LONDON (Reuters) - The slump in oil and commodity prices accompanying the global financial crisis has pressured Russian oil and mineral firms, and even the recent price recovery has not been enough to entirely resolve worries over their debt obligations.

Below, Exclusive Analysis regional specialists Teymur Huseynov and Joanna Gorska answer questions on what investors can expect in the volatile sector.

China suspends 'illegal' hydropower projects for environmental reasons China's environment ministry has suspended construction of two ambitious hydropower dams in the upper Yangtze river region, saying the projects were illegal because they were started without necessary environmental assessments.

The announcement, carried widely in state media today, is an unusually aggressive move by the ministry of environmental protection, whose local bureaus answer to local governments despite it being upgraded to a full ministry last year.

US will exempt China from binding greenhouse gas targets The US will not demand that developing countries such as China take on binding targets to cut pollution under a new treaty to fight global warming, a senior official in the Obama administration confirmed today.

Jonathan Pershing, head of the US delegation at UN climate talks in Bonn, said developing nations would instead be asked to take certain actions, such as to improve take-up of renewable energy and to boost energy efficiency standards.

Australia - Beachfront residents on own against sea rise OWNERS of beachfront homes will get little protection or compensation from the State Government if their properties are threatened by rising sea levels caused by climate change or coastal erosion, under a plan in the course of being developed.

Anger is mounting among councils and coastal communities that the Government priority will be to protect public works and public safety, creating the prospect of lengthy legal battles between councils and beachfront residents.

Michael Pollan, Garden Fresh "One of the reasons we need to nurture several different ways of feeding ourselves -- local, organic, pasture-based meats, and so on – is that we don't know what we're going to need and we don't know what is going to work. To the extent that we diversify the food economy, we will be that much more resilient. Because there will be shocks. We know that. We saw that last summer with the shock of high oil prices. There will be other shocks. We may have the shock of the collapsing honey bee population. We may have the shock of epidemic diseases coming off of feed lots. We're going to need alternatives around.

"When we say the food system is unsustainable we mean that there is something about it, an internal contradiction, that means it can't go on the way it is without it breaking up. And I firmly believe there will be a breakdown."

Pakistan: Low economic activity reduces energy demand ISLAMABAD: Energy consumption declined in the 2008-9 fiscal year because of reduced economic activities and the circular debt issue arising out of high prices of petroleum products.

However, according to the Economic Survey released on Thursday, Pakistan is at present the largest CNG user country.

Pertamina not to import more oil following refinery incident Jakarta (ANTARA News) - State-owned oil and gas company Pertamina will not increase its oil imports following a disturbance that forced its Cilacap refinery to stop operatimg, a Pertamina spokesman said.

Nuclear industry to add 10,000 jobs in future Almost 10,000 new jobs will emerge in the nuclear field in the coming decade, but many of the workers destined to fill them are still in middle or high school, according to a new study commissioned by an economic development group.

How a trip to the laundry averted nuclear disaster A chance decision to wash some clothes narrowly averted a nuclear disaster, a safety report has found.

While using the laundry room at Sizewell A power station, a contract worker spotted a leak from a cooling tank.

By the time he raised the alarm more than 40,000 gallons of radioactive fluid had spilled out from a 15ft long crack in a pipe. Some of it reached the North Sea.

Chinese cities to be lit up by LEDs A new project is being developed to light up ten cities across China with LED street lights, according to reports.

Chinese officials have asked leading LED makers from Taiwan to participate in the project and provide their cities with energy-saving bulbs.

The coming U.S.-Saudi fight over "energy independence" Are the United States and Saudi Arabia on the verge of serious tensions? They might be … if the Saudis continue to worry that U.S. energy policy could undermine their economy over the long-term.

Saudi officials are beginning to realize that the Obama administration is serious about gradual diversification away from U.S. dependence on oil and fossil fuels -- a direct threat to Saudi Arabia’s “demand security.” That explains, at least in part, Saudi Oil Minister Ali al Naimi’s uncharacteristically hawkish comments on crude oil prices at the most recent OPEC meeting held late last month -- comments that amounted to a warning shot directed at the U.S. ahead of President Obama’s visit.

Despite serious recent Saudi efforts to diversify its economy away from dependence on crude oil exports, the certainty that large-scale use of hydrocarbon alternatives remains years away, and conservative budgeting that ensures the Saudis are hurt less than most energy exporters by lower prices, the Saudis fear that substantial U.S. investment in ideas like plug-in hybrids and electric vehicles could undermine demand growth in oil, which they had assumed would remain strong, at least in the developing world. The fear is that if they continue investing in oil production capacity, they could end up overshooting demand.

EU To Agree To Strengthen Emergency Oil Stocks Rules BRUSSELS -(Dow Jones)- The European Union is expected to agree Friday to strengthen rules on emergency oil stocks and to publish data on commercial stocks every month, in an effort to increase both its readiness for any potential energy crisis and transparency in the commodities market.

Fair price issue continues to haunt Obama even after Riyadh visit When Barack Hussain Obama, the president of the world’s largest gas guzzler, landed in Riyadh, the world’s largest gas station, last week, it would have really been naïve to expect that the continuing global oil saga-with prices firming up to the highest points in the year-would not be on his mind.

His cards were already out in open.

Price Of Oil - Drawing The Line The problem is that no oil producer is making money at $40 per barrel. I've heard estimates that the break-even point is now $60 to $80 per barrel, so producers are hurting. Why doesn't a producer simply stop producing if it loses money on every barrel? That question is answered when you realize that most of our oil now comes from national entities (Saudi Arabia, Venezuela, Iran, etc.) rather than companies like Exxon or Shell. These countries do indeed work with companies, but the basic decisions there are governmental. These governments are dependent on oil revenue for infrastructure, social programs, military spending and all the rest. For them, if revenue stops, the government stops.

Vale Purchases Saudi Supertankers to Convert, TradeWinds Says (Bloomberg) -- Vale SA bought two Saudi Arabian- owned supertankers that it will convert to haul iron ore, TradeWinds reported, citing shipbrokers it didn’t identify.

Single currency: UAE pulls out of currency union The United Arab Emirates has informed the secretariat of the Gulf Cooperation Council that it is pulling out of the proposed GCC monetary union, according to a report by the country’s official news agency.

The move came less than three weeks after Gulf leaders agreed that the headquarters of the central bank for the region would be located in Saudi Arabia.

Video: Meeting the Transmission Challenge at Power-Gen Europe If there's one thing that unites the conventional and renewable energy industries, it's the need to upgrade and expand the transmission and distribution infrastructure. Global investment in new power plants has fallen because of the dearth of capital for projects. But investments in transmission and distribution systems have been relatively stable.

OPEC producers' resolve weakening on quotas The Organization of Petroleum Exporting Countries said oil production rose for a second month in May, weakening compliance with quotas, as the group lowered its forecast for global oil demand in 2009.

The 11 OPEC members bound by production quotas, which exclude Iraq, pumped 25.903 million barrels a day in May, an increase of 118,800 barrels a day from April, the Vienna-based organization said in its monthly oil report today, citing secondary sources that include estimates from analysts and news organizations.

Oil price surge sends gasoline higher Gasoline prices are blowing past recent estimates, saddling consumers with higher costs just as the summer driving season shifts into high gear.

Pump prices are following the rise in crude oil, which set an 8-month high Thursday on a falling dollar and brighter economic outlook.

Pemex says Ku Maloob Zaap field producing at peak VERACRUZ, Mexico (Reuters) - Mexico's Ku Maloob Zaap oil field is currently producing at a peak 830,000 bpd and will continue to produce at that level for the next seven years, Hector Salgado, an engineer at the state-run oil company Pemex, told reporters on Thursday.

Pemex officials said earlier this year the field, which is now Mexico's single largest producer of oil, could begin to decline in 2010.

Police fire tear gas in Peru protests LIMA, Peru – Riot police used tear gas to turn student protesters away from Peru's Congress on Thursday as thousands marched to back Amazon Indians resisting oil and natural gas exploration on their land.

At least 20,000 students, labor union members and indigenous Peruvians from the country's Andean highlands to its jungle lowlands joined the mostly peaceful nationwide protests.

Jack Cafferty: How will your life change if oil reaches $250 a barrel? Experts predict the price of oil could soon hit $250 a barrel. Already, a barrel of crude is trading at almost $73 dollars — which is up from the lows of $30 a barrel only four months ago.

Financial crisis: high noon on the high street While it is clear that Totnes is hardly the typical British town, something is stirring there that could have a profound influence on the shape of every high street in the future. Totnes is the birthplace of the Transition movement, which aims to strengthen local communities and develop resilience (a favourite Transition word) in the face of climate change and the looming crisis occasioned by Peak Oil. This refers to the widely held theory that the world’s production of oil is now at or close to its peak, and that we face a future of inexorably dwindling supplies, with all the potentially catastrophic consequences that implies, unless we can reduce our energy usage and find alternative forms of energy.

Peak Oil: Good Things Could Happen to Us Once deemed unthinkable, peak oil is now the subject of very serious consideration, partly because global consumption is rising faster than supply, and partly because the predicted rebound of our depressed economy is expected to increase demand and thus price. Furthermore, the worldwide recession and the subsequent fall in the price of oil has reduced exploration and development, further jeopardizing the immediate supply should the economy recover. The implications for the short term are worrying. If we are brave enough to think about the long-term, implications are staggering. A world of expensive and scarce oil would be radically different than the one in which we live today.

Transition Culture: Pushing Back to a Greener Future When Becky Prelitz started perusing some of her husband's books with titles such as "Power Down," "Peak Everything," "The Party's Over" and "The Final Energy Crisis," she got depressed. So depressed, in fact, about a future without endless inexpensive gasoline, electricity and water that she slept for six months. "It was too much doom and gloom so I literally took a six-month nap," she claimed.

When she woke up from her Rip-Van-Winkle reaction to what she dubbed post petroleum stress disorder, she found another book on her doorstep, "The Transition Handbook: From Oil Dependency to Local Resiliency" by Rob Hopkins and Richard Heinberg. The book replicates the original transition town movement in culturally eclectic Totnes, England, in 2006. She decided to read it.

Peak Oil & Mainstream Attention Reveals A New Economic Pattern Look out everybody. Suddenly, the mainstream media is talking about peak oil, as if they've been just as concerned all along. This spells trouble for the world economy as it is a significant change in behavior from the mainstream outlets.

Rural Life off Target People are moderating their economic behaviour in pursuit of sustainable development goals as a response to peak oil fears and global warming. Income maximisation is giving way to the other satisfactions of rural living. Economic linkages are more local than multinational. As one recent piece of research for DEFRA puts it, people are beginning to have fun. But this is not part of government policy, so it attracts no funding. While RDAs offer the rhetoric of pursuing both wealth and sustainable development, it is hard to see how these are anything other than opposed.

Immigration and overpopulation: you can eat too much and grow too fat Liberals, usually more educated and enlightened than conservatives, join ecological clubs to save the environment from further damage—caused by excessive human numbers. Liberals fill the rolls of the Population Connection (formerly ZPG), Sierra Club, Nature Conservancy, Audubon Society and Green Peace. Liberals understand that overpopulation, while most of them remain too afraid to speak out, creates an ominous future for the United States as well as all life around the planet.

Conservatives usually deeply religious, however, must be pulled—kicking and screaming—toward any kind of care for the environment. They object to or deny climate destabilization, consequences of species extinctions and most of them think that “Peak Oil” or the depletion of oil—remains a hoax.

How much have you lost in the great recession? Peak oil is just a fact of geology: that the world has used up half of this one-time gift; it will use up much of the remainder much faster than it did the first half. The question is when it happens -- did it happen in 2007 or will it be 20 years out (hardly much transition time). The remaining oil will be harder to get and more costly to refine -- and no magic hydrogen car will be dropped off by benevolent aliens.

Demand will continue to rise fast as the developing world industrializes and wants to live the car-centric American dream. Meanwhile, many of the big "elephant fields" are at or near peak -- Mexico's Cantarell being one example. It's not for nothing that the Saudi's guard their actual oil numbers as a state secret. Watch production, not reserves that can be squishy or outright fraudulent.

After 50 years, Honda confronts new challenges The turmoil wracking the auto industry presents a paradox for Honda. On the one hand, Honda has weathered the crisis because it hasn't depended on once-profitable gas-thirsty vehicles as much as its Detroit rivals. On the other hand, its competitors now have little choice but to muscle in on Honda's turf.

GM cancels Malibu hybrid, works on new system DETROIT (AP) - General Motors Corp. will stop making Chevrolet Malibus and Saturn Auras with an early generation gas-electric hybrid engine system, but engineers are working on a more efficient version of the system, a company spokesman said Thursday.

"Mild" hybrid versions of the midsize cars aren't selling well because they cost about $4,000 more than base models but only get four more miles per gallon of gasoline.

Storing energy for when needed The plant will house an array of massive flywheels spinning at up to 16,000 revolutions per minute. They're designed to store excess power from the electrical grid, releasing it as needed to match the ebb and flow of statewide demand for electricity to avoid brownouts and blackouts.

Spain facing key decision on use of nuclear power MADRID (AFP) – The Spanish government will have to take a clear stand for or against nuclear power in the coming weeks when it decides whether to renew the operating licence of the oldest of the country's six nuclear plants.

Nation's largest solar plant to be built in NM ALBUQUERQUE, N.M. – Utility officials announced plans Thursday to build a giant solar energy plant in the New Mexico desert in what is believed to be the largest such project in the nation.

The 92-megawatt solar thermal plant could produce enough electricity to power 74,000 homes, far exceeding the size of other solar plants in the United States. The largest solar thermal plant in operation now is about 70 megawatts, said Dave Knox, a spokesman for New Jersey-based NRG Energy, the company building and running the facility.

India plans much solar power, slower emissions rise BONN (Reuters) – India will submit plans within weeks to slow its rise in carbon emissions significantly and to generate more solar power by 2020 than the whole world generates now, a senior climate official said on Thursday.

But the world's fourth biggest emitter of greenhouse gases cannot say when its emissions will peak and start to decline, said Shyam Saran, special climate envoy to Prime Minster Manmohan Singh.

Reindeer & Caribou Populations Plunge Reindeer and caribou numbers worldwide have plunged nearly 60 percent in the last three decades due to climate change and habitat disturbance caused by humans, a new study finds.

Global warming and industrial development are driving the dramatic decline, said Liv Vors, a Ph.D. student at the University of Alberta who did the study with university biologist Mark Boyce.

German Bogs, New Zealand Firs Offer a CO2 ‘Free Pass’ (Bloomberg) -- Peat bogs in Germany, New Zealand firs and North American forests will likely allow industrialized countries to lower carbon emissions while still burning coal and oil, according to a draft United Nations document.

Negotiators at climate-change talks in Bonn are proposing that carbon stored and absorbed by forests, soil and peat bogs in richer nations be included as part of national targets for cutting CO2, a document obtained by Bloomberg News showed. American Electric Power Co. and Germany’s RWE AG are among the utilities that may benefit by paying less for emissions permits.

US climate envoy: China seeks top US technology BONN, Germany – China wants the United States to deliver top of the line technology as part of a new global warming agreement, the chief U.S. climate negotiator said Thursday.

Little progress seen as climate talks head for wrap BONN (AFP) – A fresh round of talks on forging a new agreement to tackle climate change headed for a close on Friday after amassing hundreds of proposals but little sign of consensus emerging.

UN sketches countries with climate risk profile BONN, Germany (AFP) – Disasters caused by climate change will inflict the highest losses in poor countries with weak governments that have dashed for growth and failed to shield populations which settle in exposed areas, a UN report said on Thursday.

"Disaster risk is not evenly distributed," said the report, released on the sidelines of the world climate talks in Bonn, as it urged countries to shore up protection for their citizens.

From 1990 to 2007, loss of life and property from weather-related disasters rose significantly, with floods the biggest single cause, it said.

ASPO International president, Professor Kjell Aleklett of the Global Energy Systems group at Uppsala University has been in Australia over the past week, presenting lectures in Adelaide and Sydney on peak oil.

ASPO Australia has copies of 2 presentations done in Adelaide - "Energy: The Challenge To Sustainability" (ppt) and "Peak oil, peak gas and peak coal: Setting the scene for future supply problems" (ppt).

[break]
The Sydney Morning Herald has a report on the visit - Highly vulnerable to oil shortages.

ONE of the world's leading energy experts has warned that Australia will be one of the first countries hit hard by oil shortages as oil production peaks within the next three years.

Kjell Aleklett, a physicist from Uppsala University in Sweden, says Australia's relatively underdeveloped public transport system leaves the country more vulnerable to a downturn in energy production. "Australia is very sensitive to such developments," Professor Aleklett told the Herald. "Much of your industry and transit is dependent on oil, and supplies will decline."

Professor Aleklett addressed the NSW electric car task force and the Federal Government's Bureau of Infrastructure, Transport and Regional Economics yesterday. He had earlier warned a Senate committee that the International Energy Agency had wildly overestimated oil production, lulling nations such as Australia into a false sense of security. Rather than oil production rising by 20 per cent to 101.5 million barrels a day in 2030, he says production is likely to fall 11 per cent, to just 76 million barrels a day.

Last week the chairman of Australian Petroleum Production and Exploration Association, Eric Streitberg, predicted peak oil - the maximum rate of global oil extraction before decline - was just three years away, and forecast prices of up to $200 a barrel.

Professor Aleklett said the global financial crisis had reduced opportunities for new oil exploration, meaning that the world was missing out on an extra two to three million barrels. Australia needed more investment in public transport to reduce its dependency on oil, with up to 20 per cent of all journeys, not merely commuting to and from work, occurring by bus and train.

He also said Sweden and other European countries were developing a network of recharging stations to handle the growth of electric cars, although Australia, with its vast distances, posed a greater challenge for electric vehicle manufacturers.

This is a guest post by Philip Henshaw, known on The Oil Drum as pfhenshaw. Phil has a BS in physics and an MFA in architecture. He has been studying the physics of how natural systems change form for 40 years, first interested in the subject by college physics experiments in how all experiments misbehave. Phil's website is www.synapse9.com.

Economic theory is based on the observed regularities of the past. Some are considered as general principles, or “natural laws” that are expected to never change. From a systems view, though, such laws are emergent properties of the complex system they are regularities of, and prone to change as the system changes form.

Growth systems, for example, invariably change form when they climax, but the present laws of economics describe a complex system that has perpetual growth that never changes form. The question is partly how to tell when such changes might be appearing. Complex systems may vary a great deal without indicating a change in the form of the whole system. What would raise the question are events of kinds that are never supposed to occur at all.

An example of one such economic law is that scarcities are temporary. In theory, self-interest drives people to either find substitutes, added supplies, or to reduce demand as prices rise, and in those ways scarcity is expected to resolve smoothly.

When none of those three things occurs, though, the economy experiences a continuing price spiral with no substitutes or added supplies being found for an extended period. It’s a primary indication that the physical system is at a point of inelasticity, and changing design in some way. Then the old “laws” become misinformation about regularities that no longer exist. This is a brief research note on one example, to raise questions.

The economies that are unable to relieve scarcities for their own needs violate their own equilibrium. They create panics as markets display a “law of limitless price” for resources in inadequate supply for which there is rigid demand, instead of the traditional “law of supply and demand”. If scarcity develops locally, but substitutes from elsewhere can be found to relieve them, such “price shocks” are natural events that the system as a whole recovers from.

Scarcity is never supposed to happen for an extended period for the whole economic system at once, though. It would imply that the value of investing in finding alternates or increasing supplies has declined to zero, no matter the price. That would violate one of the primary laws of economics, the expectation that increasing investment produces increasing returns.

In micro-economics, and in development generally, it is universally understood that any process of increasing self-investment has increasing returns only to a limit. Past that limit, additional investment produces diminishing returns. Some believe the principle of diminishing returns does not apply to macro-economics, though. The world economy as a whole has never before had slowing growth for an extended period in modern history, leaving the theoretical limitless potential of human invention untested.

Evidence that the economic system as a whole has ended its long period of continual growth, and has instead begun to climax, just as natural systems always do, would have especially far reaching implications for what can be planned on. It relates to what Keynes1 and Boulding2 referred to as the “widows cruse” (from the Biblical story, I Kings 17:8–16, of Elijah and the inexhaustible cup, or ‘cruse’ which he gave a hospitable old woman) representing the sustainable path for economies at climax as they experience diminishing returns on investment.

Figure 1- Created by Author

What would push a whole self-investment system beyond its point of diminishing returns, broadly, is additions to its energy overhead costs and/or energy resource depletion, resulting in declining whole system EROI3, 5 and declining physical profitability. As depicted in the Figure 1, a sustainable state is accompanied by a steady level of investment (solid lines).

During the development period, increasing investment results in increasing returns until it begins to have the reverse effect. If continued (dotted lines), returns decline toward a point of vanishing returns as physical income is no longer greater than costs. Where overhead liabilities build up and returns on investment decline, a point is reached where it is “no longer worth it” to operate a system. A time is reached to “call it quits” for all kinds of large and small business plans.

In general, the limit is real but beyond available information to define, and often unexpectedly discovered, as in bankruptcies. When a whole economic system displays diminishing returns, it prompts the analyst to look for possible thresholds of vanishing returns that would predict collapse. That such reversal and failure points are theoretically sure to exist for any process of development using physical resources, makes looking for such limits a good question to ask in response to evidence of unexpected inelasticity.

Natural diminishing returns is what happens when a person is shining his shoes or combing his hair, and the first strokes accomplish a lot and then later ones accomplish very little. Every resource, whether obtaining supplies of a physical material, or improving a technology for using them, displays its limit by the decreasing productivity of increasing physical investment.

The investment response to any diminished resource is often to substitute new techniques to maintain productivity. That means that diminishing returns may also be expressed as increasing complications in finding substitutes, emerging conflicts of interest or unresponsiveness for related resources in making those substitutions.

An example is the broad present experience in professional “sustainable design” and in “sustainable development”. Designers now find a very large increase in the complexity of coordinating many different designs and systems at once is needed for success. These are all features of the broad meaning of the 2nd law of thermodynamics and how it applies to the “cost of energy” for any physical process of “making things happen”, and as what the subject of thermodynamics(a) generally refers to.

One of the most curious things about the debate over the natural limits to growth, though, is the general lack of professional study of signs of significant change in the nature of economies, partly due to a belief that economic laws don’t change. The point when diminishing returns for added investment is reached is actually the end of the compound growth period. For us, a 30 year overshoot of speculative financial expansion, apparently absence real investment potentials to satisfy investors, may have disguised our passing the real point of physical diminishing returns on investment long ago.

Watching for such turning points should be our natural means of ‘steering’ our own theories. It should be our main way to discover the natural limits of our own models, not just for one point of view on the debates over planning and policy, but for all points of view. Not watching closely to see when nature is upsetting our theories implies we are treating our theories as being our reality, giving us no perspective for questioning them.

