WTF Journal

Alberta Land Sales Crater

2008-08-19T08:56:00.002-07:00

Published: Friday, August 15, 2008

http://www.canada.com/calgaryherald/news/calgarybusiness/story.html?id=bb52dcad-74ef-4be2-a3da-43fee2617c26

Click on image for bigger and more readable version:

Sunspots May Vanish??

2008-07-14T21:38:00.002-07:00

Hope these guys are wrong. We don't need another ice age.

Sick Nazi Orgy With 5 Hookers

2008-07-11T09:24:00.002-07:00

This is beyond hilarous:

"I'm a sadomasochist who rents five hookers at a time. Just don't call me a Nazi."

Formula 1 chief airs raunchy sex life to prove he's no Nazi

DOUG SAUNDERS

E-mail Doug Saunders | Read Bio | Latest Columns
July 10, 2008

LONDON -- If it were possible to craft the perfect tabloid headline, the editors of London's News of the World accomplished it a few Sundays ago, uniting the favourite topics of its readers - sex, crime, celebrity, motor sports and the Second World War - in the page-filling Formula 1 Boss Has Sick Nazi Orgy With 5 Hookers.

In a London courtroom this week, that Formula 1 boss is throwing his entire sex life before the public eye in a battle to have part of that headline retracted, to be specific, exactly one of its 10 explosive words.

Max Mosley, 68, who since 1993 has been the president of motor racing's top governing body, does not deny that he met five hookers in a Chelsea flat, or that he engaged in a sadomasochistic orgy with them for five hours in exchange for several thousand dollars, or that he wore a prison outfit and the women German-style military uniforms, shouting at him in German while shaving him, inspecting his head for lice, humiliating him and sexually abusing him. In fact, he told the court that he has had a lifelong "unfortunate interest" in such activities.

The word in question is "Nazi." It is a sore point for the racing chief, who is the son of Sir Oswald Mosley, the head of the British Union of Fascists, Britain's main Nazi party in the 1930s and 40s. Max was born to Oswald Mosley's second wife, Diana Mitford, after the two were married in Germany by Joseph Goebbels, the Nazi propaganda minister, with Hitler among the guests of honour. For much of his childhood, his parents were in British prisons.

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But in his battle to persuade the court that there were no Nazi connotations in the Germanic prison-themed humiliation session, which was videotaped by a prostitute paid by the tabloid and then posted on the paper's website, Mr. Mosley may have plunged himself into a deeper scandal, one that calls into question the judgment and politics of the wealthy community involved in international auto racing.

Last month, Formula 1's leading teams gave Mr. Mosley an overwhelming vote of confidence, 105 votes to 55, at an emergency meeting in Paris as the scandal was at its peak. That vote outraged German racing teams Mercedes and BMW, Japanese teams Toyota and Honda, the government of Israel and numerous racing celebrities such as Stirling Moss.

Yesterday, the racing boss's lawyers argued that there was no Nazi content in the role-playing session, and that Mr. Mosley had been pretending to be an English prisoner being moved into a British institution that just happened to have a German-speaking guard. The uniforms, they said, had been purchased for the occasion at Marks & Spencer. His lawyers said there was "nothing unmistakably Nazi" in the scenes.

Mr. Mosley is suing the newspaper for damages, claiming it invaded his privacy without cause, eavesdropping on a strictly private sex act in contravention of Britain's press codes, and caused him considerable damage. He has argued that his penchant for theatrical whipping and spanking scenarios is well within the conventional range of upper-class British sexual practices.

The News of the World is countering that Mr. Mosley's alleged covert politics are of considerable public interest and that laws may have been broken, so the reporters were justified in invading his privacy.

And in the best tradition of British libel trials, the paper's editors have used the occasion to bring forth even more embarrassing details about Mr. Mosley - and on this occasion, the humiliation does not appear to provide him pleasure.

"I know blood was drawn," News of the World editor Colin Myler told the court yesterday with evident relish, "because he had a plaster [bandage] on his pink bottom."

One of Mr. Mosley's lawyers argued that a crime could not have been committed since everything was self-inflicted. On Tuesday he called several of the prostitutes as witnesses, and they testified that the Third Reich played no part in their role-playing games. He conceded that the fantasies were conducted with one of the women wearing a Luftwaffe jacket and all of them speaking "cod German," but that this was normal.

"Had I wanted a Nazi scene, I would have said I wanted one and [the women] would have got some of the inexpensive Nazi stuff from the joke shops that provide uniforms and would not have gone to Marks & Spencer and got quite expensive uniforms," he said.

As for the head-lice checking, which the paper argued was a clear reference to the treatment of Jews in Nazi concentration camps, he said it was "the kind of thing these people do all the time."

Reporter Neville Thurlbeck, who organized the sting operation, yesterday ridiculed Mr. Mosley's defence.

"Why should he order German dominatrices to beat him with sticks? You might argue it was a German theme; it certainly wasn't Hansel and Gretel. ... There was an overwhelming, absolutely overwhelming Nazi theme.

"I was completely surprised by the level of the nazism, as we saw it."

The civil trial continues.

Oil Price Falling?

2008-06-26T17:22:00.002-07:00

This is a very typical headline that we’ve been observing over the years in relation to oil prices. The headline and article aren’t lying; but there is a very careful and in my opinion orchestrated media coverage to minimize oil price increases. NO kidding, follow this trend for yourself as there will undoubtably be more occurances of this media message in the future.

In this particular case, the fact oil set a record high price is minimized and the emphasis is on “Oil Falls”. As opposed to emphasizing it closed at an all time high, the emphasis is that the price fell from an interday high that was at an even higher price than the close.

Personally I find this very Orwellian.

Oil Falls From Record as U.S. House Passes Speculation Measure

By Margot Habiby

June 27 (Bloomberg) -- Crude oil fell in New York, retreating from the record $140.39 a barrel reached yesterday, as the U.S. House of Representatives approved a bill aimed at curbing excessive energy-market speculation.

The bill, which passed 402-19, would require the Commodity Futures Trading Commission to consider using position limits, or constraints on the size of the stake each speculative investor can own, and raising margin requirements, the amount of money required to trade. It was approved after the record was set.

The measure's ``not likely to be bullish,'' said Tim Evans, an energy analyst for Citi Futures Perspective in New York. ``You can argue that it may not be effective, but I don't know that you can actually argue that it's bullish.''

Crude oil for August delivery fell as much as $1.03, or 0.7 percent, to $138.61 a barrel, and was at $138.80 at 8:59 a.m. in Sydney in after-hours trading on the New York Mercantile Exchange.

Yesterday, oil rose $5.09, or 3.8 percent, to $139.64 a barrel, a record settlement price, as Libya threatened to cut output, OPEC's president said prices may reach $170 by the summer and the dollar weakened. Yesterday's all-time-high intraday price surpassed the $139.89 reached June 16.

To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net.

Last Updated: June 26, 2008 19:07 EDT

http://www.bloomberg.com/apps/news?pid=20601072&refer=energy&sid=aB1DPOiY.bA8

Stunning Graph of World Cement Production

2008-06-18T21:25:00.001-07:00

http://www.theoildrum.com/node/4162

Swamped

2008-06-12T21:20:00.003-07:00

This article has "peak oil" and "declining EROI" written all over it. See comments within.

PAST ENERGY BOOMS HAVE BEEN GOOD FOR CANADA. NOT THIS TIME, HEATHER SCOFFIELD WRITES

HEATHER SCOFFIELD

00:00 EDT Tuesday, June 10, 2008

OTTAWA -- The energy boom used to be a wonderful thing for Montreal valve maker Velan Inc.

The company saw its order book swell in recent years as it serviced the refining and petrochemical industry that bloomed when oil and gas prices took off.

But that has all changed. In recent months, as energy prices soared to heights few had forecast, chief executive officer Karel Velan saw transportation costs jump, the price tag on parts from Asia surge because of fuel surcharges, and margins on exports disappear as the Canadian dollar rode the oil rally.

"[To ship valves] from our Granby, Quebec, plant to Burlington, Vermont, we used to pay $110 for a huge truck. Now it's $350," Mr. Velan said. "That's an enormous difference over three years."

Two observations. First is that the incredible cost increase noted is very hard to reconcile with inflation at the 2% level or so that official statistics quote. This is explained very well in a recent article in Harpers, a good summary of which is here

Second; these cost increases experienced by suppliers to the energy industry are past along to the energy industry increasing its costs. This makes for the end game of the energy business a zero sum game. We are like a cat chasing it's own tail.

Why? Energy return on energy invested. Abreviated as EROI. As energy sources go down in quality, it takes more and more energy to produce energy, the net energy output which would be a rough proxy for the net profit decreases. Links to good summaries are here and here.

This has disastrous effects on society as a whole. More later.

For years, rising prices for oil and gas prices were an unambiguous positive for the Canadian economy. The oil patch poured money into development, and that money rippled across the country, flowing into businesses such as Mr. Velan's, into government coffers, and into the pockets of workers and shareholders.

But now, the balance has tipped. The energy boom, economists and businesses say, is now more of a burden than a blessing.

With oil trading at over $120 (U.S.) in recent weeks before closing at $138.54 on Friday, economists and governments are being forced to rethink how very expensive energy will affect all the building blocks of the economy: industrial output, income, inflation, productivity, spending, saving and investment.

"Certainly there's a case to be made that there is less benefit from oil going from $120 to $130 than from $50 to $60," said Robert Fairholm, director of Canadian economic forecasting services at the Centre for Spatial Economics, one of most sophisticated forecasting organizations in the country.

"The cost of the price change is larger, and arguably the benefits will be less helpful."

Oil has more than doubled in price in 1½ years, rising to $134.35 a barrel at yesterday's close from $61.05 at the end of 2006. For much of the runup, cash blanketed the Canadian economy as oil and gas companies invested their profits in exploration and development, paid royalties and taxes, hired more employees and gave them hefty raises.

Even Central Canada, mired in a manufacturing recession, managed to score a piece of the oil boom, offering up financing, machinery and equipment, and labour.

But the trickle-down process isn't working as well any more.

Now, soaring energy costs are cutting into businesses' spending plans and shoppers' budgets across the country, even driving some companies to shut down.

Consumer confidence has plunged recently to a seven-year low, mainly because of the "sticker shock" of gasoline at more than $1.30 (Canadian) a litre. Fuel oil consumption has dwindled.

General Motors' announcement last week that it will close its truck plant in Oshawa, Ont., since no one wants to buy gas-guzzlers any more, is one of many linked to higher gasoline prices.

The tourism industry is bracing for a slack summer. Airlines are adding surcharges. Train fares are going up, and even diapers are getting more expensive.

Last week, Bank of Nova Scotia raised its forecast for the annual average price of oil, but had to revise downward its forecast for Canadian growth as a result. In the past, the revision probably would have been up.

Crude's rally has been so extreme that the economic models economists once used to show how energy profits rippled through the Canadian economy have been overtaken. Oil and gas prices have risen so fast and so high that the Ontario government warned that its assumptions about how energy affects its revenues are no longer reliable.

"We're in uncharted territory," says Peter Tertzakian, chief energy economist at ARC Financial Corp. in Calgary.

"Every energy commodity is rising, and given it affects the way we work and play, it affects everything," he said.

Ontario stands to be hurt the most among the Canadian provinces. It imported all 209 million barrels of oil it needed last year, spending about $15-billion. This year, if the price averages $120 (U.S.) a barrel, it will spend about $25-billion (Canadian).

The biggest oil and gas threat to Canada's economy, however, is foreign reaction to rising energy prices. Demand in emerging markets seems insatiable for now, keeping commodity prices high.

But among rich countries that buy most of Canada's exports, consumers are cutting back drastically, especially in the United States.

"We might be at a point where there's a tradeoff between [the costs and benefits of high energy prices], and the net benefit becomes a negative," warns Stéfane Marion, economist at National Bank Financial.

Oil's trickle-down wealth effect is also being slowed because companies are no longer spending their money in Canada as fast as prices are rising.

During crude's runup, companies plowed billions - about $20-billion last year alone - into developing Alberta's oil sands.

That spending, coupled with the wealth gained by shareholders, fuelled a surge in the services sector in the West, housing and construction activity across the country, rock-bottom unemployment, and bursting government coffers, not just in the West but in many parts of Canada.

But now, an overheated economy has driven costs in Alberta sky high, making it less enticing for companies to ramp up investment in the province. So investment, always slow to change pace, is not keeping up with price increases.

Now isn't this interesting. I never knew an oilman who couldn't spend more than he could earn. The buckets of money flowing into oil companies isn't being reinvested because it seems to cost too much to do new developments. Another way of looking at this is that the developments in general are of low quality in terms of EROI. It takes almost as much energy invested to produce the energy developed.

Economists have this whacky concept that as prices rise, new resources become profitable and an endless stream of new oil and gas developments will meet the needs of consumers.

Sorry, doesn't work that way. No point in producing energy if it takes nearly as much energy to produce it. This is a zero sum game. The economist model of "price goes up, energy supply goes up" is a form of perpetual motion. Which of course is an impossibility. Physical limits apply. In the case of the energy business, when the depleting resource passes a certain point of depletion no matter how high the price rises there will be no production response as it simply isn't available to produce.

The long-term, massively scaled oil sands projects won't speed up.

"Oil sands producers can't go any faster, even with higher oil prices," said David Yager, chief executive officer of HSE Integrated Ltd., a small energy services company in Calgary.

At the same time, there are fewer targets in conventional oil - that is, non-oil-sands. Conventional production in Alberta peaked in 1973 and has slid more than 40 per cent since the mid-1990s.

The decline in conventional oil production in Alberta is yet another example of Peak Oil. I find it baffling why people find it hard to accept the Peak Oil concept on a global scale when there are legions of examples in different regions.

On the East Coast, where existing offshore fields are seeing further development, no giant new find has been discovered.

Drilling activity over all will likely fall this year: The Canadian Association of Oilwell Drilling Contractors predicts the number of completed wells will fall to 18,000 - down 6 per cent from 2007, and down 20 per cent from 2006. The forecast would have been even lower without soaring energy prices.

We can in part thank the Alberta government for messing with the royalty system for this. But even with that atrocious piece of policy set aside, the numbers are staggering. In what should be the most amazing boom in the history of Alberta is actually slowing down. Again, I attribute this to EROI. The last price runup generally resulted in dismal results with only very select strategies and management teams achieving success. I attribute this to the oil and gas business being more tricky than ever before. Lower margin properties to work on because the EROI has gotten so much smaller.

