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15 March 2011

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charlie

I think it is an interesting race. On one hand, you have the biggie: Saudi Arabia. Then the various gulf states. They can generate enough money and their population is small enough -- barely -- to keep them happy.

But everyone else -- even Iraq, Iran, Libya, etc. --while they are going to pull in a lot of cash from oil sales and a price spike, the commodity prices inflation will kill them.

Not sure where we sit in all of this, except to save our oil for when it is really expensive.

Clifford Kiracofe

Oil issues are covered and debated in depth on the blog called "Oil Drum.". That blog in turn lists many other links. Some OD types are serious geologists and there is debate on all sides. There are highly technical comments for those so inclined.

Perhaps an SST reader with expertise could comment on the impact of hedge fund speculation on prices.

walter

I believe that hedge funds are factoring in the many variables that effect the eventual supply/demand balance...most of which are perceptions of future supply/demand rather than actual measurements of supply (inventories) / demand (purchases, orders, etc). Some of these variables are:

actual supply vs actual demand

perception of supply vs perception of demand

economic strength (demand) from emerging economies (China, India, etc) who are the recent marginal buyers

Value of USD vs other currencies (as USD devalues, oil prices go up)

US Fed monetary policies (printing money out of thin air (QE1, QE2; lowering interest rates; guaranteeing and backstopping credits, etc) easing raises oil price; tightening lowers it

US Fiscal policy: deficit spending raises oil price as it increases demand in short run

Technical trading factors: see technical analysis

political risks (wars, threats of wars,

So, in sum, speculation is merely an attempt to predict present/future supply/demand balance given the many variables which effect supply and demand.

Major factor effecting current price run-up are 1. QE2 (the Fed is keystroking hundreds of billions of dollars on their keyboards and directing this free money to primary dealers (banks) who are purchasing hard/tangible assets like oil in anticipation of declining value of USD due to Fed increasing supply of USD without any work/product/value backing the USDs
Walter

arbogast

The Oil Drum:

http://www.theoildrum.com/

has near term futures contract price graphs on the right hand side of their blog. They can be clicked on for more detailed data.

They also, today, have the following quote. I offer it as a commentary on Libya, where the interests of humanity in oil for their cars, homes, etc. has, not for the first time, trumped their interest in representative democracy.

“If kindness and comfort are, as I suspect, the results of an energy surplus, then, as the supply contracts, we could be expected to start fighting once again like cats in a sack.”
—George Monbiot

If I understood what moved spot oil prices, I would be dictating this comment to a secretary in a corner office. What I do know is that if there is more money around, things will cost more. Leverage raises the price of everything.

Norbert M. Salamon


Clifford:

accordng to recent info on the OILDRUM.COM, most oil prices are set by the members of the OPEC nations in term of set prices, often monthly [ to difffenrent markets - e.g. Orient, USA, etc]. The hedge funds gamble on trying to forerun the prices as set by OPEC {& Russia mostly to Europe]. If they guess right they make lots of money, if they guess wrong they loose a lot of money,

WTI reflects the idiotic pipeline situation to Cushing, Brent prices are the spot prices for reference quality oil, neither has anything to do with the montly price setting power of Saudi Arabia, Russia, Iran et al [the countries which have control of their oil, as opposed to having the USA/UK/etc corporatoions setting prices.]
Both WTI [in N America and Brent [in rest of world] reflect the spot prices, that is prices for extra oil over the contracts by OPEC, Russia, et al, and that produced by capitalist corporations. I do read the oildrum daily for a number of years, and notwithstanding Japan's nuclear accidents, there is no other choice to compensate for declne in oil and gas in the mid to long term.
Energy in and energy out [ a standard measurement of productivity in energy supplies] indicates that there is no panacea in wind and solar, for both are very intermitent [problem of storage]. Bio based production is at best even, if not negative procedure in Energy Balance.

Perhaps the major powers should devote more research into THORIUM liquid salt nuclear plants, and less in maintaining the useless A-bombs [the USA spends 14 billion dollars per year on this useless armament].
Theoretically there is no possibility of melt down in Thorium/liquid salt nuclear plants, theoretically they are cheaper to build and have less radioactive byproducts in need of disposal, and do not have to be changing fuel regularly. No need for reprocessing fuel rods/balls.