It should be possible, then, to consider our theories as only a form of information to help us understand where nature is taking us. Discovering behaviors in the economy that violate the long trusted laws of economics would then test its assumptions. With the right information, people are very responsive to ending increased effort when they experience diminishing results, and promptly adjust their efforts for all kinds of things.

What’s first needed is a means of noticing things not following the old rules. The problem seems to occur when we have little experience except for knowing the rules to follow. We can then get the wrong signal, as when following old rules in an environment where the rules have changed.

For example, if one only looks at the profits involved, having prices rising faster than costs might signal increasing investment opportunity. If the reason for rising prices is fundamental scarcity due to over-investment in the physical resource, then accelerating that fundamental scarcity by increasing investment is quite counterproductive, even if locally profitable.

The problem being hinted at here is that relying on profiting from scarcity to be a growth industry and to pay for increasing overhead costs for other things, is a strategy that may abruptly collapse. It would be unfortunate to be banking on short-lived strategies to finance things like converting the world economy to sustainable technologies and avert climate change, for example.

If our larger economic problem is profiting in the false profit of making things scarce, we’re talking about a physical development trap potentially more threatening than peak oil, climate change, and the financial breakdown combined. The projected profits needed to invest in mankind's needs may simply not materialize at all. Development of all kinds alters its environment and creates conditions that upset the apparent “rules of the past” giving false guidance unless a person is watching for the signs of reversing directions of the environments own responses to us.

One of the hidden but most important of all principles of natural systems is that every physical system that begins with growth, alters its environment in a way that brings an end to its own growth. When that approaches, it is not the past regularities of the system or the equations one had developed trust in that are important, but the limits of the physical system and what new regularities may develop.

One of the recent economic behaviors an economy is never supposed to exhibit is the way the prices of food and fuel (our primary necessities of life) began a rapid exponential divergence from their prior stable level for the 6 years from 2002 to 2008. They increased at ~25%/yr, until the world economy collapsed. They seemed to be following some altogether new “law of unlimited price” instead of the usual “law of supply and demand”. That’s not supposed to happen.

When demand exceeds supply, the increase in price is supposed to stimulate increasing supply and lower the price again. The opposite is what actually occurred, investment increasing and prices rising faster. That produced a progression of successively more radical changes in global price relationships.

Continually increasing prices like these would naturally be expected to upset financial expectations and add to what caused the financial collapse. Clearly such a price spiral also is a sign of profound inelasticity in the global economic system as well.

Figure 2

The exponential shape of the curve strongly suggests there was an emergent system of multiplying feedbacks operating, of some sort, that a person would need to discover to know what was really happening. What is clear is that the limit of the system driving the run-away price spiral was the global collapse. The list of linked physical/economic causes for it would surely be long, but the problem is how to characterize them simply enough to make them comprehendible.

If this is a sign of fundamental diminishing returns on investing in the earth, what you would expect to be the cause are that food and fuel demand are both increasing and now competing for the same resources for the first time, while those resources themselves are being degraded making the investments in them more costly. At the same time the total overhead cost for operating society, which I call SROI4 , has also been systematically increasing.

My speculation is that the curves of increasing societal cost and decreasing resource productivity5, or EROI, might have crossed, making the net productivity of the system as a whole fall below its sustainability threshold. The emergence of a strain like that, on resources for which there is inelastic demand, would be a natural ‘snag’ in adjusting supply and demand, and seem quite adequate to explain the end of speculative increases in real estate prices, and become the direct cause triggering the collapse of finance rather than just a contributing cause.

Surely there were a great many things going on at the same time. That’s one of the mysteries of nature’s complexly well-organized systems. Systems that act as a whole are made of disconnected parts that work together as if they had ‘ESP’.

One of the particular financial mechanisms that might have played a role is speculation. Speculative investment funds moved out of real estate to look for something else with a natural mechanism to keep pumping up the returns, in this case apparent physical scarcity relative to whole system necessities.

A movement from real estate to commodity speculation probably did create a surge of speculative demand and an additional restraint on supply. The combination of the additional speculative demand for raw commodities was an additional restraint on supply adding to the other strains that made the unresponsive markets vulnerable to speculation in the first place. The flight of speculation from real-estate would have also have further weakened the prices for real estate.

The tragedy of the commons is just that. Our rules don’t tell us where the breaking points of our rules are, and even well lubricated markets have breaking points, and can give people faithfully following the old rules that have ceased to apply the entirely wrong signal.
It is fairly clear that our centuries of economic growth are now also upsetting a great variety of other environmental systems, and we don’t quite understand how or what to expect. The ancient rule “nature always recovers” is now not holding up for us in a great many ways and in a great many places.

It seems to me that the time has come for us to reexamine the rules which we assume underlie our economic system. Physical resources seem to have reached limits, driving up their physical cost for a system built for readily available and inexpensive resources. If we don’t start noticing now, when will we?

Notes

a As a note for generality, thermodynamics was originally defined only in terms of the energy equations of controlled machines as a way to describe the limits of their being controlled. For systems for which there may be no equations, but still use energy and need to satisfy the same kinds of limits, the broadest way to look at the same subject is in terms of the natural limits to their learning curves. You may not know why, but if as you buff your shoes the shine is not getting any brighter, that asymptote to the improvement indicates the thermodynamic limit of the “elbow grease” being applied. If the learning curve levels off too soon, it might save you a lot of effort or signal you to switch techniques more quickly. The stages of any learning curve, once it starts, is first experiencing increasing returns for the effort and then decreasing returns.

In general there are signs of that point of reversal (the neutral point on the curve) and the point of refusal near the end, long before they arrive. The following general diagram of the start-up and shut-down phases of any learning process shows how changes of direction tend to have leading signs of leading signs.

Diagram created by author; accepted for publication in the Encyclopedia for the Earth

1 J.M. Keynes. Treaties on Money and The General Theory – Chapter 16

2Kenneth Boulding. A Reconstruction of Economics – Chapter 17

3Energy Returned On Energy Invested, EROEI for energy is the ratio of physical returns to the physical costs to obtain resources, called ROI in general. The ROI ratio increases as resources are discovered and declines as they are depleted. It needs to be high for resource extraction in order to absorb societal overhead costs of resource use. That TROI (total ROI) needs to remain marginally greater than one for the sustainability of the whole system.

4P.F. Henshaw. 2009. “Simple System EROI”. Research note www.synapse9.com/issues/SimpleSysEROI.pdf

5Charles Hall et all. 2009. “What is the Minimum EROI that a Sustainable Society Must Have?” Energies http://www.mdpi.com/1996-1073/2/1/25/pdf

Oil climbs near $73 on higher demand NEW YORK (CNNMoney.com) -- Oil jumped near $73 a barrel on Thursday after the International Energy Agency raised its estimate for 2009 oil demand for the first time in 10 months.

Light, sweet crude for July delivery jumped $1.35, or almost 1.9%, to settle at $72.68 a barrel Thursday.

That's the highest settle price since Oct. 20, when oil ended at $74.25 a barrel.

China’s Commodity Buying Spree HONG KONG — Strong buying by China has helped lift commodity prices around the world this spring, but growing evidence suggests that a sizable portion of this buying has been to build stockpiles in China, and may not be sustainable.

At least 90 large freighters full of iron ore are idling off Chinese ports, where they face waits of up to two weeks to unload because port storage operations are overflowing, chief executives of shipping companies said in interviews this week. Yet actual steel production from that iron ore is recovering much more slowly in China, and Chinese steel exports remain weak.

Commodities and shipping executives describe Chinese stockpiling in recent months of a range of other commodities as well, including aluminum, copper, nickel, tin, zinc, canola and soybeans. Starting in April, China began stockpiling significant quantities of crude oil.

Future for big, bulky SUVs remains murky Last week’s agreement to sell the General Motors division to Sichuan Tengzhong Heavy Industrial Machinery Co. won’t do much to satisfy those who had hoped GM would simply pull the plug on the brand. But then again, with oil prices rising once more, it’s uncertain Hummer’s new Chinese masters will be able to revive a marquee born in the wake of America’s heady victory in the first Gulf War.

Indeed, with pump prices again nudging the $3-a-gallon mark in places like California and Michigan, it’s anybody’s guess what will happen to light truck sales, and SUVs, in particular.

Chrysler's next fear: High gas prices Fiat's fuel-efficient cars are more than a year away from helping Chrysler and the company prays that rising gas prices won't kill its bread-and-butter truck and SUV sales.

Iraqi oil exports reach 2003 levels BAGHDAD (UPI) -- Crude oil exports from Iraq reached 2.4 million barrels per day, their highest level since after the U.S.-led invasion in 2003, the Iraqi oil minister said.

Valero to shut Aruba refinery due to poor margins HOUSTON (Reuters) - Valero Energy Corp (VLO.N) confirmed on Thursday it plans to shut its 235,000-barrel-per-day (bpd) Aruba refinery for two to three months due to poor margins.

Chu wants faster action on stimulus money WASHINGTON (AP) -- Energy Secretary Steven Chu on Thursday expressed dismay at the slow pace at which some members of his department are distributing money under the federal economic recovery plan, saying he's making phone calls to tell people "this cannot be business as usual."

The Energy Department has nearly $39 billion at its disposal under the economic recovery effort, but has awarded only $4.4 billion as of June 7, according to the department's web site. Only $94.7 million has been spent.

FEMA Launches Effort to Measure Impact of Climate Change on Flood Insurance ORLANDO, Fla. -- Federal officials are struggling to calculate the fiscal impact that climate change could have on the nation's troubled public flood insurance program, amid predictions of intensifying downpours and more potent hurricanes. The mission is proving extremely difficult, according to one researcher, who said the effort so far has failed to reveal even "squishy assumptions."

The study, undertaken by the Federal Emergency Management Agency, which runs the insurance program, aims to determine how seawater will surge onto shorelines around the United States as warming oceans expand and rise. It also seeks to establish how warming temperatures will affect inland flooding nationwide, potentially revealing the likelihood of more damage in some riverine areas.

The results might raise policy premiums and mark a need to redraw flood lines that may place more homes in the riskiest parts of valleys and flatlands. Those changes are politically tricky, and the study could press lawmakers to make unpopular decisions that have an economic impact on their states.

Heavy crude to stay costly, hurt refiners - report NEW YORK (Reuters) - Heavy-sour crudes are likely to remain unusually costly compared to light-sweet varieties for years, potentially hurting U.S. refiners like Frontier Corp. and Valero Energy that invested heavily in heavy-sour refining, Credit Suisse analysts said on Thursday.

Higher global refinery demand for heavy crudes and a likely boost in Saudi Arabia's production of lighter oil mean prices for heavy and sour crudes - normally cheaper to purchase but costlier to refine - should remain strong through 2010 or longer, Credit Suisse said in a report.

Since 2000, heavy crude has been cheaper than light varieties by an average of around $10 a barrel, while sour crude has traded at an average discount of $3 a barrel to sweet crudes, the report said.

The historical discounts prompted major global refinery investments to process more of the cheaper oil. But this year, Mexico's heavy Maya crude has averaged just $4 to $5 a barrel cheaper than light crude, while West Texas Sour WTS- is trading around $1.70 below light, sweet benchmark West Texas Intermediate CLc1.

U.S. Economy: Retail Sales Gain on Cars, Gasoline (Bloomberg) -- Retail sales rose in May for the first time in three months, an increase driven almost solely by U.S. shoppers returning to automobile showrooms seeking bargains and the rising cost of gasoline.

Petrobras Bonds Drop Most in Three Months After S&P Downgrade (Bloomberg) -- Petroleo Brasileiro SA’s bonds had their biggest decline in more than three months after Standard & Poor’s cut the debt ratings of Brazil’s state-controlled oil company to the lowest investment-grade level.

...S&P reduced the rating late yesterday to BBB- from BBB because of concern the company will have difficulty raising financing for a $174.4 billion investment plan. Petrobras, as the company is known, is trying to boost output by more than half to 3.66 million barrels a day by the end of 2013.

Spilling over: A payout could encourage others Some Ogonis are disinclined to forget years of mistrust and others are in talks to clean up the oil spills that have been left untended, still oozing into farmland and rivers after 15 years. Ogoniland is just a sliver of Shell’s onshore oil fields, and the out-of-court settlement is unlikely to end the company’s longstanding troubles in a volatile part of Nigeria that is even more violent now than it was back in the 1990s.

The payout could also spark further court battles invoking the same American law, the Alien Tort Claims Act of 1789, originally intended to counter piracy, under which the Shell case was brought. It has been used to great effect in recent years, first against foreign officials who violated human rights, and later against firms that appeared to abet such acts. Most of the lawsuits against big companies, however, have been settled out of court, setting no clear precedents.

Gas Exporters to Discuss Secretary General Choice at Doha Meet (Bloomberg) -- Russia, Iran and Qatar, holders of more than half of the world’s natural gas reserves, will meet on June 30 at the Gas Exporting Countries Forum to discuss the gas market and the appointment of a secretary general, a Qatar Petroleum official said.

DOE releases money for vehicle efficiency research WASHINGTON (AP) -- The Energy Department says its making $240 million available for research into more fuel-efficient large trucks and passengers vehicles. It also is providing about $11 million for nine projects looking into capturing carbon dioxide from coal plants and $49 million for two dozen solar technology projects.

EDF Needs State OK for Constellation Nuclear Deal (Bloomberg) -- Electricite de France SA must get state regulatory approval for its planned $4.5 billion purchase of half of Constellation Energy Group Inc.’s nuclear-power business, the Maryland Public Service Commission said.

A full review is necessary because Paris-based EDF would gain “substantial influence” over state-regulated utility Baltimore Gas & Electric, the commission said in an order today that was e-mailed to Bloomberg News. The decision will be issued before the planned Sept. 17 closing of the deal, the order said.

ONGC May Have Lost 30 Billion Rupees on Gas Sales (Bloomberg) -- Oil & Natural Gas Corp., India’s biggest energy explorer, may have lost 30 billion rupees ($630 million) selling natural gas at below production costs in the year ended March 31, Chairman and Managing Director R.S. Sharma said in New Delhi today.

The Vindication of a Public Scholar: Forty Years After The Population Bomb Ignited Controversy, Paul Ehrlich Continues to Stir Debate For all of the things the popular book got wrong (or had mistimed), it got many other issues right. The book, which was about so much more than simply population, remains impressively prescient. “All of the junk we dump into the atmosphere, all of the dust, all of the carbon dioxide, have effects on the temperature balance of the Earth,” the Ehrlichs wrote, long before the risk of global warming was understood. The book spoke of the scourge of pesticides and Rachel Carson’s Silent Spring. And it made this outrageous assertion: “If our current rape of the watersheds, our population growth, and our water use trends continue, in 1984 the United States will quite literally be dying of thirst.” This was clearly premature, but here’s what the Web digest Earth Week, a valuable summary of scientific observations, said on March 7, 2009: “A warming and drying climate across the southwestern United States could eventually make major cities in the region uninhabitable. . . .With severe drought from California to Oklahoma, a broad swath of the Southwest is basically robbed of having a sustainable lifestyle.”

In retrospect, Ehrlich feels that The Population Bomb was “way too optimistic.”

U.S. Oil Imports at Risk In addition to decreased supplies from Venezuela, the U.S. should expect continuing declines in imports from Nigeria and Mexico, as I recently discussed. Nigeria is being consumed by an internal war; Mexico can’t drill its way out of continuing decline rates, particularly at Cantarell but also, coming next year, in other fields. Canada is not in a position to increase its exports south of the border given recent cutbacks in production capacity investments. These are four of the top five suppliers to the U.S. That essentially leaves OPEC to make up the difference.

One implication: longer supply lines, and thus more demand for oil shipping capacity. The increased shipping demand should come both from the longer supply lines going into the U.S. and the longer supply lines going into China and other growing Asian economies from Venezuela and elsewhere.

Saudi stays at No 1 in world oil producer list Saudi Arabia has easily held on to its title of the world's biggest oil producer in an annual ranking published by BP.

The world’s top oil producer last year pumped 10.846 million barrels per day (bpd), ahead of Russia with its output of 9.886 million bpd.

FACTBOX - Saudi Khurais field, a boost to world's oil Following are some facts on the 1.2 million barrels per day (bpd) Khurais oilfield project.

PDVSA Cuts by Nearly Half '08 Debt with Providers Venezuela's state oil company reduced by close to half its outstanding bills from oil-services providers last year after reviewing and renegotiating some of the contracts with these companies.

Exxon may join TransCanada Alaska project ANCHORAGE (Reuters) - Alaska officials said Thursday an announcement was imminent on a deal that would have energy giant Exxon Mobil Corp team up with Calgary-based TransCanada Corp to design and possibly build a long-sought Alaska natural gas pipeline.

Scarcity of diesel fuel prevents fishermen from getting a catch Thousands of fishermen in Cilacap, Central Java, have for the past week been forced to remain at port due to a scarcity in diesel fuel supplies for their ships in the region.

The shortage is linked to a 50 percent decrease in diesel fuel supplies to the areas by the state oil and gas company PT Pertamina Cilacap. Fisherman blamed a fire last week at one of the company's refineries as the cause of this shortage.

Imported minerals, metals fuel U.S. shift to homegrown power A U.S. clean-energy boom could force the nation to shed its addiction to foreign oil, only to develop a dependence on imported minerals and metals.

Clean-energy technologies -- solar photovoltaics, geothermal, compact fluorescent and light-emitting diode lighting, and wind turbines -- depend on globally scarce materials, some of which are produced only in unstable nations.

Electric Utilities Fail to Promote Their Energy-Efficiency Initiatives Electric utilities are increasingly offering energy-efficiency programs, but there’s a good chance their customers don’t know about them. That’s according to a survey by market research firm Gartner that found that while the vast majority of respondents said they were willing to participate in programs that could help them reduce energy bills, more than half said they were unsure if such programs were available from their utilities.

Is the problem that utilities need a lesson in marketing 101? Well, not really. The problem, according to Gartner analyst Zarco Sumic, is that most utilities are regulated in such a way that they make money from producing more electricity, not less (the exception is states that have decoupling laws, like California). That means they have little incentive to encourage customers to reduce energy use, even if they have energy-saving programs in place. Twisted? Yes.

Tesla Co-Founder Sues Elon Musk Tesla co-founder Martin Eberhard is suing Elon Musk and Tesla Motors for a slew of reasons including allegations of libel, slander, and a breach of contract.

Three Cheers for Peak Oil! So although peak oil sounds intimidating and disastrous, if its arrival is concurrent with a change in our consumptive culture, new behaviors, and the development of an abundant, domestic, renewable, clean, low-carbon alternative, then it can also be synonymous with many good things. Peak oil might mean peak smog. Peak water pollution. Peak obesity. Peak traffic congestion. Peak carbon. We might return to nature hikes, walking or cycling (to my daughter’s delight!). Maybe peak oil will be the downfall of drive-thrus and their window-framed relationships, forcing us instead to engage with our fellow citizens face-to-face. Can we hope that peak oil will end the construction of highways that divide our neighborhoods by wealth, color or luck? Can we be bold and say peak oil means peak divorce? After all, instead of ferrying ourselves around alone in our cars, maybe we will be home with our families, dining with our spouses, speaking with our neighbors, playing with our children.

Highly vulnerable to oil shortages ONE of the world's leading energy experts has warned that Australia will be one of the first countries hit hard by oil shortages as oil production peaks within the next three years.

Kjell Aleklett, a physicist from Uppsala University in Sweden, says Australia's relatively underdeveloped public transport system leaves the country more vulnerable to a downturn in energy production.

"Australia is very sensitive to such developments," Professor Aleklett told the Herald. "Much of your industry and transit is dependent on oil, and supplies will decline."

The Peak Oil Crisis: A Letter From Baghdad A couple of weeks back the peak oil community received a letter from an officer serving with our forces in Iraq.

Despite numerous distractions in Iraq these days, this officer is so concerned that peaking world oil production will soon become a serious problem that he began discussing the future of America's energy supply with soldiers in his unit. What he concluded has a message for us all.

Author Jeff Rubin says peak oil will shrink Asian trade Rubin’s book chronicles depletion of global oil reserves at the same time as demand has increased sharply in oil-producing countries. He notes that Russia has helped fill a growing gap in supply in recent years but claims that its production has peaked.

“If we can’t grow world production above 86 million barrels a day, we may not be able to grow world GDP [gross domestic product],” Rubin said. “The single most important thing to prevent peak oil from becoming peak GDP is to go back to local economies.”

Rubin's oil message a wake-up call to high tech I've never been a huge subscriber to the concept of peak oil, originally dreamed up by a thoughtful Shell scientist named M. King Hubbert. According to the aptly named "Hubbert's Curve" theory, which he developed, world oil reserves will soon peak – if they haven't already – and start to dip as the world's energy supply passes a tipping point.

Mr. Rubin, a long-haired former CIBC chief economist who quit his job to promote the book, believes intensely in peak oil. He also believes in using fear to sell books, as demonstrated by the fact that he released his tome during the greatest recession since the Great Depression.

BP's Tony Hayward warns of dwindling demand for oil It used to be the nightmare scenario that the world would run out of oil and civilisation would grind to a halt. Not so, Tony Hayward, the chief executive of BP, said yesterday: global oil production will decline, but because of dwindling demand, not because of a scarcity of supplies of crude.

Gains in energy efficiency will lead, ultimately, to falling oil demand, he said. Indeed, consumption of oil in the developed world fell by 1.6 per cent last year, the largest drop since 1982, and the decline is set to continue.

BP's grim warning over North Sea oil British production in the North Sea is set to drop to levels not seen since the late 1970s, BP statistics suggested.

Chief executive Tony Hayward said output will fall by at least 5% a year in the coming years, and if investment is not stepped up the declines could be even steeper.

Oil price leaps to year's high The drop is partly attributed to a drop in exploration drilling due to the precipitous fall in oil prices last year but also to the end of "easy" oil. Conflict this week in the Amazon and speculation about Arctic drilling underlined how oil companies are pushing into environmentally sensitive places to find new reserves.

Iraq oil genie gets out of the bottle Could the reawakening of an oil giant drill a hole in oil price expectations?

Oil near $72 on economic recovery hopes VIENNA – Oil prices hovered near $72 a barrel Thursday as investor optimism about a global economic recovery pushed crude to fresh highs for the year.

Oil has jumped from below $35 a barrel in March on expectations the worst of a severe U.S. recession was over. Traders are now beginning to price in a recovery by the end of the year and improving crude demand.

Consumers feel pinch of high gasoline prices NEW YORK (Reuters) – U.S. motorists are again facing summer pain at the pump as rising crude oil prices drive up the cost of gasoline, forcing spending cuts elsewhere and threatening the fragile economic recovery.

BP boss sees oil price between $60-90 LONDON (AFP) – The boss of British energy giant BP forecast on Wednesday that world oil prices would trade between 60-90 dollars per barrel in the coming years.

"I think there's a rational argument, for where we are today, that an oil price somewhere between 60-90 dollars is the right sort of range," Chief Executive Tony Hayward said at a press conference unveiling BP's annual report.