Oil sands development will bring more production on line, but slowly.

Instead of spending on development, some companies are buying back shares, handing out dividends, or exploring energy interests outside of Canada that hold more potential.

Again, symptomatic that Canadian oil and gas companies are struggling to do profitable reinvestments, even at record all time prices.

"To get the multiplier effect, you need the reinvestment. That's what you really want," Mr. Tertzakian said.

Gregg Scott, a land broker who helps secure new exploration territory for oil and gas companies, sees it happening before his eyes in Calgary. Three years ago, when crude was $50 (U.S.) a barrel, companies spent aggressively.

Now, many are hesitant about embracing sky-high prices and are taking a step back, he said.

"There's more planning," he said.

"Companies are going to take a cautious approach as they move forward with their plans for this year and 2009."

Hmmmm..... Apparently he's missed the land sales chasing the Montney in BC and the Bakken in Saskatchewan.

Economists point to one possible silver lining: Higher energy costs could push Canadian companies to be more innovative and improve productivity.

More wisdom from economists. Yeah dude, we'll try to be more innovative and productive. Sheesh.......

They'll take hope in James Devlin, president of Trentway-Wagar Inc., the Peterborough, Ont.-based operator of the Coach Canada bus network.

He has boosted ticket prices by between 5 and 7 per cent, and has added a fuel surcharge of about the same amount. But he's also applying new technologies, such as satellite tracking, to manage his routes more efficiently.

Plus, he wants to turn the issue of high gas prices to his advantage by marketing bus travel as a way to help the environment.

"These are very trying times," he says.

Earthquake Clouds

2008-05-20T20:14:00.002-07:00

2 videos of aurora-borealis looking clouds before major earthquake in China. Very cool. Clearly there are things about geophysics that we don't understand yet.

http://www.youtube.com/watch?v=KKMTSDzU1Z4

http://www.youtube.com/watch?v=hzVamNQzfYA&feature=related

Oil, Oil, Everywhere

2008-05-07T22:49:00.003-07:00

By Kevin Drum

May 7, 2008

OIL, OIL, EVERYWHERE....The price of oil closed at $122 today. But where's it going next? According to this AP dispatch, one analyst thinks it's likely headed up to $200 while another thinks it's probably headed down to $80. Yawn. This reaction, however, grabbed my attention:

"It's not that the genie is out of the bottle — it's that 100 genies are out of the bottle," said Daniel Yergin, chairman of Cambridge Energy Research Associates. Normally known for optimistic forecasts of lowering oil prices, Mr. Yergin's firm now says the price could rise to $150 a barrel this year.

The world's diminished spare production capacity remains the strongest single catalyst for high prices, Mr. Yergin says. The world's safety cushion — the amount of readily available oil that could be pumped in a moment of crisis — is now around two million barrels a day, according to most estimates. That's just 2.3% of daily demand, and nearly all of the safety cushion is in one country, Saudi Arabia. Everyone else is pretty much pumping all they can, which makes the world vulnerable to political or other shocks.

Saying Daniel Yergin is an optimist is like saying Chris Matthews is annoying. Yergin basically thinks peak oil is Luddite crankery and that new technology will allow us to continue increasing production for at least the next several decades. He's the Pollyanna of the oil patch.

Now, I'm sure he'd say that his current pessimism is based not on a fundamental reevaluation of recoverable reserves, but instead on "aboveground" issues: political instability, terrorism, lack of investment, and so forth. Still, if even Daniel Yergin thinks oil prices are headed upward, it's a pretty good guess that oil prices are headed upward.

Way interesting. Oil is well over $120/bbl as I write this. The nature of bull markets is that folks who've been bearish all along start throwing in the towel and getting on the bullish bandwagon late in the game. When you can't find a pessimist; it is a sign the bull market is getting old.

But, as a wise friend pointed out; the end of a bull market is where the most spectacular profits can be made. He pointed out some history on this, especially the NASDAQ tech bubble that happened a few years ago. Check out the chart below:

Half the NASDAQ bubble gains were made in the last four months of its bull market, roughly between November 1999 and March 2000. Prior to that; it built fairly steadily at a minor geometric pace since 1995. This shows up a bit more clearly on the log plot below:

Using the NASDAQ bubble as a basis to quantify estimates, could Yergin throwing in the towel be a sign we are going to have a "superspike" on oil prices that may double current prices? Possibly only lasting months and followed by a crash down to 25% or so of the peak price? The most amazing profits are made in the last legs of a bull. What separates the men from the boys is: who's got the guts to stick in to get to the peak and who's got the brains to time the sell at close to the peak?

Time will tell. If I really knew the answers to such a question I'd be rich! Sure gets my Spidey Sense tingling though.

Oil Price May Go Up to $250, Warn Experts

2008-05-03T00:20:00.001-07:00

Syed Rashid Husain

Crude prices continue to baffle analysts and pundits. With the $100-era a well established fact in our daily life, there is now a growing chatter within the energy fraternity that $200 a barrel may not be a far fetched idea altogether. Is another global oil shock now gathering pace?

With limited additional supplies, alternative fuel still some decades away and demand far from collapsing, Deutsche Bank is pointing to a “huge risk” that oil prices would continue to rise in the near to mid-term.

“There is a huge risk that the oil price simply continues to escalate until it gets to some level (possibly $250) when demand finally collapses because ordinary people can no longer afford to burn as much energy as they are burning now,” Adam Sieminski, Deutsche Bank’s chief energy economist, wrote in a report last Friday.

Pointing to the reasons behind the analysis, Sieminski underlines, “Oil supply growth in non-OPEC countries is struggling at a time when OPEC has been cautious with its production policies.”

In order to analyze the situation further, we need to look at historical facts too. In the early 1980s, oil demand collapsed only after nominal oil prices rose by a factor of 10 between 1970 to 1973 and 1980 to 1983, from about $3.50 a barrel to $35. Based on the empirical example of factor of 10, Sieminski deduces that since oil averaged about $25 a barrel from 2000 to 2003, prices would have to increase to $250 a barrel in 2010 to 2013 to have the same effect on oil users this time around.

Sieminski continues to argue that strengthening of the dollar would take time to stem the flow of investment into commodities, and alternative energies, such as solar power or biofuels, are at least a decade away from contributing to energy supply.

A Bloomberg report also quoted information provider Global Insight as projecting that crude oil could peak in the US at $135 a barrel in the next two months. Oil might rise to $135 as the declining dollar draws investors seeking a currency hedge, before new supplies see prices fall, Global Insight’s Simon Wardell was quoted as saying.

And in the meantime, OPEC president Chekib Khelil too has joined the chorus, hinting at significantly firmer crude markets in the near term. Projecting that oil prices could even hit $200 a barrel, Khelil blamed weakness in the dollar and global political insecurity for the current market woes. Establishing a direct relationship between the sinking dollar and the ascending crude prices, Khelil claimed that with the dollar losing one percent of its value, oil prices rise by $4 a barrel and vice versa.

Talking to Algeria’s El Moudjahid newspaper he argued, “I don’t think that any increase in production could help lower (crude) prices, because there is a balance between supply and demand and the stocks of gasoline in the United States have recorded a surplus and are at their highest level for five years.”

And OPEC has a point. Energy futures fell sharply last Wednesday after surprising jump in the US crude oil and distillate fuel inventories last week. In its weekly inventory report, the US Energy Department’s Energy Information Administration said crude oil inventories rose by 3.8 million barrels, more than double the increase that analysts surveyed by energy research firm Platts had expected.

Meanwhile, inventories of distillates, which include heating oil and diesel fuel, rose by 1.1 million barrels, more than seven times the expected increase.

Some analysts now believe record gas prices are depressing demand for gasoline. “The demand just isn’t there, and there’s plenty of supply,” admits Phil Flynn of Alaron Trading Corp. in Chicago.

On the other hand, despite the official OPEC insistence on not raising the output any further, most Gulf Arab states have been producing at higher levels recently. As per the Joint Oil Data Initiative (JODI), compiled by the Riyadh based International Energy Forum, Saudi Arabia lifted its rude oil supply in January and February to one of its highest levels in many years, while the UAE, Kuwait and Iran also pumped at near capacity. Qatar, a relatively smaller oil producer but a major gas power, also boosted its crude output to record levels in February.

Saudi Arabia’s output climbed to 9.216 million barrels per day (bpd) in February and an average of 9.205 million bpd in January and December. The February level was the Kingdom’s highest production in more than two years and one of the highest in a decade. And despite this high output over the last few months, Saudi Arabia maintained a spare capacity of 1-1.5 million bpd - as per its commitment as a responsible oil producer. Indeed being at the top position also brings in a number of responsibilities too. And Saudi Arabia seems fully aware of it.

Although March figures were not available yet, independent estimates showed Saudi and the Gulf output remaining almost at the February levels, if not higher.

The UAE also pumped 2.716 million bpd in February, up from around 2.700 million bpd in January. The output is close to the country’s sustainable output capacity and is the highest since the Emirates began commercial crude exports in the early 1960s.

Kuwait said it boosted its production, including output from the Neutral Zone, which it shares with Saudi Arabia, by nearly 200,000 bpd to a record high of 2.797 million bpd in February. Iran also pumped at maximum capacity of around 4.120 million bpd while Qatar raised production to its highest ever level of 862,000 bpd in February.

And the above figures once again brings under focus that the real issue afflicting the crude markets is not the output factor, as claimed by some in the industrialized world. Output may be one of the many important factors but indeed not the main factor. Other factors, much beyond the control of the OPEC seem to be equally responsible for the woes of the market, if not more, one has to concede.

Lower oil production is the real story

2008-05-03T00:17:00.001-07:00

By LOREN STEFFY
Copyright 2008 Houston Chronicle

Eleven billion dollars is not enough.

That, at first blush, seemed to explain how Exxon Mobil Corp. could earn that much money in three months and still see its stock fall 4 percent.

Wall Street expected more, and so did Exxon Mobil investors. At a time of record oil prices, America's biggest oil company reported an earnings increase that was the smallest among its peers.

The profit is what captures everyone's attention, but there's a bigger concern hidden amid the numbers of Exxon Mobil's earnings.

The company's worldwide oil production fell 10 percent, to just under 2.5 million barrels a day.

Some of the decline came from Exxon Mobil's dispute over the seizure of assets by the Venezuelan government, but even excluding those assets, the company's production declined. Overall production, including natural gas, fell 3 percent.

While Exxon Mobil boosted production from fields in West Africa and the North Sea, the gains weren't enough to offset declines from aging oil fields, the company said.

The company blamed the decline in part on its contracts with oil-producing countries, which allow those countries to claim a larger share of oil volumes as prices rise. In other words, the higher prices go, the less oil Exxon Mobil gets.

As those countries benefit from higher prices, living standards rise and, as I mentioned last week, their own demand for oil increases. That, in turn, means less oil for companies such as Exxon Mobil over the long term.

The problem isn't unique to Exxon Mobil.

Other major oil companies also offered a stark production picture. BP's was unchanged from a year earlier. Shell reported a gain only because it boosted natural gas production, which offset lower oil output. ConocoPhillips reported an increase but attributed it to its 20 percent stake in Russia's Lukoil.

With national oil companies now holding most of the world's reserves, companies like Exxon Mobil are left with few places to look for new production.

The public, though, has little concern for Exxon Mobil's travails. We only care about what we see from our side of the pump, and that means the price and the profits of the company whose name is atop the sign.

Exxon Mobil has reported earnings between $9 billion and $11 billion in almost every quarter since late 2005, and every time it does, the public outcry grows.

Capitalizing on outrage
Politicians are quick to capitalize on that outrage.

"I believe we should impose a windfall profits tax on big oil companies and use that money to suspend the gas tax and give families relief at the pump," Hillary Clinton said in a statement addressing Exxon Mobil's earnings. A typical family, she claims, would save $70. John McCain already has called for a "gas tax holiday."

A closer reading of Exxon Mobil's earnings statement, though, shows Clinton is missing the point.

Her plan, and McCain's, would essentially lower gasoline prices at the pump. And how will we respond? We'll drive more. We're talking about summer, after all. Time to load up the kids in the land yacht and cruise to Destin at 12 miles to the gallon.

As demand rises, it depletes supply even further, and that, in turn, drives prices up in the world market. Shortages aren't solved by using more.

Barack Obama, by the way, has proposed a broader windfall profits tax on the industry based on crude prices, which the companies don't control. He'd tax oil over $80 a barrel, Bloomberg News reported, even though futures markets are indicating oil will stay above $100 through 2016.

Using this logic, we should tax pizza places because of soaring cheese prices.

They don't like it either
As I've said before, oil companies don't welcome the numbers we're now seeing at the pump. Not only do they cut into refining margins — another reason Exxon Mobil's profit didn't grow as much as expected — they make us start buying Priuses in spite of their bean-pod appearance.

So the public and politicians decry Exxon Mobil's profit while the market frets over a mere 17 percent increase. Both miss the more disturbing numbers, the ones that portend greater problems, not just for the oil companies but for all of us who use their products.

It's not a question of whether $11 billion is too much or not enough. It's a question of whether 2.5 million barrels is.

Loren Steffy is the Chronicle's business columnist. His commentary appears Sundays, Wednesdays and Fridays. Contact him at loren.steffy@chron.com. His blog is at http://blogs.chron.com/lorensteffy/.

The Peak Oil Crisis: The Half-Life For Air Travel

2008-05-03T00:14:00.000-07:00

Written by Tom Whipple

Thursday, 01 May 2008

In recent weeks, airlines around the world have been reporting substantial losses, declaring bankruptcy or completely shutting down. So far the losses have been mostly of small airlines, but many of the large ones have started to thrash around for merger partners. At $3.71 a gallon, jet fuel is now the single largest expense an airline faces.

In 2000, the airlines fuel bill was $14 billion. It is now pushing $60 billion and climbing. Southwest, the most profitable carrier, recently announced that this year’s fuel bill will be $500 million more than last year and equal to 2007 profits. During the first quarter of 2008 American airlines lost $328 million; Delta lost $274 million; United lost $537 million; Continental $80 million; Northwest $191 million; and US Airways $236 million. Only Southwest Airlines, which did a better job of hedging its fuel than the others, made a profit.

It is clear we are going to see major changes in air travel shortly.