Cheers - the above is the best condensation I can do [based on what I read at OILDRUM], without doubt there are others who work in this field and can do a better job of describing the details.

Adam L Silverman

Professor Kiracofe: One of the most readable explanations of this is from Chapter 4 of Matt Taibbi's Griftopia. The whole chaper is on the commodities bubble, with a focus on oil. I've read a lot of stuff on commodoties and how their exchange is supposed to work, much of it in prep for my work in Iraq - where we were assigned, had it been properly irrigated, was part of the breadbasket of Iraq. Taibbi's chapter is one of THE MOST accessible I've seen on how this all should work versus how we're letting it work. He briefly touches on it in his weekly mailbag, its the last question he answers this week:
http://www.rollingstone.com/politics/blogs/taibblog/mailbag-charlie-sheen-9-11-truthers-oil-prices-20110314
Just an FYI - he writes like a sailor talks, so if you don't like foul language, you've been warned...

That said, let me try to provide some explanation, partially derived from Mr. Taibbi's reporting. Basically what happened is that in the 1980s the big Wall Street financial companies bought into a bunch of different firms that held seats on the commodities exchanges. Then they began to lobby for changes in how speculation could occur. The Commodity Exchange Act from the 1930s was intended to, and did, prevent speculators from making hash of commodity prices, most of which are day to day necessities by placing limits on the positions they could take. Basically the speculators, which are necessary for the proper function of a commodities exchange, were limited in what they could do. There sole purpose is supposed to be that the people that grow or produce the raw material that is the commodity or turn it into an actual, tangible physical product(both groups known as physical hedgers) would always be able to find either a buyer of the raw material or a seller of it. So the speculator was created. This individual will buy the raw material even if no one from the convert it into something to be consumed sector is buying. And then this speculator will sell the raw material to the manufacturer on days when there are no raw material producers selling. Basically the speculator was (is) supposed to be limited to acting like a type of escrow account for raw materials so the sale of commodities doesn't seize up. This also allows both the producers of the raw materials, as well as the consumers of them who turn them into finished products (whether its corn into breakfast cereal or petroleum into gasoline)to lock in fairly stable prices, ie hedging against future risk, which in turn result in fairly stable prices for the rest of us who are just consumers. the whole point of the exchange is to hedge against risk of locusts, drought, whatever could interrupt the production chain somewhere.

So what happens is that in the 90s the commodities trading companies (now owned by big financial firms) began asking the government for a relaxation on the limits to the speculative positions they could take that are set by the law from the 1930s (which were created as this was the last time they blew up the commodities market...) Basically they argued that just like the farmers and petroleum companies they were taking big risks too, so they should be able to reap big rewards. Instead of being the grist that keeps the mill wheel rolling, they argued that they needed to be viewed as important as the mill, the miller, and the material being ground. They didn't want to be considered as speculators anymore, they wanted to by physical hedgers. Once the government agreed to this in the early 90s, the limits placed on the positions the speculators could take was essentially eliminated. This was all done by the Commodities Futures Trading Commission through letters to 17 different companies. And was largely done in secret. Once this occured, over the next almost 20 years, more and more of the trading on the commodities exchanges becomes purely speculative. Its no longer intended to match up buyers/consumers of raw materials to be converted to finished products with the sellers/producers of the raw materials, now its intended to function like a major profit making market. And its self feeding. The more money that is invested into the commodities markets, the more expensive the commodities get. Everything winds up being a long position because the money is chasing the commodity which is now chasing the money. So leading up to the petroleum price insanity of 2008, just like now, nothing in reality, other than pouring speculative money into the commodities market, can explain the rise in oil prices. Production wasn't down, the Chinese weren't actually consuming so much more that supplies were tight, in fact supplies weren't tight at all. And they aren't now. Even information that could lead to a fear based spike really shouldn't have mattered then, just as it shouldn't today. We get virtually no oil from Libya, the Suez Canal is still open for business, and the Saudis have made it clear they'll pump more to make up the difference. Demand isn't up in the US, its not spiking in China. So what's driving up the price? Speculation in the commodities markets - basically commodities as speculative bubble.