Behind Oil's Surprising Surge It seems like a paradox: Demand for oil, which almost always rises, is likely to drop by 3% in 2009—the worst decline in almost 30 years. Stockpiles are so high that an ocean of oil is building up around the world in tankers or in depots. Yet since hitting a low of $34 per barrel on Feb. 12, the price of light, sweet U.S. crude has more than doubled, to $71 per barrel. Why are prices soaring?

IEA Raises Oil-Demand Forecast LONDON -- The International Energy Agency Thursday slightly raised its 2009 world crude-demand forecast for the first time in 10 months in response to gentle signs emerging that an uptick in economic activity is breathing some life back into oil consumption.

In its monthly oil market report, the IEA said it expects global crude demand this year to average 83.3 million barrels a day, representing an increase of 120,000 barrels a day from the agency's May report.

On the issue of oil demand, not supply problems Peak oil proponents like Simmons, of course, believe the world has reached or is nearing the maximum global petroleum extraction point, after which the rate of production enters terminal decline. This does not stem so much from well or reserve depletion, but rather the moment when the costs no longer make sense, and alternatives like renewable energy become economically more viable.

Is It Time to Buy Oil? Those bullish on oil point to the inevitability of "peak oil," arguing that the time will come when we hit the peak of global oil production. From that point on, we'll be able to pump less and less oil out of the ground. In economic terms, we'll face decreasing supply.

Gazprom plans to postpone several investment energy projects MOSCOW, June 10 (Itar-Tass) -- Russia’s gas monopoly Gazprom considers postponing several investment projects in the field of electricity generation, Gazprom Board Member, Chief of the Department of Marketing, Gas Processing and Liquid Hydrocarbons, Director General of the company’s subsidiary Mezhregiongaz Kirill Seleznyov said on Wednesday.

Norway oil spending set to increase Investment in Norway's oil and gas sector is set to continue in 2010 after an expected 17% surge this year to a record Nkr145.2 billion ($22.88 billion), Statistics Norway said on Thursday.

'Global warming is hoax': the world according to Nick Griffin OK, how about the fact that I believe, along with the Czech politician [Vaclav Klaus] everyone is berating, that global warming is essentially a hoax. It is being exploited by the liberal elite as a means of taxing and controlling us and the real crisis is peak oil. We're running out of proper, real energy. And it is something with an immediate and catastrophic effect in a few years' time potentially — not worrying about floating polar bears in a 150 years.

Portland's streetcar architecture -- past becomes future Today, planners call these structures mixed-use buildings with ground-floor retail, but many historians and architects call them something else: streetcar architecture. Today's versions may be taller and clad with modern materials, but the concept is the same. They add human density and retail services on streets served by public transit.

Development plans lack proper direction Judging by what some councillors had to say, they haven't actually visited an Ottawa suburb in this century. First place goes to Councillor Diane Holmes, who said people in the suburbs are "living the 1950s white picket fence dream."

Anyone who has visited a suburb would know that developers are jamming townhouses and stacked townhouses into new developments that are housing far more people per hectare than the norm in the city's older single-family neighbourhoods. Anti-suburban councillors believe that suburban houses are almost all singles and they are on big lots. In fact, about half of what's being built in suburbs are not single detached homes at all.

Metro Vancouver's growth strategy hits interference Reimer and some others have also raised the spectre of peak oil, which is the point when global petroleum production will go into decline. Some analysts say that after the world surpasses peak oil production, we can expect to see sharply higher transportation, food, and energy costs. In his response to the draft regional growth strategy, Bryn Davidson, executive director of the Dynamic Cities Project, recommended explicitly acknowledging oil depletion “as a key factor” in regional planning between 2010 and 2040.

In addition, Davidson recommended adopting a regional oil-consumption target and updating infrastructure-planning methodologies “to incorporate both current and future demand shifts driven by the combined impacts of peak oil and climate change”. He noted in his submission that Portland, San Francisco, Brisbane, and the Southern California Association of Governments are already responding to peak oil.

Battle escalating over mass transit fare hikes NEW HAVEN — As buses rumbled toward crowded stops on the New Haven Green, Democratic lawmakers, mass transit advocates and environmentalists decried as “outrageous” a provision in Gov. M. Jodi Rell’s proposed budget that would increase bus fares by as much as 40 percent, and Metro-North fees by 10 percent.

“By raising the rates of mass transit, you’re pushing more people onto the roads, you’re discouraging more people (from taking) mass transit, and make it harder for those who ... depend on mass transit, make it harder for them to get to work,” said House Speaker Christopher Donovan, D-Meriden.

The result, he said, could be “crippling” for the people who can least afford it, he said.

Report blames petroleum industry for 25% of toxic pollutants WASHINGTON (AFP) – The US petroleum industry accounted for a quarter of toxic pollutants recorded across North America in 2005 by a government-backed environmental watchdog, an annual report said on Wednesday.

The Commission for Environmental Cooperation (CEC) -- created by Canada, the United States and Mexico -- said 90 percent of toxic pollutants came from just over a dozen industries.

Aside from oil and gas extraction, mining, wastewater treatment, electric utilities and chemical manufacturing are named as the principle offenders.

Peru suspends decrees that fueled Amazon violence LIMA (AFP) – Peruvian lawmakers suspended a controversial law that eased restrictions on lumber harvesting in the Amazon rain forest, days after it sparked clashes between police and indigenous protesters, killing dozens of people.

The legislature agreed by a 59 to 49 vote to suspend Decree 1090 -- dubbed the "Law of the Jungle" -- that covers forestry and fauna in Peru's northeastern Amazon rain forest, said Javier Velasquez, the head of Peru's single-chamber Congress.

House GOP offers nuclear-loaded energy bill WASHINGTON – House Republicans are calling for a hundred new nuclear power plants to be built in the next two decades as part of an energy plan they say is a better alternative than one championed by Democrats.

The legislation unveiled by the GOP Wednesday would also increase production of oil and gas offshore, open the Arctic National Wildlife Refuge to drilling and spur refinery construction. The money from the new drilling would go into a trust fund that would pay for the development of renewable energy.

Company Calls New Small Nuclear Reactor a 'Game Changer' A major manufacturer of power-generation equipment announced plans today to build a small nuclear reactor that company officials touted as a "potential game changer for the global nuclear market."

RI lawmakers debate new plan for funding wind farm PROVIDENCE, R.I. – The state's dominant electricity distributor would be forced to buy power from renewable energy producers under a deal struck Wednesday that could remove a major financial obstacle to building a windfarm off Rhode Island.

Study: Jobs in fledgling green sector growing NEW YORK – The fledgling renewable energy industry has grown steadily over much of the past decade, adding jobs at more than twice the national rate, according to a Pew Charitable Trusts study released Wednesday.

Solar and wind-power companies, energy-efficient light bulb makers, environmental engineering firms and others expanded their work force by 9.1 percent from 1998 to 2007, the latest year available, according to Pew.

The average job growth in all industries was 3.7 percent during the same period.

Canada to establish carbon trading market OTTAWA (AFP) – Canada announced Wednesday plans for a carbon market that could eventually link up with nascent EU and proposed US markets to form a global system for carbon pollution trading.

The local market would provide Canadian companies and individuals an opportunity to reduce their carbon emissions, which are linked to global warming.

China says no to greenhouse gas cuts BEIJING (AFP) – China will not accept binding cuts in its greenhouse gas emissions, an official said Thursday, after the United States said it made progress with Beijing in talks here on a global climate pact.

The comments came after a visit by US climate change envoy Todd Stern aimed at pressing the Asian giant to commit to hard numbers on emissions reductions ahead of December talks in Copenhagen on a new global warming treaty.

Japan Sets Emissions Targets, and No One Seems Pleased TOKYO — Japan, a major emitter of greenhouse gases and an important player in the global warming debate, announced Wednesday that by 2020 it intended to reduce emissions 15 percent from 2005 levels — a goal immediately criticized as inadequate by environmentalists and industry officials.

I was recently asked to give a talk at "The Generation Green Tent" during the Summer Arts and Music Festival at the Benbow Lake State Recreation Area. Here's the text and supporting images for that talk.

Thanks for coming to my presentation. I am going to say some challenging things today. I don't know if you are going to be validated or view me as a heretic. In any case, if you are taking notes I am going to have eight main points to cover. Here it goes!

My wife is a physician and has a Masters in Public Health, and so I am going to start with an analogy inspired by her profession that I believe all of us can follow. A very telling study was done on the health of Native Americans on both sides of the U.S.-Mexican border. The Mexican population was quite fit, while the U.S. population had high rates of obesity and associated diseases, such as diabetes. I am going to make some judgments about the society that produced this discrepancy, and perhaps we can primarily assign the blame for the illnesses of these people on their sick environment. However, I don’t want to absolve individuals of all responsibility for their predicament because that is a disempowering thing to do.


Overcoming the obesity crisis of humanity requires paying off our ecological debt. This means accepting certain job losses and developing job gains in other areas. See full article for discussion.

What I am going to argue is that you are all capable, powerful individuals and that you are responsible for making great changes.

So, let’s imagine a morbidly obese person died. What was the cause of death?

Did the heart get clogged? Perhaps the lungs filled with fluid? Was it renal or kidney failure or a collapsed circulation system? Did a growing cyst or new cancer lead to a weakness in one of the organs? There are so many possibilities because just about every system was over-taxed.

The patient was in the hospital before expiring, and the doctors weren’t sure what to do. It was like one of those “wack-a-mole games” at an arcade. Addressing one problem, such as heart failure, worsened another, such as kidney failure. The problems kept popping up, and taking care of one simply brought another to the surface…faster and faster and faster until coping with so many became impossible. The medical staff, and ultimately the patient, were simply overwhelmed as everything seemed to go wrong at once.

I’ll ask the question again: “What was the cause of death?”

Common sense tells us that looking at the death of this person from the perspective of failing organs misses the point. The root cause of death was years of unhealthy habits.

Point 1. This is the first point of my talk. I want everybody to view the grim environmental statistics as multiple “organ failures” approaching for human civilization.

I’ll just run through a few of them: Species are being lost at a rate that is about 1000 times higher than normal. Nearly all populations of commercial fish are in severe decline or utter collapse. Forests, wetlands, prime agricultural lands, and other highly productive habitats are routinely paved over or degraded. Key non-renewable mineral and energy resource stocks, especially oil, have been consumed at exponentially increasing rates for decades and are now past or near their extraction peak. Fresh water is frequently polluted and overdrawn from aquifers. And just to finish off this incomplete rundown, greenhouse gases in the atmosphere are destabilizing the climate system with frightening consequences.


Graphs from New Scientist.

Most environmentalists will give a talk about one of these systems and then propose some things you or the government or business can do to make it not so bad. I am not going to give that kind of talk. Let’s not waste any more time dealing with the organs, let’s take a look at why they are all failing at once.

Point 2. The second point I want everybody to get is this: The cause of environmental decay is a kind of obesity crisis of humanity. We humans are taking more than we should from the planet, getting fat in the process, and leaving our trash behind.

Why do I put it this way? Well, let’s examine some other statistics. Growth in human population has been sharply rising for several decades. So has industrial output. The number of cars, trucks and planes in the world has increased steadily. Consumption of paper products, and stuff of all kinds, really, has risen exponentially. This is people taking stuff from the planet, building things, and creating lots of waste.


Graphs from New Scientist.

I am going to do an audience survey. I want you all to check your feelings during the following scenario I will describe. It will help if everybody closes their eyes for this exercise. It will only take a minute.

Your radio alarm clock goes off on Monday morning and it is the newscast you regularly hear. The tone of the newscaster is subtly jubilant. She is telling you about the latest survey of consumer confidence. It is high. A new report on the economy indicates that GDP is growing again, that car sales are up, and so is new home construction. Resorts around the world are preparing for a new tourism boom as the economy gets back to robust growth.

Keep your eyes closed. Now, how do you feel about it? I am going to give you three choices. Be honest, eyes are closed. First, raise your hand if your emotions register this broadcast as “good news.” Now raise your hand if your emotions register this broadcast as “bad news.” Anybody left with “mixed feelings” raise your hand.

[Historical note: I gave the same speech on Saturday and Sunday and only one person thought this was good news. The split was about even between bad news and mixed feelings. I suggest this was not a randomly selected audience.]

Thank you for doing that. I believe the common response to that news report would be a sense of “good news.” Now, what if the next news report told you about another calving ice sheet and warned of sea level rise? Perhaps it is an update on the area of plastic waste in the North Pacific Ocean the size of Africa. These would be taken as “bad news,” right?

To make it crystal clear, I am saying that the idea, “Economic growth is good,” is in conflict with “Destroying the environment is bad” because currently, the way things work, growing economies destroy the environment. Just look at the past 20 years in China. They are now wallowing in the putrid wastes of their own “progress.” Conversely, the current economic depression in the U.S. has people driving fewer miles each month for nearly the past two years. Why aren’t we celebrating this drop in gasoline use? Isn’t it great news that we are reining in greenhouse gas emissions and using less foreign oil? Bike sales in 2009 are now greater than car and truck sales combined. Shouldn’t we be celebrating the closing of car factories and the rise in bike sales?

How bizarre then, that the activities that we call “good” are the cause of our collective obesity, leading to organ failures such as calving ice sheets. Keep in mind that societies frequently have bouts of madness. We look back at history and gush, “What were they all thinking?” Can anybody give an example of a crazy mass delusion in history? Our mass delusions are extremely dangerous.

Point 3. This brings me to my third main point: It is well past the time for us to admit that we are a bit off our rockers too. Our society is obviously in a state of collective cognitive dissonance.

Wikipedia defines cognitive dissonance as:

an uncomfortable feeling caused by holding two contradictory ideas simultaneously. The "ideas" or "cognitions" in question may include attitudes and beliefs, and also the awareness of one's behavior. The theory of cognitive dissonance proposes that people have a motivational drive to reduce dissonance by changing their attitudes, beliefs, and behaviors, or by justifying or rationalizing their attitudes, beliefs, and behaviors.

Apparently there are two ways to reduce cognitive dissonance: “either by changing attitudes, beliefs and behaviors, OR by justifying or rationalizing their attitudes, beliefs, and behaviors.”

I am here to ask you to do the former, not the latter. Change behaviors, don’t rationalize. I will also make the claim that by changing your behavior you are going to feel a whole lot better. It will be like going on a diet and exercise program, tough at first, but ultimately very rewarding. I will also make the claim that you really don’t have any choice. You will never hear a news report about a newly robust economy--only the false promise of one some vague distance in the future. We are just beginning the Greater Depression and you better get ready. It’s time to shed some pounds.

Some may be wondering why I don’t believe Barack Obama, Ben Bernanke, Tim Geitner and good old American spunk can get the economy back on track. Well, here’s why.

Let’s imagine Mother Nature is a banker. Several generations ago our forefathers walk into “Bank of Nature” and get a loan. Mother Nature approves our loan and offers us plenty of credit. We are now endowed with the riches of ancient forests, prolific fisheries, fertile topsoil, clean water, concentrated mineral ores, vast reserves of fossil fuels, and a splendidly stable climate. These assets, Mother Nature’s credit slip, are the source of our wealth and comfort. Every widget, gizmo, thing-a-majig, do-dad, wach-a-macall-it and Winnebago produced in our factories, sold in our stores, piled in our landfills and spilled in our waters originated as a loan from Bank of Nature.

Why is there a problem? Because loans, as we are now discovering, are not just slips of credit, they also come with debt. While we gleefully liquidated the Natural Capital loan Mother Nature approved for us, we failed to develop a business plan that could pay back the debt. This ecological debt is the underlying problem in our financial system right now. As soon as the economy tries to heat up again, which we call increasing DEMAND, it will be capped on the knees by the henchmen Mother Nature hired. She will not extend us any more credit since we have done a poor job with the first loan. Some of the protest signs you may have seen pictures of around the world are correct: Nature doesn’t do bailouts.

If you are not quite following me here, a few of examples should help. Let’s say demand picks up for fish…woopsie, most fisheries are already collapsed. Want a new tourism boom? Too bad, oil supplies have peaked and the airline industry is being forced to contract, not expand. Looking ahead, how’s the ski resort business going to be with dramatically reduced snow packs and expensive fossil fuels?

The global financial system is not structurally capable of dealing with this situation and is in the process of failing. The current policy response is to inject more money into the system, which doesn’t help because all students of economics know the following: When more money chases fixed or declining goods the result is inflation that brings demand in line with what is materially available.

Don’t get me wrong, economic opportunities remain. What I am saying is that business and government enterprises that run an ecological deficit each year and further deepen our ecological debts will fail. I’ll get to those opportunities later.

Point 4. This brings me to point 4. Problems with the environment or natural resources are problems with the economy because human economic systems are a subset of planetary ecological systems. Environmental issues should be the main topics on page 1 of the business section of your local newspaper—assuming you still have one.


The human economy is a subset of planetary ecology, or Earth System. Ignorance of this simple truth has led to a misdiagnosis of our troubles.

This point brings me back to our original analogy. To our great detriment, the human economy went past its healthy growth phase and is now so enormous it desperately needs liposuction and a frugal diet plan. If we don’t cut back on our portion size, get off the couch and start cleaning up after our slovenly selves, our poor health will lead to our demise as Mother Nature boots us out of her home.

What this means, of course, is that if we want to have a nice home and the economic security and stability that goes with it, we have to repay our debt to Bank of Nature. This sounds scary, and is a huge project, but ultimately we have no choice so let’s not whine and delay. Let’s take it on as a great adventure, a thrilling challenge. Our success or failure is going to hinge on our attitude. We need to take control of the circumstances instead of being passive and expecting someone else to solve the problems we create each day by the way we live.

Let me give you an example. I have a friend named Mary Wood who lives in Eugene OR. I am going to read something she recently wrote about her experience as a soccer mom. This is going to be a long quote because it is much easier for me to copy from her than to write something myself:

Five years ago, I was a newbie soccer mom. I enrolled my little boys in soccer and started hauling them around town to practices and games. Along the soccer field at the appointed time was a regular line-up of huge, gas-guzzling SUVs and mini-vans. After the children spilled out onto the field, the parents would idle on the sidelines sipping coffee from Styrofoam cups, or drinking Pepsi from plastic bottles. They would talk about their family trips to Costa Rica, or Mexico, or Europe, or Disneyland. They would rave about the new soccer equipment they had purchased and share their exploits at the mall. At half time, the parents would dole out dozens of plastic juice bottles to the little soccer players. They would dispense Albertson cookies from plastic boxes and slices of cake from thick plastic domes, slap the goodies on paper plates, and stuff plastic forks into little reaching hands. Within five minutes, the trash cans exploded with paper, plastic and Styrofoam. No one seemed to give any thought to the waste. This was the soccer life. Practices three times a week, two games on the weekend, and heaps upon heaps of trash.

What did Mary and her family do about this? I’ll read on:

There came a point, however, when I could no longer look my children in the eyes with out thinking about climate crisis and the tipping point and my role in it all. Yes, there were benefits to soccer, but really, in light of the world ahead, is soccer the skill that our kids need most? And how do we reconcile the enormous carbon pollution in today’s parenting? How can we love our children and yet contribute to the demise of their world? That’s not love. That’s denial.

We gave up the soccer life.

At about this time, Mayor Kitty Piercy made a carbon challenge to the residents of Eugene in which she asked them to do two new things a month to reduce carbon. We made this a family challenge. At first we did things like ride the bus, or have a no-drive day once a week. The next month we’d come up with two new things, and the next month two more things. Within a year, our front lawn had become a mini-orchard and vegetable garden, there was bulk food stored in our garage, we were riding our bicycles nearly everywhere, we had eliminated almost all food packaging, nearly all of our fruits and vegetables came from local sources, we made our own bread and chicken soup and granola bars every week, we rarely entered a grocery store, we raised chickens and built a coop, we gave up plastic and air travel, we spent our summers berry picking and backpacking, and we spent the long autumn days canning, freezing, and drying the harvest we had gleaned from our own garden and local farms. Our family enterprise became completely devoted to self-sufficiency, home food production, and skills-building in farming, food preservation, wild plant identification, and the like.

These days, our kids dash home from school eager to get started on planting, or raising seedlings, or canning tomatoes, or drying pears. They hop on their bicycles and ride through the neighborhood, giving away extra lettuce, tomatoes and berries from our garden. Their little acts of sharing build community. Neighbors drop in with gifts for our kids – like an old tub to wash carrots in, a blueberry bush, a jar of pie filling, pumpkin seeds, and a recipe for granola bars. My children have become self-appointed ambassadors for this urban homestead lifestyle by talking about it to our neighbors and their friends, and using it as the subject for school writing assignments and projects. Our family dinner conversation is often filled with new insights into raising vegetables or canning foods, or the latest ways to keep slugs out of the spinach. We also have discussions about how fast the world is changing, and how we will prepare for it, embrace it, and learn new ways -- or old ways. Days upon days go by without using the car, and we really don’t even notice it because we are so occupied at home, working side by side to produce our own food -- all of which is part of a family journey towards more self-sufficiency, carbon reduction, and sustainability.

At some point along the way, I noticed that Mayor Kitty Piercy’s carbon challenge had evolved into a new – and infinitely richer – way of life for us. The challenge of two carbon-reducing initiatives a month had grown into a family enterprise, a source of joy and pride, a learning experience, a family identity, and a well-spring of self-esteem and responsibility for our children. Perhaps most important, it had become a shared statement of purpose, a moral fabric for family life – a daily expression of the trust covenant shared with our children. My husband often comes in from the garden and says, “It’s a wonderful life.” And I have to agree. I invite you to embrace this new world ahead -- with courage, passion, and a sense of adventure -- and join in the Great Family Turning.

What Mary’s family is discovering is well-known by social psychologists and goes under the heading Self-Determination Theory. According to the research behind this theory, well-being depends in large part on meeting one's basic needs for autonomy, competence, and relatedness. Can you see all of that developing through Mary’s story?

Point 5. My fifth point is this: Your zone of control is you and your family. Start the changes there, taking it one step at a time. Over a year this will mean changing your life, but it will happen at a reasonable pace, and it will be a healthy and responsible way to live.

I have a kind of system for thinking about my life and how to get what I need without deepening our ecological debt, while also enhancing my family’s resilience and health.

I plan my home and habits around these categories: Food, Water, Shelter, Transportation, Health, Communication, Personal Skill Set, Social Network, Economics and Finance, and Disaster Preparations. In each of these areas I work to become more competent and self-reliant. For example: making our house energy efficient and powered by renewable energy systems, having a large garden and food storage, paying off debts and limiting unnecessary purchases, using a bike and cargo trailer for nearly all transportation. I will not discuss any “how to” details for these. Anybody can sort out how to do this when motivated. I didn’t know much about any of these things a few years ago. All I needed was time to develop competence. You can do this too. Are you motivated yet?

This has been a five year process so far, and we are not complete. It is an ongoing journey. Personally, I am not able to hold down a full time job, invest in retirement funds, take big vacations, watch T.V., and do all sorts of regular stuff like that anymore. For me, time and money are spent building and being in this new way of life, and I agree with Mary’s husband Joe that it is much better than the old way.