For some time now, airlines have been eliminating frills, raising prices, filling the planes and effecting whatever other economies come to mind. After the summer flying season ends next September, many airlines are planning to retire 5-10 percent of their least efficient aircraft, thereby reducing their flight schedules by a similar amount.

Knowledgeable observers are expressing doubts these moves will be enough. People are starting to talk about $200 oil which implies that airline fuel costs will double again. Newer aircraft are more efficient, but the improvements are nowhere near what is necessary to keep up with surging fuel costs and, as Continental Airlines concluded this week, there is not enough financial benefit in a merger to keep up with costs.

Airlines are continuing to raise fares -- the average ticket is up 10 percent over last year -- but at some price point the airlines will drive away discretionary travel and they will be left with only essential business and personal travel that is unlikely to fill many planes. On top of the fuel prices is the current economic downturn which is likely to start impacting discretionary travel before the year is out. In short, airplanes simply can’t make money while charging affordable fares at current, much less prospective, fuel prices. The era of 500 mph travel for most people is nearly over.

There is no obvious way out of this dilemma unless there is a major breakthrough in the efficiency of aircraft. Fares will continue to rise. Flights will be cut. Smaller cities will lose their air service. Shorter trips will be eliminated as being too expensive. More seats are likely to be squeezed on planes and one manufacturer is even pondering seat-less planes in which passengers are strapped to boards during the flight.

Ten or 15 years from now, air travel is likely to be significantly reduced; will be patronized by business travelers or the very wealthy; and will be limited to trans-oceanic or long-distance flights between major population centers.

Consolidation of the major airlines and the demise of the smaller regional carriers has already started. After a number of rounds of consolidation, we will be down to only a handful of national or multi-national airlines probably subsidized by governments on “national security” grounds.

While the demise of inexpensive discretionary air travel has ramifications for many industries, in the first instance tourism is likely to be hit the hardest.

Ignoring for the minute the likely effects of $4 or $5 gasoline in California this summer, Las Vegas reports that nearly half of its tourists arrive by air. To make matters worse, resort operators have recently spent billions upgrading their facilities to the $300 a night places that are less likely to attract drive up customers. The same pattern can be repeated at air-dependent tourist attractions all over the world.

There is still a remarkable amount of denial in the airline business. This week Airbus released a forecast showing that the number of large commercial aircraft will grow from 15,000 to 33,000 in the next 20 years and that the number of passengers will triple.

If there is to be a long-term future for air travel, it is unlikely to be with liquid fuel powered turbines driving heavier than air devices. The U.S. Air Force is currently embarked on a campaign to convince the Congress to buy it a multi-billion dollar facility to convert coal to jet fuel and a couple of airlines are busy demonstrating that their planes will run on biofuels.

While limited use of coal to liquid fuel or biofuels for aircraft may see limited use, neither of these replacements is likely to produce enough affordable fuel to keep Airbus’s 33,000 large transport jets in the air 20 years from now.

Over the longer run, the development of hydrogen powered aircraft might prove feasible or perhaps lighter-than-air dirigibles might be developed to the point where they can move people and goods efficiently over long distances. In any case, the day of the ubiquitous kerosene-powered jet transport which revolutionized travel for many of us in the second half of the 20th century is likely to be shorter than most realize.

Food crisis looms for Japan as prices rise

2008-05-02T23:13:00.002-07:00

By Julian Ryall, in Tokyo

Last Updated: 1:04AM BST 02/05/2008

Japan is facing its first food shortages in almost 40 years, with supermarkets close to running short of stocks.

n the last month, the price of milk, soy sauce, bread, noodles, pasta and cooking oil have all risen as makers are forced to pass on rising costs.

Butter has already begun to disappear from supermarket shelves as surging global grain prices make it impossible for Japan's dairy farmers to increase milk production. Retailers warn that other goods could follow soon.

With the global food crisis beginning to bite in one of the world's most powerful economies, more than 80 per cent of Japanese said that increasing prices were having an impact on their household spending. Many shoppers said they were switching to cheaper brands or buying in greater bulk.

Article continues

This is of particular note:

A major concern for Japan's government is that its farmers can produce only about 40 per cent of the food consumed each year by its 128 million inhabitants. This is the lowest proportion for any industrialised nation and also adds to transport costs, which have become a larger burden than elsewhere.

The Coal Crunch is Coming

2008-04-30T23:27:00.002-07:00

The Coal Crunch is Materializing

Posted by Luis de Sousa on May 1, 2008 - 1:00am in The Oil Drum: Europe

In recent days a series of media articles surfaced pointing to a concerning situation in China. The New Scientist reported:

At the end of a cold and stormy winter, the country has just 12 days of coal reserves at most power stations. Some provinces, including Hebei, bordering Beijing, have less than a week's coal left. This is a record low, the state electricity regulatory commission revealed on Tuesday.

It continues:

China relies on burning coal for 70% of its electricity. Even though Chinese coal production in the first quarter of this year was up almost 15% on the same period last year, it has apparently not been enough to meet rapidly growing demand.

[...]

The coal mining industry, and the rail network needed to bring the coal to the power plants, are both struggling to keep up with the drive to build ever more generating capacity. The strains raise questions about how much longer China's breakneck industrialization can continue.

China Stakes presents even grimmer details:

The Vice-President of the State Electric Power Supervisory Commission, Wang Yeping, said that in Hebei, Anhui, and Chongqing, the stockpile of coal for power generation was not even enough to last 7 days. This situation is quite similar to the one that existed in January 2008. Theoretically, a stockpile that is smaller than 7 days supply has reached an “urgent level”.

This scenario is even more concerning coming during the Spring when electricity demand is at the lowest. Air conditioning is not needed yet and most of the country should by now be through with home heating. The coming Summer can indeed have some hardships reserved for China.

While the hard winter brought all sort of disruptions to the regular life of Chinese folk during the weeks prior to the New Year festivities, production kept strong during the first months of 2008, setting new records. These facts show that the difficulties felt during January and early February were mainly caused by shipping disruptions.

While cold weather continued for the rest of the Northern Hemisphere, China was granted some relief in March with some warm temperatures:

Temperature anomalies in March of 2008. Source University of Alabama in Huntsville.

Although out of season frosts returned to China in April, the southern provinces of the country are now well into Spring. So why these dwindling stocks now? China Daily have it by the numbers:

The General Administration of Customs said on Thursday that China exported 8.75 million tonnes of coal for $630 million [during January and February], up 13.5 percent and 39.7 percent, respectively, year-on-year.

Prices averaged $72.2 per tonne. For February only, exports were 3 million tonnes, down 32.1 percent.

Imports were 7.06 million tonnes, down 18.2 percent year-on-year. These shipments were valued at $450 million, up 13.1 percent. The average price was $63.3 per tonne. For February only, imports were 2.82 million tonnes, down 28.2 percent.

Putting it simply, China is importing a smaller volume of Coal than last year, but actually spending more money doing it. Especial attention should be taken to the prices per tonne, in the order of $60 – 70.

At the same time prices in Europe are well above $100 /tonne and Indonesian Coal is expected to reach a $150 /tonne, this kind of Coal was below $50 /tonne last year.

Apparently the international Coal market is getting tight enough for a country like China to feel the pinch. While Europe and North America are still able to import their usual share with prices triple of those last year, China isn't. Volumes available for export in South East Asia, Australia and New Zealand are being diverted away from local buyers with lower purchasing power.

Partially this problem is rooted on extreme weather events that have been affecting Australia's production. Floods during the first months of the year brought hard cooking coal prices to a spike of $400 /tonne [hat tip Big Gav]. Still, the same article indicates long term contracts being celebrated at $300 /tonne, and thermal coal also bound to go over $100 /tonne this year.

With the Coal Crunch the world is stepping into is just another dimension of the present energy crisis that is being triggered by anaemic oil production. Either by pushing demand up for other energy sources or supply down for minerals, food and other commodities, oil is building an economic whirlwind that has the potential to transform the face of our societies. Ready to ride?

Hybrids and I'm Not Talking Cars Here........

2008-04-30T22:39:00.005-07:00

Interesting article. I guess it's a morbid fact that a chimp-human hybrid can be created. Yuck. No doubt the resulting individual would need some back waxing. I thought the items at the bottom of the article on hybrids amoungst other animals were interesting and are quoted below the whole article link:

http://realitysandwich.com/the_cryptic_cosmology_synchromysticism

EVEN though hybrids of humans and animals have never been created, many other creatures have been crossed successfully.

Lions and tigers have been bred to create ligers, the world's largest cats.

And there are also zorses (zebra and horse), wholphins (whale and dolphin), tigons (tiger and lion), lepjags (leopard and jaguar) and zonkeys (zebra and donkey).

As well as these hybrid mammals, there are also hybrid birds, fish, insects and plants.

Many hybrids, such as mules, are sterile, which prevents the movement of genes from one species to another, keeping both species distinct. However, some can reproduce and there are scientists who believe that grey wolves and coyotes mated thousands of years ago to create a new species, the red wolf.

More commonly, hybrids mate with one of their parent species, which can influence the genetic mix of what gets passed along to subsequent generations.

Hybrids can have desirable traits, often being fitter or larger than either parent.

Most hybrid animals have been bred in captivity, but there are examples of the process occurring in the wild.

This is far more common in plants than animals but in April 2006 a hunter in Canada's North-west Territories shot a polar bear whose fur had an orange tint.

Research showed that it had a grizzly bear father, and it became known as a pizzly.

In 2003, DNA analysis confirmed that five odd-looking felines found in Maine and Minnesota were bobcat-lynx hybrids, dubbed blynxes.

OK now it really gets weird. No shit. You can't make this stuff up:

Scientist sent to Africa in Stalin's plan for species that felt no pain

THE controversial fascination with crossing humans and chimpanzees has a colourful history.

Records suggest that in 1926 the Russian dictator Joseph Stalin decided he wanted to try to create a new species of superhuman.

Kirill Rossiianov, of the Russian Academy of Sciences in Moscow, has studied Soviet archives that detailed the wor

His findings, published in the journal Science in Context in 2002, outlined how Russia's leading animal breeding scientist, Professor Ilya Ivanov, was ordered to turn his skills to the quest for an ultimate soldier by crossing humans with apes.

Stalin reportedly told the scientist: "I want a new invincible human being, insensitive to pain, resistant and indifferent about the quality of food they eat."

Ivanov was sent to French West Africa and on 28 February, 1927, he wrapped two female chimps in nets and inseminated them with sperm from a local man. On 25 June, he inseminated another chimp with human sperm, this time using a special cage and knocking her out with ethyl chloride.

None of the three became pregnant, and at that point he changed tack. He reportedly went on to ask the authorities whether he could, instead, inseminate native women with the sperm of a dead male chimpanzee in a local hospital.

He even suggested the experiment could be carried out without the women's knowledge because he was concerned they would resist.

According to records, the authorities refused permission because the studies would be taking place in a hospital.

Instead they suggested the procedure could be done outside, where no regulations existed, but Ivanov was apparently offended, believing his research should take place in a clinical setting.

It is believed that Ivanov left Africa with a number of primates and went to the Soviet Republic of Georgia.

There, it is thought he worked in a government primate station, where rumour has it he attempted to arrange further experiments on the artificial insemination of women volunteers. No evidence exists that these experiments actually took place.

No evidence, eh? A quick google search yielded this nugget and many more to boot:

http://tinyurl.com/5wt78v

Mass Murder of Young Men?

2008-04-28T23:22:00.002-07:00

I don't normally follow crime stories but this is pretty interesting. Sounds like it is straight out of the Chris Carter series Millenium :

DETECTIVES: Chris Jenkins murder connects dozens around country

Could there be a calculated, cross-country plot to kill young college men, including some in Minnesota? It seems a little hard to believe, but two New York detectives say they can prove it.

Now, they are revealing years of their evidence for the first time to 5 EYEWITNESS NEWS...

Click above for article and TV report

Oil demand destruction, where is it?

2008-04-28T23:12:00.002-07:00

Oil is close to $120/barrel, "peak oil" is everywhere you look, so where’s the demand destruction? The latest EIA figures actually show a 0.57% increase in US gasoline demand year on year over the last week. The week prior also showed an increase in gasoline demand, but the 4-week average still shows a 0.5% decrease because of lower demand in 2008 for the weeks ending 4/4/08 and 3/21/08. Regardless of which statistic one chooses, this is hardly a convincing case for demand destruction.

Click above for whole story

Good question; where is the demand destruction? I thought we'd see clear signs of it by now.

Analysts Divided Over Cause of Food Price Increases

2008-04-28T23:03:00.002-07:00

AGRICULTURE: What is Really Causing ‘Agflation’?

By Mario Osava

RIO DE JANEIRO, Apr 25 (IPS) - The old laws of the marketplace are no longer working. Food prices have been rising for six years because of surging demand, and increased production is not restoring the balance as it used to in the past. In fact, prices have been going up even faster over the last year.

The so-called "financialisation" of commodities markets, that is, the influx of investment funds seeking safer and more lucrative assets, has intensified the trend and "at the moment impinges more than the law of supply and demand," said analyst Fernando Muraro of AgRural, a consultancy firm in Brazil.

There is no way to measure the influence of speculative forces on "agflation," the new term coined to describe inflation provoked by the agricultural sector, he said.

>>>>>>>>>

There is a global excess of dollars, and holders are transferring them to markets and products wherever sustained price increases indicate good prospects for making profits, he said.

>>>>>>>>>

In contrast, Sergio Vale, a consultant with MB Asociados, said "it’s not true that a financial bubble exists for agricultural commodities." The price increases are "concretely based" on sustained growth of demand in China, India and other Asian countries, as well as in Latin America, he told IPS.

Click on title block for whole article. I'm not certain either; they both may be partly correct.

Japanese Bond Panic

2008-04-28T23:00:00.001-07:00

JGBs sell off

Published: April 25 2008 09:38 | Last updated: April 25 2008 18:52

It takes a lot to rattle Japanese government bonds. But on Friday, the world’s biggest bond market went into freefall. The yield on 10-year JGBs jumped 12.5 basis points to 1.6 per cent. Futures trading screeched to a halt – the first enforced stoppage since new systems were introduced at the start of the year.

Part of the rush for the exits can be explained by global concerns about higher inflation. The $6,700bn JGB market has a habit of selling off when US interest rates bottom. Many expect a cut next week by the US Federal Reserve to be the last in this cycle. Against this backdrop, foreigners were keen to reduce their positions.