R Whitman

Having been around the outside of the "awl bidness" since 1959, I can confidendly state that you cannot predict the future price of oil.

Try this experiment: right now write down your predictions for WTI and Brent for April 15, 2011, Sep 15, 2011 and March 15, 2012. Chances are that not one of the six figures you put down will be within $.50/bbl of being correct.

Adam L Silverman

Professor Kiracofe: Here's another good source on what happened in 2008
http://ftalphaville.ft.com/blog/2008/09/10/15761/oil-price-speculation-masters-back-on-the-attack/

Fred

Norbert,
A Thorium plant is unlikely to be built even though the theoretical fission cycle is promissing. Oakridge National Laboratories already did significant research into these in the late '60s. Similarly the Atomic Energy Commission had research on BWR's (boiling water reactors) in the 1950's. The problems seen now were discussed then. These were only built for one reason, lower construction cost. The issue that won't be discussed is summed up in 6 words, 'free market and less government regulation'. What is happening at Fukushima is one shining example of why regulation and accurate sciencentific knowledge are necessary today. The problems at Fukushima are the result of an earthquake and tidal wave, not an accident. The risks of any such combination in most of the US is pretty close to zero.

What should be getting asked is just what is the USN doing. It's been almost 5 full days, don't they have a ship in place as a plaform for airlifting in de-mineralized/borrated water for use in cooling these plants? Emergency diesel generators and associated cables and switch gear for replacing those damaged by flooding? Air compressors and piping? Surely the list of materials shouldn't be that difficult to create nor airlifting said equipment from, if necessary, us utility companies, to somewhere nearby where it can be sent in. If it no one in naval reactors (or whatever they call it now) has taken initiative to make some of this happen more than a few heads should roll. I can't imagine that Rickover would have waited 5 hours much less 5 days get things done.

arbogast

http://www.zerohedge.com/article/why-oil-has-peaked

VietnamVet

Colonel,

The energy issue is a Gordian Knot of our civilization. I am proponent of electrifying Americans railroads and shifting long distance freight and passengers from diesel powered vehicles. I’m a loon crying in the distance. Why? Two reasons: the Special Interests (Oil Oligarchs, Wall Street and War Profiteers) and Ideology (Peak Oil and Climate Change are anti-god) that prevent rationale approaches to solving America’s problems.

No wonder Corporate Media and right wing Think Tanks are attacking American public education. Can’t have the downtrodden realize they and the kids’ futures are being screwed by today’s Neo-Robber Barons. They deny at every opportunity what happened in Japan could ever happen in America (even though everyone brought up on the West Coast knows the big one is coming). I just didn’t acknowledge till this week that a huge tidal wave will hit the USA sooner or later. It could be financial, environmental, or that Asteroid whose trajectory God or NASA couldn’t change.

Adam L Silverman

Fred: If I recall the reporting correctly the reason the US response has been slow is that we kept offering our help and they had been turning it down.

The Union of Concerned Scientists has a good rundown in this trascript of a teleconference on what the concerns are (hat tip to the Balloon Juice folks):
http://www.ucsusa.org/nuclear_power/nuclear_power_risk/safety/nuclear-crisis-japan-telepress-transcript-03-15-11.html
And off to the right on the links there's one for nuclear power safety

Harper

Absolutely right that this is a vital topic. A few maybe obvious observations: The oil companies funded the entire anti-nuclear movement in the 1970s, which successfully shut down any new nuclear power construction in the United States for the past 40 years. Look at the Rockefeller (Standard Oil) funding of the Natural Resources Defense Council (NRDC) as just one example, and the role of Royal Dutch Shell's Futures Group in the same.

Prior to the mid-1970s, most oil contracts were 20 year state-to-multinational fixed price contracts. By the mid-1970s, the spot market had opened the speculative factor on oil prices, and suddenly, the whole speculative racket was off and running, between insurance prices, sales and resales, often a dozen times between the time an oil supertanker left the port and arrived at the final refinery destination. Later, hedge funds and other strickly speculative outfits got into the act--bigtime--and tacked another speculative price spike on top of what OPEC and the oil companies themselves were charging as add-on profits.

