Here we go again.

Anyone here remember the main horror story the Y2k loons told everyone and scared many people half to death? The one about how the electricity grid would fail because of date misinterpretations, and once it went down there would be no way to get it back up? People got so scared that some of them, including at least one high-profile IT expert and author, bought a home in a rural area of the US West (Montana, I believe), and many others literally bought sacks of rice and beans, cases of bottled water. One household I know installed a diesel generator.

This notion of Y2k causing a permanent blackout was compelling simply because everyone in an industrialized country knows how incredibly dependent we all are on electricity. Plus, the majority of people have no clue where their moving electrons come from or what it takes to get them from wherever they originate to the nearest wall outlet, so they were easily swayed by the “logic” of the doomers’ stories.

(And just for the record, I’m not saying that Y2k wasn’t a serious problem. I know for a fact that it was, and the main (only?) thing that saved us from major problems in computerized systems was the dedication and resourcefulness of many programmers and project managers. It really was an enormous challenge, and my fellow geeks rose to the occasion.)

I bring this up again because of how often I see this “the grid is toast” meme popping up in peak oil discussions. For example, in The end of civilization and the extinction of humanity:

One by one, starting in 2012, the world’s cities will experience permanent blackouts; and once we enter the Dark Age, the Stone Age won’t be too far behind. Bear in mind, I have mixed feelings about this. On one hand, I know the current culture — the culture of make believe, or the culture of death, depending on how deeply you care to think about it — is the worst possible route for most of the planet’s species; as a conservation biologist, I realize the faster and more complete the collapse of Empire, the greater our biological legacy. On the other hand, the paralyzing hand of fear grips me every time I think about Peak Oil; a life in the ivory tower is damned poor preparation for Stone-Age living. Fortunately, I only think about it a few thousand times each day.

We have only five years until “the world’s cities will experience permanent blackouts”? Really? And this hyper-precise prediction is based on what, exactly? No, really–I want to know. [insert sound of crickets here]

Perhaps the answer is in the very next sentence: “Bear in mind, I have mixed feelings about this.” What kind of misanthrope sees “permanent blackouts” in “the world’s cities” just five years from now as anything but a monumental human catastrophe? And is that what would lead someone, anyone, to make such a terrifying prediction–they want to see the Big, Scary Thing Happen during their lifetime, so the world can be brought into line with their desires, no matter the human cost?

But wait, there’s more…

Don’t think for a minute that Internet shopping will replace small, locally owned shops in every town: After all, Internet shopping relies on cheap delivery, and delivery will no longer be cheap in the days ahead. In addition, Internet shopping depends on reliable electric-power systems. Electricity is a short-lived luxury because all sources of power are derivatives of oil; for example it takes a lot of oil to rip coal out of the ground, and then a lot more to deliver it to the power plant; it takes a lot of oil to construct a solar panel or a wind turbine, or even to maintain dams used to generate hydroelectric power.

OK, I’m going to type this slowly for all the people who think there’s some Deep Truth in the above paragraph.

• Notice the slick move from “oil will be expensive” to “there won’t be oil for even the really, really important things”. This is one of the hallmark Apocalypticon tactics.
• This paragraph assumes that there’s only one way to do things–with oil–or that we’ll be too stupid or won’t have the time to change to different methods. Neither possibility is based in reality.
• There is no attempt here to back up the assertions with facts. How much oil does it take to build a wind turbine at today’s oil price, and how much will it take once we adjust to oil that costs much more? With all the focus on reducing our greenhouse gases, how much coal will we use in coming years? How much oil is used to mine and transport coal? And then there’s my favorite–the oil needed to maintain hydro dams. Again: How much, and what are the options if oil becomes much more expensive? And how expensive would oil have to become before we, as a society, say, “Nope, that’s too expensive. I’ll just do without electricity”?

Later on (emphasis added):

We’ll also see pestilence — what we call disease, when it happens one person at a time — making a big comeback. Cheap oil allows us to sanitize our water, lethally cook harmful organisms, sterilize the surfaces on which we prepare and eat food, and manage many potentially catastrophic diseases. Contemporary American healthcare is completely dependent on ready supplies of cheap oil, for grid-based electrical power, backup generators, and thousands of pieces of equipment we all take for granted, from IVs and syringes to disposable gloves and plastic containers for tossing out contaminated needles and other sharp objects. When the trucks stop running, we won’t even be able to deliver antibiotics, unless ginormous numbers of non-apocalyptic horsemen suddenly appear. I hope society will retain some understanding of germ theory, so you are able to live at least half as long as your grandparents.

American health care depends on cheap oil for grid-based electricity? Really? According to the Annual Energy Review, Table 8.2a, petroleum accounts for 1.56% of US electricity generation. So that leaves us with that whole “we won’t be able to produce electricity from other sources if we don’t have cheap oil” thing.

The author borrows (and apparently endorses) James Howard Kunstler’s 10-step agenda, including:

Step 4: We must move people and things differently.

You’ve probably all seen the bumper sticker on about every fourth 18-wheeler on the interstate: “Without trucks, America stops.” That’s about right, at least with respect to economic growth. And the trucks are going to stop within the next half-decade or so. Shortly thereafter, the interstate highway system will simply collapse. Let’s not waste our time trying to prop up our hallucinatory economy with its fatal dependency on cars and trucks. Rather, we could restore public transit.

We could start with our railroads — currently, we have a rail system the Bulgarians would be ashamed of — and we could electrify our railways so they can run on renewable energy. Then we could move to the waterways, starting by ripping out the condos and bike paths from the inner-city harbors and then restoring the piers and warehouses (not to mention the sleazy accommodations for sailors). Numerous career opportunities lie ahead for those hardy individuals willing to put away their iPods and Blackberries long enough to chart the course.

Wait a second–we’re going to have “permanent blackouts” in “the world’s cities”, but one of the steps we need to take is to electrify rail using the same renewable sources that we can’t find enough oil to build or maintain?

Let me be painfully, unmistakably clear about why this kind of thing drives me nuts, and why it should get your back up, as well:

First, it’s the worst form of linear extrapolation. “We use resource X to do Y now, so when X becomes too expensive there won’t be any Y.” Oh brother. We won’t go from readily available $70 oil to worldwide shortages of $300 oil overnight. Hell, if we’re smart and aggressive enough in our conservation and transition efforts (and lucky enough to avoid an act of stupidity like a US war on Iran) we may never see $300 oil (measured in 2007 dollars, of course). There’s a fundamental lack of understanding of how the world works–from individuals through entire economies–inherent in such doomer predictions. I’ve said before that taking this view of our situation is akin to trying to solve a calculus problem with algebra.