SPECULATING IN HUNGER

2008-04-28T22:42:00.001-07:00

ARE INVESTORS CONTRIBUTING TO THE GLOBAL FOOD CRISIS?

by Ellen Brown, April 28th, 2008

http://www.webofdebt.com/articles/global-food-crisis.php

Investment newsletters are now featuring headlines like "How You Can Profit from the Global Food Crisis." The recommended investments include agribusiness stocks and exchange-traded funds (ETFs) that speculate in agricultural commodities. These investments will no doubt do very well in the global food crisis; but before you put your money down, you may want to explore whether you will be helping to alleviate the problem or contributing to it. Do you really want to "invest" in starvation? In an April 23 article in the German news source Spiegel Online called "Deadly Greed: The Role of Speculators in the Global Food Crisis," Balzli and Horning note, "Many investors . . . are simply oblivious to the fact that by investing in the global casino, they could be gambling away the daily food supply of the world's poorest people."1

Jean Ziegler, UN Special Rapporteur on the Right to Food, has called the exploding food crisis "a silent mass murder." In an interview in the French daily Liberation on April 14, he said, "We are heading for a very long period of rioting, conflicts [and] waves of uncontrollable regional instability marked by the despair of the most vulnerable populations." He blamed globalization and multinationals for "monopolizing the riches of the earth," and said that a mass uprising of starving people against their persecutors is "just as possible as the French Revolution was." In some places, this is already happening. In Haiti, where the cost of rice has nearly doubled since December, the prime minister was fired this month by opposition senators after more than a week of riots over the cost of staple foods. Violent protests over food prices have also been set off in Bangladesh, where rice has also doubled; in the Ivory Coast, where food prices have soared by 30 to 60 percent from one week to the next; and in Egypt, Uzbekistan, Yemen, the Philippines, Thailand, Indonesia and Italy.

In an April 21 Wall Street Journal article titled "Load Up the Pantry," Brett Arends observed that the food riots now seen in the developing world could soon be affecting Americans as well. Rocketing food prices are not a passing phase but are actually accelerating. He recommends hoarding food – not because he is actually expecting a shortage but as an investment, because "food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund." Arends goes on:

The main reason for rising prices, of course, is the surge in demand from China and India. Hundreds of millions of people are joining the middle class each year, and that means they want to eat more and better food. A secondary reason has been the growing demand for ethanol as a fuel additive. That's soaking up some of the corn supply.2

That's the rationale published in the Journal of Wall Street, the financial community that brought you the housing bubble, the derivatives bubble, and now the commodities bubble, producing the subprime crisis, the credit crisis, and the oil crisis. The main reason for the food crisis, says this author, is that the Chinese and Indian middle classes are eating better. Really? Rice has been the staple food of half the world for centuries, and it is hardly rich man's fare. Moreover, according to an April 2008 analysis from the United Nations' Food and Agriculture Organization, food consumption of grains has gone up by only one percent since 2006.3 That hardly explains the fact that the price of rice has spiked by 75 percent in just two months. The price of Thai 100 per cent B grade white rice, considered the world's benchmark, has tripled since early 2007; and it jumped 10 percent in just one week. The fact that corn is being diverted to fuel, while no doubt a contributing factor, is also insufficient to explain these sudden jumps in price. World population growth rates have dropped dramatically since the 1980s, and grain availability has continued to outpace population.4 Biofuels have drained off some of this grain, but biofuels did not suddenly happen, and neither did the rise of the Asian middle class. If those were the chief factors, the rise in food prices would have been gradual and predictable to match.

Another explanation for the sudden jump in grain prices is not mentioned by this Wall Street Journal writer but is suggested by other analysts. William Pfaff wrote in the April 16 International Herald Tribune:

[M]ore fundamental is the effect of speculation in food as a commodity – like oil and precious metals. It has become a haven for financial investors fleeing from paper assets tainted by subprime mortgages and other toxic credit products. The influx of buyers drives prices and makes food unaffordable for the world's poor. "Fund money flowing into agriculture has boosted prices," Standard Chartered Bank food commodities analyst Abah Ofon told the media. "It's fashionable. This is the year of agricultural commodities."5

The "hot money" that has fled the collapsed real estate bubble is now moving into the commodities bubble, and that includes food. "Hot money" is an influx of speculative capital in search of high rates of return, quickly moving from one market to another. It moves, however, not because the products are better (the traditional justification for price-setting according to "free market forces") but because the speculative "spread" is better. Money is invested not in making real goods and services but simply in making more money. Food prices are being driven by speculators, and today that includes ordinary investors like you and me, who can now gamble in agricultural futures through ETFs that have opened up a lucrative market formerly available only to big investment players.

Conventional economic theory says that prices are driven up when "demand" exceeds "supply." But in this case "demand" does not mean the number of hands reaching out for food. It means the amount of money competing for existing supplies. The global food crisis has resulted from an increase, not in the number of mouths to be fed, but simply in the price. It is the money supply that has gone up, and it is investment money in search of quick profits that is largely driving food prices up. Much of this seems to be happening in the futures market, where fund managers seek to maximize their profits by using futures contracts. Balzli and Horning explain:

The futures market is a traditional tool for farmers to sell their harvests ahead of time. In a futures contract, quantities, prices and delivery dates are fixed, sometimes even before crops have been planted. Futures contracts allow farmers and grain wholesalers a measure of protection against adverse weather conditions and excessive price fluctuations. . . . But now speculators are taking advantage of this mechanism. They can buy futures contracts for wheat, for example, at a low price, betting that the price will go up. If the price of the grain rises by the agreed delivery date, they profit. Some experts now believe these investors have taken over the market, buying futures at unprecedented levels and driving up short-term prices. Since last August, this mechanism has led to a doubling in the price of rice.

The authors quote grain wholesaler Greg Warner, who says what is happening now in the grain futures market is unprecedented. "What we normally have is a predictable group of sellers and buyers -- mainly farmers and silo operators." But the landscape has changed since the influx of large index funds into the futures market. "Prices keep climbing up and up." Warner calculates that financial investors now hold the rights to two complete annual harvests of a type of grain traded in Chicago called "soft red winter wheat." He calls these developments "stunning" and points to them as "evidence that capitalism is literally consuming itself."6

What about investing in agribusinesses such as Monsanto, which have promoted the "Green Revolution" through the bioengineering of foods and the production of GMO (genetically modified) seeds, synthetic fertilizers, and herbicide and pesticide sprays? Won't these corporations, at least, help to alleviate the global food crisis?

To the contrary, say critics, these businesses too are just driving food prices up. Monsanto's patented GMO seeds have been genetically engineered so that they cannot reproduce but must be purchased every year from the company. Small farmers who have fallen for the hype of greater productivity and subjected their land to these seeds and chemicals have found that not only have their yields been reduced but that the land will no longer bear anything except GMO seeds.7 Farmers who can no longer afford the seeds are priced out of the market, handing monopoly control over to the agribusiness giants that can then raise prices to whatever the market will bear; and in the case of food, it will bear a lot, right up to the point of slavery. As Henry Kissinger once famously said, "Who controls the food supply controls the people; who controls the energy can control whole continents; who controls money can control the world."

What can you invest in, then, that actually would help relieve the global food crisis? One possibility is local organic farming. "Community-supported agriculture" (CSA) is a model of food production, sales, and distribution aimed at increasing the quality of food and the care given to land, plants and animals, while reducing losses and risks for producers. A variety of CSA systems are now in use worldwide, allowing small-scale commercial farmers and gardeners to have a successful, small-scale closed market while providing their customer-members with a regular delivery or pick-up of healthy local produce. The USDA provides a list of CSA addresses and websites.8

That still leaves the problem of speculation in food futures. How can parasitic profits to non-producing middlemen be eliminated while still protecting farmers? The futures market was first created for farmers, who needed to be able to lock in a price today that would cover their costs and return a reasonable profit later. One interesting proposal is to return to the policy of "farm parity pricing" enacted during the 1930s. It ensured that the prices received by farmers covered the prices they paid for input plus a reasonable profit. If the farmers could not get the parity price, the government would buy their output, put it into storage, and sell it later. The government actually made a small profit on these transactions; food prices were kept stable; and the family farm system was preserved as the safeguard of the national food supply. With the push for "globalization" in later decades, farm parity was replaced with farm "subsidies" that favored foods for export over local markets, and large corporate farms engaged in chemical farming over sustainable farming, forcing thousands of family farmers out of business.

Farm parity pricing could help, but a complete solution to the problem of global inflation would require an overhaul of the private central banking system that has created one bubble after another for the last century. (See E. Brown, "Market Meltdown: The End of a 300 Year Ponzi Scheme," webofdebt.com/articles, September 3, 2007.)

And if you want to invest in the commodities boom without guilt? You can buy gold, which is no one's staple food or fuel.

___________________
1 Beat Balzli, Frank Hornig, "Deadly Greed: The Role of Speculators in the Global Food Crisis," Spiegel Online (April 23, 2008).
2 Brett Arends, "Load Up the Pantry," Wall Street Journal (April 21, 2008).
3 "2007–2008 World Food Price Crisis," Wikipedia.
4 Ibid.
5 William Pfaff, "Speculators and Soaring Food Prices," International Herald Tribune (April 16, 2008).
6 Balzli & Hornig, op. cit.
7 William Engdahl, Seeds of Destruction (Global Research 2007), summarized by Stephen Lendman in "Unleashing GMO Seeds: 'Food is Power'", Global Research (January 19, 2008).
8 "Alternative Farming Systems Information Center," USDA.gov. See "Community-supported Agriculture," Wikipedia.

China stock exchange investors suffer from spectacular bear market

2008-04-25T23:44:00.001-07:00

China's stock market has lost half its value since October in one of the most spectacular bear markets of the last half century, eliminating $2.5 trillion (£1.25 trillion) of paper wealth.

The Shanghai Composite briefly fell below the key psychological level of 3,000 yesterday, down 50pc from its peak.

...

Food costs make up roughly a third of China's inflation index, so the spiralling cost of rice, corn, poultry and milk is playing havoc with price stability.

The inflation rate is nearing levels that set off urban riots in the late 1980s and caused workers to come out in sympathy with the students in the Tiananmen Square protest.

more here

Japan: Where has all the butter gone?

2008-04-25T23:42:00.000-07:00

Where is the butter? — cry Japanese consumers who have been hunting everywhere for the dairy product. The drastic reduction in raw milk production, complicated by hikes in the price of grain as well as changes in the global patterns of dairy product consumption, have caused a serious butter shortage in Japan. Empty shelves in the dairy section of grocery stores across the country have not seen a shipment of butter for days, and stores are posting signs apologizing for the shortage.

more here

Food Rationing Confronts Breadbasket of the World

2008-04-25T23:39:00.001-07:00

April 21, 2008 Edition

BY JOSH GERSTEIN - Staff Reporter of the Sun

April 21, 2008

URL: http://www2.nysun.com/article/74994

MOUNTAIN VIEW, Calif. — Many parts of America, long considered the breadbasket of the world, are now confronting a once unthinkable phenomenon: food rationing. Major retailers in New York, in areas of New England, and on the West Coast are limiting purchases of flour, rice, and cooking oil as demand outstrips supply. There are also anecdotal reports that some consumers are hoarding grain stocks.

At a Costco Warehouse in Mountain View, Calif., yesterday, shoppers grew frustrated and occasionally uttered expletives as they searched in vain for the large sacks of rice they usually buy.

"Where's the rice?" an engineer from Palo Alto, Calif., Yajun Liu, said. "You should be able to buy something like rice. This is ridiculous."

The bustling store in the heart of Silicon Valley usually sells four or five varieties of rice to a clientele largely of Asian immigrants, but only about half a pallet of Indian-grown Basmati rice was left in stock. A 20-pound bag was selling for $15.99.

"You can't eat this every day. It's too heavy," a health care executive from Palo Alto, Sharad Patel, grumbled as his son loaded two sacks of the Basmati into a shopping cart. "We only need one bag but I'm getting two in case a neighbor or a friend needs it," the elder man said.

The Patels seemed headed for disappointment, as most Costco members were being allowed to buy only one bag. Moments earlier, a clerk dropped two sacks back on the stack after taking them from another customer who tried to exceed the one-bag cap.

"Due to the limited availability of rice, we are limiting rice purchases based on your prior purchasing history," a sign above the dwindling supply said.

Shoppers said the limits had been in place for a few days, and that rice supplies had been spotty for a few weeks. A store manager referred questions to officials at Costco headquarters near Seattle, who did not return calls or e-mail messages yesterday.

The curbs and shortages are being tracked with concern by survivalists who view the phenomenon as a harbinger of more serious trouble to come.

"It's sporadic. It's not every store, but it's becoming more commonplace," the editor of SurvivalBlog.com, James Rawles, said. "The number of reports I've been getting from readers who have seen signs posted with limits has increased almost exponentially, I'd say in the last three to five weeks."

Spiking food prices have led to riots in recent weeks in Haiti, Indonesia, and several African nations. India recently banned export of all but the highest quality rice, and Vietnam blocked the signing of a new contract for foreign rice sales.

"I'm surprised the Bush administration hasn't slapped export controls on wheat," Mr. Rawles said. "The Asian countries are here buying every kind of wheat." Mr. Rawles said it is hard to know how much of the shortages are due to lagging supply and how much is caused by consumers hedging against future price hikes or a total lack of product.

"There have been so many stories about worldwide shortages that it encourages people to stock up. What most people don't realize is that supply chains have changed, so inventories are very short," Mr. Rawles, a former Army intelligence officer, said. "Even if people increased their purchasing by 20%, all the store shelves would be wiped out."

http://www2.nysun.com/pf.php?id=74994&v=2508878021

Good-Bye, Cheap Oil. So Long, Suburbia?

2008-04-25T23:25:00.001-07:00

http://www.businessweek.com/magazine/content/08_18/b4082056979063.htm

The suburban landscape has been marred by foreclosures and half-built communities abandoned in the subprime aftermath. But James Howard Kunstler, author of a dozen books, including The Geography of Nowhere: The Rise and Decline of America's Man-Made Landscape, thinks there's a bigger threat to those far-flung neighborhoods: the scarcity of oil. As Kunstler sees it, oil wells are running dry and the era of cheap fuel is over. Given the supply constraints, he says the U.S. will have to rethink suburban sprawl, bringing an end to strip malls, big-box stores, and other trappings of the automotive era.