As far as I can tell, peak oil is a propaganda tool, used by those speculating on oil futures, to artificially keep prices outrageously high, by playing the scare card. Between vast untapped sources of oil, yet to even be discovered, and the prospect of a big expansion of nucler power--even despite the tragic events in Japan--there ought to be a serious cut in oil prices.

It has been raised that there should be strict regulations on the commodities futures markets. Simple rule: If you can't use it, you can't buy futures. Why should Goldman Sachs jack up prices of jet fuel, when they could not take delivery on the commodity they are "buying?" Yes, Southwest Airlines needs to hedge on future jet fuel price spikes, because they need the fuel at guaranteed prices to stay in business. So, put those kinds of sensible restrictions on who is allowed to trade on the futures markets. Otherwise, there is no reason on God's good earth why we cannot return to the pre-1970s system of longterm contracting for deliveries at stable prices, adjustable for overall inflation. Japan's last 25 year contract on Saudi crude oil expired just a few years ago.

And then, go nuclear in a really big way. There are many different designs of new generation nuclear power plants that are safe, and some models are not vulnerable to weapons grade proliferation. Pebble bed reactors were developed by the Germans and are now going commercial--in South Africa. India has been working on thorium reactors for decades, and have now commercially viable models set to put into production. Part of the problem has been the anti-science hysteria funded by the oil companies and their allied banks, and fueled by counterculture anti-science Luddism of the greenies. None of the so-called alternative energy sources like wind or solar produce enough energy or energy flux density (heat levels) to be commercially viable. They are, in fact, net losers. But nuclear is the clear wave of the future, until we do the last remaining scientific and technological work to perfect commercial fusion. Probably 15 years into the future, but we could have gone commercial a decade ago if research funding had not been cut back drastically.

With adequate nuclear energy, we can also solve the problems of water shortages, through high tech, high energy desalination. Let Saudi Arabia replace DuPont as the petrochemical giant, and let us have a serious plan to get beyond fossil fuel dependency over the next two or three generations. We are human beings. We can plan for the future, and use science to the benefit of mankind.

Adam L. Silverman

Harper: ive made that point about the Shell futures report here before. It is in that report, written shortly after Shell acquired significant uranium interests, that the term peak oil was first used. I think I've got a copy of the report somewhere on digits (amazing what one can find on the Internet...), so I'll give a look for it later and if I can find it I'll upload it as an attachment. And before anyone has a freak out: yes, I know oil is not a renewable resource and that we will eventually run out of it, Shell's creation of peak oil or not.

WP

Japan is a good example of how to handle oil. For many years, Japan has always had all of the oil it ever needed, all without the ecological degradation caused by its extraction. In WWII, Japan tried to conquer the resource sources and failed. Since then, it has just been a consumer and purchased at market prices and has done well. Regardless of whether you own the resources, or conquer them, or whether you buy them, ultimately you get them at the prevailing world market price. Perhaps, we should stop the warring and let our traders do all of the work for us and let our engineers compete to discover the best extraction process so we will make the most money providing technology and knowhow on the extraction end of the equation. Germany is a great example of a country that has failed at warring and won on providing services and technology. China may already have learned the lesson that trade and services are more successful and profitable than warring.


walrus

There are a number of issues conflated here.

There is the question of the workings of the market itself, then there is the question of supply and demand for oil. I am an expert in neither.

The issue with the workings of the market is corruption. That comes from Three sources: Sovereign corruption - which is market manipulation by China, Saudi Arabia and others for their own purposes. Then there is organised crime. Then there are the Hedge Funds.

Regulators, and most probably others, do not seem interested in stemming corruption otherwise there would be a world wide ban on naked short selling, among other things, by now.

As for the Hedge funds, In 2008(?) during the last price spike, I watched an Australian billionaire take a call from New York and then announce to all within earshot that he was now "in the Oil business". The trick for these guys is to know when to quit while ahead.