Second, this shows an astonishing lack of lack of faith in humanity. We are far more resourceful and inventive than the sorry parody of humanity that doomers use to portray us. Here’s a hint for all the Apocalypticons out there: We will deal with global warming and peak oil and peak natural gas and who knows what else comes our way. It won’t be cheap or easy, but it won’t be anywhere near “the end of human civilization” as stated in this item’s title or the human disaster you predict. And we will laugh at you just as we now laugh at the TEOTWAWKI morons who scared people in the run-up to Y2k.

Third, it makes it much harder for those of us who are convinced that peak oil is a real, huge, and imminent challenge to reach out to mainstreamers. We tell them about peak oil, they do a few Google searches, and they find crackpot nonsense on the ‘net and then completely tune it out. If anything, the worst legacy of Y2k could be that people have learned to ignore any dire warnings or calls to action they read online, since that one turned out to be (from their perspective) a lot of wasted keystrokes and hours online.

If you really are convinced we’re headed to hell in a hand basket, then step up to the challenge and back up your predictions with solid analysis and facts. Educate us. Tell us exactly how things will play out in the coming years–what the price and availability of various resources will be and how we can mitigate the effects of those changes on human beings and the environment. Don’t just hand wave and make big, scary predictions. Get down here in the trenches with us and do the hard intellectual work and then teach people. You may think you’re doing that now, but you’re not even in the right time zone. All the Apocalypticons are doing is indulging themselves and their followers with doomer porn and turning away many people who need to understand how serious our situation is and take action now to help themselves and everyone else. At this point in our shared history, that’s the greatest disservice of all.

One of the must-read items every week for the geekiest of energy geeks is the TWIP (This Week in Petroleum) report that arrives every Wednesday. The current (August 29, 2007) installment has some graphics and text that deserve attention far beyond our little clubhouse.

First, the main visual:

And now the text:

As the chart [above] indicates, not only is the absolute level of inventories low (see Figure 4 in the Weekly Petroleum Status Report [PDF file]), but in terms of days of supply, it is the lowest ever recorded (the days of supply data goes back to March 1991), reaching just 20 days. This is even fewer days than seen following the hurricanes in 2005. While the absolute level of total gasoline inventories has been slightly lower a few times in recent years, when the level of demand is taken into account, it has not been this low before. Of course, with gasoline demand set to fall significantly after Labor Day, the low level of inventories is not likely to cause a sharp spike in retail prices, but more likely will limit the usual seasonal decline seen after Labor Day, with the possibility remaining of an atypical slight increase over the next few weeks.

What this means is that while retail prices are not expected to jump sharply on a national average, they are also unlikely to fall dramatically over the next few weeks. Of course, this expectation is based on the assumption that there are no major hurricanes or other non-market events impacting petroleum infrastructure over the next few weeks. With no storms forming in the Atlantic as of this writing, that should be considered as another bit of good news for drivers.

Finally, the US gasoline stockpiles in absolute terms, from the same TWIP:

So, what to make of all this?

The US gasoline stockpile situation is unsettling, and obviously we could be in a world of hurt if there were a major disruption to our refining capabilities, like another hurricane that strayed into the “wrong” part of the US Gulf Cost. Look at the red line in the graph immediately above. While stockpiles normally drop at this time of year, they’re already below the five-year band (in blue), and in the last couple of weeks they’ve dropped faster than they have historically.

I’ve seen the question raised online (and in e-mail) about just how low stockpiles can go before the basic distribution system, which is dominated by pipelines, starts to break down. I won’t pretend to know the answer to that one, but it feels to me like a Very Important Issue we should be talking about.

In the top graph above, it’s hard not to notice that we’re already at a lower days of supply figure than we were after the hurricanes in 2005, which is even more attention-grabbing than saying we’re at the lowest point ever for this measure. Twenty days? That’s cutting it too close for comfort.

Right now, we need to keep dodging bullets. No more refinery outages, no hurricanes in inconvenient places, no demand spikes, no interruptions in the imports of finished gasoline. Speaking of imports, I would also point out that the only reason we avoided more than the spot shortages we saw in 2005 was a spike in imports of gasoline, much of it from Europe. I’ve seen analysts comment that Europe doesn’t have the spare gasoline to sell us right now, which puts and even finer point on the matter.

So keep your fingers crossed. The next couple of months could be decidedly interesting.

Right now, “the” battleground in the oil situation is mainstreaming the idea of what peak oil is, what it does and doesn’t mean, and how we can take action now to benefit ourselves and everyone else.

A new study on the oil industry, “2007 Global Upstream Performance Review” mentioned in this press release, provides yet another piece of evidence that we are making progress in peak oil awareness, albeit much more slowly than I and 99% of the people who read this site would prefer. The entire report is available here (29 page, 513KB PDF).

On page nine, the Forward says (emphasis added):

The debate over peak oil continues, and, in fact, has become quite heated. Without expressing a position on the matter, we believe that the issue has become part of the industry’s long-term planning. If the peak oil theory is correct, and a decline in world production is imminent, a company must choose among four alternatives – try to become a dominant participant, find a niche operational talent, harvest assets, or liquidate quickly.

Selecting the best option among these four requires that a company properly evaluate its ability to compete in a shrinking industry. Lacking a competitive advantage in one or more of its business lines may force it to choose between harvest and liquidation. Clearly, the selection will be determined by whether acceptable returns can still be earned during the decline and by whether market demand allows for a sale of assets. Anticipation of poor future returns and a less favorable market encourages rapid liquidation. A stronger asset purchase market or more limited reinvestment needs allows the choice of the harvest strategy, perhaps in the form of conversion to an income security. However, harvest is merely an orderly, delayed liquidation.

If the company possesses a competitive advantage, it can attempt to become the dominant producer in a region, allowing it to access oilfield services at lower cost than others. After all, the service companies will become anxious for business in a world that is producing less oil every year, and their largest customers could easily command discounts. But there may be little to be gained in building a large enterprise if returns are falling and exiting is becoming more difficult.

Finally, niche operators identify a means to earn higher returns, perhaps by exploiting a technological advantage or by developing production that is better suited to the needs of the market or a contracting refining industry. Niche operations, by their nature, are limited in scope, but it should be possible to use acquisitions to add others that are amenable to internal management skills.

The industry has been able to generate enormous wealth for its shareholders over the last several years, both from the upstream and downstream sectors. However, questions are emerging as to the sustainability of this performance. We see the primary challenges lying in reserve maintenance, particularly for oil, and in controlling the costs of finding and producing hydrocarbons in
a fiercely competitive environment.

In other words, the oil crunch is already here (as seen in the increasing reliance on unconventional, ever more expensive oil), it has broad, serious implications for the business strategy of oil companies, and research firms, like the ones who authored this report, are openly talking about this paradigm shift in the market. In the case of OPEC, it seems that they’ve now incorporated peak oil into their strategic planning and are intent on squeezing as much money out of the oil importers as possible.

I also feel compelled to point out that one of my pet peeves is the notion voiced constantly online that some powerful person or entity (George Bush, various oil companies, etc.) does or doesn’t “know about peak oil.” Barring and specific evidence or statement to the contrary, we should assume that all these people and organizations know, even if they aren’t saying it publicly.