Now some people look at my family and Mary’s family and think, “That is fine for them. They have made a nice lifestyle choice. My choice is to keep on doing tomorrow what I did yesterday.”

Well, that is not going to cut it. While I like my lifestyle choice I want to make another key point.

Point 6. Sustainability is not a lifestyle option of the few, it is a necessary change for everyone if we want a decent future on this planet. This is logically true because anything unsustainable must end, and our demonstrably unsustainable old habits are coming to and end, whether we want them to or not.

Let me give you an example of our old ways coming to an end. General Motors just went bankrupt. Residential developers of suburban sprawl and mega-malls are going bankrupt too. Why? Because our economy is part of the finite planet Earth and we have reached some hard limits. Oil production is in decline and this means GM can’t keep building Hummers that will fill garages in dwellings miles away from work and schools and basic goods and services. Ecological debt yields financial ruin. Ways of life fade away.

If you accept this new direction it will be extremely liberating. No longer will you feel at the mercy of the unfathomable and mysterious global market system. That system is crumbling, and you should get away from it. If you move away in time, you might be able to watch it dissipate with a calm sense of detachment rather than horror.


Oil production history and forecast to 2100 by Tony Eriksen at theoildrum.com.

Mary mentions interactions with neighbors. This is very important. My family is not a modern-day Robinson Crusoe in the midst of civilization. We are part of a small but growing local economy. This new economy is building rather informally at first, meaning it is happening without the use of much money or legal structures. Informal economies are actually the dominant ones on Earth. Think of the statistics you hear about people living on $1 per day. How do they manage? Because most of what they need is available without money!


As our formal economy declines more work will be done in the informal economy, as is true now in so-called developing countries. Graph from Post Peak Living based on World Bank data.

Typical two income households end up paying for all kinds of services that they could do themselves if they had the time. Laundry, housecleaning, home maintenance, vehicle repair, processed and prepared food, gym fees, childcare…it goes on and on. By contrast, the “underemployed” can share skills and time with neighbors, basically trading favors, and no money needs to change hands. Remember: autonomy, competence, relatedness…

A social shift is happening now because of the Greater Depression. Home gardening is undergoing a huge revival. This is fantastic news. It means people are reacting wisely to new circumstances by building skills and improving self-reliance.

Point 7. Here’s point 7. We are social animals and need each other. There is no separate peace. Build community based on your personal strength and example.

A few, or perhaps many, of you might be thinking: “This guy is taking joy in the loss of the American Way of Life and the good jobs that hard working people have held for many years. Is he a heartless jerk?” Well, I don’t think so.

Plenty of job opportunities should exist in order for us to pay back that loan Mother Nature approved. But we can’t keep doing the old jobs and these new jobs. Put another way, we can’t afford both a massive new “green jobs” program and a bailout to the very same industries that have gotten us into this mess. We have to go green all the way.

I think you’ll get my point with some examples. I am going to list “Jobs we need to lose” and “Jobs we need to gain.” I will first say a job, or type of business that should disappear or at least shrink dramatically, then a job or business that should grow rapidly.

While you can make changes in your own life, there is no guarantee that society will follow along. Unsustainable ways will end, but, as professor Jared Diamond documented in his book "Collapse," and Joseph Tainter in "The Collapse of Complex Societies," they could end in the morgue. I’d rather see them end by becoming outmoded. I want to see humans live as constructive parts of the planetary ecology. Making the necessary changes society-wide requires engagement beyond your home and neighborhood.

Point 8. My final point is this. Find ways to widen the circle of change to include governments, businesses and institutions at all levels.

I should mention that in addition to being a fantastic mother who does what it takes to create a future for her children, Mary Wood is a law professor. Here’s something else she tells me.

Governments are incorporated as trustees of the commons and have an obligation to protect assets held in trust, which includes the natural assets like air, water, and soil. Legally speaking, your government shouldn’t spend your tax dollars or give permits to businesses that degrade those assets. To do so is to steal from the future, and therefore a violation of the function of a trustee. But governments have been treating protection of natural assets as discretionary instead of obligatory, which has led to the ecological debt crisis. This can’t go on any longer. Every action of government should be viewed in light of the need to repay our ecological debt. Since government is a trustee of the commons, they legally must protect the commons.

A vital job of citizenship is to hold governments accountable for their trust obligations. And because you have personally reduced your ecological debt you will speak with authenticity when you say, “I don’t need freeways, I need safe bike routes. Why are you spending my tax dollars expanding an energy inefficient transportation system that we can’t even afford to maintain when we have inexpensive alternatives that don’t pollute.”

If you are going to be involved in government my advice is this: Follow the money. Governments are great at making fantastically eco-friendly pronouncements while the budget funds diesel-powered backhoes digging us deeper graves.

Another great option that widens the circle is to start a business. This may sound funny from someone telling you the economy is never going to rebound. While the economy we have now will shrink, we do need something sustainable to grow in its place. Because of financial instability and expensive oil, I see a process of decentralization occurring. Whereas in the past factories in China and Taiwan could be relied upon to deliver, that won’t be the case in the future. Small local shops or regional factories can be amazingly productive at building the new products we will need to take care of basic needs like developing sustainable food, shelter, energy and water systems.

For example, I run a small farm that operates primarily using manual power. The key implements I use are generally not available in stores. When was the last time you saw a low-wheeled cultivator, and do you even know what it is? How about a broadfork, a no-till roller, a scythe, a drill seeder, a grub hoe? I have had to go to great lengths to source and maintain this equipment, which was ubiquitous in America 60 years ago.

I am using a no-till roller to kill an annual cover crop. This is a low-energy method of farm management that minimizes soil disturbance and avoids herbicide use.

Can you go downtown where you live, walk into a store and purchase a solar oven or a cargo trailer for your bike? Can you test-ride an electric bike? Will a local contractor readily install a rainwater harvesting system for your home, or a gray water wetland that irrigates your yard? Do you have a local seed company that tests and packages cultivars for your bioregion? Is anybody making prepared foods like soups and stews using local, seasonal ingredients? I hope you are seeing some potential by now.

Lastly, I want to discuss another opportunity. Underemployment could mean more free time. What are you going do with it? May I suggest supporting the non-governmental institutions where you live? Perhaps join Friends of the Library, work in a soup kitchen, or any number of service clubs that undoubtedly exist. As government programs are cutback and shut down, we will have to learn to take care of ourselves and the less fortunate to a greater extent.

A special class of non-governmental organization is involved in paying back our ecological debt. These are the local environmental centers. I strongly encourage you to join with them on various projects that could make the difference between a healthy versus a dystopian future. The big question I have is this: How are we going to restore and manage local watersheds and ecosystems in this new economy? For example, will a switch to renewable energy mean greater use of wood, and will that decimate the forest or be done with ecological wisdom? Might the jobless hunt for meat and will cause the local extirpation of game or be a healthy, sustained harvest. And I wonder, as people can’t afford trash disposal services will they dump in creeks and at the edge of fields more and more? Who will watch and restore the creeks and clean up the mess others leave behind?

Personally, I have helped found a local group called Willits Economics Localization to discuss the very topics in this speech today. You may have a group in your area like mine, or you can start one. Look for the Transition Town Network on the web. If you are going to begin the process of change that sets you apart from the mainstream it really helps to be socially reinforced by sharing this transition with others. Someday, what you are doing will become the mainstream, but for now we need courageous pioneers.

In this new era, local watchdogs, citizen organizers, restoration ecologists, sustainability educators and pioneers will be extremely vital to the function of a society that must learn how to fit within the limits imposed and the richness given by the Earth around them.

A reader has kindly provided a pdf of this talk.

Part 1 can be found here. This series of posts will be co-authored by phoenix, who is an Engineer heavily involved in the energy sector. It will be based on a submission we made recently to the Australian Government. Obviously, projections of this type are difficult. This is an attempt to provide a model for this kind of projection. We then use the model to provide some insights into just how hard the conversion will be for Australia.

How Much Time Do We Have?

Since Australia has one of the largest per capita endowments of energy resources, it is easy to be lulled into a false security that this benefit will last forever. This impression is boosted by quoted production vs. demand figures exceeding 100 years. The reality of our energy security is not so rosy.

As discussed above, most production vs. resource figures are established by assuming a continuation of the current demand or extraction rate. While this may be a reasonable methodology for determination of the life of a mine or the value of the resource it is patently false for determination of our overall resource security. Demand rates for all of our energy resources are climbing year by year.

The paradigm of continually increasing growth driven by an increasing population and an expectation of improving standards of living demands a continuing increase in production of our natural resources. The following table shows Australia’s major non renewable energy resources together with their expected life calculated on this basis.

Coal Oil(inc
all liquids) Gas Uranium Unit Million Tonnes Billion Litres Billion M3 Tonnes Base Year 2006 2005 2006 2005 Resource 39,600 668 3022 1,143,000 Production 405 42 42 12,360 Growth Rate 4.0% 2.0% 2.1% 4.7% Life Expected 47 years 14 years 47 years 46 years Resource Exhausted 2053 2019 2053 2051

Sources: Australian Coal Association

Australian Coal Industry

GeoSciences Australia

BP World Energy

UIC - Australian Uranium and who buys it.

IAEA &OECD-NEA Uranium 2005 Production and Demand

Note 1: All of the above numbers including growth rates have been established from the recognised sources listed above. Long term growth rates have been used and the last two years data excluded from the information as these would have skewed the rates to an even higher level.

Note 2: The quantity of gas resources was increased by a nominal 20,000 PJ to take into account newly identified CSM resources. The exact magnitude of this resource could not be firmly established from published data.

The above calculations take no account of the effects that EROEI will have on net energy recovered. As we approach the bottom of the resource barrel for each of the fuels EROEI will have two effects:

1. The net energy liberated will decrease and the consumption rate will skyrocket.
2. The exponential aspect of EROEI means that once the problem of energy cost of extraction and refining really kicks in there will be very little time remaining for the resource to provide usable net energy.

Of course there will be continual additions to the current proven reserves that will have the potential to extend the above calculated life expectancies. On the other hand the rest of the world does not have the per capita abundance of energy resources that exist in Australia. As the world runs short of energy earlier than Australia, there will be increased
pressure, both economic and strategic, for Australia to increase production to meet this shortfall.

The figures quoted above do not take into account any restriction in fuel use as a result of greenhouse gas limitations. The effect of these limitations on global and even domestic consumption rates is entirely subject to political considerations and therefore very difficult to
predict. As a concession to this effect the usage rate and reserves of brown coal has been removed from consideration in this table.

On balance then the above figures therefore represent a reasonable view of the expected life of our non-renewable energy resources in a business as usual scenario.

We have until around 2050 to put in place renewable technologies to provide for our energy needs.

Of particular note is the very short timeframe whereby the entire Australian demand for oil will need to be entirely met by foreign imports. Strategically this represents the greatest challenge. Competing in a global market for a diminishing product will prove very expensive and will in the medium term drive Australia to use a range of conversion technologies to reform coal and gas resources to more valuable liquid forms of energy. This in turn will further decrease the resource life expectancies for these other fuels.

The size of the task

In order to establish the time required to put in place renewable sources for energy supply, it is necessary to make assumptions with regard to the infrastructure that needs to be constructed. This is a very difficult task given that much of the technology is in a developmental phase. Picking winners is not easy and frequently not wise. We can however, by taking an average developmental cost for a range of possible technologies, be fairly confident about the expected developmental and implementation effort and time required.

The following table represents one possible scenario in respect of the conversion of demand from fossil based energy to renewables. The table indicates both a growth in demand up to the year 2050 and the effects in energy efficiency terms of conversion from one form of energy base to an alternate renewable source.

Possible Scenario for conversion of Energy Demand to Renewable
SourcesEnergy uses Current Growth Usage 2050 PJ/y Renewable Conversion (Non- electricity based) Source Usage PJ/y Rate   Source Efficiency Gain Usage 2050 PJ/y                 Agriculture Oil 101 1.2% 164 Biofuels -33% 218 Mining Oil 97 2.5% 267 Electricity 60% 107   Gas 149 2.5% 410 Electricity 10% 369 Industry/Commerce Oil 179 2.5% 491 Electricity 10% 442   Gas 464 2.5% 1277 Electricity 10% 1149 Road Transport Personal Oil 866 0.0% 866 Electricity 60% 346 Road Transport Goods Oil 297 2.5% 818 Biofuels -33% 544           Electricity 70% 123 Public Transport Oil 28 7.0% 449 Electricity 70% 135 Rail Transport Oil 26 5.0% 188 Electricity 70% 57 Air Transport Oil 219 0.0% 219 Biofuels -33% 292 Water Transport Oil 55 2.5% 151 Biofuels -33% 201 Products Oil 82 2.5% 225 Biofuels -33% 299 Heating Oil 5 1.2% 8 Electricity 60% 3   Gas 187 1.2% 305 Electricity 60% 122 Metal smelting Coal 264 2.5% 727 Electricity 20% 581                 Electrical demand   792 2.5% 2180 Electricity 0% 2180                 Sub-total Electricity             5122 Sub-total Biofuels             1553 Total   3809   8745     6675

Notes

1/ The basis of GDP growth has been assumed to be a very modest 2.5% p.a.. This value is below general governmental economic policy. The authors believe that, even this low level of growth is difficult, given the energy constraints that will be place on the Australian and world economies. However, in order for energy policy to be in line with other government policy the 2.5% figure has been retained.

2/ In line with other analysis described in this paper the energy demand forecast has been kept in direct proportion to the projected GDP figures for all industry and commercial based energy uses.

3/ Population related energy uses have been kept in line with Australia’s current 1.2% p.a. population increase rate.

4/ In anticipation of the dramatic increases in energy pricing the growth figures for personal transport has been forecast at 0%. As a complimentary allowance the growth in public transport has been increased to 7%. The balance between these growth numbers represents a reasonable transference of energy use between these two categories.

5/ Again in anticipation of the effects of high energy costs the level of air transport growth has been limited to 0% and correspondingly the rate of growth in rail transport has been boosted to 5%.

6/ The efficiency gain nominated for all conversions from oil based fuel to biofuels is a loss of 33%. This represents a nominal loss due to EROEI effects. It assumes an EROEI for future biofuels of around 3. Given the current analysis from the USA on ethanol based biofuels this is very optimistic assumption.

7/ The conversion efficiency for most oil to electricity conversions has been assumed to be 70%. This figure represents a combination of a number of factors including:

• change in mechanical efficiency between electric and Internal combustion engine drives
• losses due to transmission and storage of electricity
• reduction in vehicle weights due to energy cost drivers

8/ No currently viable technology exists for large scale smelting of iron ore using renewable energy sources. The figures for energy efficiency therefore represent a nominal allowance that this technology when developed will be based on electrically derived heat.

Therefore under this scenario to completely replace Australia’s energy sources with renewables will require the construction of the appropriate infrastructure to produce:
5,122 PJ or 1,423,000 GWHr of electricity and
1,553 PJ or approximately 47,000 megalitres of biodiesel

The cost of the task

With respect to the electrical demand, our future energy requirements will undoubtedly come from a range of renewable sources. These will include hydro, wind, biomass, solar thermal and solar PV. The table below indicates a possible mix of sources and their respective capital construction costs.

Renewable Electricity Generation

  Electricity Generation             Source Proportion Generation Utilisation Capacity Capital
Cost       GWhr/y   MW $/kW $Billion   Hydro 10%
142,281 70%
23,203 3500
81   Wind 30%
426,842 25%
194,905 2500
487   Biomass 20%
284,562 70%
46,406 2500
116   Solar Thermal 30%
426,842 20%
243,631 3000
731   Solar PV 10%
142,281 20%
81,210 5000
406                   Total  
1,422,808  
589,356  
1,821  

1/ Utilisation factors indicated above should be viewed in the light of the current overall system utilisation of the Australian power generation industry of 56%. This reflects the relationship between the average working generation capacity and that needed to provide a consistent reliable grid supply.

2/ Utilisation factors for Solar Thermal and Solar PV are indicative of current technologies in these respective fields with an overlay of system reliability. While a number of proposals exist for extending the daily range of solar thermal. While these heat storage technologies may enhance the application of solar thermal they will not significantly alter the capital cost per MW delivered.

3/ The utilisation factor attributed to Wind is probably low by current wind farm development standards which aim for an availability of between 30% and 35%. This number has been reduced to reflect the fact that in order to achieve the overall output required, wind-farms will need to be developed at locations not currently considered viable.

4/ Utilisation of both Hydro and Biomass have been kept low to recognise that these two technologies will probably fulfil the role of peaking power plant.

The infrastructure required for provision of biofuels will be a significant challenge, hence the limitation of this fuel source for all uses except where it is irreplaceable because of energy density. The production of biofuels on the scale required is unprecedented. Production of sugar or grain based ethanol for this volume could not be contemplated. It appears that the only viable biofuel at this level of production will be production of algal based biodiesel. Research has indicated that this form of biodiesel production will involve plant capital costs in the region of $8 Million per megalitre of production capacity. The capital cost of the infrastructure to produce 47,000 ML per year will therefore be
approximately $377 Billion.

The total direct cost of revamping Australia’s energy production infrastructure will be in the order of $2,200 Billion.

Some points to note in respect to this number:

• Although the cost has been based on a range of assumptions concerning energy technologies, it is unlikely that a different mix of conversions or replacement technologies would greatly affect the bottom line price.
• The figure quoted only represents the major energy production plant required. In parallel with this will be a similar cost associated with the changes made by energy users (i.e. electric vehicles, mining and manufacturing equipment, rail lines, power transmission, etc, etc....)
• The cost assumes a single transition from the current energy production infrastructure to the final renewable infrastructure. This won’t happen. As successive governments are driven by the need to maintain the power on and the fuel tanks full there will be a staged series of interim technologies implemented. Depending on the quality of vision of political and industry leaders these interim technologies could consume as much or more than the cost indicated for the final conversion.

What can we afford to spend?

Total Australian
GDP is currently around $1070 Billion per year. This GDP is growing in real terms at a long term average rate of around 3.5%. A growth rate of 1.2% is required to maintain a stable GDP per capita.

Given the imperative of making the conversion to a renewable energy economy let us look at the outcome if we expend all of the differential GDP growth per capita. This is a considerable commitment involving the expenditure at current values of 2.3% of GDP or $25 billion per year and will mean that Australians are to spend all of the additional wealth we create on this project for as long as it lasts.

Unfortunately this will only complete the conversion task in around 160 years. In fact the conversion will never be achieved because the rate of gain in renewables is lower than the forecast increase in consumption. Clearly, the expenditure required must be re-examined in this light.

Let us assume we expend 5% of the entire Australian GDP on the conversion to renewable energy. This expenditure amounts to $54 Billion (2009 Dollars) per year. At this rate we will complete the task in around 74 years. Unfortunately as indicated in the preceding sections we only have around 38 years of proven reserves of fossil fuel energy remaining in the ground.

It could be argued that the progressive conversion of the fossil fuel based economy to renewables will extend life of known reserves and therefore the time we have for conversion. While this is a valid argument the effect is only marginal. Only 29% of the fossil fuel energy we extract is used for domestic consumption. Thus if we immediately commenced a full scale construction program as indicated above we would only extend the available resources out from 2047 to 2049.

As another approach we could elect to undertake the transition in the period dictated by our remaining fossil fuel reserves. In this case we would need to expend $95 Billion per year or around 9% of GDP to complete the exercise by 2051. For comparison purposes, during the recent mining boom Australia’s peak expenditure on all engineering/industrial infrastructure was around $60 Billion per year. The expenditure required on a single industry sector is therefore not possible in any normal economic environment.

There is no net gain in wealth from this expenditure it is simply replacing the energy infrastructure we already have. This expenditure would therefore represent a huge erosion of individual wealth.

Obviously none of the options indicated above is acceptable but they indicate the crisis that Australia faces over the coming few decades and the complete error in the premise that Australia has abundant energy resources.

This post has provided a model for evaluating the cost, time and difficulties associated with a transition to alternate and renewable energy infrastructure. Our next post will apply the model to the International situation. We will then discuss solutions.

Proposition: global effort to model largest oil fields The authors propose that the key to this understanding is the modeling of the largest fields. Should government and industry fail to understand the future supply from these fields, there is a potential for large shortfalls of productive capacity without adequate alternative replacements having been put in place. As the world has experienced on several occasions, even small shortfalls can cause large price increases. Failure to understand when and at what volume oil supply will be insufficient is not acceptable.

Economy, Higher Oil Prices May Restart Shelved Projects A rebound in oil prices and signs of economic recovery are renewing interest in exploration and production, but producers are still wary of volatility and determined to cut construction and service costs, which surged last year after oil prices spiked to record levels.

U.S. Trade Deficit Widens as Oil Moves Higher As oil prices march higher, the United States trade deficit is again widening as consumers spend more on gasoline, the government reported on Wednesday.

Will Higher Oil Prices Drive Petroleum Industry Recovery? Briefly, the Goldman Sachs' higher price predictions are based on its belief that the world has entered into a four-part bull market for crude oil. They view the current rise to $65 as reflecting the normalization of "pricing dislocations caused by the credit crisis" and its impact on oil demand. They believe that most of the yearly oil demand decline anticipated has already occurred and that demand is stabilizing and should head higher in the future as the recession ends and economic growth resumes.

BP Says Weak Economy to Keep Gas Prices ‘Depressed’ (Bloomberg) -- Natural gas prices will remain “depressed” this year because of the weak global economy and increased supply, according to BP Plc, Europe’s second-largest oil and gas company.

Liquefied natural gas supplies will grow at a record pace this year, BP Chief Economist Christof Ruehl said after the publication of the company’s 2009 Statistical Review of World Energy in London. Global economic growth may remain “elusive for some time,” he said.

Oil and gas companies enjoy both lower costs and higher crude oil prices Unhappily, prices of natural gas have not recovered and look set to remain low for the rest of 2009. At $3.50/million btus, many shale gas projects have stopped completely. Those shale gas companies that continue to drill are being much more selective in the choice of location with the Haynesville shale considerably out in front because of high initial productivity. But it is true that drilling rig day rates are down and it they continue falling, new shale gas activity may result.

Energy providers snub Polish coal Polish coal mines are struggling to sell their coal as domestic energy providers turn to cheaper foreign imports. In Q1 this year, imports of coal were three times higher than in Q1 2008. Every month Poland buys 1.43 million tonnes of foreign coal; a year earlier the figure was not even half a million tonnes per month.

U.S.-Saudi Trade Relations If current production remains unchanged, Saudi Arabia would have over 4 mn barrels in spare capacity (the largest excess capacity in the world), at a cost of more than $15-20 mn per day. Saudi Aramco for its part has stated that it will carry out additional drilling at existing fields in order to compensate for the natural declines from mature fields. The plan includes increasing planned drilling by a third to around 250 wells, with the priority on offshore areas. In the recent past, Saudi Arabia has stated that the country can add as much as 200 bn barrels of oil to proven reserves, after an extended period of investment and exploration.