Not Guzzling So Much Gas

2008-04-25T23:16:00.001-07:00

From http://calculatedrisk.blogspot.com/:

Without the strong world economy, oil prices would probably already be falling. From BusinessWeek: Not Guzzling Quite So Much Gas

Traffic levels are trending downward nationwide. Preliminary figures from the Federal Highway Administration show it falling 1.4% last year. Now, with nationwide gasoline prices having recently passed the inflation-adjusted record of $3.40 a gallon set back in 1981, the U.S. Energy Information Administration (EIA) is predicting gas consumption will actually fall 0.3% this year. That would be the first annual decline since 1991. Others believe the falloff in consumption is actually steeper than the government's numbers show.

The supply and demand curves are both very steep for oil, so a small decline in consumption would usually result in a significant decline in price. However, right now global demand is more than making up for any decline in domestic consumption.

How Cuba Solved Hunger

2008-04-25T22:36:00.001-07:00

"Unable to import food or fertilizer, Cuba saw the calories and protein in the average diet drop by almost a third, from 3,000 calories a day to 1,900 calories between 1989 and 1994."

Click above to read the article to get the good news of how they fixed it.

A house price crash or soaring inflation

2008-04-25T22:16:00.004-07:00

This is the corner the Americans and Brits have backed themselves (and everyone else into by proxy)

Bank of England's dilemma: A house price crash or soaring inflation
By Edmund Conway, Economics Editor

Last Updated: 1:07am BST 25/04/2008

Which would you rather face: a recession and house price crash or years of soaring seventies-style inflation?

Whole article here

Hmmmm. Might put oil prices down if they opt for the price crash route. Something to keep an eye on.

WSJ Recommends Food Hoarding

2008-04-25T22:07:00.003-07:00

http://online.wsj.com/article/SB120881517227532621.html?mod=googlenews_wsj

Load Up The Pantry

Wall Street Journal

4-23-8

I don't want to alarm anybody, but maybe it's time for Americans to start stockpiling food.

No, this is not a drill.

You've seen the TV footage of food riots in parts of the developing world. Yes, they're a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.

Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster.

"Load up the pantry," says Manu Daftary, one of Wall Street's top investors and the manager of the "I think prices are going higher. People are too complacent. They think it isn't going to happen here. But I don't know how the food companies can absorb higher costs."

Stocking up on food may not replace your long-term investments, but it may make a sensible home for some of your shorter-term cash. Do the math. If you keep your standby cash in a money-market fund you'll be lucky to get a 2.5% interest rate. Even the best one-year certificate of deposit you can find is only going to pay you about 4.1%, according to Bankrate.com. And those yields are before tax.

Meanwhile the most recent government data shows food inflation for the average American household is now running at 4.5% a year.

And some prices are rising even more quickly. The latest data show cereal prices rising by more than 8% a year. Both flour and rice are up more than 13%. Milk, cheese, bananas and even peanut butter: They're all up by more than 10%. Eggs have rocketed up 30% in a year. Ground beef prices are up 4.8% and chicken by 5.4%.

These are trends that have been in place for some time.

And if you are hoping they will pass, here's the bad news: They may actually accelerate.

The reason? The prices of many underlying raw materials have risen much more quickly still. Wheat prices, for example, have roughly tripled in the past three years.

Sooner or later, the food companies are going to have to pass those costs on. Kraft saw its raw material costs soar by about $1.25 billion last year, squeezing profit margins. The company recently warned that higher prices are here to stay. Last month the chief executive of General Mills, Kendall Powell, made a similar point.

The main reason for rising prices, of course, is the surge in demand from China and India. Hundreds of millions of people are joining the middle class each year, and that means they want to eat more and better food.

A secondary reason has been the growing demand for ethanol as a fuel additive. That's soaking up some of the corn supply.

You can't easily stock up on perishables like eggs or milk. But other products will keep. Among them: Dried pasta, rice, cereals, and cans of everything from tuna fish to fruit and vegetables. The kicker: You should also save money by buying them in bulk.

If this seems a stretch, ponder this: The emerging bull market in agricultural products is following in the footsteps of oil. A few years ago, many Americans hoped $2 gas was a temporary spike. Now it's the rosy memory of a bygone age.

The good news is that it's easier to store Cap'n Crunch or cans of Starkist in your home than it is to store lots of gasoline. Safer, too.

Write to Brett Arends at brett.arends@wsj.com

On a related story, FOX News report on "food rationing" in the US at Sam's Club and Costco. Click below; when I played this it buffered slow so may be a wait. Note the "alarmist" site that this is hosted on.

http://www.vloggingtheapocalypse.com/viewVideo.php?video_id=518&title=FOX_NEWS_ON_FOOD_RATIONING_AT_COSTCO_AND_SAM_S

Wheat Crop Failures Could be Total, Experts Warn

2008-04-25T21:38:00.001-07:00

Something unexpected like this; if it happens at the wrong time can create massive troubles.

David Kotok, chairman and chief investment officer of Cumberland Advisors, said the deadly fungus, Puccinia graminis, is now spreading through some areas of the globe where "crop losses are expected to reach 100 percent.”

Losses in Africa are already at 70 percent of the crop, Kotok said

The Exploding Whale

2008-04-25T21:25:00.001-07:00

This is damned funny in a quirky way. Yeah the whale blew up. With surprising results.

http://www.hecklerspray.com/awesome-or-off-putting-the-exploding-whale-of-1970/200813718.php

World Food Prices Continue to Soar

2008-04-18T20:58:00.001-07:00

Global food crisis looms as Asia's rice bowl empties and world price soars

By Raju Gopalakrishnan in Manila

THE crisis over rice showed no signs of easing yesterday as the price of the world's benchmark jumped 10 per cent in just one week, fanning fears that millions across Asia will struggle to afford their staple food.

In a clear sign of the strain on output after major exporters began to curb exports earlier this year, a tender from the Philippines, the world's top importer, attracted offers to sell only about two-thirds of the half a million tonnes it sought.

In Bangkok, Thai 100 per cent B grade white rice, considered the world's benchmark, hit $950 (£482) per tonne, three times its price at the start of 2007.

The REAL cost of inflation

2008-04-18T20:54:00.002-07:00

The trick of official underestimation of inflation is wearing thin. Folks are catching on. See below.

The REAL cost of inflation: The Mail's Cost of Living Index reveals food prices rising at SIX times official figure

By SEAN POULTER
Last updated at 13:00pm on 18th April 2008

The true, devastating scale of rising prices is revealed today - by the new Daily Mail Cost of Living Index.

It shows that families are having to find more than £100 a month extra this year to cope with increases in the cost of food, heat, light and transport.

According to the Consumer Price Index, inflation is running at only 2.5 per cent.

Yet the Mail's index finds that food costs alone are rising at 15.5 per cent a year - more than six times the official rate.

And there are double-digit increases in other "must-pay" essentials such as petrol, gas and electricity.

Many families need to find more than £1,200 extra a year just to stand still.

Once higher mortgage costs are added, millions are having to pay out at least another £2,000 a year to keep their heads above water.

The Bank of England's chief economist Charlie Bean admitted last night that higher food and energy costs are likely to push the Consumer Price Index over 3 per cent this year.

Click the title to see the whole article

Brazil Betters Alberta

2008-04-17T22:34:00.002-07:00

Brazil respects agreements and contracts; Alberta doesn't. This is specifically referring to the "no grandfathering" aspects of the New Royalty Framework in Alberta. Read it and weep:

RIO DE JANEIRO, April 17 (Reuters) - Brazil is mulling changes to its set of rules for oil exploration and production, eyeing more taxes, but any shift would apply only to future contracts, Mines and Energy Minister Edison Lobao said on Thursday.

"Concessions can be brought up to date, improved, but we don't want to change the rules of the game already under way. It will be for future (concessions)," Lobao told reporters.

Can We Stay in the Suburbs?

2008-04-17T22:29:00.003-07:00

From The Oil Drum where you can read the whole article. Growing potatoes in the suburbs? Excerpt below:

April 17, 2008 - 10:00am

This is a guest post by Aaron Newton, who is working with coauthor Sharon Astyk on the forthcoming book, A Nation of Farmers. Aaron contributes at Groovy Green; he also blogs at Powering Down. Aaron is a land planner and garden farmer in suburban North Carolina, seeking ways to transform the current course of human land use development in an effort to prepare for the effects of global oil production peak and its outcome on automotive suburban America.

There is little doubt that during that last 60 years we here in America have transformed our manmade landscape in a way that is fundamentally different from any form of human habitation ever known. While many have flocked to this new way of organizing the spaces in which we live, critics have noticed the shortcomings and have loudly pointed them out. It’s been suggested that the development of the suburbs here in the U.S. was a really bad idea. Author James Kunstler describes suburbia as, ‘the greatest misallocation of resources in the history of the world.’ The ability of most citizens to own and cheaply operate an automobile means we’ve had access to a level of mobility never before experienced. The outgrowth of which has been a sprawling pattern of living that changed the rules about how and where we live, work, and play and how we get there and back. We are now more spread out than ever before, mostly getting back and forth from one place to another by driving alone in our cars. This could turn out to be a really bad thing.

As the cost of fueling those cars increases, it’s becoming obvious we’ve foolishly put too many of our eggs into one basket. And as America wakes up to the realities of a changing climate, it’s also painfully obvious that soloing around in a huge fleet of carbon emitters isn’t the most thoughtful way to transport ourselves from one side of suburbia to the other. The question is, as the expansive nature of suburban life becomes too expensive, both economically and ecologically, what will we do with this great ‘misallocation’ of resources?

Potatoes 'could solve food shortage'

2008-04-17T22:05:00.001-07:00

Now if we could just invent a car that run on spuds.....

By Alex Spillius in Washington
Last Updated: 12:01am BST 16/04/2008

The potato has been touted as a solution to the global food crisis. Increasingly derided in the West for contributing to expanding waistlines, the vegetable is being rediscovered as a nutritious crop for the developing world.

Researchers at the International Potato Centre, in Lima, the Peruvian capital, suggested that the growing problem of food supply due to rising prices and the production of crops for biofuel rather than food could be alleviated by an increase in potato cultivation.

"The shocks to the food supply are very real and that means we could potentially be moving into a reality where there is not enough food to feed the world," said Pamela Anderson, the centre's director.

more here

Inflation Coming or Going?

2008-04-17T21:16:00.005-07:00

I'm more than a bit puzzled about what I perceive to be an impending inflation juggernaut not bearing its teeth sooner. Read some of the articles posted earlier relating to massive increases in commodities. Everyone knows oil; but coking coal is up 200%, iron ore 65%, rice over 100%, etc......

The Globe today had a bunch of articles pertinent and interesting in explaining what might be going on.

First, this from the Globe and Mail

Inflation dips, rate cut expected

HEATHER SCOFFIELD

Globe and Mail Update

April 17, 2008 at 2:16 PM EDT

OTTAWA — An aggressive 50-basis-point interest rate cut from the Bank of Canada is more of a sure thing now that inflation for March has proven to be benign, economists say.

Total inflation was 1.4 per cent in March from a year ago, the slowest pace since in well over a year and the fourth straight month of deceleration.

The core rate of inflation, which excludes the most volatile prices such as energy and some types of food, was just 1.3 per cent over a year ago, compared to the 1.5 per cent pace recorded for February.

Which is followed by the following articles:

China deal sends Potash soaring

JOHN PARTRIDGE AND ANDY HOFFMAN

April 17, 2008

Desperate for fertilizer to increase crop yields amid a looming global food crisis, China agreed to pay more than three times as much for potash as it did last year, launching Potash Corp. of Saskatchewan to a record stock price and within spitting distance of becoming Canada's largest publicly traded company.

And this

Runaway prices fuel Chinese unrest

GEOFFREY YORK

From Thursday's Globe and Mail

April 17, 2008 at 3:42 AM EDT

BEIJING — Construction worker Chai Changyi, one of the vast army of migrants from Western China who provide the muscle for Beijing's building boom, is always searching for the cheapest place to buy his meals. Lately it's becoming harder and harder to find anywhere he can afford.

"I used to spend 400 to 500 yuan (about $57 to $71) on food every month, but now it is 700 to 800 yuan," he says.

"A beef dish used to cost 10 yuan, but now it is 18 yuan and we've had to stop ordering it. The restaurant owners say they have to increase prices because vegetables and meat are more expensive now."

In the temporary kitchens and dormitories of China's sprawling construction sites, the rising cost of food is a source of rising discontent. The workers hope for higher wages, or at least some government action to ease the crisis.

Perhaps the temporary lull in inflation is explained in this article; it explains the lack of food inflation but not of other commodities soaring:

Against the grain

Why the world's crisis in food inflation isn't being felt in Canada – yet

HEATHER SCOFFIELD AND MARINA STRAUSS

From Thursday's Globe and Mail

April 17, 2008 at 12:20 AM EDT

OTTAWA AND TORONTO — Amid a deepening global food crisis, the cost of food for Canadian consumers has done something unusual: gone down.

Households across the country are enjoying the benefits of food deflation. Food from grocery stores was 0.6 per cent cheaper in February than a year ago – a stark divergence from the United States, where food prices are rising at 4 per cent a year, and China, where they soared 21 per cent in the first quarter.

Canadian inflation numbers for March are to be published today, but the trend is not expected to disappear overnight.

Canada's stronger dollar is playing a role in keeping some food prices down for consumers, especially imported fruits and vegetables, analysts say.

But the surging loonie doesn't explain everything. A closer examination shows food commodity prices are actually rising in Canada – they're just not being passed on to consumers at the supermarket.

The Bank of Canada's commodity index shows food prices at the raw materials level have soared more than 50 per cent in the past year. The index is in U.S. dollars, but even after converting to Canada's currency, food commodity prices have risen 28 per cent.

Consumers are benefiting from trench warfare between grocery stores, said CIBC economist Avery Shenfeld, who has dissected the food chain to determine how consumer prices are declining while raw material prices are soaring.

So if food prices are being kept down in Canada due to fierce competition amongst grocers I think it is only reasonable to think the increases in food prices are coming and when they come they will be harsh. We're living on borrowed time.

What to do? Stock up on staples that have a shelf life. Go long on loans at the low interest rates available. Invest in things now that will save money in the long term like home energy efficiency. Invest in equities that will benefit from increased commodity prices. Be shy of investing in any stocks that rely on consumer spending. A storm is coming, best get ready for it. Usually the warning signs are not so obvious and there is not usually so much time to prepare.