(Yes, I realize how absurd that position sounds in light of the US car companies’ apparent desire to Thelma and Louise off the nearest precipice at full speed; I consider them to be an exception, and a particularly blockheaded one, at that.)

But this one report won’t change any mainstream minds. For that, we need broader efforts, like this site, my book project and presentations, and all the help we can get from people like you to help spread the word.

USGS Greenland Survey Shows Much Lower Resource Potential (emphasis added):

The northeastern shore of Greenland could provide the U.S. with significantly fewer billions of barrels of oil and gas resources than previously thought, the U.S. Geological Survey said Tuesday.

…

The government agency said it believed the area - which lies under massive sheets of ice in water depths up to 500 meters - holds 9 billion barrels of oil, 86 trillion cubic feet of natural gas and 8 billion barrels of natural gas liquids that are undiscovered but recoverable.

The 2000 survey estimated 47 billion barrels of oil, 81 trillion cubic feet of gas, and 4 billion barrels of natural gas liquids.

…

As the last major survey of the geologic potential of the Arctic estimated that 25% of the world’s remaining undiscovered hydrocarbon resources lay within the Arctic circle, the U.S. government was hoping to supplant other crude imports with future supplies from the Arctic. Greenland, although the country governs itself, is part of the Kingdom of Denmark, and it is thought it would be a politically stable and a reliable supplier.

I wish more than I can say that this insane notion that we can “save ourselves form peak oil” by drilling the hell out of the Arctic would die.

First, we have very little hard evidence of what’s actually up there. I’ve long wondered where that infamous line about the Arctic containing “25% of the world’s oil and gas” came from. Did the USGS simply look at the overall geology of the area and use averages to guesstimate what it contains? Whatever the case, it now seems that we’re headed for another case a beautiful theory slain by an ugly fact.

Second, finding and extracting oil from that part of the planet will be mind-blowingly dangerous and expensive, not to mention years away and likely to produce only a small production level of oil, even once we figure out how to do it.

Third, the 9 billion barrels of oil in the portion of Greenland that’s been re-assessed is enough to run the world at its current rate of consumption for less than four months. Coupled with the highly likely low production rate, this means these deposits will have little impact on our energy future.

Fourth, we will still likely exploit these reserves (as well as those in ultra deep waters in the Gulf of Mexico and those in environmentally sensitive areas off various US coastlines). It’s an inescapable conclusion, given the proximity of the peak and how much worse that will make the oil crunch.

See this page for a downloadable MP3 file from Purdue University, “After Oil.” It’s a big download and earful–about 59MB, running 51 minutes. I haven’t had a chance to listen to it yet, so this is more a promising link I’m tossing out as opposed to a recommendation.

In Caspian, Big Oil Fights Ice, Lethal Fumes — and Kazakhs:

Since an unlikely alliance of Western oil companies received rights to drill for oil here a decade ago, they’ve struggled to cope with a combination of rig-wrecking ice packs, bone-chilling winters and noxious, high-pressure gases. Yesterday, the consortium’s bid to exploit one of the world’s top oil deposits encountered its biggest challenge yet: Kazakhstan’s government, stung by delays and rising costs, suspended the group’s permit for the field, halting work there for the next three months.

“From today, work on Kashagan will be frozen,” said a Kazakh official.

It wasn’t immediately clear whether the project had been shut down. The field’s operator, Italy’s Eni SpA, declined to comment, saying only that consortium representatives were meeting yesterday with local authorities. Sources close to the negotiations said the delay was an attempt by the Kazakh government to pressure Eni and squeeze additional money out of the project.

Highly recommended, this is a longish article about the challenges, politics, and economics of Kashagan.

Notice that a graphic in the article says the current estimate for the production from Kashagan is 250,000 barrels/day by 2011. In terms of assessing the impact of this field on alleviating the upward price pressure from the oil crunch in the short term, flow rate is more meaningful than the total size of the reserves. And for those who simply must know, the estimate for Kashagan’s recoverable oil is 9 to 13 billion barrels of oil, meaning that at 250,000 barrels/day, it would take just over 98 years to extract it all. Anyone here think we’ll still be willing to pay the price, monetary and otherwise, to extract oil from Kashagan a century from now?

Once again I find myself reading a news item and trying to gauge What It Really Means. Aside from the fairly obvious desire on the part of Kazakhstan to delay production and sell this oil later at a higher price, which is just another implicit admission that the peak is very close and the crunch is here, I wonder: Would it be better for humanity to keep this oil in the ground for now? I think the answer is pretty obviously yes. Less cheap oil now means higher prices, a stronger and more consistent market signal to transition away from oil, less consumption and less CO2 emitted into the atmosphere, and more of an emergency supply for the coming years if we truly need it.

Whenever I express such views on this site or at a presentation, I inevitably hear objections from people who think we should do everything we can to keep oil prices down now because something wonderful (and delightfully unspecified) will happen in the near future to make all that nasty sacrifice unnecessary. I think this is the height of insanity and myopia, not to mention generational selfishness. But maybe that’s just me.

Most of you who read this site are probably aware that a couple of weeks ago Newsweek ran a big cover story on the global warming “denial machine,” to use their very apt phrase. Well, the September 3, 2007 edition is out, and it has the letters in response to that issue.

To no one’s surprise, there’s the usual mix of people throwing rocks at each other, including some people from a zipcode that surely maps to a particularly badly lit corner of Bizarro World. But the there was one letter, reproduced in its entirety here, that almost made me stand and cheer when I read it (emphasis mine):

Sharon Begley’s article about “the denial machine,” as frightening as it was, misses a crucial aspect of the problem. It is not just that well-heeled corporations are buying up politicians or promoting science-as-they-want-it-to-be. It is that our society is more than happy to accept spin and cant because we have come to believe that all expertise is bias, that all knowledge is opinion, that every judgment is relative. I see this daily in my university classroom. Many of even my best students seem to have lost the ability to think critically about the world. They do not believe in the transformative power of knowledge because they do not believe in knowledge itself. Begley decries the tactic of making the scientists appear divided, but the corporations didn’t have to invent this tactic. It is built into our carefully balanced political “debates,” into our news shows with equal time given to pundits from each side and into the “fairness” we try to teach in our schools. We need not be surprised that people have become consumers who demand the right to choose as they wish between the two equally questionable sides of every story. Neither global warming nor any other serious problem can be addressed by a society that equates willful ignorance with freedom of thought.

Bernard Dov Cooperman
Dept. of History, University of Maryland
College Park, Md.

Wow.

I needed a cigarette after reading that, and I don’t even smoke.

The whole letter is exceptional, but that last sentence is such a perfect characterization of the hurdle we face in waking people up to the global warming and peak oil problems that I’m Kermit-the-Frog green with envy that I didn’t write it.