Steve LeVine: Choosing Iran's Next Leader Does Mir Hossain Mousavi have a genuine chance to defeat Iranian President Mahmoud Ahmadinejad in Friday’s elections? Or is he simply the latest beneficiary of the predilection of reporters and pundits to make a wishful-embrace of electoral challengers in dictatorial nations?

At O&G, we are closely watching the first round of Iran’s presidential election because of the potential game-changing impact on natural gas politics in Europe: At once, a less populist leadership in Tehran could help lower the diplomatic temperature, thus opening the door to genuine talks with Washington, and possibly a deal that, among other benefits, ultimately unfetters the development of Iran’s sanctions-crippled natural gas fields.

What happened to the energy crisis? It was less than a year ago when gasoline prices hovered near four dollars per gallon and the entire nation was in an uproar over “energy policy.” Now, even though gasoline prices have climbed more than 50% from their levels at the beginning of the year, not a whisper is heard about what the government is doing to solve the supply problems.

Canada in the driver's seat Magna is ready to produce battery assemblies and could be building electric cars within three years -- which means jobs and investment in Ontario.

Electric Car Glut on the Way? Plug-in cars have barely made a dent in the global vehicle fleet, and automakers have yet to launch their first real entries into the race for a mainstream electric car. When carmakers do start selling those models — late next year and beyond — they for the most part plan to take their time ramping up, easing into the market with regional rollouts and leases to government or corporate fleets. But, according to some industry observers, we’re on the verge of a global glut of plug-in cars. Huh?

House OKs $4 billion 'cash for clunkers' WASHINGTON (CNNMoney.com) -- The House on Tuesday waded deeper into the rescue of the troubled auto industry when it passed a $4 billion plan to subsidize new cars sales for consumers who scrap old ones.

By a vote of 298-119, the House approved the "cash for clunkers" program.

The downside of lower gas taxes President Obama’s recent announcement that auto fuel efficiency standards are being sped up to require an average per-fleet fuel economy of 35.5 mpg for cars by 2016 (the previous goal was 35 mpg by 2020) has its environmental and geopolitical merits. Less green house gas emissions, less dependency on foreign oil producers is a very big win-win.

But it is potentially lousy news for the roads we drive.

David Suzuki: Now that we own General Motors, what should we do with it? Well, we now own part of GM. Shouldn’t we have some say in what becomes of it? Will the U.S. and Canadian governments show some imagination and foresight and turn this crisis into an opportunity?

Mr. Rubin and Mr. Moore are right: Our future is in fuel-efficient cars, buses, and trains, and in green energy. (And even private automobiles may eventually be a thing of the past; the idea of using of a tonne of metal and many litres of fossil fuel to get one person to the grocery store or work is more than a bit absurd.)

Wartime tips to save the planet LONG before recycling targets and pay per throw taxes, our grandparents knew a thing or two about being green. Make do and mend was more than a slogan, it was a way of life.

And now, as we tighten our collective belts and brace ourselves for economic gloom, seven out of 10 of us believe the country should once again embrace the wartime spirit in an effort to cut down on waste.

Water Scarcity and the Western Oil Shales Vast technical and environmental challenges have long stood in the way of commercial oil shale production.

But it is water – or more specifically, its scarcity – that is likely to be shale oil’s greatest stumbling block in the arid West.

The United States Geological Survey recently estimated that there may be as many as 1.525 trillion barrels of oil trapped in the rock of Colorado’s Piceance Basin, the region’s richest shale field. And a report released in March by the non-profit Western Resource Advocates, an environmental group based in Boulder, Colo., suggested that oil companies have acquired water rights at hundreds of locations in the upper Colorado River basin, which could be used for future oil shale production.

Reports: Russia pledges to keep up oil output MOSCOW — Russia is not planning to reduce oil production in the next few years and is considering help for companies that discover sizable oil and gas fields, a top oil official said Wednesday, according to national news agencies.

Deputy Prime Minister Igor Sechin said there were no economic reasons to cut output.

"We are not planning to cut the production in the next three years, but it may happen afterward if there is no investment in exploration and production," he was quoted as saying by Interfax.

There is no point in putting a cap on exports either, according to Sechin:

"Exports have become more economically reasonable. So why cut it?" Interfax reported him as saying.

Natural Gas Should Get a Boost from China's New Demand China has been developing natural gas vehicles for many years, recently the number of vehicles running on nat gas has risen dramatically. For example, the government of Xi'an in western China, a medium size with 8M population, has decided to mandate all city buses and taxis using natural gas. The government website reported 5000 buses and 20000 taxis was using nat gas in 2008, and is expected to grow in coming years. This is just a tip of the iceberg. Nat gas may become a major alternative fuel to oil in China, and demand is ramping up.

Speculators back to oil market - Kuwaiti oil official KUWAIT (KUNA) -- Recent increase in prices of oil could partially be attributed to the return of speculation action to the market amid indications of a start of a global economic recovery, an oil official told KUNA Wednesday.

Will Oil Prices Prevent a Recovery? The rise in oil prices does not seem to be consistent with the overall weakness of the world economy, but there are several reasons why it just may be sustained or extended, even in the absence of a global economic rebound.

The third reason is that the looming danger of peak oil has not gone away, it has only been masked by "peak demand" caused by the economic downturn worldwide. Any incremental oil is now coming from very expensive sources like the Canadian oil sands or the very deep waters of Brazil, both of which require oil prices in the mid-$60’s to be economically viable.

Nigeria militants again promise to release Briton Nigerian militants Tuesday promised for the second time in 10 days to release a British oil worker held hostage in the Niger Delta for the past nine months.

Iraq to announce oil contracts end-June: minister BAGHDAD (AFP) – Iraq will announce at the end of this month which energy companies have been awarded contracts to work in the country, Oil Minister Hussein al-Shahristani said on Wednesday.

Baghdad says will not compensate firms in KRG deals BAGHDAD (Reuters) - The Baghdad government will not pay firms that signed independent deals with Iraq's Kurdish region for the development of the Taq Taq and Tawke oilfields, Iraq's Oil Minister Hussain al-Shahristani said on Wednesday.

Views on Jatropha as Biofuel Mixed Three different news items highlight the vast differences in viewpoint and the continuing uncertainty around the farming of Jatropha by small scale farmers as a feedstock for Europe's refineries moving towards meeting the EU's renewable liquid fuel goals.

All Washed Up for Jatropha? A comprehensive new analysis of water use in biofuel crop production finds that jatropha, an oil-rich plant championed for its ability to grow in arid regions where food crops cannot, is the biggest water hog of them all.

Researchers from the University of Twente, in the Netherlands, report in a recent issue of the Proceedings of the National Academy of Sciences that jatropha requires five times as much water per unit of energy as sugarcane and corn, and nearly ten times as much as sugar beet--the most water-efficient biofuel crop, according to the same study.

Green but costly, hybrid buses far from mass production VIENNA (AFP) – Fuel-efficient and environmentally-friendly, hybrid buses starred at a public transportation congress in Vienna this week, but they still face a long road before becoming cost-effective on a mass scale.

France Finds ‘Carousel’ Tax Fraud in Carbon Emissions Market (Bloomberg) -- The French government found evidence of “carousel fraud” relating to value-added tax on trades of European Union carbon dioxide allowances, according to an official in the nation’s budget ministry.

The official, who declined to be named citing government policy, didn’t disclose the size of the fraud. Sellers committing carousel fraud, or “missing traders,” collect the tax and then disappear before submitting the money to authorities.

China leads escalation of coal consumption Coal consumption is continuing to grow more quickly than other traditional sources despite high prices and the dangerous impact it will have on carbon emissions, new statistics released by oil giant BP show.

China, which has been trumpeting its new wind and solar goals in recent days, led the way with a near 7% increase in the amount of coal it burned during 2008 despite average prices rising 73% to $150 (£129) per tonne. This accounts for 43% of global coal use.

China alone could bring world to brink of climate calamity, claims US official China must be far more ambitious in tackling climate change if the international community wants to prevent calamitous levels of global warming, a senior US official told counterparts in Beijing today.

David Sandalow, assistant secretary of state for energy, said the continuation of business as usual in China would result in a 2.7C rise in global temperatures by 2050 even if every other country slashed greenhouse gas emissions by 80%.

Taking on Climate Change Myths and Sceptics The scientific facts seem clear, climate change is happening and it is man-made. Still some people disagree. Why?

In my experience, these people primarily do not like the consequences of the scientific findings: that we need to reduce our greenhouse gas emissions.

31% - White Evangelicals Reject Global Warming While only 39% of black Protestants say global warming is a result of human activity, they are, however, the least likely of the religions studied to deny global warming (15%). The unaffiliated (58%) are the most likely to say there is solid evidence the earth is warming because of human activity.

World’s Carbon Emissions Climb 1.6% on Chinese Coal (Bloomberg) -- World carbon-dioxide emissions from energy use rose 1.6 percent last year as coal consumption advanced in China.

World Oil Reserves Fell for First Time in 10 Years, BP Says (Bloomberg) -- Global proved oil reserves fell last year, the first drop since 1998, led by declines in Russia, Norway and China, according to BP Plc.

Oil reserves totaled 1.258 trillion barrels at the end of 2008, compared with a revised 1.261 trillion barrels a year earlier, BP said in its annual Statistical Review of World Energy posted on its Web Site today. The world has enough reserves for 42 years at current production rates, BP said.

BP and other oil companies are struggling to replace reserves as access to deposits becomes harder and older fields in places like the U.K. and Mexico are depleted.

Turkmenistan’s Proved Natural Gas Reserves Triple (Bloomberg) -- Turkmenistan’s proved reserves of natural gas tripled last year, taking it to fourth place in the world above Saudi Arabia, according to BP Plc.

OPEC Will Wait for $100 Oil Before Raising Output (Bloomberg) -- OPEC, the supplier of 40 percent of the world’s oil, will only consider increasing output when the price of crude rises to $100 a barrel, according to Kuwaiti Oil Minister Sheikh Ahmed al-Abdullah al-Sabah.

The Organization of Petroleum Exporting Countries, due to meet in September, wouldn’t raise production with oil at $75, “but if it reaches $100, maybe,” al-Sabah said today in Kuwait.

Crude Oil Rises Over $71 on API Stockpile Drop, Weaker Dollar (Bloomberg) -- Crude oil rose to a seven-month high after an industry group reported U.S. stockpiles dropped and the dollar weakened against the euro, bolstering the appeal of energy as an alternative investment.

Energy Stocks to Outperform in Recovery, Morgan Stanley Says (Bloomberg) -- Energy, technology and cyclical stocks are likely to outperform other sectors over the coming months as correlations between markets and companies break down during the economic recovery, according to Morgan Stanley.

Oil’s Gain Marks Return to ‘Pre-Crisis Trend,’ Gazprom CEO Says (Bloomberg) -- Oil’s recent gain marks a repeat of last year’s rally before the global financial crisis sent crude tumbling, and may extend to $85 a barrel this year, OAO Gazprom Chief Executive Officer Alexei Miller said today.

“When we see that over the past weeks oil prices closed at around $70, this is not a technical correction or accidental fluctuation but a return to a pre-crisis trend,” Miller said on the Italian island of Sardinia, according to a copy of a speech translated from Russian. “There are sufficient objective grounds for the oil price to rise to $85 a barrel by year-end.”

Petrobras Ready to Benefit from Next Oil Price Spike Such ultradeep wells encounter intense pressure and temperature. In a recent Forbes articles ("Crude Cassandra"), Matt Simmons suggested going much deeper with a drill bit might strike molten lava and unleash “the biggest volcano in the history of the world.” It’s interesting to think about such an encounter and what the results might be on the surface of the water. Luckily, none of the test wells to date have resulted in such fireworks. That said, Matt Simmons is spot-on with his oil predictions. To put things in perspective, as large an oil field as Tupi is, at 8 billion barrels it is only enough oil to supply the world’s demand for 3 months.

The centre of gravity in the global energy market has changed and we need to wake up The last year will go down in the history books for many reasons: the events in financial markets; the takeover of much of the banking sector by governments worldwide; and the presidential election in the United States, to name but three.

But one event went almost unnoticed. 2008 was the year when the centre of gravity in the energy market tilted sharply and permanently towards the emerging nations of the world. For the first time ever, non-OECD energy consumption outstripped that of the OECD nations.

Senate Panel Approves Drilling Off Florida WASHINGTON -- A Senate committee on Tuesday approved opening the eastern Gulf of Mexico to oil and gas drilling, including an area rich with natural gas 10 miles off the Florida Panhandle. A 45-mile no-drilling buffer would be maintained off most of Florida's coast.

Iran, China Sign $5 Billion Contract on South Pars Gas Field (Bloomberg) -- National Iranian Oil Co. said it has signed a $5 billion contract with China National Petroleum Corp. to develop Phase 11 of the South Pars gas field.

Pdvsa's contribution to income tax and social plans falls At the end of the fiscal year 2008, the state-run oil company Petróleos de Venezuela (Pdvsa) reported revenues and earnings higher than in the previous year. Despite this increase, Pdvsa's contribution to income tax (ISLR) and to social development programs lowered, although the price of the Venezuelan basket of crude oil averaged USD 86.49 in 2008. However, Pdvsa's contribution on royalties, extraction taxes and other imposts was slightly higher.

Petrobras Starts Blog to Respond to Questions Over Tax Probe (Bloomberg) -- Petroleo Brasileiro SA, the Brazilian oil company under investigation after a newspaper alleged tax evasion, is starting a blog to publish its responses to inquiries about the probe.

Petrobras said it will disclose all media requests and the state-controlled producer’s responses as lawmakers prepare to examine allegations that the company evaded 4.4 billion-reais ($2.3 billion) of taxes and overpaid for pipelines and ships.

Mars Mission Could Ease Earth’s Energy Supply Crisis ScienceDaily - Techniques and instrumentation initially developed for ExoMars - Europe’s next robotic mission to Mars in 2016 - but now due to fly on a NASA mission in 2018, could also provide the answers to the globally pressing issue of energy supply.

Savior Technologies - not the end of motoring era Here's what's important: These and all other emerging technologies could make IC engines alone produce startling fuel efficiency numbers without any high-cost technological breakthroughs; and, in that manner, without losing the characteristics that have made IC engines traditional favorites in the 3%-5% of the time when extra torque and horsepower are required.

China launches green power revolution to catch up on west China is planning a vast increase in its use of wind and solar power over the next ­decade and believes it can match Europe by 2020, producing a fifth of its energy needs from renewable sources, a senior Chinese official said today.

Zhang Xiaoqiang, vice-chairman of the of China's national development and reform commission, told the Guardian that Beijing would easily surpass current 2020 targets for the use of wind and solar power and was now contemplating targets that were more than three times higher.

Not so windy: Research suggests winds dying down WASHINGTON — The wind, a favorite power source of the green energy movement, seems to be dying down across the United States. And the cause, ironically, may be global warming — the very problem wind power seeks to address.

Delay new biofuels rule one year: U.S. oil industry WASHINGTON (Reuters) - The government should delay new rules that expand U.S. use of biofuels until 2011, the oil industry said on Tuesday, because there is too much work to do on the ground-breaking rules to start sooner. The Environmental Protection Agency has a January 1 target to apply the rules that also require advanced biofuels to have greenhouse gas emissions that are 40 percent lower than petroleum from creation through consumption.

Ensus Prepares to Produce Britain’s First Wheat-Based Biofuel (Bloomberg) -- Ensus Ltd. is preparing to start production at Britain’s first wheat-based bio-ethanol plant as the country increases requirements for cleaner-burning fuel.

How to feed a city Feeding cities has never been easy. On the contrary, it could be described as mankind’s oldest self-imposed dilemma. The problem is that even though people living in cities don’t tend to produce their own food, whether they realise it or not, they still dwell on the land. The resultant distance (in all senses) between city-dwellers and their food is a paradox at the core of civilisation; resolving it is the greatest challenge of our time.

Green values now in prime time The transformation from global to local economies will not come about by electing Green governments.

Too many people are still stubbornly attached to the old politics defined by an economics of perpetual growth, corporatism, and security defined by militarism. Instead, it will come by necessity as the era of cheap oil comes to an end.

Trucks, Trains, and Traffic Infrastructure Australia just doesn't seem to have a grasp on reality when it comes to land transport.

Its National Infrastructure Priorities lists seven “themes” which are supposed to “...provide a framework for action to meet the gaps, deficiencies and bottlenecks in our nation's infrastructure”.

And neither the national road network nor urban road freight networks rate a mention.

Japan to give 2 billion dollars in loans to fight climate change Tokyo - The Japanese government was expected to provide 2 billion dollars in yen loans to Bangladesh, the Philippines, Thailand and Vietnam over the next two years to support their efforts to combat global warming, media reports said Wednesday. Prime Minister Taro Aso was to announce the aid later in the day along with Tokyo's target for the reduction of greenhouse gas emissions after the Kyoto Protocol expires in 2012, Jiji Press said.

Texas Blasts Federal Efforts to Fight Global Warming Texas elected officials Tuesday railed against federal efforts to curb global warming, claiming it would throttle the state's economy -- one of the few that generated job growth last year.

Japan targets 8% emissions cut from 1990 levels TOKYO (AFP) – Japan said Wednesday it plans to cut greenhouse gas emissions by the equivalent of eight percent from 1990 levels by the end of the next decade, a goal attacked as too little by environmentalists.

Prime Minister Taro Aso announced Japan's mid-term target ahead of a December meeting in Copenhagen set to hammer out a new climate treaty that will replace the Kyoto Protocol when it expires in 2012.

Migration From Global Warming May Exceed All Past Displacements (Bloomberg) -- Human migration due to global warming may exceed all previous displacements of people as sea levels rise, fresh water becomes scarcer and crop yields decline, a United Nations study found.

Desertification in Mexico, Mali and Niger is already causing migration while in Bangladesh increased coastal flooding is expected to increase the movement of people, according to the study by the UN University, Columbia University and the charity Care International.

“Flooding, intense storms, or droughts, or more gradual but significant changes in regional climates place great stress on livelihood systems,” the 36-page report said. “The mass of people on the move will likely be staggering and surpass any historical antecedent.”

If you had not gathered this before, then you should know that I have been favorably impressed with the potential of algae as a future source of biofuels. However I recognize that there is a considerable amount of research and business development and growth that will have to occur before such fuel makes a significant impact in the market place.

Of the other alternative biofuel sources, I was also considerate of jatropha, which seemed to have some significant potential. The fuel comes from the nuts which the shrub produces, and since it can be grown on quite poor land, and in some countries is already in use a fencing plant I anticipated that its potential would be increasingly recognized. Well, it has not quite turned out the way that I thought it would, at least not yet.

And so some comments on what has, and has not, happened. Jatropha seems to have its own slogan “Soil to Oil” with a Center for Jatropha Promotion & Biodiesel located in Rajasthan in India. Jatropha curcus is a shrub or small tree that can grow on poor to marginal land in tropical parts of the world, growing to a height of perhaps 15 feet. It produces a nut in clusters of around 10, and the nuts contain seeds which are about 37% of an oil that will run a diesel engine without further refining.

The oil has been used in a 50:50 blend with jet fuel to power one engine of an Air New Zealand 747 on a 2-hour flight last December 30th. The oil has a lower freezing temperature than jet fuel, and has been estimated to cost around $43 per barrel. This flight was followed, on January 7th by a Continental Airlines flight which used a 737-800, and a mix of oil from jatropha and algae. The flight saw a 3% savings in fuel by the engine using the biofuel. The algae oil came from Sapphire Energy; the jatropha came from Terasol Energy. The biofuel was mixed 50:50 with jet fuel, and there were no modifications made to the engine.

The success of the test has encouraged Sapphire, who is now predicting that they will be able to produce 1 million gal/year (65 barrels/day) of diesel and jet fuel, rising to 10 million gallons (650 bd) by 2018 and 1 billion gallons (65 kbd) by 2025. Sapphire is based in San Diego.

Terasol supplies both oil and feedstocks, concentrating, at the moment, on jatropha and castor bean oil.

Japanese Airlines carried out their own test on January 30th. The Japanese flight, an hour-and-a-half long, used a mixture of 84% camelina, under 16% jatropha oil, and under 1% algal oil.

Camelina, (or wild flax) incidentally looks as though it deserves more investigation, since it grows on poor ground and has twice the yield of soy. Further it also has a low gell temperature. The spent biomass is recognized as a good animal feed, and it grows in places like Kansas and Montana, perhaps alternating with wheat, in which combination it apparently increases the wheat yield by 15%, and gives 100 gallons/acre of oil.
According to the article:

Dr. Bill Schillinger at Washington State University recently described camelina’s business model to Capital Press as: “At 1,400 pounds per acre at 16 cents a pound, camelina would bring in $224 per acre; 28-bushel white wheat at $8.23 per bushel would garner $230.”

Returning to jatropha, the President of Terasol recently answered some questions for Scientific American. He noted that the main problem the fuel now faces is one of scale.

. . . the main obstacle is the lack of research and practice in large-scale commercial cultivation, as well as mechanized harvesting. Currently most jatropha and castor are grown on smaller, independent farms. The second obstacle is yield and unit of input. Research in plant breeding needs to continue in order to improve the quantity and quality of oils being produced.

They see commercial quantities of the jatropha being available in 3-5 years.

The optimistic view of jatropha’s future is becoming less common, even as it is projected as a fuel of the future. There in fact some doubts about its feasibility:

Not only was the cultivation of jatropha supposed to absorb more CO2 from the atmosphere than it released, but the miracle tree could also stabilize and restore degraded soils. That’s surely why Scientific American in 2007 called jatropha “green gold in a shrub,” a plant that “seems to offer all the benefits of biofuels without the pitfalls.”

Fast forward a couple of years. By 2009, governments from China to Brazil, along with several major biofuel companies, had planted — or vowed to plant — millions of acres of jatropha. In India alone, the government has announced plans to subsidize an intensive program to plant jatropha for biofuels on 27 million acres of “wastelands” — an area roughly the size of Switzerland.

The problem, again, is one of scale. With the average farm being around 12 acres (at 2-300 gal/acre/year) the current gains come mainly from local use, rather than collection to meet larger national goals.

For example, in Mali the nation has some 10,000 km of jatropha hedges that yield about 1 kg/meter/year. If all the nuts were collected and processed this would yield around 5 million liters per yr of oil (85.8 bd). Typical village hedge lies between 2 & 15 km, making oil generation very much a local enterprise. It is growing because there has been a move to provide local women with engine powered grain mills, to start small businesses. But the fuel cost was prohibitive. Collecting and processing the nuts can not only provide the needed fuel, but also inject about $3,800 on average, per village per year. As a result local hedges are growing in length, though somewhat slowly (from 5 – 15 km in 8 years.) The projects have also benefitted from development of a shelling machine for the nuts.