Food Inflation, Riots Spark Worries for World Leaders

2008-04-14T11:32:00.002-07:00

IMF, World Bank Push for Solutions; Turmoil in Haiti
By BOB DAVIS and DOUGLAS BELKIN

April 14, 2008; Page A1

WASHINGTON -- Finance ministers gathered this weekend to grapple with the global financial crisis also struggled with a problem that has plagued the world periodically since before the time of the Pharaohs: food shortages.

Surging commodity prices have pushed up global food prices 83% in the past three years, according to the World Bank -- putting huge stress on some of the world's poorest nations. Even as the ministers met, Haiti's Prime Minister Jacques Edouard Alexis was resigning after a week in which that tiny country's capital was racked by rioting over higher prices for staples like rice and beans.

More here

83% over the past three years? Not sure how the low single digit inflation values that are put out by government agencies jive with this.

IMF Approves Selling 400 Tons Of Gold

2008-04-10T21:39:00.000-07:00

April 8, 2008 8:28 a.m. EST

Benjie Telleron - AHN News Writer

Washington (AHN) - The executive board of the International Monetary Fund has approved the sale of some 440.3 tons of its gold supplies in a wide-ranging financial overhaul and to replenish its depleting coffers.

Dominique Strauss-Kahn, IMF managing director, welcomed the board's move on Monday, the action seen as a buffer to the expected $400 million budget deficit the Washington-based lending institution could experience in the next few years.

The board is projecting to generate at least $11 billion from the sale of at least 12 percent of its gold reserve. The money to be generated from the sales would fund the reorganization of the IMF and finance lending to needing countries.

Strauss-Kahn said it will also shore up diverse investments to generate income.

However, the IMF still needs congressional approval and legislative action of the 184 member-nations of the IMF.

The IMF is facing the challenge of cutting costs and trimming its bureaucracy, after a downturn in lending as some countries refuse to borrow money due to IMF's strict conditions.

The lending firm has a projected budget deficit of at least $140 million for the fiscal year 2008 which will end on April 30.

However, the IMF said the sale of the gold will be carried out in several transactions over several years so as not to affect the international gold market.

Global price of gold reached an all-time high of over $1,000 an ounce.

http://www.allheadlinenews.com/articles/7010571641

The World Food Crisis

2008-04-10T21:20:00.001-07:00

Published: April 10, 2008

Most Americans take food for granted. Even the poorest fifth of households in the United States spend only 16 percent of their budget on food. In many other countries, it is less of a given. Nigerian families spend 73 percent of their budgets to eat, Vietnamese 65 percent, Indonesians half. They are in trouble.

Last year, the food import bill of developing countries rose by 25 percent as food prices rose to levels not seen in a generation. Corn doubled in price over the last two years. Wheat reached its highest price in 28 years. The increases are already sparking unrest from Haiti to Egypt. Many countries have imposed price controls on food or taxes on agricultural exports.

Last week, the president of the World Bank, Robert Zoellick, warned that 33 nations are at risk of social unrest because of the rising prices of food. “For countries where food comprises from half to three-quarters of consumption, there is no margin for survival,” he said.

Whole article here

From the "What are the Odds" file......

2008-04-09T20:20:00.003-07:00

Hmmm. What are the odds of having your house hit five times be meteorites?

I'm not sure about buying into the alien explanation; but if this is really true it certainly begs some real explanation!

Man 'targeted by aliens'

A Bosnian man whose home has been hit an incredible five times by meteorites believes he is being targeted by aliens.

Experts at Belgrade University have confirmed that all the rocks Radivoje Lajic has handed over were meteorites.

They are now investigating local magnetic fields to try and work out what makes the property so attractive to the heavenly bodies.

But Mr Lajic, who has had a steel girder reinforced roof put on the house he owns in the northern village of Gornja Lamovite, has an alternative explanation.

He said: "I am obviously being targeted by extraterrestrials. I don't know what I have done to annoy them but there is no other explanation that makes sense. The chance of being hit by a meteorite is so small that getting hit five times has to be deliberate."

The first meteorite fell on his house in November last year and since then a further four have smashed into his home. The strikes always happen when it is raining heavily, never when there are clear skies.

He said: "I did not know what the strange-looking stones were at first but I have since had them all confirmed as meteorites by experts at Belgrade University.

"I am being targeted by aliens. They are playing games with me. I don't know why they are doing this. When it rains I can't sleep for worrying about another strike."

Short-term supplies of natural gas

2008-04-08T22:28:00.003-07:00

Good article. Note the growth of natural gas use in the US. Looks like prices going up?

http://www.theoildrum.com/node/3785#more

Here's a real hint that North American gas prices will be going up. Look at what Japan is paying to lock up LNG supply. Doesn't look like cheap LNG will knock our gas markets down. Doesn't this article simply play into todays theme of inflation postings??

Indonesian term LNG deal sets new Asian benchmark

By Annika Breidthardt

SINGAPORE, March 31 (Reuters) - Indonesia's deal to raise liquefied natural gas (LNG) prices to Japan sets a new benchmark for Asian term contracts and ups the heat on other gas deals currently under negotiation, analysts said on Monday.

Analysts said the agreed price based on crude oil levels -- around $16 a million British thermal unit -- was the highest they had seen for firmly guarded term LNG deals.

whole article is here

Concentrating Solar Power

2008-04-08T22:25:00.001-07:00

Good Article and links therein:

http://anz.theoildrum.com/node/3791#more

Good Articles on Energy Return on Investment (EROI)

2008-04-08T22:21:00.003-07:00

Part 1

http://www.theoildrum.com/node/3786

Part 2
http://www.theoildrum.com/node/3810#more

Oil Hits $115/bbl in Singapore

2008-04-08T22:18:00.001-07:00

http://anz.theoildrum.com/node/3814

IMF: Financial Losses May Approach $1 Trillion

2008-04-08T22:15:00.000-07:00

Read it below and weep:

http://calculatedrisk.blogspot.com/2008/04/imf-financial-losses-may-approach-1.html

The Import Slowdown: Los Angeles Area Ports

2008-04-08T22:12:00.001-07:00

Great article; links to the rail car articles being parked and has some good links and graphs.

http://calculatedrisk.blogspot.com/2008/04/import-slowdown-los-angeles-area-ports.html

Railcars idle as economy falters

2008-04-08T22:02:00.001-07:00

By SUSAN GALLAGHER - Associated Press- 04/04/08

CRAIG — BNSF Railway Co., the nation’s top hauler of container rail freight, is parking miles of railcars in Montana and elsewhere because there isn’t enough freight to keep them rolling.

Cars that often carry 40-foot containers of goods shipped from Asia stand like an iron fence between the Missouri River and this Montana burg known for world-class fly fishing. They stretch as far as Sandee Cardinal can see when she stands outside her home on the river’s west bank between Helena and Great Falls.

‘‘What is that but a symbol of how America is down in the dumps right now?’’ Cardinal asked as she gazed at the cars that haven’t moved for about three months.

The cars parked are the type that haul cargo from ships on the coast to points inland, mainly imported goods — an area that’s starting to slow down due to the weak economy. Analysts say transportation usually is among the first sectors to show signs of a downturn in the economy and with Americans feeling pinched — employers eliminated 63,000 jobs last month amid declining consumer confidence — it could be a while before the idle cars move.

‘‘If you take a look at transportation, both trucking and rail, you will see that things started softening last summer,’’ said Arnold Maltz, associate professor of supply-chain management at Arizona State University. ‘‘The reason you are seeing all those cars parked is that the consumer economy translates into slower imports.’’

Texas-based BNSF Railway, a division of Burlington Northern Santa Fe Corp., has parked upward of 1,000 cars in Montana alone, spokesman Gus Melonas said. More are parked in other parts of the company’s 32,000-mile system, which operates in 28 states and two Canadian provinces.

‘‘There’s been a downturn in international business and therefore this equipment is not necessary at this point,’’ Melonas said.

The cars standing between Helena and Great Falls constitute 5 percent of the BNSF fleet, Melonas said. He declined to say what percentage of the fleet is parked elsewhere, citing confidentiality issues.

Seasonal car storage is common, he said, but the number of cars now idle is exceptional.

Most of the parked cars are designed for intermodal transportation, when containers filled with imported goods are taken off vessels at U.S. ports and then transported by train, truck or both to distribution centers around the country.

For the first two months of 2008, the volume of intermodal rail freight in the United States was down 3.4 percent compared to the same period last year, according to the Association of American Railroads, an industry group based in Washington, D.C. Last year, intermodal traffic was flat as railroads began to feel the effects of slowing retail orders and the dollar’s decline.

While shipments of store-ready consumer goods such as clothing have dipped, movement of coal, grain and ore have risen, according to the association. The latter are less sensitive to swings in the economy and help balance out the bottom line.

Excluding intermodal traffic, rail freight rose 1.7 percent for the first two months of 2008 compared to the same period a year earlier. Coal was out in front last month with 576,012 carloads, or an increase of 5.7 percent.

‘‘The railroads have actually performed relatively well when you look at their entire portfolio,’’ said transportation analyst Todd Fowler of KeyBanc Capital Markets in Cleveland.

For 2007, BNSF Railway’s parent company, Burlington Northern Santa Fe Corp., reported about $15.4 billion in total freight revenues, compared to about $14.6 billion the previous year. That growth was carried largely by coal and agricultural segments.

The annual revenue generated from hauling domestic freight was down about 1 percent from 2006, while international traffic was up 2 percent. Meanwhile, coal and agricultural revenue each grew about 12 percent.

Union Pacific Railroad spokesman James Barnes said the Nebraska-based company’s intermodal business is ‘‘just a little down, but that’s not unusual for this time of year.’’ The company’s total commodity revenue was $15.5 billion in 2007, compared to about $14.9 billion in 2006. The agricultural segment posted an 8 percent increase over 2006.

Another major rail company, CSX Corp. in Florida, said its car storage is not out of the ordinary. The company’s total revenue from surface transportation was up 5 percent, from about $9.6 billion to $10 billion in 2007.

One of the nation’s leading trucking companies, Schneider National in Green Bay, Wis., says it believes a freight recession began about 20 months ago, well before signs of a downturn closed in on consumers.

‘‘We have been in a freight recession longer than people have been expressing deep concern about the economy,’’ said Bill Matheson, Schneider’s president for intermodal transportation.

Trucking companies are in a unique position. They often compete with railroads for long haul contracts, while also carrying rail freight from the nearest railhead to its final destination.

Schneider is not parking trucks, but neither is it buying new ones to the usual extent, Matheson said.

In Long Beach, Calif., home of the nation’s busiest port complex with Los Angeles, the movement of goods has been somewhat stagnant. About 7.3 million containers passed through the Port of Long Beach in 2007, the same as in 2006, port spokesman John Pope said.

‘‘That was a big decline from the growth we’d seen in the past decade or so,’’ Pope said. ‘‘Typically, there had been double-digit growth from year to year.’’

In January, Long Beach posted a decrease of about 12 percent in overall volume compared to January 2007. The situation was less extreme last month, with a 2 percent drop in overall volume compared to a year earlier.

While retailers have imported less goods to be hauled by rail or truck nationwide, exports leaving Long Beach rose as the weak dollar strengthened overseas purchases of U.S. goods, Pope said. Rising export volume — including grain and wheat shipped by rail — helped balance falling container imports for most of last year.

‘‘It’s a barometer of the economy,’’ Pope said. ‘‘We’re going to see the ebb and flow that mirrors what happens in the rest of the nation.’’

Haiti Food Inflation Riots

2008-04-08T21:51:00.002-07:00

The real consequences of massive inflation are only starting. Here is one example of many that are happening.

Protests over food prices paralyze Haitian capital

Tue Apr 8, 2008 5:39pm EDT

By Joseph Guyler Delva

PORT-AU-PRINCE (Reuters) - Haitians erected fiery barricades and tried to storm the National Palace on Tuesday as protests against rising food prices, which have killed five people, paralyzed the impoverished nation's capital.

whole article here

Batten Down the Hatches

2008-04-08T21:46:00.003-07:00

I chuckled when the author is talking about inflation at two percent and maybe going higher. Of course it is going higher and probably already much higher than 2%.

Batten down the hatches: this is the big one

The Bank has to change its low inflation mentality to address economic reality

* Ashley Seager, economics correspondent
* The Guardian,
* Monday April 7 2008

This article appeared in the Guardian on Monday April 07 2008 on p26 of the Financial section. It was last updated at 08:58 on April 07 2008.

"Whole cities of pain. A continent of pain," said the great, if eccentric, Wall Street money dealer Jim Cramer recently. He was talking about the economic pain spreading across the United States, of course.

Until recently, the pain of the US housing market had not spread to our own fair land. Much of the economic data here has been, if anything, surprisingly healthy. But such figures are generally backward-looking and often look fine until suddenly they don't.

Last week we saw a dramatic escalation in pain levels as one mortgage lender after another either withdrew home loans or raised the interest rates. The chart shows the growing divergence between the Bank of England's official rate and interbank Libor rates that explains this.

This is the most concrete evidence to date that the esoteric "credit crunch" has moved out of the so-called "interbank money markets" and into the consciousness and pockets of the British people.

The Co-op Bank and First Direct said they had to shut their doors to new business because house buyers were deluging them with requests for favourable mortgage terms. Many who bought a two-bed flat in a city centre anywhere in Britain are now finding they can't afford the mortgage repayments and the value of the property is dropping fast.

Perhaps Cramer should take a trip across the Atlantic to see more cities groaning under the pain.

Britons are also carrying record levels of debt. Figures last week showed a surprise jump in unsecured lending in February, mostly overdrafts.

A sign of continued consumer confidence, you might say. But it looks more as if consumers faced with greater difficulty in raising mortgage finance have simply let their overdrafts take the strain: it is a sure sign of consumers under stress.

That makes sense when survey after survey has been showing consumer confidence is very weak and people's intentions of making a major purchase are vanishing. No wonder private car sales are dropping. Ernst & Young, the consultants, have warned that dealerships face a year of struggle.

The Bank of England's credit conditions survey last week showed banks expect lending conditions to get worse, signalling more trouble ahead.

The economy has sailed resiliently through many shocks over the past 15 years, from the Asian crisis in the late-1990s to the dotcom bust of the early noughties. But it has not been hit by anything like this credit calamity for a very long time, if ever. This is the big one.