I will be contacting Dr. Cooperman to thank him as soon as I post this.

Northwest Passage Nearly Open:

This image shows sea ice around the Northwest Passage as observed by the Advanced Microwave Scanning Radiometer for EOS (AMSR-E) aboard NASA’s Aqua satellite on August 22, 2007. In this image, blue indicates open water, white indicates high sea ice concentration, and turquoise indicates loosely packed sea ice. The black circle at the North Pole indicates no data as the satellite does not make observations that far north. McClure Strait, Parry Channel, Victoria Strait, and McClintock Channel (north of Victoria Strait), all appear nearly ice-free. North of McClure Strait, an area of sea ice remains, but it is fragmented.

Oops. Sorry about that, Mother Nature. Our bad.

For those who are a little behind on such things, here’s the Wikipedia entry for the Northwest Passage.

Along the same lines, it looks like we’ll hit the lowest ever level of sea ice coverage in the Arctic this year, breaking the old record set in 2005.

The Mitsubishi i: No That’s not a Typo:

Anyhow, despite the name, the i is a fantastic Japanese automobile, though it is little-known outside of Japan. You’ll notice it looks an awful lot like a Smart Car, but with a few advantages that make it more practical and more fun. First, the i is a four-seater with four doors. The car is larger than the Smart Car, and thus considerably roomier. However, it’s stil a tiny car, making it practical mostly for big-city use.

…

Mitsubishi is planning on releasing the car in the UK soon. Their UK managing director says of the i:

“The i offers a genuine alternative in a congested market. Its diminutive dimensions make it an ideal choice for the forward-thinking city dweller, but it’s also capable on the open road. In Japan, the i has already become a cult car and we’re confident that its space and sophistication, coupled with Mitsubishi’s reputation for quality and reliability, will also make it a hit in the UK.”

There’s no news on the U.S. launch. Likely, this is because no one in America would buy one. Alas.

Additional exciting i news? Indeed there is. Mitsubishi is eyeing a 2010 launch for an all-electric lithium-ion version of the i called the i MIEV.

Yes, the name doth sucketh. Hint to companies worldwide: Never use a product or project name that looks like you dropped something on your keyboard. (In Mitsu’s defense, one web site, “‘i’ is a play on the Japanese word ‘ai’ meaning love, which emphasises the car’s people and eco-friendly properties. It is also designed to be intelligent, innovative and imaginative.”.

The bigger issue is what will it take for this car to be accepted in the US market? I thoroughly reject the notion that “Americans will never buy a little car”. I see a lot of cars on the road here in Rochester about the size of the i, and I strongly suspect that an established company could sell enough of them, since they’re already in production and being sold in other markets, to be worth the expense of making them meet US regulations and laws, advertising, etc. Mitsubishi would definitely qualify as one of the companies desperate enough in the US market to take such a gamble.

But what price per gallon for gasoline (or what pattern of intermittent shortages) would it take to make the i more than a niche product in the US? My gut feeling, based on nothing but, well, my gut, is that we’re already pretty close to that point now.

Iran says current OPEC production is enough:

Iran, OPEC’s second-largest oil producer, said on Saturday it does not foresee any change in the cartel’s output ceiling to be decided at the Sept 11 meeting in Vienna.

‘It seems that the current OPEC production is enough and that at the next meeting the current ceiling will be kept,’ caretaker Oil Minister Gholam Hossein Nozari was quoted as saying by the ISNA news agency.

…

There had been growing calls from consumers for an increase in production after the price of crude rose to record highs of just under 80 dollars a barrel.

However Vaziri Hamaneh attributed surging oil prices to political concerns and a shortage of petrol in the United States during the summer holiday season, and said they were unrelated to OPEC quotas.

What Happens If Iran Blocks The Strait Of Hormuz?:

As tensions simmer between the U.S. and Iran, a big energy threat hangs over the world.

Iran has said that if the U.S. attacks, it will respond by disrupting trade through the Strait of Hormuz — the narrow gateway that tankers use to bring oil from the Persian Gulf to the rest of the world. About two-fifths of the world’s seaborne oil passes through the Strait.

…

Iran’s threats to disrupt oil have come from as high up as Supreme Leader Ayatollah Ali Khamenei. If any country attacks Iran, “shipment of energy from this region will be seriously jeopardized,” Ayatollah Khamenei said in a June 2006 speech. He also said the U.S. and its allies won’t be able to provide security to all the shipments that transit close to Iran’s coast. Iran’s oil minister at the time, Kazem Vaziri Hamaneh, later said that if the country’s interests are attacked, oil would be used as a weapon.

While most security and regional analysts doubt Iran’s ability to block exports for any amount of time, recent naval exercises indicate Iran is testing its ability to do so, with antiship missiles and mines, according to the commander of U.S. naval forces in the region. But blocking the Strait would be difficult, says Vice Admiral Kevin Cosgriff, commander of the U.S. Fifth Fleet. And the U.S. and other countries that rely on trade through the passage would be forced to act.

Please see both articles, especially the second one above, for more details.

So why, one may ask, is the Bush administration so openly drooling over the prospect of war with Iran? Those who closely follow the US political scene have seen a long series of articles about how there is a civil war inside the White House over whether to attack Iran, with reports differing on which side is winning the argument and even what their motives are.

I think this is another of those situations where we can get lost in the endless discussions about What The Hawks Really Wants, i.e. does they really believe the neocon idiocy about serial regime change in the Middle East? Are they just trying to jump-start the rapture? (Yes, I’ve heard that one a lot.) Are they scared to death about peak oil and looking for a way to take a lot of it off the market, even at the price of causing a bad worldwide recession, to force a more aggressive transition and delay the geologically forced decline in production? Or are they simply trying to funnel yet more money from the US treasury into the pockets of defense contractors, using whatever excuse they can drum up? (Hey, it worked once. PLus there was that oil and natural gas thing in Iraq…)

I’ve looked at this particular problem from every angle I can imagine, read everything I could get my hands on, and I’ve concluded I don’t know diddly about what’s really going on. Perhaps we need to bust the Kremlinologists out of retirement and ask them what the hell is going on in the White House.

And as for Iran–if you were in charge of their energy policy, why on earth would you want to increase OPEC’s output? The world’s #1 oil consumer imports over 68% of that oil, and they’re saber rattling non-stop. So why wouldn’t you want to keep oil prices high, maximize your revenues, and do as much as you can to hurt the US economy, even if you don’t sell oil to them directly? And if you can, make some noise about blocking Hormuz, just to push up oil prices even more without having to reduce production. I don’t think decisions come much easier than that on the international front.

I’m shoveling bits as fast as I can today, between web site work, prepping for my presentation on the 20th (and if you’re in the Rochester area, I hope you’ll be there–Brighton public library, 9/20, 7PM), and book work. Oy. An energy geek’s job is never done.