Contrary to popular opinion, a little speculation is necessary in commodity markets to provide liquidity. The trouble comes when "Synthetic" investment products backed by notional commodities are created. For example the volume of Gold backed "investment" securities is Two Hundred Times the worlds physical store of the metal. This has lead one group of economists to advise its clients that if they wish to invest in Gold , then it must be physical metal, stored personally. All those holdings "stored in our secure vaults in Jersey" are vapour should there ever be a run on gold.

As for oil supply, Wikileaks reports that U.S. Diplomats believe Saudi reserves are nothing like what they suggest. However that is not the main problem. Others have pointed out that we will never run out of oil. What we will run out of is easily extractable and therefore cheap oil.

As for oil demand, I said in another forum around year 2000, that if America, as the worlds biggest oil consumer, didn't curb its appetite for cheap oil voluntarily by Government intervention, then the market would do it for you, with much more concomitant pain.

However there is an even bigger issue to do with oil - that is to do with productivity. When an Indian or Chinese peasant buys a motorised pump or replaces a horse and cart with a truck, he doubles, or quadruples his productivity. He can and will be motivated to pay much more for oil than some American guy who wants to drive his Hummer to McDonalds.

To put it simply Oil in America has been too cheap for too long and the inevitable market distortions this created will be corrected in due course by the free market, if it is allowed to.

To put it another way, why isn't America producing a wide range of the worlds most fuel efficient vehicles? American primacy is a given in many other fields of endeavour, why not this one?

Fred

Adam, I am of the opinion that the pre-positioning of equipment does not require a permission slip from a bueuarcrat. If the collection and movement of equipment was delayed because of 'lack of permission' the president needs to fire someone. The USN can sail anywhere in international waters it pleases, including 100 miles offshore of Fukishima.

As to the Union of Concerned Scientists the the document you linked to they referenced 9-11 on page two; it took them a dozen more pages to get around to the references to the BWR owner's group emergency procedures. Frankly I find the UCS counterproductive.

Here's a couple of quotes:

"This is Ed Lyman. "…. but our main concern is that the industry here in the United States and elsewhere doesn't try to continue to whitewash this event and pretend that it isn't something which it is, which is one of the most serious accidents that has occurred at a nuclear power plant in the history of nuclear power."
Followed further on by:
Ed Lyman. "Just one more point, that you -- I think as members of the press, you may want to investigate whether the story that is coming out of TEPCO and the Japanese government is fully consistent with their own picture of the situation or if they're still trying to cloud the picture. "

They are hardly unbiased. No one in mentioning trains washed off the tacks as train 'accidents'. This incident was NOT started by an accident at a power plant but by an earthquake followed by a tidal wave. The risk probability of that, outside of Japan, is low. What is needed now is not clarity at a press conference.

There are 400,000 homeless in need of food, water and shelter. Panic is of negative value and hyping the problems a Fukishima are counter-productive, regardless of the scale of that problem at that location. Dr. Lyman is a PHD in Physics, he should stick to the issues related to design. His comments about fires in spent fuel pool being from H2 released by zirconium water reactions are pure speculation. It could just as easily be a short-cicuited light fixture. (As to my background, 15 years of military and commercial nuclear power plant operations and maintenance (electrical gernerating and distribution systems), including multiple re-fuelings at commercial power plants.)

The emergency diesel driven generators failed on day 1, it is now day 5, what was the failure, electrical or mechanical, why haven't they been repaired, what is needed to fix them? What replacement equipment is available. (I'm sure we could have flown a few out of Iraq by now.)That's what needs to be asked, not why isn't the NRC requrieing moving spent fuel to dry storage quicker, etc.

Frabjous

Does anyone know if U235 is pyrophoric like U238 (so called depleted uranium-which when used as a munition wreaks havoc inside whatever is targeted by the round, say a tank)? I would think so as radioisotopes tend to have similar chemical properties.

That is to say, does it burn like magnesium if ignited? I ask because the link above (union of concerned scientists telepress) describes what can happen when the spent fuel pool loses cooling - the zirconium cladding around the rods can burn, so if the U235 inside the rods is pyrophoric, and the ceramic coating is compromised (not hard to imagine if the rods are burning and losing their physical integrity), the U235 would burn as well, creating a cloud of radioactive combustion products which would be a BAD thing, I would think.

Mark

Norbert M. Salamon

It is what it is. Go where the data leads you.