But while the growth is commendable, it is nowhere near working at the scale needed to have a significant market impact. The latest news is that to get high yields, huge water inputs are needed--20,000 liters of water to produce one liter of biofuel. This news will further make scaling up oil production from jatropha difficult.

This series of posts will be co-authored by phoenix, who is an Engineer heavily involved in the energy sector. It will be based on a submission we made recently to the Australian Government.

INTRODUCTION

Energy is a gateway resource.

Given abundant energy, minerals can be refined from seawater if necessary. But in the absence of energy even the richest mineral deposits are inaccessible.

Similarly, given sufficient energy, a valuable energy resource such as oil can be made synthetically from virtually any organic input. In theory (given the right infrastructure and energy production) the production rate of synthetic oil would be limited only by the availability of sufficient energy.

In this series of posts we will attempt to do 7 things:

1. Discuss Energy Return on Energy Invested (EROEI). Show that a net-zero EROEI for a resource does not necessarily mean that the energy resource has no utility - it simply means that the energy resource has become an energy carrier, not an energy source. The burden of energy production must be moved to a different energy source. If reduced energy returns exist in our future (as they clearly do – this is happening already) then an infrastructure for this alternate energy source (or sources) must logically be built before the energy available from fossil fuels approaches zero.
2. Discuss the lifespan of Australia’s endowment of fossil fuel (FF).
3. Present an order-of magnitude estimate for the amount of time necessary to build an alternate energy infrastructure.
4. Show that the lifespan of Australia’s current FF energy endowment is likely to be less than the time required to design and build an alternate energy infrastructure.
5. Show that the energy required to build the infrastructure is likely to be a substantial fraction of all the energy that we have available, leading to an inevitable impact on GDP and living standards.
6. Examine the same issues from a US/International perspective.
7. Discuss solutions.

We do not intend to discuss the Hubbert Peak, declining supplies, or declining exports, since all of these matters are very familiar to TOD readers. However we will discuss Energy Return on Energy Invested (EROEI) because this is a prerequisite for the discussion that follows.

EROEI

People visualize an oil well as being a hole in the ground with oil shooting out in a profligate geyser of energy-rich hydrocarbons. In fact, this has not been the case for decades. Modern oil wells rarely consist of a light drill rig making a hole out of which pressurised oil erupts. More commonly the oil is a tar-like substance which requires a complex technology to bring to the surface. Even more complex technologies are required to convert this viscous substance into what we would recognise as oil.

Refining Tar Sands. Not only does this process require immense energy inputs, it is also CO2 intensive.

The substance we describe as “oil” today is not what was described as “oil” in previous decades. The diminishing supply of “sweet light” crude oil simply does not meet today’s demand, forcing us to use toxic “heavy sour” oils, tar sands, and other sources of petro-chemicals that are only distantly related to conventional oil.

Similarly, acceptable grades of coal have broadened. Anthracite is being increasingly replaced by brown coals, which may be 60% or more water. Obviously, drying this coal before use consumes considerable energy and leads to decreasing energy returns from the coal.

In almost every form of mining similar stories are found. The easily accessed, highly concentrated ores have been mined, forcing us to consume more energy in extracting and refining the less-accessible, less-concentrated ore. The energy required to extract mineral resources is increasing for almost every mineral resource we mine.

When dealing with energy resources we see this problem in its purest form. We are looking at the energy required to produce energy. The concept of Energy Returned On Energy Invested (EROEI) is gaining increasing currency in thinking about this problem.

In the case of shale oil we are approaching the point at which, for some shales, the energy required to extract and refine the oil may exceed the amount of energy the oil will provide. This oil no longer provides our society with energy; it simply converts energy from cheap sources (such as nuclear power or natural gas) into a higher-value, convenient liquid fuel for powering our vehicles.

The utility of an energy-dense liquid fuel is immense, so this conversion has great value. However we must not lose sight of the fact that the energy must come from somewhere. If it is no longer coming from the oil, then it must be coming from renewable and alternate energy sources (in “alternate” I include nuclear and all other non-fossil energy sources).

Stephen Leeb in his book “Game Over” defines “Absolute Peak Oil” as that point where we invest more than a barrel’s worth of energy to pump, refine, and truck a barrel of oil to its point-of use. He discusses the plunging decline in energy return that has occurred recently and shows that the point in time at which oil’s energy return reaches zero is approaching.

In the next few decades we will need to expend a significant quantity of energy to simply extract and refine our fossil fuel. This will lead to an increased requirement for energy at a time when fossil fuels are yielding a decreased return.

THE CONSEQUENCES OF A PEAK IN ENERGY

Resource companies have consistently claimed that we have no shortage of resources. All that is required is a higher price. This is particularly true where fossil fuels are concerned. Companies have asserted that for the right price, reserves can be found.

This is undoubtedly true since, as observed above, products such as oil can be manufactured from almost any organic source, as long as energy is available. HOWEVER, the unspoken assumptions are:

• That alternate energy sources will be made available.
• This alternate energy can be produced in the quantities required.

Upon examination, these unspoken assumptions imply that we will need a steadily increasing alternate energy infrastructure as a prerequisite for the continued supply of our resources.

In general, the consequences of these assumptions have not been explored in depth by the responsible authorities.

This appears to be because the resource companies that make these unspoken assumptions are not responsible for planning and delivering an alternate energy infrastructure. The authorities that are responsible for planning and providing this infrastructure have not been fully briefed on the implications of the unspoken assumptions.

The next post attempts to address this issue. We will explore the time and energy required to build an alternate and renewable energy infrastructure in Australia. The estimated duration of Australia’s reserves of fossil fuel will then be compared to the time and energy required for this transition. The economic consequences will be explored.

The decline in quality and quantity of Fossil Fuels would not be an issue if adequate alternate energy sources can be made available.

The clear conclusion is that renewable and alternate energy sources are no longer a “nice to have” or a “green solution” they are an absolutely critical requirement of any future resource calculus.

Unfortunately, providing these facilities is not without issues. In subsequent posts we intend to explore the technical issues associated with the viability of this course of action.

Part 2 is here.

$70 oil menaces budding recovery NEW YORK (CNNMoney.com) -- Two weeks change a lot in the oil markets.

At the end of May CNNMoney.com ran a story asking if $60 oil will kill any economic recovery. 'No," most analysts said - consumers could shoulder $60 crude, and analysts didn't see prices going much higher.

Now oil is touching $70 a barrel. Goldman Sachs recently said it sees crude at $85 by the year's end. With the economy still on life support, oil is drifting dangerously close to being the wet blanket at the recovery's party.

Gasoline spikes above forecast for summer high While the summer driving season has been underway for only two weeks, gasoline prices have already blown expert forecasts for highs for the summer.

Average prices at the pump on Monday were $2.62 a gallon, according to AAA, up 16 percent from just a month ago, and over the $2.50 a gallon high that AAA had forecast for the entire summer. Last week, AAA spokesman Geoff Sundstrom said the group revised its forecast for the summer high to $2.75 a gallon.

Canada export agency sees $70 oil as unsustainable CALGARY, Alberta, June 9 (Reuters) - Canada's export agency has raised its 2009 oil price forecast, based on recent gains, but its chief economist said on Tuesday he does not believe the fundamentals support current levels just shy of $70 a barrel.

Export Development Canada, a federal financing agency, now sees an average price for West Texas Intermediate oil of about $55 a barrel, up from its last forecast of $47. The higher price would lessen an expected skid in the value of Canada's petroleum exports.

"Clearly, what's happened in the last 20 days has adjusted our thinking a bit," EDC Chief Economist Peter Hall said.

Venezuela says will not seize all oil service firms CARACAS (Reuters) - Venezuela will not nationalize all the oil service companies present in the country, Oil Minister Rafael Ramirez said on Tuesday, adding that gas and water injection units taken over last month were "monopolistic."

Venezuela's state oil company PDVSA has run up large debts with service companies including Halliburton and Schlumberger and is trying to renegotiate tariffs with them.

Shell’s Odum ‘Confident’ Brazil Oil Rules Will Lure Investment (Bloomberg) -- Royal Dutch Shell Plc, Europe’s largest oil producer, is “confident” Brazil will establish rules that will attract exploration and production investments to the country’s so-called pre-salt area, an executive said.

The Hague-based Shell, which has invested $2.8 billion in crude exploration and production in Brazil since 1998, will hold off on spending plans for the pre-salt area until rules are clear, said Marvin Odum, head of the company’s U.S. operations.

Mexico's Pemex to develop new 13,700 bpd oil field MEXICO CITY (Reuters) - Mexico's state oil company Pemex said Tuesday it was seeking bids to build a production platform at an small offshore field discovered last year.

Pemex said it expected the Kambesah field to produce approximately 13,700 barrels of oil and 9.3 million cubic feet of gas per day when it reached peak production.

BG LNG tanker sets sail for Chile Chile is set to receive its first ever cargo of liquefied natural gas at the end of June after a BG Group cargo set sail from Trinidad for the Quintero terminal.

Duke reaches `smart meters' settlement Duke Energy Indiana has reached a settlement with state officials and a consumer watchdog group on its $445 million plan to install an electronic metering system for 775,000 residential electric customers.

U.S. Power Firms Want Free Carbon Permits to Last Beyond 2030 (Bloomberg) -- The Edison Electric Institute, which represents investor-owned utilities, wants the free carbon- dioxide permits under a proposed “cap-and-trade” program for greenhouse gases to continue beyond 2030.

Lester Brown: A Warming World Means More Destructive Storms Elevated global temperatures bring a number of threats, including rising seas and more crop-withering heat waves. Higher surface water temperatures in the tropical oceans also provide more energy to drive tropical storm systems, leading to more-destructive hurricanes and typhoons. The combination of rising seas, more powerful storms, and stronger storm surges can be devastating.

...Against this backdrop, insurance companies and reinsurance companies are finding it difficult to calculate a safe level of premiums, since the historical record traditionally used to calculate insurance fees is no longer a guide to the future. For example, the number of major flood disasters worldwide has grown over the last several decades, increasing from 6 major floods in the 1950s to 26 in the 1990s.

EIA: Total US Natural Gas Consumption Seen Falling 2.2% In 09 HOUSTON -(Dow Jones)- The U.S. Energy Information Administration on Tuesday expects natural gas prices to remain below $4 a thousand cubic feet until late this year amid robust supplies and weaker demand resulting from the economic downturn.

Industrial gas consumption is forecast to decline by 8% this year, unchanged from last month's forecasted decrease, according to the EIA's Short-Term Energy Outlook.

Major industrial gas consumers, including companies in the fertilizer, chemicals and aluminum industries, have curbed gas use and cut spending.

Total natural gas consumption is expected to fall 2.2% in 2009 amid the ongoing economic downturn and increase slightly in 2010, said the EIA, the statistical arm of the U.S. Energy Department. The EIA had previously forecast a 1.9% drop in 2009.

U.S. Senate Panel Approves More Offshore Drilling (Bloomberg) -- A U.S. Senate panel approved expansion of offshore oil and natural gas drilling, opening more of the eastern Gulf of Mexico to energy development.

The Senate Energy and Natural Resources Committee voted 13- 10 today in favor of an amendment to expand drilling, as part of its debate over pending energy legislation.

Shell Nigeria deal won't end image problem-activists PORT HARCOURT, Nigeria (Reuters) - Royal Dutch Shell's agreement to pay millions of dollars to the families of Nigerian protesters executed in the 1990s is unlikely to end local hostility towards the firm, activists said on Tuesday.

Why Now Is the Time for Business to Go Green There are a multitude of global trends signaling a needfor sustainable business-climate change, populationincrease, rapidly developing nations, resource depletion,environmental degradation, society's toxic burden, the loss of biodiversity, the prospect of peak oil, and more. The bottom line is that we need to learn to do more with less-both less stuff and less impact on the environment.

Refinery construction costs fall 9 pct - IHS CERA HOUSTON (Reuters) - U.S. refiners struggling with slack gasoline demand, sinking profit margins and soaring inventories could see one bright spot on the horizon in the form of falling construction costs, according to a new report released on Tuesday.

According to IHS Cambridge Energy Research Associates, an energy consultancy, the cost of building new refining and petrochemical plants fell 9 percent between the third quarter of 2008 and the second quarter of 2009, after years of steady increases.

Shell to Wait for Right Econ to Move on Certain Projects Royal Dutch Shell will wait until the economics is right before advancing its oil sands and floating liquefied natural gas projects, its outgoing chief executive said Monday.

"If I feel that by waiting, costs will be lower, I prefer to wait," Chief Executive Jeroen van der Veer said in response to a question from Dow Jones Newswires. "Because oil sands are projects built for decades. Over time, I am convinced, the Canadians will have more capacity to build projects."

Recession, energy prices depress rig demand HOUSTON, TEXAS: The ongoing global recession and decline in energy demand, along with uncertainty about oil and natural gas prices, continue to put downward pressure on exploratory drilling efforts worldwide. Cancellations or delays of drilling programs, falling day rates and financing issues are plaguing the rig market. Much new work coming available is trending towards sublets and short drilling programs.

While the long-term outlook for deepwater drilling rigs remains more optimistic, jackup markets continue to soften as operators delay or cancel drilling programs to wait out the recession. However, deepwater drilling also is being affected by the credit crisis and low energy demand and prices.

Chavez Says State Oil Co Not in Trouble Venezuelan President Hugo Chavez denied that state-owned oil giant PDVSA was in financial trouble, dismissing gloomy media accounts about impending bankruptcy as "another lie of the bourgeoisie to make people believe that the socialist project is impossible."

"A lie that from being repeated so much" tries "to make people think it's true, so that in the collective mind the idea forms that the socialist project is impossible," the president said during his weekly radio and television show on Sunday.

Venezuela Oil Shipments to Cuba Rose by 32%, Asia Sales Doubled (Bloomberg) -- Venezuela’s shipments of crude oil and refined products to Cuba gained 32 percent last year and sales to Asia doubled under President Hugo Chavez’s strategy of diversifying the country’s oil sales to rely less on the U.S.

Will Shell pay-out change Nigeria Delta? But will the settlement affect the current violent struggle between other Nigerian communities and oil companies?

The campaign of attacks on oil installations and kidnapping oil workers has cut Nigeria's output by about a quarter in recent years.

Dubai fast emerging as Asia's fuel trading hub Dubai is emerging as one of Asia's key trading hub of refined crude products, analysts said. However, the emirate needs to improve on certain platforms before the market officially awards it the coveted position, traders said.

Firm tracks drivers to curb palm oil theft PETALING JAYA: The theft of crude palm oil (CPO) in the country is alarming, forcing industry players to come up with their own mechanism to contain the problem.

Experts plumb cap-and-trade bill in search of bottom line Looking for a price tag on the massive House climate and energy bill? Good luck.

Conflicting financial analyses abound. Some predict the measure will bring financial ruin, others say it will actually save money for most Americans.

U.S. to Get Half of Gas From ‘Tight’ Fields by 2020, Shell Says (Bloomberg) -- The U.S. will get more than half of its natural gas supplies from so-called tight reservoirs by 2020, Royal Dutch Shell Plc estimates.

New technology will allow tapping 500 trillion cubic feet of unconventional gas resources in North America, enough to supply the U.S. for two decades, said Malcolm Brinded, executive director for the upstream business at Europe’s biggest oil company. Shell expects to more than triple tight gas output to more than 300,000 barrels of oil equivalent a day in 2020.

“Having picked much of the low-hanging fruit, our industry is now focused on more difficult resources, tight reservoirs, fractured carbonates, oil shales, oil sands, and ultra-heavy oil,” Brinded said in a speech posted on the Hague-based company’s Web site today. “Tight gas in North America has rapidly developed into a real game-changer.”

Natural Gas Oversupply to Remain, Morgan Stanley Says (Bloomberg) -- The surplus in natural gas may stay longer than expected as the U.S., Australia and Qatar boost output from unconventional sources and in liquefied form, Morgan Stanley said.

“I will expect gas to stay in excess for years to come, even after the economic recovery,” William Wicker, Morgan Stanley’s managing director and vice chairman of global natural resources, told the Asian Oil & Gas Conference in Kuala Lumpur today. “This is not a short-term phenomenon.”

Energy fuels new 'Great Game' in Europe The giant Russian energy company, Gazprom, which controls the world's largest reserves of natural gas, has issued a stark warning to the European Union saying it must decide if it wants to continue receiving supplies of Russian gas.

Speaking in a BBC interview, Gazprom deputy chairman Alexander Medvedev warned that Europe was now at a crossroads.

"Only three countries can be suppliers of pipeline gas in the long-term - Russia, Iran and Qatar. So there is no other choice than to deal with these suppliers," he said.

Gazprom targets 10% of US gas market Russian gas export monopoly Gazprom plans to raise deliveries to the US and eventually supply up to 10% of the world's biggest economy's gas needs, a senior company official said on today.

Greek power workers set summer strikes over jobs ATHENS (Reuters) - Workers at Public Power Corp, Greece's biggest electricity company, said they will strike next month to press for 7,000 new hirings.

Labour walkouts last year led to widespread power cuts, forcing state-controlled PPC to shut down units and boost imports from Bulgaria and Italy.

Mich. agency: Drivers can afford gasoline tax hike Drivers can afford to pay higher gasoline taxes to improve their roads, Michigan's top transportation official said while warning more than 125 projects will be delayed if funding is not increased.

State Department of Transportation Director Kirk Steudle on Tuesday estimated motorists would pay an extra 16 cents per week - "a stick of gum" - for every penny increase in the 19-cents-a-gallon gas tax. He urged lawmakers to support a proposal to convert the gas tax to a percentage tax on the wholesale price of gas, which would rise at capped amounts as prices at the pump increase.

Natural Gas Cheapest to Oil Since 1992 Signals Gain (Bloomberg) - This year’s 34 percent decline in natural gas made it the worst performing commodity and the cheapest next to oil since the fall of the Soviet Union. That’s about to change, if history is any guide.

Natural gas lost 73 percent in 11 months as the U.S. fell into the deepest recession in 50 years and drillers failed to idle rigs fast enough to control inventories. Stockpiles are 22 percent larger than the five-year average, the Energy Department said. Oil costs 18 times more than gas, the biggest gap since 1992, when the collapse of communism cut supplies from Russia, according to data compiled by Bloomberg.

China May Seaborne Crude Oil Imports 13.8 Mln Tons - Ministry SHANGHAI (Dow Jones)--China imported an estimated 13.8 million metric tons of crude oil through seaports in May, or around 3.26 million barrels per day, up 5.1% from the same month last year, the Ministry of Transport said in a report on its Web site Tuesday.

However, seaborne imports fell 9.8% from April, according to calculations by Dow Jones Newswires, which may indicate crude demand is slowing from the high levels recorded earlier this year.

Shell to pay $15.5 million to settle Nigeria claims (CNN) -- Oil company Royal Dutch Shell will pay $15.5 million to settle a lawsuit against its Nigerian subsidiary by the family of executed Nigerian environmental activist Ken Saro-Wiwa and other dissidents, the plaintiffs announced Monday.

Global airlines fear oil rally as losses mount KUALA LUMPUR (Reuters) – Global airlines called for concerted action to prevent another runaway surge in oil prices as the International Air Transport Association nearly doubled its forecast for industry losses to $9 billion in 2009.

The head of the Geneva-based airline lobby on Monday lambasted "greedy speculation" in oil markets and accused governments of squandering money raised from aviation while carriers suffer from still slumping demand.

Ethiopian rebels threaten foreign oil companies ADDIS ABABA (Reuters) – An Ethiopian rebel group on Wednesday warned international oil companies against exploring in a region of the Horn of Africa nation where the rebels attacked a Chinese-run field in 2007 killing 74 people.

The Ogaden National Liberation Front (ONLF) -- whose hundreds of fighters seek autonomy for the ethnically Somali Ogaden region -- said oil firms had cleared some 1,600 square kilometers, displacing locals and destroying vegetation.

"Certain multinational oil corporations are intent on exploiting Ogaden fossil fuel resources in alliance with the current Ethiopian regime that is committing genocide and war crimes in Ogaden," it said in an emailed statement.

Shell pays Nigeria rights victims $15.5 mln NEW YORK (AFP) – Royal Dutch Shell has agreed to a 15.5 million dollar payout to settle a lawsuit alleging complicity in murder, torture and other abuses by Nigeria's former military government.

Purchase of Hummer against China's development trend HANGZHOU - A domestic company's purchase of the gas-guzzling Hummer brand is against China's economic situation and the country's development, said an official with the Development Research Center of the State Council, the country's Cabinet, Tuesday.

"If the Chinese company is just trying to stir media hype, that is understandable; if it really takes this step to buy, relevant departments should be strict and cautious with the approval, or reject the application if necessary," said vice director Lu Zhongyuan, at the China Opening-up Forum in Ningbo of eastern China's Zhejiang Province.

Oil Platforms Vulnerable To Hackers ScienceDaily — Oil company data security is inadequate, and production systems are at risk of attack by hackers, viruses and worms.

Energy realism - finding common ground Americans share common ground when it comes to this country's energy goals. We aspire to an environmentally responsible approach to energy that will help our country be more self-sufficient while not putting the cost of energy out of reach for American consumers and businesses. But we seem to have less common ground in the discussion about how, and when, we can realize those aspirations. I support these energy objectives, but believe that policies to achieve them can be successful only if they are rooted in fact and in reality - what I call "energy realism."

Energy realism starts with an understanding of scale. Every day the world uses, from all energy sources, the equivalent of 245 million barrels of oil. Worldwide, we use 50 percent more energy than we did only 20 years ago. And 20 years from now, demand will have risen by 30 percent or so more.

Richard Heinberg: Look on the Bright Side Recently I've begun compiling a list of things to be cheerful about. Here are some items that should bring a smile to any environmentalist's lips...

ResilientCity.org International Design Ideas Competition ResilientCity.org is holding a design ideas competition to raise awareness in the architecture, planning and engineering communities of resiliency as a central strategy for dealing with the future impacts on our cities of peak oil and climate change. It is the intent of the competition to generate imaginative and useful design and planning exemplars that effectively illustrate ResilientCity planning and design principles.

Brighter days seen for solar, next-gen biofuels NEW YORK -- Big changes are afoot in the fledgling alternative-energy industry.

As the sector recovers from the 2008 financial market meltdown, insiders look for next-generation biofuels and solar technologies to start joining mainstream energy markets, while wind power continues to lean heavily on government support.

Solar brightens a bleak Michigan town Rife with auto layoffs, Saginaw residents hope a big expansion at the nearby Hemlock solar plant can help jumpstart their battered economy.

Nuclear fusion power project to start in slimmed-down version MARSEILLE, France (AFP) – A multi-billion-dollar project to prove whether nuclear fusion, the power that fuels the Sun, can be a practicable energy source is to be scaled down in its early stages, sources said on Monday.

The test reactor, to be built at a site in southern France, will start its experiments in 2018 as scheduled but will initially be built in a slimmed-down form, they said.

Exelon: No public threat from Ill. tritium leak CHICAGO – A tritium leak was found during routine monitoring of Exelon Corp.'s nuclear power plant, but contaminated water was contained to the property and did not pose a public health threat, company officials said Monday.