Anyway…

Clean Hydrogen Producers To Try Out Solar Water Cracker Technology In Spain

Using solar thermal to create hydrogen that’s then either fed to a fuel cell or sold? I’m not sure about the economics of that approach. Is it better than converting the light directly into electricity with solar PV, even with the higher up-front capital cost plus lower ongoing conversion efficiency of PV vs. thermal?

Aug. 27, 1859: America Enters the Oil Bidness

I can’t believe I didn’t know this was coming–the anniversary of Col. Drake’s first oil well in Titusville, Pa.

Natural Gas Imported To US For Electricity Generation May Be Environmentally Worse Than Coal

Wind data offers some surprises

Winds a couple of hundred feet up are stronger and more consistent than they are at ground level? I’m positively shocked! to hear that the laws of physics still apply. And yes, this isn’t the first such study to find out that we’ve been underestimating the wind potential of just about the entire continental US.

Renewable Energy Vital to Pennsylvania’s Economic Growth

Ecological damage may halt Caspian oil project

Can you say, “getting the maximum economic and political leverage out of reserves of a natural resource that’s facing imminent worldwide decline”? I knew you could!

Sun set to shine on solar

Interesting article about how one big-time venture capitalist is literally betting that “the” solar solution will be thermal, not PV. Of course, any prediction at this high level of abstraction contains a ton of assumptions about the future regarding the relative costs of various ways to move electrons, how much value we place on reducing CO2 emissions, etc. My primary takeaway from the article: I’m really happy I’m not the one betting cubic miles of dollars on these assessments.

Don’t blame ethanol for the price of food

The main thrust here, that corn contributes such a tiny percentage to the overall cost of food, is a good example of the kind of analysis I think we need to perform more often. I’ve argued here several times over the years that when people wail about how we’ll manage to move food after peak oil are way out in left field, at least in part because of a failure to do this analysis.

Briefly, what percentage of the price you pay for almost anything in your local grocery store is directly attributable to the price of motor vehicle fuel (typically diesel)? It’s literally a few cents per item most of the time, thanks to how efficiently we can move things by truck. If you assume oil gets truly expensive–increases by a factor of 5, so diesel fuel is $15/gallon, and you further assume that the trucking industry is too stupid to become more fuel efficient (clearly a bogus assumption, given their actions already in that direction), then guess what? The increase in food prices will be small, and the reduction in oil consumption will come from other parts of the economy. There will still be plenty of food in the stores.

The only way you get from “oil production has peaked” to “we have less food” is if you assume we experience very significant supply disruptions, so severe that even large-scale government intervention can’t find the fuel for trucks. In essence, you have to subscribe to the “peak oil = no oil” fallacy. Extraordinary challenges produce extraordinary responses, and, if needed, we’ll take some quite drastic steps to keep food moving.

(Yes, even I got tired of the endless “mash” one-liners. Just consider yourself lucky I didn’t do something even more self-indulgent, like switching to lacrosse terms.)

Future of electric rates hazy:

Ohio was one of 17 states and the District of Columbia that enacted electricity deregulation laws in the late 1990s. The theory was that deregulating the electricity-generation portion of customer bills - while regulators continued to monitor the cost of transmission and distribution - would spark market competition and lead to lower rates.

For reasons ranging from the Enron debacle to the nature of electricity (it can’t be stored), those lower rates haven’t materialized. And in states such as Illinois and Maryland, when freezes expired, prices skyrocketed 50 percent or more.

…

“We’ve watched what’s happened in other states, and it’s not good. In Maryland, prices spiked 70 percent. We don’t want to see that happen here,” said Eric Burkland, president of the Ohio Manufacturers Association.

…

David Boehm, a Cincinnati utilities lawyer who helped develop the manufacturing coalition’s proposal, said one problem with deregulation is “who pays for new generating plants?”

The state’s utilities will undoubtedly have to build new plants to meet growing demand and replace older, less environmentally friendly facilities, he said. The advantage of requiring utilities to come before the commission, he said, is that it would force them to justify their prices based on costs they incur.

Environmental advocates such as Environment Ohio say the state needs to adopt standards requiring a certain percentage of electric generation to be from renewable sources, such as wind and solar, as well as requiring energy-efficiency standards to slow the need for new generation. Amy Gomberg of Environment Ohio said both ideas would generate new jobs in Ohio and lessen the state’s dependence on fossil fuels.

Here we go again. I’m amazed at how many times we see things like this play out and people are shocked (shocked! I tell you) to find that when you deregulate an industry you get not just change for the better but often as much or even more change for the worse. Airlines? Check. Cable TV? Check. Electricity? Check.

And given all the things that are at stake, not limited to the question of everyone’s monthly electricity bill, it might be a good idea for consumers and voters everywhere in the US to educate themselves and get involved in the political process. Just a suggestion.

Of course, no matter what happens nearly all of us will be paying more for electricity in the coming years, with rates varying much more throughout the day.

Real world oil demand:

Compared to July 2006, when we had similar prices, we have one massive and little remarked difference today: there is nothing like the geopolitical risk we had in July 2006 at the height of Israel’s intense bombing and artillery shelling war against Lebanon. At the time, the geopolitical risk premium (GRP) was estimated at anywhere from 15 to 30 USD-per-barrel. Today’s GRP is likely only about 5 to 7 USD-per barrel. It therefore has a lot of growth potential, and not much downside potential.

The underlying base for high prices is short supply, because the world is one more year closer to Peak Oil than in 2006. Coupled with over-discounted risks to supply, prices can fly at the touch of the right panic button.

Under several scenario – far from ‘worst possible’ – the current and low GRP could double or triple, very quickly adding 5 to 15 USD to the barrel price, and yielding daily spot and forward prices in the range of 80 to 90 USD-per-barrel.

Despite the faux precision in oil prices quoted above, a recommended, longish piece focused on the international aspects of our oil mess.

And I would add that this is yet another example of a too-tight focus on the peak itself. We’re already in the oil crunch, as seen in the three-year-old price run up, just as we’re already seeing the early stages of global warming’s impact.

‘Momentum building’ for new climate deal: U.N.:

The United Nations says momentum is building for broader long-term action to fight global warming beyond the U.N.’s Kyoto Protocol and a climate meeting starting in Vienna on Monday will be a crucial test.

About 1,000 delegates from more than 100 countries at the Aug 27-31 talks will seek common ground between industrial nations with Kyoto greenhouse gas caps until 2012 and outsiders led by the United States and China, the top two emitters.

“Momentum is very much building,” for global action, Yvo de Boer, the U.N.’s top climate change official, said of the meeting of senior officials, scientists and activists. “And Vienna’s going to be crucial.”

“The coming week will give us an indication of whether the political community … is willing to move beyond well-intentioned platitudes towards real negotiations,” he told a news conference on the eve of the talks.

“The fight against climate change must be broadened,” Austrian Environment Minister Josef Proell said, welcoming U.S. willingness to take part in a long-term U.N. deal to cut emissions mainly from burning fossil fuels.