The idea that we can escape the impact of what is happening in America is just wishful thinking. There was some optimism in financial markets last week that the worst of the credit crunch might be over. These are the same markets that failed to predict the credit crunch and are the root cause of this misery, so their opinion, frankly, is not worth much.

Housing bubble

The reality is that the economy has been pumped up and up in the past decade by the cheap and easy availability of credit. Now it is neither cheap nor plentiful and the fallout is hurting.

For one thing the housing market bubble - in a way we knew all along it was a bubble - has been pricked and is starting to deflate rapidly.

House prices are not going to drift quietly sideways over the next few years while average earnings catch up. They are going to fall sharply. I would be surprised if they don't fall by a quarter or more over the next two years.

It is not just about the supply of credit, it is about mentality - the fear and greed syndrome. Who would buy a property, even if they could get a mortgage, if they thought they could wait another year and pay, say, 10% less?

Estate agents report they have stacks of properties for sale but simply can't shift them. So supply is plentiful and demand has dried up. In most markets, that means prices fall. Why should the housing market be different?

Already, the construction sector has nose-dived, as witnessed by two surveys of the sector that came out last week. The much bigger services sector, too, looks as if it is running into trouble, according to a survey by the Chartered Institute of Purchasing and Supply last week.

The service sector is about two-thirds of the economy and has looked robust until now. Financial services employment has fallen sharply. The data is turning down.

All of which brings us to the policy response. What can the Bank of England do about interest rates? The growing risks to growth would normally call for sharp cuts in interest rates, following the Federal Reserve in the United States. The Fed has cut from 5.25% last autumn to just 2.25% now.

The Bank of England has been much more cautious, cutting from 5.75% to 5.25%. Part of the reason is that, until now at least, the British economy had held up well. But the other key element, as the Bank's executive director, Paul Tucker, said last week, is that the monetary policy committee is not prepared to let the "inflationary genie" out of the bottle.

He hinted that slow, gradual rate cuts were in the committee's mind rather than Fed-style emergency cuts.

Inflation

Inflation has been pushed up to 2.5% - above its 2% target - by rising food and energy prices and is likely to rise quite a bit further.

Tucker acknowledged that a sharp slowdown in the economy would also put the brakes on inflation but it was not clear by how much.

But these are strange times for the MPC. In the face of such a shock to the economy as this credit crunch, it has to be wondered whether any of its forecasting models are of any use.

Models often use past performance to predict what might happen. But the past 15 years have been so stable for British growth and inflation that most models are likely to forecast that it will simply carry on. That is very unlikely, which means in turn that interest rates could be left too high for too long, just as happened in the US.

The rate cuts implemented by the Bank of England have probably already been cancelled out by the rising market interest rates that have pushed mortgage costs up. So interest rates are likely to be slowing the economy down, rather than boosting it.

The MPC is also conscious that for years, inflation was steady around the 2% target as high domestic inflation was offset by very low foreign inflation thanks to the strong pound and cheap Chinese imports. But now, rising world food and energy prices, combined with a falling pound, mean imported inflation has risen.

The implication of that is that domestic inflation will have to be much lower in the coming years than in the past decade. In turn, that means the economy will have to be run more slowly to keep domestic inflation in check. That's why Tucker said last week that the MPC wanted to see some slack develop in the economy.

But the risk is that the economy might slow much more sharply than the MPC is expecting, possibly even follow the US into a recession.

In the face of such downside risks, which look to be much bigger than the upside risks to inflation, rates need to be cut, and fast, starting this week. There may not be much time. The pain is real, it is time to get the aspirin out.

Serious Inflation in the Works #2

2008-04-08T21:39:00.003-07:00

Coking coal up 200%, rice up 100%, oil up a mere 50% in the last year......

Serious inflation in real good is happening before our eyes. All this inflation, yet the prime interest rate in the US is in low single digits. This may mean that the real interest rate is actually negative.

Price of rice set to soar

Shortages in exporting countries push up the wholesale cost, force local supermarkets to raise theirs

Joanne Lee-Young, Vancouver Sun; with files from Reuters

Published: Thursday, April 03, 2008

Food-price inflation is about to hit one of the main staples for local shoppers at Asian supermarkets: rice.

At T&T Supermarket, executives have been watching wholesale prices rise more than 100 per cent during the past year.

"Prices have basically more than doubled," said Herman Poon, T&T's marketing manager. "If we take a specific example, like rice from Thailand [the world's biggest exporter], there is still a lot of upward movement. It has gone up 30 per cent in the last month."

At Jia Jia, an Asian market in Richmond, owner Raymond Lin said that starting next week, he will raise retail prices by 20 per cent.

With rumours swirling day to day as to when exactly this might happen, some customers are already picking up some extra 10- and 20-pound bags of rice, said Lin.

"Instead of one bag, they are picking up two or three."

T&T has managed so far to shield its customers from large price hikes, Poon said, because with eight stores across Metro Vancouver it has a "bigger buffer" than other retailers in the form of larger inventory stocks.

"But this is going to change real soon," Poon said. "We are just hanging in there for the next 30 days" in terms of price changes that would impact consumers.

Sean Hwang, the manager of H-Mart, a Korean supermarket with three stores in Metro Vancouver, said he is struggling with the idea that he might have to do what other retailers are already doing. As much as possible, he would like to avoid raising rice prices.

"[Rice] is a very sensitive item. For Koreans, it is a main food. We usually don't make money on it [anyway], so it is very hard for us to change the price."

Most countries that export rice face supply shortages, the Food and Agriculture Organization said Wednesday.

And those nations are curbing overseas sales to contain food prices at home, the Rome-based United Nations organization said in an e-mailed report, adding that China, India, Egypt, Vietnam and Cambodia have imposed curbs on shipments, including minimum export prices and quotas.

"The international rice market is currently facing a particularly difficult situation with demand outstripping supply and substantial price increases," said Concepcion Calpe, a senior economist at the FAO.

On Monday, India imposed a ban on non-basmati rice exports to ensure the country had enough rice to feed its more than one billion people.

And Indonesia, the world's third-largest rice producer, may also curb exports as declining inventories threaten to spark unrest around Asia.

Indonesia's rice production may exceed domestic consumption by about two million tonnes this year, insufficient to allow for exports, Agriculture Minister Anton Apriyantono said Wednesday. The United Nations warned in February that 36 countries, including China, face food emergencies this year.

Rising populations and higher incomes across Asia are leading to increased consumption of rice. Global production will rise to a record of about 423 million tonnes, and consumption is expected to increase to nearly the same amount, according to the U.S. Department of Agriculture.

Higher fuel prices and hoarding by suppliers anticipating higher prices are also being blamed for inflation in rice prices.

Serious Inflation in the Works

2008-04-08T21:35:00.003-07:00

This is a sign that serious inflation is going through the world economy. 200% - carumba!

Record coal contract has producers salivating

South Korean steel maker agrees to pay three times as much as it did last year, setting 'astronomical' new benchmark

ANDY HOFFMAN

MINING REPORTER

April 8, 2008

Coal producers are rejoicing after a South Korean steel maker agreed to an unprecedented 200-per-cent increase in the price it will pay for coking coal, setting a benchmark for other yearly contract negotiations between miners and steel makers.

However, the record contract will likely add to inflationary pressures, as the price increase is expected to boost the cost of producing everything from automobiles to building materials.

Posco, Asia's third-largest steel maker, said it will pay Australian coal producers more than triple what it did last year or as much as $305 (U.S.) a tonne for coking coal, a key component in making steel.

"What appears to be coming to fruition in coal contracts are numbers that we've never seen. These are astronomical numbers in [metallurgical] coal," John Hughes, an analyst at Desjardins Securities, said in an interview.

Coal producers annually negotiate contract prices with steel makers for the coal year, which begins April 1. The Posco contract marks the first major met coal contract signed for the 2008 coal year and is likely to set a precedent for other negotiations.

The seaborne met coal market, which annually supplies roughly 180 million tonnes of coal to steel makers, has been sideswiped by an extraordinary string of disruptions over the last few months that has constricted the coal supply amid strong demand for steel.

Extraordinary rains caused flooding at coal mining operations in Australia and is believed to have reduced production by as much as 15 million tonnes.

In China, where a booming economy has driven higher demand for steel, the worst snowstorms in 50 years hindered production. Attempts by coal producers to increase supply in response to the anticipated higher prices have been constrained by logistics including a lack of rail and port capacity.

"You could say that $305 a tonne for met coal is almost panic-buying levels. Which means somebody is desperate enough to want to keep their blast furnaces running and will pay that price for the coal," said Tony Robson an analyst at BMO Nesbitt Burns.

Shares of Canadian coking coal producers, including Fording Canadian Coal Trust, Teck Cominco Ltd., and Western Canadian Coal Corp. gained in anticipation that they will win similar increases.

Fording units surged to a record, rising as much as 11 per cent before settling back for a 6-per-cent rise.

Company spokesman Colin Petryk said Fording will negotiate "accordingly" in its talks with steel makers, which are continuing.

"It's definitely showing us where the price is going. That's good news for Fording," he said.

The Calgary company, which supplies coal to Posco, among others, and hopes to produce roughly 23 million tonnes of coal this year, has seen its unit price increase more 60 per cent so far this year, pushing its market value above $9-billion (Canadian).

Fording, which owns 60 per cent of the Elk Valley Coal Partnership, put itself up for sale in December. Teck, which already owns about 20 per cent of Fording and has a 40-per-cent stake in the Elk Valley operations, giving it a 52-per-cent interest in the overall partnership, has been widely seen as the most logical buyer.

However, Fording's price tag has risen so much that Teck may not be willing to bid.

"I think the message from Teck Cominco has been that they don't want to overpay for Fording. And the higher that the unit [price] goes, the more difficult it is, if you want to buy Fording, to substantiate you are not overpaying," Mr. Hughes said.

Yet the Posco contract likely means steel customers and consumers will have little choice but to pay more.

Global steel prices hit a record last month. Posco recently said it was planning another steel price increase after raising prices by 11 per cent in February.

"Safety" in Commodities Futures......

2008-03-16T21:41:00.003-07:00

"On Wall Street and elsewhere, skittish investors are continuing to flee to the safety of gold and oil futures, and away from the U.S. dollar amid widespread concern that the United States has slipped into recession."

Whole article is here

Rolling on the floor laughing here! Fleeing to the safety of the commodities future market? I've never heard of the volatile commodities futures markets as being considered "safe" investments before. Bizarro world change is in full progress. WTF indeed.

Bear Stearns Liquidated at $2/share, Down From $30/share Close on Friday

2008-03-16T21:34:00.003-07:00

The fecal material is hitting the fan. Investment bank icon Bear Stearns basically worthless..... I'm pretty sure that JP Morgan would only be taking them out to avoid issues with counterparty liabilities. Very bad stuff......

Asian stock markets went into a freefall after Bear Stearns, trading at $30 by Friday's close, announced a deal to be sold to JP Morgan for $2/share in a stock-swap transaction. Bear Stearns' price peaked at $170 in 2007. "The price is indicative that there were bigger problems at Bear than clients and the public realized," said Ron Geffner at Sadis & Goldberg.

Whole article is here

New 'super-spike' might mean $200 a barrel oil

2008-03-08T22:28:00.002-07:00

Goldman's projections foretell persistent turbulence in energy prices

By Steve Gelsi, MarketWatch

Last update: 1:42 p.m. EST March 7, 2008

NEW YORK (MarketWatch) -- With $100-a-barrel here for now, Goldman Sachs says $200 a barrel could be a reality in the not-too-distant future in the case of a "major disruption."

Goldman on Friday also boosted by $10 the low end of its 2008-2012 projected range for crude to $60 a barrel -- significantly lower than current prices, to be sure, but a possible mark for oil if "normalized" trends return to the marketplace.
With the dollar's fall continuing and financial markets roiled by the credit crunch, commodities like oil have been drawing the fancy of increasing numbers of investors. Accordingly, Wall Street firms have been eager to adjust forecasts to incorporate fresh data on the global economy and energy supplies.

Goldman analysts Arjun Murti, Kevin Koh and Michele della Vigna said prices have advanced more quickly than Goldman had forecast back in 2005, when it predicted a range of $50 to $105 a barrel as part of its "super-spike" oil theory.
"We characterized the upper end of the band as more likely to be driven by geopolitical turmoil and that recession was a key risk to our view," the analysts said. "In fact, oil prices have reached $100 a barrel without extraordinary turmoil, and the U.S. currently appears to be in recession."

Tacking on $15 a barrel to all of its oil estimates, Goldman now sees average selling prices of $95 a barrel for 2008, $105 a barrel for 2009 and $110 a barrel for 2010. The high end of its range is now $135 a barrel -- but Goldman hinted that prices could be headed even higher.

"As the lack of supply growth and price-insulated non-OECD demand suggest a future rebound in U.S. gross domestic product growth or a major oil supply disruption could lead to $150-$200 a barrel oil prices," Goldman said.

While saying it has a bullish long-term outlook, Goldman acknowledged that oil prices could correct from recent highs.

Favorite picks among energy stocks include Frontier Oil, Cabot Oil & Gas in the U.S. as well as Eni, Repsol, and Gazprom overseas.

Goldman also reiterated its view that oil prices could fall as normal market conditions return over the next four years.

"The core of our 'super-spike' view is that oil prices will keep rising until demand declines globally on a multiyear basis, resulting in the return of excess capacity and a lower cost structure," Goldman's analysts said. "Given this view, once excess capacity returns, we think prices can move sharply lower."

The analysts reiterated their "attractive" view on the European energy sector, but kept a neutral view on the Russian sector due to costs. It upgraded Transneft and Sibir Energy to neutral from sell after underperformance, and cut Imperial Energy to sell from neutral on capital-spending requirements.

Broccoli compound boost for immune health

2008-03-07T21:57:00.000-07:00

By Stephen Daniells

07-Mar-2008 - A compound found in broccoli, previously linked to anti-cancer benefits, may also counter the decline in the body's immune system associated with age, says a new study from UCLA.
The compound sulforaphane was found to activate a set of antioxidant genes and enzymes in specific immune cells, which then combat the detrimental effects of free radicals that can damage cells and lead to disease, reports the study in the Journal of Allergy and Clinical Immunology.

"Our defence against oxidative stress damage may determine at what rate we age, how it will manifest and how to interfere in those processes," explained lead researcher Andre Nel from the University of California, Los Angeles (UCLA).