Exactly! And for starters see Pollux's post upthread:
U.S. Net Imports of Crude Oil and Petroleum Products at lowest level since March 1998.

But how can that possibly be when we just hit an all time high in world production? Easy, it's called the Export Land Model. Producing countries are using more and more of their oil for their own use. Take Saudi Arabia for instance. Their population is growing by leaps and bounds. Their population is getting restless so the King is giving more and more to the people in an effort to keep them happy. He is giving them very cheap gasoline, very cheap desalinated water and very cheap electricity. As a result they are using more and more of it each day.

Soooo... this means that Saudi Arabia, and all other exporting nations are using more and more of their own oil and exporting less and less.

The EIA only has export and import data through 2009 but that is enough to give you the idea. The chart below represents all exporting nations crude oil exports minus their crude oil imports. It is net crude oil exports of all exporting nations, 2000 thru 2009 in thousands of barrels per day.

There is one thing that the chart does not show and that is net exports of refined petroleum products. The EIA only gives that data through 2007. But the 2007 export of refined petroleum products, minus imports, was about half a million barrels per day below the 2005 level. So if you could include that data then the total net exports would be down even more.

The data is what it is, go where it leads you. And when you do you will realize that as far as all crude oil importing nations go, we are not at peak oil, we are way past peak oil.

Note: The chart above represents all nations with any net exports in the years 2005 or 2009. All had exports in both years except Indonesia and Brazil. Indonesia had exports in 2005 but was a net importer in 2009. Brazil was a net importer is 2005 but was a net exporter by 2009.

Ron P.

The above citation is from Darwinian at oil drum at

http://www.theoildrum.com/node/7668#more

comment section.

Net Export of oil decreased from 40.5 M barrels per day to 37.5 Million barrels per day - indicating that for OIL IMPORTERS peak oil started in 2005, and by 2009 they lost 3 million barrels per day injh available commodity.

There is a graph, this citation is close to the end of the comment section.

Cheers:

OilDrum has excellent indexing, therefore all interested in this prtoblem should search for:

1., NET Export
2., Cost of new discoveries [most above $80 barrel
3., New Dsicoveries per annum vs. annaul usage.
4., Energy balance of various alternate energy sources, Bio, Solar, Wind, Colorado Shale, Oil Sands, Alga etc.

The above will clearly explain the crunch coming.

Also Search for the German Defence Oil report for the future, and the UNITED Command Report [USA] which indicvates that by 2015 the world will be short 10 million barrels per day.

Fred: that years ago Thorium was not feasible, now that the SH+T is about top hit the fan, they should reasses it.

 Charles I

TV Ontario just had a one panel on this very subject. Jeff Rubin, definitely a peak oiler, made this observation.

Last economic cycle took eight years to push Brent crude to $120 bbl, this one and half years. Some market margin is running out, increasing somebody else's dramatically. But can it be repeated, ever shorter cycles of rally shock, bust, sustained as a basis for civilization?.

Those with faith in technology and markets say yes.

One other chap pointed out that if china collapsed due to inflation, insurrection or catastrophe, demand would plummet, problem solved

All that being said, oil futures used to be hedges for real services, airlines, home heating oil, etc, by 2007 or 2009, 60% of that activity was by the finance sector - banks, hedge funds, pension funds, the stock market winners of, wait for it. . . the previous 8 year bull market.

Who won this one? I don't think it was the marker recovery.

Find out who has power of disposition of the $17 trillion doled out the Fed window prior to the return, discussed by WRC and I a bit back, I'd say. When the stock market collapses again, that $ is coming out.

Adam L. Silverman

Fred: Thanks for the more informed take. Nuclear physics is not my area, I just came across the link at a source I generally found reliable, and put it up.

Harper: here are the links to the first published paper on peak oil and then to Hubert's presentation on it for Royal Dutch Shell, which is, I think the one you were referring to and was certainly the one I was referring to:
http://www.oilcrisis.com/hubbert/science1949/
http://www.hubbertpeak.com/hubbert/1956/1956.pdf

Fred

Adam,

from what I can see the US press is almost worthless. The latest ABC Nightline was just an insult. They have a theoretical physicist giving opinion and advice. They haven't, are far as I can see, actually talked to anyone with actual power plant design or operations experience. It seems like they just looked to see who was on speed-dial. So much for journalism. Perfect teaching moment and they put out less useful information than an MTV video. Too bad Ted Koppel is no longer on. Maybe I should just hope Jon Stewart starts covering this.