About freakin’ time.

Of course the US is showing a new “willingness” to take part in the talks. Bush is stiff-arming yet another big, ugly problem so that the next resident of 1600 Pennsylvania Ave. gets an even bigger flaming sack of dog crap outside the front door on moving-in day.

GM HCCI Technology:

GM demonstrated the combustion process, known formally as homogeneous charge compression ignition, or HCCI, for the first time in two driveable concept vehicles, a 2007 Saturn Aura and Opel Vectra. When combined with the enabling advanced technologies such as direct injection, electric cam phasing, variable valve lift and cylinder pressure sensing, HCCI provides up to a 15-percent fuel savings, while meeting current emissions standards.

…

Highlights of HCCI technology include:

• Diesel-like engine efficiency with substantially reduced after-treatment cost
• Builds off proven gasoline direct-injection and variable valve actuation technologies
• Adaptable to conventional gasoline engine architectures
• Requires only conventional automotive exhaust after-treatment
• Compatible with all commercially available gasoline and E85 ethanol fuels.

Could HCCI blow right past diesel as “the” next technology for the liquid-fuel portion of vehicle drive trains in the US? It’s entirely possible, thanks to the ability of car companies to use these new engines as a drop-in replacement for a gasoline engine, plus the ability of drivers to refuel at basically any gasoline or E85 pump. (For those outside the US, diesel fuel is a lot harder to find at gas stations here than it is in Europe, for example.)

It’s easy to get so focused on plug-ins and EV’s that we overlook the dire need for the most efficient engines possible, as they’ll still be in use for a long time, whether in a standalone configuration or as an on board gen set.

I’ll be posting some news items shortly, but I wanted to take a few seconds of our shared time to touch briefly on some other things.

First, please do feel free to treat anything labeled as an “open thread” as just that. If you have a pointer to an article or an opinion about energy + environmental issues, or a comment about the site itself, let ‘er rip. I mention this because I think too many people feel constrained to talk about the news items I mention in an open thread.

Second, I was glad to see that my latest mini-rant, this one about faux precision, was taken in the spirit with which it was hammered on my keyboard. I’ve always had a short fuse with the Apocalypticons, the same morons who scared people spitless during Y2k, but lately I find myself having no patience whatsoever with them and their faith based conclusions.

Third, yes, my beloved Rochester Rattlers lost to the LA Riptide 15-14 in the playoffs on Saturday in the MLL. It was a classic example of a team with inarguably superior talent losing to a team with inarguably better teamwork. Mrs. Lou and I were there for the game, since the championship weekend was in Rochester. One might be tempted to draw a life lesson from that loss about the value of enlightened people working toward a common goal, like, oh, I don’t know, saving our butts from peak oil and global warming, if one were so inclined.

Of course, the lax world continues to turn, and tonight is game 6 of the Peterborough Lakers/Brampton Excelsiors playoff series in Major Series Lacrosse, with a trip out west to play the Coquitlam Adanacs for the Mann Cup on the line. Yeah, it has bupkiss to do with e+e issues, even tangentially.

Fourth, speaking of global warming, yesterday I finally saw the two-hour special “Global Warming: What You Need to Know”, the one hosted by Tom Brokaw. Highly recommended.

Longtime readers know how riled up I get over the comments we see in the mainstream news from time to time about possible oil price jumps–”if Iran blocks the Strait of Hormuz, oil could reach $300 a barrel!” As I’ve pointed out numerous times, these comments are meaningless hype, and hanging a specific number on an obvious trend (i.e. prices would jump) is a classic example of faux precision.

My biggest complaint is that such “predictions” are nothing but wild-eyed guesses. If Hormuz closed, the market psychology driving up the price would largely be dictated by the circumstances–why was it closed, was it completely closed, what are the prospects for it reopening and in what time frame, what can be done to mitigate the effects of the closing, what is the response of various governments to the closing, etc. Answer those questions and you can make a reasonable argument for an oil price the following day on the NYMEX of anywhere from about $80 (it’s just under $70 as I type this) to $200, $300, or just about any science-fictional number you want. In less kind terms, the prediction is foo-foo.

It’s obvious why this phenomenon persists: In large part the people making the statement know that the press will publicize it and them, and the writers and editors in the various media organizations are genetically wired to latch onto any quotable text from an Acknowledged Expert that includes a Big, Scary Integer and run with it, regardless of how flimsy its foundation. (Consider it side effect #287 of the death of true journalism.) Even those predictors who aren’t doing it for the attention and are speaking sincerely are only muddying the waters by making unsupportable claims.

Even people I respect greatly in this field, like Matt Simmons, have been known to succumb to the siren call of making these comments, and I’ve said here and elsewhere online that I wish he and everyone else would knock it off.

So by now you’re no doubt wondering what has pushed my buttons enough to trigger this post. As it turns out, it was a posting at The Oil Drum which I’m convinced was made with the best intent. The item in question, World Oil Forecasts Including Saudi Arabia - Update Aug 2007 by “ace”. If you go to that post, you’ll see in ace’s Figure 1 that he (I’m guessing from general energy geek demographics that ace is a he) plots past and projected (five years out) oil supply, which is a very common thing in peak oil circles, and something I have zero problem with. My concern is with the other two items plotted on the same figure: demand and market price.

As I pointed out in comments in the discussion thread there, no one has a good way of mapping supply and demand to market clearing price, especially for a commodity like oil that has a notoriously inelastic demand response. (Loosely speaking, inelastic demand = a big change in price creates a small change in demand.) Throw in all the “balls in the air” I constantly talk about here, like the consumer response to higher oil prices and the rise of alternatives, and I wouldn’t trust any price prediction past Thanksgiving of this year.

And for that matter, what does the plot on that same figure for “demand” even mean? I assume it indicates “desired consumption”, but by predicting steeply rising prices ($190/barrel in five years) and rising demand over time, this prediction says that the demand curve for oil with shift to the right pretty quickly in just a few years.

What is this analysis based on? I asked in the thread on TOD and didn’t get a reply yet.

Before the tinfoil hat brigade goes nuts here, let me be clear: I don’t know ace or anything about him, and I have no history of communication with him at all. And further, my intent here is not to call him out or beat him over the head with my keyboard. I intend solely to use his post as an example of why it’s important for everyone to be diligent when talking about e+e issues to ask the tough questions. Where did these numbers come from? What assumptions or, possible, unvoiced agendas, do they embody? Are they presented in a way that implies, perhaps accidentally, an unwarranted degree of precision?

This is why I take such great pains to link to original source documents whenever possible on this site. If you want to be a info-tourist, or worse, a consumer of doomer or cornucopian porn, then knock yourself out. Skim the headlines, unquestioningly accept whatever people tell you, and sit in your dark corner and feel good about how The Man Will Get His Overdue Comeuppance or The Rich Will Triumph Again. And we all know that there are plenty of people in both of those groups, so you won’t be alone.