Climate bill to pay hundreds of dollars in rebates WASHINGTON – Low-income families will receive hundreds of dollars a year to help pay higher energy bills if Congress enacts the first-ever limits on the gases blamed for global warming, according to a new analysis.

China response to Obama climate envoy positive BEIJING – China said Tuesday that it was committed to making this year's Copenhagen climate change conference a success, sounding a positive note at the close of a two-day visit to Beijing by President Barack Obama's global warming envoy.

Foreign Ministry spokesman Qin Gang gave few details and reasserted China's insistence on "common but differentiated responsibilities" under which developed countries such as the U.S. would bear most of the responsibility for reducing greenhouse gas emissions.

Introduction

I love to read. I particularly enjoy books about energy, sustainability, and the environment. One of the benefits of reviewing books is that I end up getting a lot of free books on these topics. One thing about getting free books, though, is that I have to be careful that it doesn't impact my objectivity. After all, the publisher or author was nice enough to send me this free book. How do I then approach the matter if I sharply disagree with some aspects of the book?

I am on record as being very skeptical about the ability of algal biodiesel to scale up and contribute significantly toward liquid energy supplies. Mark Edwards, a Professor of Strategic Marketing and Sustainability at Arizona State University recently saw one of my essays, and said that while he agreed with my points that many algal producers have been overly optimistic, he also felt like I had glossed over algae's potential. He offered to send me a copy of his book Green Algae Strategy: End Oil Imports And Engineer Sustainable Food And Fuel.

The first thing I thought when I saw that title is "Either Mark Edwards is dead wrong, or I am dead wrong." But I believe it is important to read and understand a wide range of viewpoints, because I just might change my mind. Maybe I am dead wrong. This book won the 2009 IPPY award for the best science book, so there are definitely those who think Mark makes a good case.

Mark Edwards writes that he has three goals:

1. Create Green Independence for America and the world

2. Halt and reverse climate change

3. End American and world hunger

While I can certainly get behind those goals, the devil is always in the details. And I think in the details we are going to run into some very challenging problems. Of course this is something I wouldn't mind being dead wrong about. In fact, a few years ago I was very optimistic about the possibility of algae to produce large amounts of fuel without utilizing large amounts of good crop land. The prospects for algal fuel certainly sounded too good to be true. But a series of articles and discussions since then has swung me increasingly to the belief that the stories were too good to be true.

My Slide Toward Skepticism

First I read an essay here at TOD called Has the Algae Cavalry Arrived? The essay was mostly based on work done by Krassen Dimitrov, who had gone back to first principles of incoming solar insolation to argue that GreenFuel Technologies was exaggerating their claims. While Dimitrov's work has been criticized, he does raise a number of important issues. Primarily for me was the issue of just how much renewable diesel could be made from a square meter of area, contrasted with what the overall costs might be. Dimitrov concluded that you could make at best about a gallon of algal oil per square meter per year. However, costs were estimated to be over $100 per square meter. That sounded like a pretty serious, but potentially surmountable problem. (Important to note that in Green Algae Strategy, Mark Edwards also argues that GreenFuel made "some serious mistakes in executing strategy", and led the industry in "hope and hype").

Then came a post from John Benemann: Algal Biodiesel: Fact or Fiction? John has been heavily involved in algae studies for many years. In fact, he was the Principal Investigator and main author of the U.S. DOE Aquatic Species Program Close-Out Report. He certainly has some credentials on the topic of algae, and he weighed in to say that the essay described in the previous paragraph was generally correct. John's position is that the present status of algal biodiesel is nowhere near commercialization, but in 10-15 years commercialization may not be out of the question. But it is far from a sure thing, and it certainly won't happen soon. (See also John's recent position paper on the subject: Opportunites and Challenges in Algae Biofuels Production).

Meanwhile, more question marks emerged. De Beers Fuel, having made some pretty far-fetched claims about their ability to deliver algal biodiesel, as well as having sold 27 franchises for algal biodiesel production, turned out to be a scam and collapsed. GreenFuel Technologies finally decided their future was bleak, and they closed down.

Information about the true costs started to become publicly available. While it has long been known that algal biodiesel is currently very expensive to produce, the actual price was only vaguely quantified. Krassen Dimitrov had suggested costs of around $20/gal. The government in British Columbia commissioned a study to look at the prospects, as well as the estimated costs of production. They estimated that the net cost of production per liter for photobioreactors (PBRs) was $24.60 ($93.23 US dollars/gallon), for open raceways it was $14.44 per liter, and for fermentors was $2.58 per liter. (There are some other issues with using fermentation that I won't get into here). The report also stated that the much-touted carbon sequestration benefits of algae were illusory:

What about the value of sequestered carbon in algae-based biofuels? In short, there isn’t any. Atmospheric carbon is only sequestered for a short time until it’s burned in an engine. Under existing biofuels mandates in most industrialized countries, there will be no opportunity to sell carbon offsets unless fuel production is additional, or beyond such mandates.

Finally, Bryan Wilson, a co-founder of Solix Biofuels, went on record and stated that they could indeed make biofuel from algae, but the cost to do this was $33/gallon.

That preamble is meant to establish that there was quite a lot behind my slide from algae optimist to algae skeptic. But I was looking forward to seeing whether Mark Edwards could push me back toward the optimist camp with his book.

The Book's Strengths

Let me talk first about what I feel are the book's strengths. Edwards clearly lays out the challenges we face over our dependence on fossil fuels. He takes on current U.S. biofuel policy in a credible way. He is sufficiently skeptical about the near term prospects for cellulosic ethanol, and is harsh in his assessment of corn ethanol (even more so than I have been). He cites familiar names such as Lester Brown, delves deeply into the challenges of water and soil depletion, and discusses the issue of NPK (nitrogen, phosphorous, and potassium) availability in the future.

On the overall topic of algae, the book is incredibly informative. I had no idea that algae played such an important role in food, medicines, and consumer products (e.g., Aquafresh toothpaste). Edwards discusses many different varieties of algae, and characterizes them according to lipid, protein, or carbohydrate production.

Edwards makes a good case for why it would be a great idea to have algae-based fuels. He emphasizes that the co-products in many cases can improve the overall economics of the process. He lays out all the possible benefits of procuring our fuel from specific waterways as opposed to trading topsoil and fossil aquifers for fuel.

I can say with certainty that this book will come in handy for me in the future as a reference book. (More details at a later date, but I am likely to do some work on algae myself in the not-too-distant future). But what I won't use this book for is as a "How To" guide. And that's a good segue into the problems I had with the book.

The Book's Weaknesses

At times it felt as if this book was written by two people. There was Mark Edwards, the cellulosic ethanol skeptic, accurately reporting on some of the potential problems with commercialization of cellulosic ethanol. Then there was Mark Edwards, the algal biofuel optimist, uncritically presenting seemingly far-fetched claims from any number of would be algae producers.

There was even Mark Edwards the algal fuel skeptic, but I just couldn't reconcile that person's views with those of Mark Edwards the optimist. On one hand, Professor Edwards notes that the current estimated costs for algal biodiesel are over $20/gallon. He said that over 75% of the companies who had algal aspirations in the 80's and 90's no longer exist. He wrote that the algal fuel industry as a whole has produced less than 100 barrels of product. Then he turns around and writes that within three years the industry will be producing hundreds of millions of gallons. (Based on the 2008 publication date, I guess we can expect a gusher of production next year).

I had a number of specific criticisms as I read the book. First, it was presented throughout the book that algae can be used to produce food and fuel, all while sequestering carbon. I don't agree with that. Certainly algae take up carbon dioxide and convert it into biomass as they grow. However, unless that biomass is stored away without being consumed, there is no real carbon sequestration. Imagine two different scenarios. In the first scenario, the carbon dioxide from a coal-fired power plant is bubbled through tubes filled with algae. The algae will consume that CO2, preventing the immediate escape into the atmosphere. But what happens if fuel is produced from the algae? The carbon dioxide ends up getting released into the atmosphere. What you can say is that the release was delayed, and (depending on the energy inputs into producing the fuel) potentially more fuel was produced for a given emission of CO2. However, that isn't carbon sequestration.

Second case, algae are grown utilizing atmospheric CO2. During the growth phase carbon dioxide is indeed removed from the atmosphere. Take that algae and bury it deep in the earth, and carbon is sequestered. Turn it into fuel, and the CO2 taken up during the growth-phase is released back into the atmosphere. This is potentially a greenhouse gas (GHG) neutral process, but there is little potential for sequestration if the goal is to use the algae for fuel. However, this carbon sequestration meme is mentioned many times in the book (and many themes in the book were unnecessarily repetitive).

He blames the lack of progress for algae on lack of funding, which is blamed on corn ethanol. This, he argues, was the politically favorable biofuel that sucked up all the R&D funding (and subsidies). He later writes "If corn ethanol makes sense, the market will reward it without taxpayer monies or protectionist tariffs." Can't we say the same about algal fuel? If the potential is so great, money should flood in from investors looking to get in early on a huge growth opportunity.

I don't recall that the issue of energy return was ever covered in the book. If the energy inputs into the process are too high - as Bryan Wilson of Solix Biofuels recently suggested - then you have a potentially serious issue. How can algae be harvested and processed with minimal energy inputs? One of John Benemann's comments from his position paper was "At present there are no low-cost harvesting technologies available." Why? It takes a lot of energy to extract the algae from the water, relative to the BTU content of the algae you are extracting.

I felt that there was some confusion around the usage of specific terminology. For instance, on Page 6 Professor Edwards wrote that oil pressed directly from algae can be used directly in a diesel engine, and this is called green diesel. While plant oils can be used straight in a diesel engine, this product is called straight vegetable oil, or SVO. (Note: Do not attempt to use SVO in a vehicle unless you understand the caveats!) Further, there is a difference between green diesel and biodiesel, but this terminology is used interchangeably in the book. (See my Renewable Diesel Primer for an explanation of the differences between green diesel and biodiesel.) Another misuse of terminology comes on Page 15, where ethanol is called a hydrocarbon.

But those aren't the biggies for me. The title of the book indicates that it is a strategy book, but I see it more as a series of facts, connected to goals. What is missing is the "how to", which would be the strategy part. Yet difficult technology challenges were addressed casually. There are numerous instances where there is a presumption that technology will solve a particular problem. The word "might" is used an awful lot in the book. But when you casually dismiss technical challenges, you can effectively argue that the most implausible scenarios are inevitable. Let me give you an example.

Bananas are a very healthy food, and in the U.S. we depend on imports from tropical countries for our banana supplies. Just imagine if we could grow bananas in the Midwest. The soil is fertile. There would be additional options for farmers to make money. New jobs could be created in the domestic banana supply chain. So let's say I write a book about my Midwest Banana Strategy. I talk at length about the benefits of bananas, and the benefits of growing them in the Midwest. These are facts. I then tie them to my goals: To commercially grow them in the Midwest. The only problem is that unless I am willing to invest in heated greenhouses - at very great expense - my banana goal is going to come to naught. So presently Midwestern bananas are a pipe dream. But if I invoke the wonders of biotech - "there will be a solution that will enable cold-tolerant bananas" - then problem "solved." And that's how I felt many problems were dealt with in the book.

There are a series of independent facts, and then we have a black box, and then we have commercial algal biofuel. Solutions are presented as inevitable ("when this happens") instead of possible ("if this happens"). Sometimes I had flashbacks to The Singularity Is Near, in which author Ray Kurzweil employed this tactic throughout to argue that the near future is so fantastic we can't even imagine it. It is certainly true that a lot of companies are working on algae. But I would argue that Professor Edwards falls prey to the Vinod Khosla fallacy on cellulosic ethanol: This is simply too important and there are too many companies working on this to fail.

If I hand wave away the challenging problems and presume technology will solve them, then who needs algae for fuel? Hydrogen is waiting to solve all of our problems. Recall all that hydrogen economy business that was all the rage a few years ago? Despite numerous potential benefits, there are multiple very challenging technical issues that keep a hydrogen economy at bay - and will continue to do so for the foreseeable future. But I could still write a book called Hydrogen Economy Strategy if I am willing to brush away those technical issues as temporary.

While there were a number of claims that I thought were presented uncritically, there were also some claims that I found to be very odd. Some examples:

Page 13: As a criticism of using food crops for fuel, he states that massive planting of corn leads to high humidity because the leaves transpire water. This leads to thunderstorms and potentially tornadoes.

That large areas planted in corn can increase the risk of tornadoes is something I have never heard before.

Page 105: Algal biodiesel is carbon neutral because the power needed for producing and processing the algae can come from the methane produced by anaerobic digestion...

That sentence is inaccurate. It is only carbon neutral if the power does come from digestion, not that it can. Based on the above, we could also say that corn ethanol is carbon neutral, because the power for processing can come from methane produced from digestion.

Page 150: When writing that algal fuel mimics fossil fuels without fossilization, he writes "Skipping the fossilization step not only saves 200 million years of pressure and heat, but lowers production costs significantly."

I can't really comprehend this one. The reason biofuels have trouble competing with fossil fuels is because nature already did the heavy lifting for the fossil fuels. Nature provided all that heat and pressure for free. Humans have to provide the heat and pressure to process biofuels - at a price. So I would come to the opposite conclusion: Skipping 200 million years of pressure and heat increases production costs significantly.

Page 179: He cites a claim by Aurora Biofuels that their process creates biodiesel with yields 125 times higher and 50% cheaper than current methods.

I am going to presume that this was supposed to read 125% higher and not 125 times higher.

Page 204: "When someone invents a carbon capture filter for vehicle exhaust pipes, there will be a nearly limitless supply of low-cost CO2 for growing algae."

I don't even know what to say about that one. It gets back to the issue of energy return. Anything you do here (e.g., compressing the spent CO2 from the vehicle) is going to take energy (and add weight to the vehicle) which is a penalty against the overall energy return of the process.

Conclusion

Let me say that I agree with the goals of Professor Mark Edwards, and that I think his heart is in the right place. I agree that we should spend research dollars on an algal biofuel program. I agree with him that economical algal biofuel could provide substantial benefits. (A good portion of the book was devoted to algae as food, and I didn't really address that at all in this review). Where I disagree sharply is that solving the technical challenges is inevitable. This is primarily where I found fault with the book.

On the other hand, the book was very informative on the topic of algae. I learned a lot I didn't know. But at the end of the book, my skepticism had not been swayed because I did not see a real pathway to get from where we are today to vast quantities of commercial algal biofuel. The book failed to make the case that the technical challenges will be solved.

No doubt Professor Edwards will disagree with some of this review. But I am a strong proponent of allowing people to answer criticisms. I therefore extend an open invitation to Professor Edwards. If he wishes to dispute or address any of the points I have raised, I will happily publish his comments.

The CEO Poll: On black gold Peak-oil theory has steadily been gaining traction over the years. A survey conducted recently by COMPAS Inc. found a majority of Canadian CEOs polled subscribe to peak-oil theory — the idea that the planet is running out of easily accessible and economical oil — but believe it is difficult to predict when peak production will occur.

More than 60% of the 117 CEOs agreed with the theory. Only 18% said new technologies and new discoveries will always allow for production increases. Another 16% not only espoused the peak-oil view but said we will be unable to satisfy demand in the near future.

“Finding easy-to-get-to oil is a thing of the past,” wrote one CEO. “Demand in the developing countries will increase as wealth builds. They will not have the money for new technologies. That will fall to the developed countries.”

Willem Schulte says we have enough oil, for now Willem Schulte: The world is not running out of oil, not at the moment.

That is Dr. Willem Schulte, Chief Scientist for Reservoir Engineering for Shell. He says that while there is a lot of oil and natural gas remaining, its getting harder to recover.

Willem Schulte: For the medium term, we have enough hydrocarbons to supply to the world. In the past, we have produced one trillion barrels of liquid oil. There are still two trillion barrels, or twice as much, to be gained from those same reservoirs. We probably can add three to four trillion barrels of oil from unconventional, more complicated methodologies to recover oil, which we considered unrecoverable so far.

Oil Traders Storing Crude on Seven Tankers Off U.K. (Bloomberg) -- Oil companies are storing crude on at least seven supertankers off the coast of the U.K., enough to supply the country for more than a week, even as higher prices reduce the incentive to put more oil into storage.

Seven Very Large Crude Carriers, containing as much as 14 million barrels of North Sea crude, are anchored off Britain, according to AISLive tracking data and the median estimate of six oil traders surveyed by Bloomberg. The U.K. consumed about 1.6 million barrels of oil a day in 2008, according to government data.

Total battles to extend life of North Sea field ELGIN FRANKLIN RIG, NORTH SEA (Reuters) - Extreme technical conditions and declining production -- Total's Elgin Franklin platform in the North Sea shows the challenges of oil that is becoming scarcer and harder to reach.

Ensco nixes Venezuela contract US Offshore drilling contractor Ensco International has ended its contract for a jack-up drilling rig with Petrosucre, after the unit of Venezuelan state oil company PDVSA had failed to pay past dues.

Iran's China oil outfit battles to boost exports BEIJING (Reuters) - National Iranian Oil Company (NIOC) has set up its first Beijing office to push for crude sales in China, but the world's No.4 crude exporter will have a tough job boosting volumes sharply in the absence of a refinery.

Now China's second biggest crude supplier, Iran sold China nearly half a million barrels each day in the first four months of this year, but posted only a tepid 3-percent year-on-year rise, far below the 26-percent rally in exports from top supplier Saudi Arabia, official data shows.

But if Iran can leverage its huge domestic resources -- like the $4.7 billion South Pars gas project that China's state-run CNPC has signed up to -- it may have a fair chance of boosting exports to the world's No.2 consumer.

Ukraine Says $3 Billion Needed for Gas to Ensure Europe Transit (Bloomberg) -- Ukraine needs about $3 billion this year to pay Russian natural gas exporter OAO Gazprom for imports of the fuel to ensure that a January halt of flows to Europe isn’t repeated.

NAK Naftogaz Ukrainy will have to buy about 16 billion cubic meters of gas to pump into underground storage, Valentyn Zemlyanskyi, a Kiev-based spokesman, said by telephone today.

Iraq's Energy Development Dependent on Politics Iraq is regarded as second only to Saudi Arabia in terms of its oil and natural gas reserves, but 80 percent of its fields lay undeveloped and those that are developed suffer from weakened infrastructure. At a recent conference in Houston, energy industry representatives and participants from Iraq focused on what needs to be done to develop the country's badly needed resources.

Iran opens largest Mideast gas injection project TEHRAN (Xinhua) -- The largest gas injection project in Mideast was inaugurated on Monday in Iran's southwestern province of Khuzestan, the official IRNA news agency reported.

West and Russia spar, China wins The Khabarovsk summit followed a series of energy conferences that EU convened recently in pursuit of its search of diversifying energy supplies by creating a "Southern Corridor" from the Caspian and Central Asia to Europe that bypasses Russia. Moscow sees the venture as essentially geopolitical and detects Washington's hand in it.

Europe's pipeline politics On the shores of the Baltic Sea, among the sea birds and sand dunes, a quiet energy revolution is taking place.

If all goes to plan, the island of Ruegen, off the coast of Northern Germany, will host the terminal for the massive new Nord Stream gas pipeline connecting Russia with the heart of Western Europe.

Ontario Teachers' files lawsuit in Oklahoma The Ontario Teachers' Pension Plan has filed a lawsuit in Oklahoma against Chesapeake Energy, accusing the chief executive and directors of breaching their fiduciary duties to shareholders "by approving excessive expenses."

Peak Coal: What Do Tighter Coal Supplies Mean for ‘Clean Coal’? If U.S. coal supplies are tighter than thought, that could have big implications for the great black hope of U.S. energy policy: so-called clean coal, or coal-fired plants that capture and store their emissions of greenhouse gases. That’s because capturing coal’s emissions requires a lot of energy.

‘Smart grid’ — buzz of the power industry Thomas Alva Edison, meet the Internet.

More than a century after Edison invented a reliable light bulb, the nation's electricity distribution system, an aging spider web of power lines, is poised to move into the digital age.

Who Killed the Hydrogen-Powered Car? Unfeasibility, expense were enough to do it in.

American flight will test fuel-saving tricks DALLAS - American Airlines will test fuel-saving technology and tactics on a Paris-to-Miami flight this week that the carrier and federal officials hope will help make the case for a new navigation system.

The plane on Thursday's flight will take a direct route guided by global-positioning technology instead of staying within the usual jetliner highways.

Large mammal migrations are disappearing Africa is home to spectacular migration events. Large mammals ranging from Grant's gazelles to blue wildebeests pound their hooves across vast tracts of land as the seasons change.

New research suggests, however, that migrations across the continent might be going extinct.

Oil: The rise and fall . . . and rise Where the crude will come from to satisfy these new wants is a puzzle. Most of the cheap and easy oil has been extracted. For much of this decade, when demand already was pushing the supply envelope, drillers ventured into fields and waters that required high expense and high technology to yield their riches. Now, many of those projects have shut down.

At the same time, OPEC has taken oil off the market, and some analysts believe worldwide drilling has dwindled more than 30% from a year ago. On the face of it, that seems out of whack with the modest scale of the current oversupply, and could worsen a squeeze in the years ahead.

Even a glut doesn’t change the nature of a finite resource -- just how fast it’s depleted. One reason oil companies journeyed to second-tier sources is that formerly prolific fields are drying up. The most spectacular example: Mexico’s relatively young Cantarell field. Only a few years ago, it provided more than 2 million barrels a day, but 2009 estimates have tumbled into the 600,000 range.

Understanding peak oil - Why we need the national academy of sciences to study peak oil (petition) A growing number of international geologists and analysts warn of a looming catastrophe with the onset of the decline in the global supply of oil. Likewise, reports by several federal agencies, including the US Army Corps of Engineers, point to the need for immediate action, because the foreseeable impacts on our infrastructure and economy are without precedent.

Please sign our petition, calling on President Obama and Congress to direct an immediate scientific investigation by the National Academy of Sciences (NAS).

‘Stagflation Scenario’ Stalks U.S. as Commodity Prices Jump (Bloomberg) -- As if General Motors Corp. didn’t have enough to worry about, a 60 percent jump in gasoline prices this year may cause inflation to soar as it did in 2008 and throw another roadblock in the way of recovery.

Rising costs for oil and gas sector ends BP and Shell have both said it, and now Cambridge Energy Research Associates is saying it, too: the runup in equipment and services in the oil and gas sector in recent years is over.

Gazprom receives Ukraine gas payment for May MOSCOW (AFP) — Russian energy giant Gazprom said on Monday it had received Ukraine's May gas payment in full, after warnings that a missed payment by Kiev could lead to a new gas crisis.

Gas Discovery Changes Israel's Energy Picture A huge natural gas discovery 50 miles off the Israeli coast at Haifa could potentially meet Israel's energy needs for 20 years once it eventually comes online. In January 2009, a consortium led by U.S. energy exploration company Noble Energy announced the discovery of three massive gas fields, with one of the group's partners calling the find "one of the biggest in the world" that represented a "historic landmark in the economic dependence of Israel."