This professor's website seems to be better technically, but I'm uncertain of the status updates. The background material is very good and worth the reading. (I found this via Brad DeLongs site)
http://bravenewclimate.com/2011/03/14/fukushima-more-technical-info/

different clue

Harper and Adam Silverman,

I first read about M. King Hubbert and "Hubbert's Peak" several decades ago in an article in Mother Earth News Magazine. It is only more recently that I have read about people more broadly hearing about Peak Oil. While there may be people or groups using the concern for propaganda purposes, is this to say that oil is not a finitely available material and that we won't eventually have less-left-to-use than what we have already used? What is driving us to look for oil in ever more difficult and high-hazard areas? There are a couple of "oil-drummy" sites devoted to the peak oil problem in particular:
The Oil Depletion Analysis Centre: http://www.odac-info.org/
and The Association for Study of Peak Oil.
http://www.peakoil.net/

Harper, I hope you are wrong about the undiscovered existence of vast new deposits of oil, because if you are right; they will be discovered and they will be burned. And we have already exceeded the margin-of-safety for carbon dumping in the Overhead Skyfill (also known as the "atmosphere").
The global heating problems are well-known to non-deniers. The "acid ocean" problems will become unavoidably knowable over the next couple of decades.
http://en.wikipedia.org/wiki/Ocean_acidification
So if there really are vast new undiscovered deposits of oil, then the Venusian HellPlanet Earth scenario I offered in our host's "apocalypse?" thread becomes distinctly more likely.
I am surprised to read bout Standard Oil and Shell Funding of the anti-nuclear movement. Is there information on how much of the movement's overall funding came from oil companies or foundations or oil family fortunes? If there had been no funding from that source, would the anti-nuclear power movement people have gone unfunded or raised money some other way?

Clifford Kiracofe

NMS and ALS,

Thanks for the insights, will follow up. This is a complicated issue to say the least. So many variables and factors.

As the US floated two world wars for our allies on our oil, it is logical that we have significantly less now of the more easily obtained hydrocarbons. This is not to say that similar or other forms, more difficult of access and recovery, are not under our soil or sea space.


1. Economic security is a fundamental element of national security.

2. Supposedly the "lessons learned" from the 1920s-30s led to reforms such as various legislation to regulate markets to protect them from fraud, manipulation ,etc. Glass- Steagall for banking, other legislation for commodities trading, and the like.

3. But "deregulation" took away reforms including regulations in the public interest. Lessons unlearned. Why? Disaster follows severely undermining our economy and thus our national security

Pogo theory obtains, the enemy is (some of) us.

4. It does not take much imagination to consider that various techniques of economic warfare can be used more easily in unregulated markets. There is much more to contend with out there than the so-called "sovereign funds" issue.

For example, can hedge funds act as instruments of economic warfare? Can sovereign funds engage in "soft" economic warfare?

[Those naive enough to believe there is no such thing as economic warfare need not reply.]

Norbert M. Salamon

Clifford:
yes to your questions, Hedge funds and TBTF banks are always in economic warfare since deregualtion.
But so is the Federal Reserve, attempting to lower the value of the $ presuming that this will help USA exports. This is a fallcious plan, as the example of Canada clearly shows from the 80-s, when the Can$ went down from a high ofr 105 [1966 I believe] to a low of some 60 odd cents USD, with the econmy going south. First class stagnation [ higher interest rates, no wage gains high inflation - due to need to import necessary items priced in foreign currencies!

Compare the EU land's problems on recent sovereign debt issues, and you will find that aside from Ireland and Greece, all other nations have better sovereign debt status than the USA - and all we hear from MSM and Fioancial talking heads is PIGS' problems.
the FX exchange market is the largest casino the world has seen - daily turn over approaches or passes the WORLD'S GDP in monetary terms.

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