But if you’re serious about this stuff, as I sincerely believe most people reading this site are, and you really want to continue to learn about what’s going on and what you can do right now to help yourself, your family, and everyone else, then you have to do your homework to ensure that your actions are rooted in reality. Regardless of your formal training or experience level you have to be willing to act like a scientist. To me, that means one thing above all else: Approach the world with an open mind and a skeptical eye, and go exactly where the facts lead you and nowhere else.

Judge Orders Reports on Global Warming:

The Bush administration violated federal law by missing deadlines to produce a study on the impact of global warming, now as much as two years overdue, and must issue a summary by March, a federal judge ruled. Judge Saundra B. Armstrong of Federal District Court in Oakland, Calif., said the United States government “unlawfully withheld action” required under the Global Change Research Act of 1990 to update a research plan and scientific assessment of climate change.

Your US tax dollars at work laying down every roadblock possible to taking action on global warming. And you can bet that any action on peak oil is even further down Bush’s priority list. This is the man, I will remind you, who told Americans immediately post-9/11 to go shopping.

Who ya gonna call?:

Scientific theories gain credence from successful predictions. Similarly, scientific commentators should gain credibility from whether their comments on new studies hold up over time. Back in 2004 we commented on the Bryden et al study on a possible ongoing slowdown in the North Atlantic overturning circulation. In our standard, scientifically cautious, way we said:

…it might be premature to assert that the circulation definitely has changed.

Our conclusion that the Bryden et al result ‘might be premature’ was based on a balance of evidence argument (or, since we discussed this a few days ago, our Bayesian priors) for what the consequences of such a slowdown would be (a (unobserved) cooling in the North Atlantic). We also reported last year on some data that would likely help assess the uncertainty.

In other words, all you non-scientists reading this: Stop using The Day After Tomorrow as your mental model for the threat that global warming poses.

Silicon nanoparticles enhance performance of solar cells

Nanoparticles Boost Solar Cell Efficiency by 60%

Two views of (apparently) the same breakthrough and published work.

A cheap way to get a 60% boost in solar PV efficiency is very big news, assuming it scales to industrial production volumes.

The larger point here is that even though we’ve been making solar cells for decades, our drive to invent better PV cells has grown much more urgent in recent years as we’ve felt a push from the global warming and peak natural gas issues. Plus, we’re seeing a confluence of technologies in several corners of the energy and environmental arena–most notably nanotech making better batteries and PV cells and genetic engineering leading to better biofuels production by modifying algae or trees to make them better sources of biomass.

Small Wind Turbine Global Market Study 2007:

State and federal policy remain the pivotal factor for sustaining and growing the market for small wind electric systems in the U.S. and abroad. The U.S.-pioneered Small Wind industry has not benefited from any federal-level incentives since 1985, though it has seen annual growth of 14-25% since 1990.

Roughly 7,000 Americans purchased small wind systems in 2006, but these systems are still far too expensive for most consumers. A 30% federal investment tax credit would help consumers overcome this up-front cost hurdle and could grow the market 40% annually.

See also the AWEA market study mentioned above, AWEA Small Wind Turbine Global Market Study 2007 (14-page, 448K PDF).

I don’t see small wind ever being a major factor in the US’ energy future. The per-watt costs of an installation are so high, and the limits of where you can put the towers and turbines are so restricting that I think it will remain a niche-of-a-niche market.

This is in contrast to James Howard Kunstler who said in an interview published in April 2006 about wind turbines (my addition in []’s):

I see them playing a role, but not the role that people expect. I don’t think we will do it on the mass Niagara-Mohawk basis. [Niagara-Mohawk is a power company in Western NY that runs massive hydroelectric plants]. I think that mostly what we will see is these things being used on a household basis, or the extremely local basis, if at all.

GM May Make 60,000 `Volt’ Electric Cars in First Year:

General Motors Corp. may build as many as 60,000 of its Volt electric cars for their inaugural year on the market, four times the sales of Toyota Motor Corp.’s hybrid Prius on its U.S. debut, people with knowledge of GM’s plans said.

Production at that level may allow GM to sell the plug-in Volt for less than $30,000, said the people, who didn’t want to be identified because the plans are confidential. The discussions show the Detroit automaker, racked by losses and U.S. sales declines, believes an affordable electric car will help spur a revival, the people said. Toyota’s Prius can be bought for $22,175.

If GM can sell a plug-in series hybrid with a 40-mile battery-only range in 2010 for $30K, I guarantee that they’ll have precisely zero trouble 60,000 of them the first year.

Who resolves Arctic oil disputes?:

Russia’s planting of a flag at the North Pole this month has set off a race for control of the Arctic, with five nations preparing to make claims to the seabed at the top of the world.

Since Aug. 2, when a Russian research submarine placed the flag on the seabed 13,000 feet below the surface, the Arctic has suddenly moved onto the international stage. Denmark dispatched icebreakers to survey potential claims in the far north, where the US Coast Guard ice-breaker Healy is already engaged in a mapping mission that would bolster a US claim. Canada, which announced it will build two military outposts in the region, is expected to follow suit.

Resolving disputes arising from the claims will represent a major diplomatic challenge to the five nations that surround the rapidly thawing Arctic Ocean. But experts say the track record for dealing with similar disputes is encouraging, suggesting it’s likely that rival nations can work out a mutually satisfactory solution over the coming decade.

Highly recommended.

The Arctic political circus is just starting to erect the first tent. This won’t be pretty.

Dean Only Seen Causing Mild Disruptions to Mexico Oil Ops:

As Hurricane Dean heads into Mexico’s main oil-producing zone, industry officials are optimistic it will only cause a blip in operations instead of the extensive damage the country remembers from Hurricane Roxanne over a decade ago.

Dean weakened into a Category 1 hurricane Tuesday afternoon after coming ashore in Mexico. The storm was heading inland at 18 miles per hour, with maximum sustained winds of 85 mph, according to the National Hurricane Center.

As of Tuesday afternoon, Mexico was even able to keep one of its oil export ports, Pajaritos, open for operations. Pajaritos is the third-largest oil port in the region, shipping crude to the U.S. Gulf Coast and also unloading gasoline imports from the U.S.

It’s probably still too early to call this one over, but the early indication is that there won’t be any major impact to Mexico’s oil and natural gas operations.

One aspect of energy and environmental issues that I find endlessly fascinating is the “psychology of the marketplace of ideas”, meaning what does and doesn’t push peoples’ buttons to get involved, take personal conservation steps, support local wind farms, etc. I suspect this obsession is a side-effect of having a degree in economics, but it’s also possibly related to something in the water in Union City, New Jersey (where I lived until I was 12). The jury is still out.

Anyway, here’s a selection of news items that I think are interesting from a psychology and/or message framing perspective:

Wind power is vital to our energy future

Wind turbine OK brings hope in Vt.