Conoco Shuts North Sea Oil Output After Platform Is Damaged (Bloomberg) -- ConocoPhillips shut 23,000 barrels a day of North Sea Ekofisk oil production after a platform was damaged by a drifting vessel.

Iran aims to export gas -- minister TEHRAN (KUNA) -- Oil Minister Gholam-Hossein Nozari said here on Monday that Iran will be transform from being a country that imports gas to a country that produces it.

During the inaugration ceremony that was held at Aghajari oilfield in the southwestern province of Khuzestan, Nozari affirmed that his country is willing to increase the productivity of gas through establishing seven new refineries.

Oman plans to slash oil export reliance Oman plans to drastically reduce its reliance on oil exports and double its income from industrial activities in the coming decade as the Gulf Arab region strives to diversify away from crude export revenues.

The non-Opec oil exporter aims to reduce the contribution of the oil sector to its gross domestic product to 9% by 2020 from 41.5% in 2007, according to an official planning document from the Ministry of National Economy.

Pirates try, fail to hijack Libyan tanker TRIPOLI - Pirates in the Gulf of Aden fired on a Libyan oil tanker bound for China early on Sunday but failed to hijack the ship which sped on into safer waters, a Libyan newspaper reported.

The Aisha was carrying 144,464 tonnes of Nile crude from Bashir port in Sudan and was in a shipping lane subject to international monitoring, independent daily Oea said, citing a Libyan shipping official.

Nigeria: Oil Companies Oppose Review of Contracts Federal Government's decision to review existing oil exploration and production contracts in line with the reforms in the oil and gas sector has pitched it against the international oil companies (IOCs) operating in Nigeria.

Brazil mulls over pre-salt taxes Brazilian officials drafting a reform of the oil sector will propose that President Luiz Inacio Lula da Silva create a federal tax on companies developing offshore oil reserves deep under the ocean floor, a local newspaper reported today.

Algeria says to raise gas exports by 30 Bcm/yr within five years Algiers (Platts) - Algeria will boost gas exports by 30 billion cubic meters/year within the next five years to 85 Bcm/year when the Galsi and Medgaz pipelines to Spain and Italy are operational, oil minister Chakib Khelil said Sunday after signing two gas-related contracts worth $1.56 billion with foreign contractors.

The Geopolitics of Global Energy: International Competition, Rivalry and Conflict An International Workshop on 28-29 May 2009, Birkbeck College, University of London (The papers given at the workshop can be downloaded in Word format.)

Canada must contain The cost of borrowing money Italian Economic Development Minister Claudio Scajola called for an alliance between the private sector and governments to spur investment. "When the crisis is over, the risk of insufficient energy supply exists, and as a result high and unstable prices."

From these statements, it appears that some governments finally recognize a precarious situation in oil pricing and supply when they see one. There's a book that just went on my must read list, "Why your world is about to become a lot smaller - Oil and the end of globalization." Jeff Rubin, formerly CIBC's chief economist, foresees future recessions caused by oil price spikes in triple digits.

Kunstler: Lagging Recognition Through the tangle of green shoots and sprouting mustard seeds, a certain nervous view persists that the arc of events is taking us to places unimaginable. The collapse of General Motors and Chrysler signifies more than the collapse of US car manufacturing. It spells the end of the motoring era in America per se and the puerile fantasy of personal liberation that allowed it to become such a curse to us.

Life behind the plow after Starbucks Brace yourself for record-high gas prices. We're already paying almost a buck a litre as we reel through the worst recession since the Great Depression.

So just how fast and how high will prices soar when the recession ends and economic engines start firing again in China, India, North America and Europe?

There are two types of scientists... Assigning any group to one of just two categories is usually little more than an exercise in stereotyping. What do you do with someone like Francis Collins, for example? On the one hand, he's a brilliant genome sequencer, on the other he confuses (as Bob Park aptly writes) a "hormone rush" with "an encounter with God." But every now and then, plotting attitudes on an x-y grid and dividing the Bell curve into left and right halves is useful way of looking at a problem. NASA climatologist Gavin Schmidt essentially does this in an interview with Salon's Peter Dizikes, and in doing so helps make clear why geniuses the likes of Freeman Dyson get climate science so very wrong.

Green energy overtakes fossil fuel investment, says UN Green energy overtook fossil fuels in attracting investment for power generation for the first time last year, according to figures released today by the United Nations.

Wind, solar and other clean technologies attracted $140bn (£85bn) compared with $110bn for gas and coal for electrical power generation, with more than a third of the green cash destined for Britain and the rest of Europe.

World's First Floating Wind Turbine The world's first water-based, electricity-generating wind turbine is set to be installed off the coast of Norway this coming weekend.

U.S. Foresees a Thinner Cushion of Coal Every year, federal employee George Warholic calculates America's vast coal reserves the same way his predecessors have for decades: He looks up the prior year's coal-reserve estimate, subtracts the year's nationwide production and arrives at a new official tally.

Coal provides nearly one-quarter of the total energy consumed in the U.S., and by Mr. Warholic's estimate, the country has enough in the ground to last about 240 years. A belief in this nearly boundless supply has led officials to dub the U.S. the "Saudi Arabia of Coal."

But the estimate, recent findings show, may be wildly overconfident.

91.86.90 (video) 91•86•90. What do these numbers mean? Why do they affect you? Why should you care? Steven F. Crower, an energy investment banker from Denver, CO, finds a creative way to present the underlying data of the world's petroleum supplies and why we should pay attention to it...

Oil retreats below $68 as rally stalls Oil prices dropped below $68 Monday as a rally that has roughly doubled the price of crude in four months lost some steam in the face of economic reality.

Shell CEO warns next oil spike 'may already be in the making' Kuala Lumpur (Platts) - Oil and gas players are slashing spending on new projects amid the current recession, but as energy demand climbs over the long term, "the next [oil] price spike may already be in the making," the chief executive of Royal Dutch Shell, Jeroen van der Veer, warned Monday.

The steep slide in oil prices from their historic peak of July 2008 was "only a dent in a graph that goes up all the time," van der Veer said in an address to the 14th Asia Oil and Gas Conference in Kuala Lumpur.

Gazprom May Borrow $10.5 Billion From Russian Banks (Bloomberg) -- OAO Gazprom, Russia’s gas export monopoly, will seek approval from its shareholders to raise up to $10.5 billion in dollar, euro and ruble loans from state banks, it said in a statement on its Web site.

Venezuela state oil company earnings up in 2008 CARACAS (AFP) – Venezuela's state oil company reported Sunday that it reaped a 50 percent increase in earnings in 2008 over the previous year due mainly to high oil prices.

In its annual report, Petroleos de Venezuela (PDVSA) said it earned 9.4 billion dollars in 2008. At 126.3 billion dollars, sales of crude oil were up 31.3 percent over the previous year, the company said.

China Companies Eyeing $12 Billion Oil Deals, Morning Post Says (Bloomberg) -- China Petroleum & Chemical Corp. and other Chinese companies are considering overseas acquisitions of oil and gas assets worth as much as $12 billion, the South China Morning Post said, citing unidentified industry sources.

Gazprom CEO predicts oil reaching $85 per barrel by end of 2009 ST. PETERSBURG/MOSCOW (RIA Novosti) - Oil prices should reach $85 per barrel by the end of 2009, the head of Russian energy giant Gazprom said on Friday.

Iraq, Kuwait Dispute Flares Up as Oil Income Falls (Bloomberg) -- Iraq, holder of the third-largest oil reserves in the world, wants to halt about $25 billion in war- reparation payments to Kuwait as lower oil prices reduce its budget revenue and raise tension between the two neighbors.

High oil prices and the end of globalization really? Or a missed opportunity for Mexico and Venezuela It is a particularly thankless job to be an oil forecaster, as there are numerous unknowns: from the demand side, China has a very large impact but the accuracy of their information is anybody's guess. From countries with better access to information, such as the United States , there is also large room for error, as most economists can testify from their failure to predict the severity of the current economic recession. From the supply side, accessing the right information is already a challenge. For example, one would expect that OPEC, created by the largest oil producing countries for the sole purpose of defending producers' interests (i.e. prices), would have the best information available on their own members' production. That does not seem to be the case as the Government of Venezuela is trying to convince everybody that Venezuelan production is higher than what OPEC has reported. Of course, the biggest unknown is oil reserves. These are even more difficult to forecast since politicians and company executives have a vested interest in inflating them.

Japan's Itochu takes up fuel storage in Mid East "They have been looking around for tanks for quite sometime now, but the situation here in the UAE is tough...land storage is tight," a Middle East based trading source said.

"I'm not surprised they jumped at the opportunity to take up those tanks which Morgan Stanley gave up."

U.S bank Morgan Stanley (MS.N), which had previously held the tanks, did not renew its contract after it expired at the end of April, sources said.

Nigeria Tackles Oil And Gas Reform With 184 trillion cubic feet of proven natural gas reserves, 36 billion barrels of proven oil reserves and significant deepwater production growth from finds such as Total's Akpo field, Nigeria remains one of the world's most promising energy markets. Although most attention focuses on the challenges posed by militant groups in the Niger Delta, the success or failure of the country's regulatory reform process could have an even greater impact on future energy production.

Cuba could become U.S. oil supplier at embargo's end Cuba has launched a bold policy of oil development that could turn the country into an important supplier of fuel in the Caribbean — and the United States, should the embargo be lifted in the future.

But world economic turmoil might sidetrack Venezuela's commitment to underwrite the multimillion-dollar projects in Cuban refineries and ports.

Obama seeks global uranium fuel bank WASHINGTON - As part of a new strategy to stop Iran from obtaining nuclear weapons, President Obama plans to seek the creation of the first-ever international supply of uranium that would allow nations to obtain fuel for civilian nuclear reactors but limit the capacity to make bombs, according to senior administration officials.

Coal's Pipedream? President Obama should be applauded for taking climate change seriously, recognizing that the phenomenon can be traced to the burning of fossil fuels and intensifying the search for viable solutions. In one of its centerpiece initiatives, however, the administration may be digging a very expensive dry hole.

Green Promise Seen in Switch to LED Lighting LEDs are more than twice as efficient as compact fluorescent bulbs, currently the standard for greener lighting. Unlike compact fluorescents, LEDs turn on quickly and are compatible with dimmer switches. And while fluorescent bulbs contain mercury, which requires special disposal, LED bulbs contain no toxic elements, and last so long that disposal is not much of an issue.

“It is fit-and-forget-lighting that is essentially there for as long as you live,” said Colin Humphreys, a researcher at Cambridge University who works on gallium nitride LED lights, which now adorn structures in Britain.

Wisconsin: State's wind-power opportunities blowing away Eight times as much wind power is being generated today as there was a little more than a year ago. But electricity from the wind still accounts for only about 5% of the state's power supply.

Pertamina to cut biodiesel content in gasoil on subsidy issues Jakarta (Platts) - Indonesia's Pertamina plans to reduce the biodiesel content in its biodiesel-blended gasoil to between 1% and 5% from the current 10% if it does not receive government subsidies on the biofuel for 2009, a senior company official said late last week.

Water Fights, Dying Forests, Roving Homeless Are Earth’s Future (Bloomberg) -- In one photo, flood-plagued Bangladeshis crowd onto a speck of road surrounded by rising water. Another image gives an aerial view of Florida’s Delray Beach, where luxury high-rise buildings cluster on a thin strip of eroding sand.

Gary Braasch, an award-winning environmental photojournalist, captured those shots and their embedded warning of global catastrophe. His book “Earth Under Fire: How Global Warming Is Changing the World” combines field experience, scientific reporting and stunning pictures of what’s already happening as the planet warms. An updated version of the 2007 edition has been issued by the University of California Press.

Texas: State climatologist talks global warming - “We're going into territory we haven't seen in millions of years” Nielsen-Gammon said that by midcentury, temperatures will increase by 1 to 3 degrees Celsius, possibly more. Precipitation will become more variable, resulting in more droughts and more floods. Hurricanes will grow fiercer, and Texas' water resources will be depleted about 10 percent.

Globally, there will be “large expanses of the Earth which supported life that no longer do so,” he said.

China and U.S. Seek a Truce on Greenhouse Gases WASHINGTON — For months the United States and China, by far the world’s two biggest emitters of greenhouse gases, have been warily circling each other in hopes of breaking a long impasse on global warming policy.

They are, as President Obama’s chief climate negotiator puts it, “the two gorillas in the room,” and if they do not reach some sort of truce, there is no chance of forging a meaningful international treaty in Copenhagen later this year to restrict emissions.

Climate change groundhog day The same nonsense, the same confusions - all seem to be endlessly repeated. But what needs more explaining?

Canada "bullying" developing countries over Kyoto: Environmentalists OTTAWA — Environmentalists say government documents show Canada's role in international climate change negotiations includes "bullying" developing countries, backpedalling on commitments and attempting to exploit divisions in Europe.

Indian farmers to insure themselves against climate change crop failure For more than half a million farmers in rural India the age old fear of crops failing due to bad weather could soon be banished, thanks to an innovative insurance scheme that UN negotiators gathering in Bonn this week are considering as a central component of climate change adaptation measures in Africa, Asia and Latin America.

Following a successful trial last month, MicroEnsure, a company specialising in providing insurance to poor communities, plans to launch a scheme next year for up to 600,000 farmers in India's Kolhapur province allowing them to insure against their rice crops failing due to drought or heavy rains during the plants' flowering period.

A U.S./EU Dogfight Over Greener Air Travel American airlines are balking at new EU emission rules, but with British Airways and others on board, they may be fighting a battle they can't win.

Airlines reject new tax to fight global warming The airline industry has rejected calls for a compulsory tax on international flights to help the world's poorest countries fight global warming.

The chief executive of the International Air Transport Association, Giovanni Bisignani, said carriers were "absolutely against" another levy in a year that the industry is expected to lose $9bn.

Train can be worse for climate than plane True or false: taking the commuter train across Boston results in lower greenhouse gas emissions than travelling the same distance in a jumbo jet. Perhaps surprisingly, the answer is false.

A new study compares the "full life-cycle" emissions generated by 11 different modes of transportation in the US. Unlike previous studies on transport emissions, this one looks beyond what is emitted by different types of car, train, bus or plane while their engines are running and includes emissions from building and maintaining the vehicles and their infrastructure, as well as generating the fuel to run them.

This series concludes by visiting a political bloc that represents another major philosophical current in Europe. The Confederal Group of the European United Left – Nordic Green Left (GUE-NGL) is the Scientific Socialist reference at the European Parliament. Although composed at its core by state-level Communist parties, it also brings together some less Scientific parties that haven't yielded to Liberalism. More than sharing a philosophy, GUE-NGL members share a common reluctance towards the Europen Construction process, at least in its current form.

Editors' note: Apologies to readers. Luis completed this post a few days ago, but through a mix-up on the editorial end, it did not get promptly posted. Since these parties have platforms that may still be of interest, we offer it to you at this late date.

It all started 150 years ago when a German textile tycoon sent his young son to work at one of his factories in Manchester. During the two years spent there the young man became convinced that the Industrial Revolution was resulting in poorer, not better, living conditions for the majority of the population – the working class – which led him to write a book on the subject – his name: Friedrich Engels. After two years in England, Engels decided to go back to Germany. On the way, he stopped in Paris to meet another young thinker: Karl Marx; his journey ended there. Moving to Brussels the next year, they would spend three years writing “The Manifesto of the Communist Party”. The rest is history.

At least, that is one of the ways of starting the story. What Marx and Engels presented was the idea that social inequity had as its roots on the control that certain individuals had on the Commons, and on the means of production in general. To deal with that imbalance, the only proper remedy would be to simply eliminate any sort of private control of the Commons and deliver control of the enterprise to the working class.

A thorough accounting of what Communism achieved in Europe is beyond these simple lines, a profoundly rich story that would be quite extensive. Fast forward to the early 1980s with the second oil shock and Europe divided in East – surrendered to Communism – and West – surrendering to Liberalism. The collapse of oil prices in 1985 coupled to the peak of oil production in the USSR triggered the collapse of the Communist bloc, which eventually led to Europe becoming more uniform in political terms, with Communist parties relegated to the background in a Market Economy backed by rotating Democracies.

With the Globalisation process following the implosion of the USSR, a slow process (that was already in march in many states) shifting the working class from blue collar to white collar jobs ensued. The Communist parties largely failed to appeal to this emerging working class and progressively lost their grip on the electorate, something quite visible in their Parliament results, going from over 10% of the seats in 1979 to just over 5% in 2004.

Communist parties in Europe today are not exactly the same as those of the XIX century. Fully integrated in the Democratic process, they do not advocate for Planned Economies, choosing instead to advocate for state control of key services in a market economy framework. Their biggest flag in recent years has been the fight for workers' rights, confronting the precariousness of labour contracts imposed by the Free Market. Modern Communist parties are sometimes compared to the Social Democrats of the early XX century, when Socialists of that time re-factored Socialism to integrate a multi-party democracy. As a reference for foreigners, many of the concerns of European Communists are common to the Socialist Party of America, although the latter goes further left in many issues.

GUE-NGL is less of a party and more of an ideological platform; its parliament members retain almost full independence, especially on state matters. There isn't, for instance, a common Vision for Europe put forward. Of all the groups reviewed in this series, GUE-NGL is the least cohesive and farthest from the traditional concept of a party.

GUE-NGL's website is sober but well organized, far from the mega-productions of the traditional parties. It has a great focus on the people: each parliament member is presented individually. Each state-level delegation is also presented in some detail. There's even a section dedicated to the party's staff, with a small file presenting a picture and contact for each. GUE-NGL also doesn't present election specific content, something that seems exclusive of the big parties; possibly a consequence of budget limitations. But the website contains a section entitled Policy that a lists a good number of areas for which the party tried to present structured but simple ideas. Clicking on Energy, the reader is presented with two lonely paragraphs:

ENERGY

The GUE/NGL Group has contributed to adopting new legislation to enhance energy saving policies, to improve energy efficiency and to reinforce the use of renewable energies with the objective of respecting the commitments made by the European Union at the Kyoto Conference. We continue to press the case globally for renewable energies and we emphasise the role that research into energy efficient vehicles and investment in clean and ecological public transport systems could have on limiting pollution and protecting the future of the planet. The active development of renewable energy will go some way towards addressing the fossil fuel crisis and can lead to environmental improvements. It can also bring economic benefits through developing new technologies and creating new jobs.

"Contributing to meeting the energy challenges of the 21st century is a European responsibility, but it cannot be adapted to an unbridled race for profitability or competition. Preparing the post-oil era; progressing much further in the reduction of greenhouse gases; increasing the research effort to boost energy efficiency and diversity; transforming the organisation of transport; establishing the right to energy for all - these are the eminently political tasks that cannot, for risk of failing, be allowed to be kept in check by short-sighted market considerations." Francis Wurtz.

“Post-oil era”. Words that are not that common in the political discourse these days (with the proper exception made for Commissioner Piebalgs). These lines attempt simply at a Mission and Vision, not at a real Policy. Some keys areas of action are identified; but it is not that clear if the party really aknowledges the emergency of the moment. And at the closing stages “the right to energy for all” ends up somewhat dislocated from the rest of text, no matter what good intentions are behind that sentence. Before the right to energy comes the access to, or production of it.

Such meager lines prompt a bit more of research through the website's sections. There are a few loose articles on the matter which do not bring forth an integrated perspective. Worth reproducing is a two year old note by Francis Wurtz, the party's President, on Liberalisation proposals by the Commission:

Statement by Francis WURTZ, President of the GUE-NGL Group in the European Parliament
Following the Commission's proposals on energy

Brussels, 19/09/07

As it had announced, the Commission has just proposed a new legislative "package" in the field of energy.

More than ten years after the adoption of the first liberalisation directives, the assessment is gloomy: in terms of prices, security of supply and of environmental performance.

Prices are escalating: electricity charges increased by 9% in the EU in 2006, the Union is not immune to the serious crises that are believed to be the preserve of other continents, such as the massive blackout of November 2006 which left millions of Europeans without electricity. As for the sustainable energy challenge, it is still worth noting that coal and gas account for 48% of the electricity production of the EU.

The official report is therefore sufficiently alarming so that one wonders about the justification of the method followed up to now. Instead of that, the Commission is pushing ahead, and now proposes a pure and simple separation between the production means and the distribution network - in other words the dismantling of major companies trusted by all for the quality of their service. It brings to mind the drunkard from St-Exupéry's tale who, having drank too much, drinks without further ado to forget… that he drinks.

My group defends a radically different vision for the European energy domain. Energy is a strategic asset, essential to the economy as well as to society. It is a common asset to which any and everybody has to have access. The service of general interest that entails the production, transportation and distribution of energy has to be defined democratically and entrusted to public operators equipped with the necessary industrial means, and all the more accountable thanks to an irreproachable method of governance, with respect to their employees, with respect to consumers and the entire company. They must absolutely be preserved and put in a position to contribute to a genuine European public energy service.

My group will therefore fight with the employees, with consumers and with the advocates of public service, against the dangerous draft that the Commission has just submitted.

There's life beyond Liberalisation. By nature, Communism and unbundling/deregulation don't exactly match, but it is good to know that at least someone at parliament understands that these tactics will not provide Energy Security.

This peering into GUE-NGL's Energy Policy ends up being a major disappointment. There's no clear policy to show. It isn't even clear if this is a priority area of intervention or not; too little information, without making any commitments. Being traditionally an opposition party and with a declining electoral base, GUE-NGL is one of those groups that can afford, and actually profit from, bringing to the debate those issues that aren't comfortable for bigger parties. That's more or less the Greens' strategy, but unfortunately, such isn't case with the Communists. If Peak Oil isn't a disruptive event capable of triggering social change, then what will be?

Final notes

Taking the extra space haplessly provided by the GUE-NGL, these final paragraphs reflect on this series as a whole.

The first point to make is that Energy is not a determining area to choose between any of these parties; none of them provides a serious, congruent programme to deal with fossil fuel scarcity. Apart from the Greens-EFA, all the parties leave Energy in the background, with little or no priority. The Greens are willing to commit themselves to more objective strategies, especially in the Transport sector, scoring points in the Efficiency front, but don't really grasp the urgency of the moment and compromise their stance with an unrealistic outlook on Nuclear.

To all these parties Growth is an accepted fact, an immutable constant, a goal pursuable and to pursue above everything else.

Before leaving, it is perhaps good to stress that although this series encompasses all of the major parties and political currents in Europe, this series left much uncovered. There are more political parties in Parliament and many more at state-level that do not have seats at the moment. An informed voting decision should properly look into those parties as well. To assist in finding parties, there's a handy electronic tool that informs the citizen which parties are closer to his/hers philosophical profile:

EU Profiler

May the 2009-2014 term be the one when Europe overcomes its dependence on Fossil Fuels.

Previous entries of this series:

Greens-EFA

ALDE

PES

EDD-ED