Do Not Buy Into The Global Warming Scam, Christians!
(Warning: Be sure you have your seatbelt fastened before you click through to this one. It’s one of the more colorful things to show up in my Google alerts in quite some time.)

Global Warming Deniers Take A Cue From Big Tobacco – How They Lie And Put Profits Before The Public Welfare

Radioactivity Discovered in Water Below Dump Site

Tenn. nuclear fuel problems kept secret
(If there’s a “must read” item in this list, this is it.)

Over at Gristmill there’s a discussion about How bad is peak oil, really? that I think is missing one key point: Timing of the PO and GW issues.

Assume for the sake of argument that we’ve either passed the peak or will very soon, and that the onset of GW effects will be gradual enough that we have a window of perhaps 20 years during which we can more or less ignore that issue and concentrate on transitioning away from petroleum, even at the environmental cost of additional CO2 emissions from using coal-to-liquids technology.

Now, assume the reverse–we’re on a more or less sustainable oil production plateau that will extend for 15 or 20 years, but the GW situation is every bit as serious as James Hansen says, and worse. Clearly we would pursue a different set of policies during the short- and mid-term (out to about 20 years).

And if both GW and PO are large and immediate threats (as I believe they are), then we have a whole other set of problems. Our financial resources will be stretched very thin (you can find the money to subsidize or pay for only some of the things you “must do right away”), and perhaps even more critically, it will be much harder to get people to focus on the “other crisis”, PO, because they’re already bombarded with messages about the seriousness of GW. I think that’s exactly the situation we find ourselves in, and it will only make the impact of PO that much worse.

I’m not claiming that no one is talking about PO, obviously, as there’s even a bi-partisan Peak Oil Caucus in the US House of Representatives. But in mainstream discussions it’s been relegated to the same “crackpot theory from the Internet” bin that people assign Y2k to. The best we can hope for right now is that some enlightened politicians get into power and push hard for the right policies under the guise of “achieving energy independence”.

I reject this notion that we’re too distracted or dumb or otherwise incapable of dealing with two large problems at once. But I’m also realistic enough to know that the term “peak oil” has become radioactive in the mainstream (thanks to the Apocalypticon morons, many of whom knew zip about the Y2k situation and needlessly scared people silly), which is why in my presentations and book I will focus on The Oil Crunch (the continued and growing demand and supply imbalance) and avoid making the peak oil concept the centerpiece of the discussion. I think it’s much more productive to talk about the near certainty of much higher oil prices in the mid-term and what we can do about it, instead of scaring people away from the topic entirely.

A few people have e-mailed me and asked, in one form or another, “What the hell is up with the oil markets? A category five storm is bearing down on Cantarell and the price of oil went down!?”

As best I can tell, here’s what’s going on here:

Yes, Dean was a humongous category five storm, and yes, it was headed directly for Cantarell, which is in the Bay of Campeche in the southern part of the Gulf of Mexico.

But to get to Cantarell, Dean had to cross a sizable piece of land–the Yucatan Peninsula. As I type this, Dean is over the peninsula and has already dropped to a category two storm. Still nothing to take lightly, but it’s expected to be down to a category one by the time it’s back over water and on top of Cantarell.

Pemex evacuated their offshore rigs, shutting in 2.65 million barrels a day of crude oil and 2.634 billion cubic feet a day of natural gas. That amount of oil coming off the market for more than a few days, with the oil supply situation already stretched tight as a drumhead, would normally cause quite a jump in oil futures.

Right now, oil is about $71/barrel, and seems to be treading water (no pun intended) as everyone waits to see how things play out in the Gulf.

Bottom line: The traders have concluded that Dean will weaken enough not to pose a threat to Pemex’s offshore infrastructure. They’re also convinced that the shutdown of oil and natural gas production will be very short lived.

Did the traders read the tea leaves correctly? Who the hell knows. At this moment it seems they got it right, but in the next 12 to 24 hours the picture could change dramatically.

(And just to say that which shouldn’t need to be said: I join all those hoping for the absolute minimum of human impact from this storm. The energy stuff is important, but it pales in comparison to direct human suffering.)

Sorry for the late start this morning, folks.

See Hurricane Dean’s Impact on Oil Infrastructure for some of the latest news on hurricane Dean, from an oil and natural gas production perspective. In general I get very nervous about sweeping predictions based on where people think hurricanes will or won’t go. These storms are immense collections of energy, and they often do quite weird things as they meander over open water of different temperatures and encounter various land formations. If nothing else, consider how Katrina (or was it Rita?) in 2005 was making a bee-line for downtown Houston before it curved right and smacked New Orleans and the surrounding area.

I was a wee lad when Agnes ambled up the east coast and then stalled for days in the northeast US, causing one hell of a flood. I lived in Wilkes-Barre at the time with my mother, and I could tell stories about that flood that would curl your hair, turn it gray, and then make it fall out.

See also Mexico moves oil workers on Dean, sees output impact for word on preparations and the (supposedly) impending release of PEMEX’s estimate of how much Dean will impact their production.

From Warming Will Exacerbate Global Water Conflicts:

As global warming heats the planet, there will be more desperate measures. The climate will be wetter in some places, drier in others. Changing weather patterns will leave millions of people without dependable supplies of water for drinking, irrigation and power, a growing stack of studies conclude.

At Stanford University, 170 miles away, Stephen Schneider, editor of the journal Climatic Change and a lead author for the authoritative Intergovernmental Panel on Climate Change (IPCC), pours himself a cup of tea and says the future is clear.

“As the air gets warmer, there will be more water in the atmosphere. That’s settled science,” he said. But where, and when, it comes down is the big uncertainty.

“You are going to intensify the hydrologic cycle. Where the atmosphere is configured to have high pressure and droughts, global warming will mean long, dry periods. Where the atmosphere is configured to be wet, you will get more rain, more gully washers.

“Global warming will intensify drought,” he says. “And it will intensify floods.”

I know you’re sick of hearing it, but I’m going to hammer the point again: Global warming’s effects won’t be the uber dramatic events of cheesy science fiction films, like 100 feet of water on NY City streets or Europe freezing solid in one winter or a thousand-mile-wide mega storm wiping Japan off the map. It will be things like these shifts in rainfall patterns and snow pack accumulations that will, in all too many cases, move water away from where people and crops are now.

From Volvo C30 to get 52 mpg:

Volvo announced Monday that an “Efficiency” version of the 2008 C30 with a 1.6-liter turbo diesel engine will get about 4.5 liters/100 km (52 mpg).

Additionally, Volvo said that its Volvo C30, S40 and V50 with the 2-liter turbo diesel engine will have a new “Powershift” gearbox that will reduce overall fuel consumption by about 8 percent.

The article doesn’t say if this model is headed to the US, but we can hope. The more high(er)-MPG options US drivers have, the better.