"In particular, our study shows that a chemical present in broccoli is capable of stimulating a wide range of antioxidant defence pathways and may be able to interfere with the age-related decline in immune function."

more here

Already we have riots, hoarding, panic: the sign of things to come?

2008-03-07T21:55:00.001-07:00

From The Times

March 7, 2008

Carl Mortished, World Business Editor

The spectre of food shortages is casting a shadow across the globe, causing riots in Africa, consumer protests in Europe and panic in food-importing countries. In a world of increasing affluence, the hoarding of rice and wheat has begun. The President of the Philippines made an unprecedented call last week to the Vietnamese Prime Minister, requesting that he promise to supply a quantity of rice.

The personal appeal by Gloria Arroyo to Nguyen Tan Dung for a guarantee was a highly unusual intervention and highlighted the Philippines’ dependence on food imports, rice in particular.

“This is a wake-up call,” said Robert Zeigler, who heads the International Rice Research Institute. “We have a crisis brewing in rice supply.” Half of the planet depends on rice but stocks are at their lowest since the mid1970s when Bangladesh suffered a terrible famine. Rice production will fall this year below the global consumption level of 430 million tonnes.

Street protests and rioting in West Africa towards the end of last year were a harbinger of bigger problems, the World Food Programme said. The global information and early warning system of the Food and Agricultural Organisation (FAO) has monitored outbreaks of rioting in Mexico, Morocco, Uzbekistan, Yemen, Guinea, Mauritania and Senegal. There have also been protests in Jakarta, the Indonesian capital, over government price increases.Population pressure and increased wealth are mainly to blame for the resurgence of food insecurity. More people are eating meat and dairy products in Asia, which increases the demand on the animal-feed industry. Milk powder prices rose from $2,000 to $4,800 per tonne last year as rising consumption of milk products in Asia coincided with shortages in the Western world. Drought in Australia has worsened the problem as have government policies in Europe and America to increase the use of biofuels.

Mounting concern about rice has prompted the Indian Government to restrict exports of certain varieties. The measure triggered a surge in global rice prices, which have risen 50 per cent in a year, according to the FAO. The rice shortage is even felt in Britain where the price of basmati, the biggest-selling variety, is rising rapidly.

Wheat is suffering even greater pressures, with prices up 115 per cent in a year. A succession of droughts in Australia has put upward pressure on the cost of a food commodity that is already in short supply. Stocks are at a 40-year low and exports are being restricted from Beijing to Buenos Aires. Ukraine started closing its door to grain exports in June and Russia set a 40 per cent export tariff on wheat in January.

Argentina has delayed the reopening of its wheat export registry until April to protect domestic supplies, and China, a net exporter of corn, rice and wheat last year, has imposed export quotas on grain in order to stem runaway food price inflation. A surge in its inflation index in December was blamed entirely on rising food prices, notably pork, which rose 48 per cent.

Farmers worldwide are worried about feed costs. In Europe pig and poultry breeders are threatening to cut production unless they are paid higher prices.

Carlyle Capital Adds to Fears Of Forced Sales

2008-03-06T18:35:00.001-07:00

By MARGOT PATRICK and RAGNHILD KJETLAND
March 6, 2008 11:50 a.m.

LONDON -- Carlyle Capital Corp., a listed investment company managed by a unit of private-equity firm the Carlyle Group, added to worries about forced liquidations of residential mortgage-backed securities after failing to meet margin calls on its $21.7 billion portfolio Wednesday.

Carlyle Capital said Thursday that it has received a notice of default from one of the banks that helps finance its portfolio of Freddie Mac and Fannie Mae securities through short-term repurchase agreements, known as repos, and that it expects to receive at least one more default notice after falling short of margin requirements with four lenders.

It said seven repo counterparties had demanded an additional $37 million Wednesday to keep funding in place. It met the requirements of three of them, which it said had indicated "a willingness to work with the company during these tumultuous times."

Carlyle Capital as recently as Monday had reassured investors on its funding lines, saying it had $2.4 billion in undrawn repo lines and that it had increased a credit facility provided by the Carlyle Group by 50%, to $150 million. Its lenders as of Dec. 31 were: Bank of America Corp., Bear Stearns Cos., BNP Paribas SA, Calyon, Citigroup Inc., Credit Suisse Group, Deutsche Bank AG, ING Groep NV, J.P. Morgan Chase & Co., Lehman Brothers Holdings Inc., Merrill Lynch & Co. and UBS AG.

The repurchase agreements outstanding at that date had an average maturity of 20 days. Carlyle Capital's longest-dated repo line is for three months. The company leverages its $670 million equity 32 times to finance a $21.7 billion portfolio of residential mortgage-backed securities issued by U.S. housing agencies Freddie Mac and Fannie Mae. All of the securities are rated Triple-A and are considered to be implicitly guaranteed by the U.S. government.

Carlyle Capital said Thursday that it has been subject to margin calls and additional collateral requirements totaling more than $60 million over the past week, and had met all calls up until March 5.

(more)

http://online.wsj.com/article/SB120479022207116361.html

NASA Baffled by Unexplained Force Acting on Space Probes

2008-03-05T23:54:00.001-07:00

By Charles Q. Choi
Special to SPACE.com
posted: 03 March 2008
10:03 am ET

Mysteriously, four spacecraft that flew past the Earth have each displayed unexpected anomalies in their motions.

These newfound enigmas join the so-called "Pioneer anomaly" as hints that unexplained forces may appear to act on spacecraft.

A decade ago, after rigorous analyses, anomalies were seen with the identical Pioneer 10 and 11 spacecraft as they hurtled out of the solar system. Both seemed to experience a tiny but unexplained constant acceleration toward the sun.

A host of explanations have been bandied about for the Pioneer anomaly. At times these are rooted in conventional science — perhaps leaks from the spacecraft have affected their trajectories. At times these are rooted in more speculative physics — maybe the law of gravity itself needs to be modified.

Now Jet Propulsion Laboratory astronomer John Anderson and his colleagues — who originally helped uncover the Pioneer anomaly — have discovered that four spacecraft each raced either a tiny bit faster or slower than expected when they flew past the Earth en route to other parts of the solar system.

'Humble and perplexed'

The researchers looked at five deep-space probes — Galileo to Jupiter, the NEAR mission to the asteroid Eros, the Rosetta probe to a comet, Cassini to Saturn, and the MESSENGER craft to Mercury. Each spacecraft flew past the our planet to either gain or lose orbital energy in their quests to reach their eventual targets. (Galileo made two flybys.)

In five of the six flybys, the scientists have confirmed anomalies.

"I am feeling both humble and perplexed by this," said Anderson, who is now working as a retiree. "There is something very strange going on with spacecraft motions. We have no convincing explanation for either the Pioneer anomaly or the flyby anomaly."

More here

Perfectly Normal

2008-03-05T23:30:00.002-07:00

Yikes, the Cadman affair is looking like a first-rate political shit-storm.

First:

"Perfectly normal"

By KATHLEEN HARRIS, NATIONAL BUREAU CHIEF

Prime Minister Stephen Harper says it was "perfectly normal" for Conservative officials to offer a dying man financial assistance to wage a re-election campaign.

Under heavy fire from all opposition parties, Harper insisted the financial offer made to Chuck Cadman before a critical May 2005 vote was normal and permitted by law.

"We wanted Chuck Cadman to rejoin our party. The party was prepared to assist Chuck Cadman in securing his nomination and to ensure, financially and otherwise, that he was able to fight a successful election campaign," he said.

But Bloc Quebecois Leader Gilles Duceppe said it's just not credible that party officials would offer a terminally ill man financial help to hit the hustings.

"He had trouble getting to Ottawa, yet he would have had an election campaign in the condition he was in? That's the prime minister's actual answer?" he fumed.

Second:

Unanswered questions

Mar 05, 2008 04:30 AM

Why does this have to be so hard? Why can't Prime Minister Stephen Harper stand up in Parliament or go before the House of Commons ethics committee and provide clear answers to simple questions?

It's no secret that Conservative party officials back in 2005 tried to persuade independent Member of Parliament Chuck Cadman, who was dying of cancer at the time, to rejoin the Tory caucus and topple Paul Martin's minority Liberal government in a confidence vote.

But what exactly did the Conservatives offer for Cadman's support?

Three Cadman family members – his wife Dona, his daughter Jodi, and his son-in-law Holland Miller – all say Cadman told them, in separate conversations, that he was offered some kind of million-dollar "life insurance" deal. If so, that might constitute a bribe and a crime.

Harper fiercely denies any wrongdoing, and he has threatened to sue Liberal Leader Stéphane Dion and others who suggest as much.

Yet when asked two years ago about the policy by Cadman biographer Tom Zytaruk, Harper replied that party officials had "discussions" with Cadman about "financial issues" and "financial insecurity." He also said: "But the, uh, the offer to Chuck was that it was only to replace financial considerations he might lose due to an election, okay? That's my understanding of what they were talking about."

What offer, exactly? What financial issues? What insecurity?

Did anyone from the Conservative party, or claiming ties to it, offer Cadman a million-dollar benefit, with or without Harper's approval?

Instead of casting a libel chill over the Cadman affair, Harper should tell Canadians what he knows. What led him to conclude there was "no truth" to the insurance story when he looked into it? And party insiders Tom Flanagan and Doug Finley need to shed light on precisely what help they offered Cadman and on what terms.

The Royal Canadian Mounted Police have been asked to look into all this by the Liberals. But Parliament needn't defer to a police probe. The ethics committee should be calling Flanagan, Finley and others to testify. If the Conservatives truly have nothing to hide, they should not be standing in the way of such an inquiry.

Third, excerpted from here:

The Conservatives have not yet explained why they first denied any offer had been made, only to later say a repayable loan was offered to Cadman's local riding association to cover campaign expenses if he rejoined the party.

Repeated appeals to the Prime Minister's Office since the Chuck Cadman affair surfaced have failed to yield direct answers to the following questions:

1. Did anyone from the Conservative party, or connected to the Tories, offer Cadman a $1-million life insurance policy?

* Refused to directly answer the question. Tory MP James Moore has repeatedly said officials only offered to take Cadman back into the party.

2. What did Stephen Harper mean when he said in a 2005 interview that "an offer" that included "financial considerations" was made to Cadman?

* Conservative party spokesman Ryan Sparrow said Monday the offer Cadman mentioned in a TV interview was a repayable loan to the local riding association.

3. If Tory officials Tom Flanagan and Doug Finley offered a repayable loan, what was the amount and what were the terms of repayment?

* No answer.

4. Why did the Prime Minister's Office and the Conservatives first deny an offer had been made to Cadman, only to later say a repayable loan was offered?

* No answer.

5. Why didn't Harper reveal last week that he told Dona Cadman more than two years ago that he didn't know about the alleged life-insurance offer?

* No answer.

6. What motivation would Dona Cadman, a Tory candidate in her husband's former riding, have to fabricate a story about the life-insurance offer?

* No answer.

Fourth and finally (anyone seeing a pattern here?)

The interesting case of the former Tory candidate
Posted By Weston, Greg

In the category of stones flying from glass houses, Parliament Hill is definitely alive with the sound of some fine shattering today.

For the first time in history, the prime minister has hired a big-gun lawyer to go after those nasty opposition Liberals for unkind things they have been saying about Stephen Harper's alleged involvement in the Chuck Cadman affair.

This is not just any lawyer. Richard Dearden is arguably the top libel lawyer in the land, having cut his teeth defending journalists like me against intimidating legal actions by the rich and powerful like, well, you know.

Dearden has fired off an ugly note to the Liberals, warning that remarks about Harper on their party website are malicious, reckless, "false and devastatingly defamatory."

The offending statements, of course, relate to allegations Conservative party officials offered Cadman some sort of million-dollar deathbed deal in 2005 in return for his vote to defeat the then-Liberal government of Paul Martin.

Since Cadman was a sitting Independent MP at the time (he died of cancer weeks later), offering to buy his vote would have been highly unethical, if not a criminal offence.

Harper and the Conservative officials involved have denied any such deal was ever offered - ergo, the prime minister apparently feels compelled to sue the official opposition for suggesting he knew of a criminal act.

The prime minister's libel letter is not unlike the lawsuit filed two years ago by Ottawa lawyer and would-be Conservative candidate Alan Riddell - against Harper et al.

Riddell successfully sued Harper and the Conservative party for reneging on a deal to pay him up to $50,000 to step aside as the party's candidate in the riding of Ottawa South.

The party brass under campaign director Doug Finley wanted to hand the riding nomination to Allan Cutler, the former federal public servant who gained national attention as the first major whistleblower in the sponsorship scandal.

Riddell was reluctant to oblige, having spent much time and money to win the nomination.

On Nov. 25, 2005, Riddell and the Conservative party brass finally reached a formal agreement: he would stand aside in exchange for a party guarantee it would compensate him up to $50,000 for the costs he had already incurred.

But the deal didn't hold for a day before there were fireworks, and ultimately a few libel suits.

First, someone inside the party leaked the false story to the media that Riddell had been disqualified as a candidate by his own riding association.

In response, Riddell issued a press release saying he had voluntarily stepped down to clear the way for Cutler's candidacy.

But it was a subsequent news story about money changing hands that brought the most remarkable response of all.

On Dec. 4, fully 10 days after the deal was struck and with the 2006 election campaign in full swing, Harper was asked point-blank if the Conservative party had agreed to pay off Riddell as part of a backroom deal to clear the way for Cutler, the famous whistleblower. "In fact, there is no agreement and he hasn't been paid anything," Harper told reporters.

If Harper was misinformed, he stayed that way for the rest of the day. He was later asked the same question again.

"The party does not have an agreement to pay Mr. Riddell these expenses, and Mr. Riddell has not been paid anything to date," Harper replied.

The courts ultimately found that Riddell absolutely had a deal, and ordered the Conservatives to pay up.

Riddell also sued Harper and others for libel, and the case was settled out of court this past November, three months before it was due to go to trial.

Both sides agreed to say nothing.

- Greg Weston writes for Sun Media/Osprey Media.

Canadian Outlook: Another Fall Coming For Canada

2008-03-04T23:01:00.003-07:00

Some commentary on Canadian oil and gas activity dropping and why.

http://www.worldoil.com/Magazine/MAGAZINE_DETAIL.asp?ART_ID=3442&MONTH_YEAR=Feb-2008

"World Oil" Cautiously Points to Peak Oil

2008-03-04T22:48:00.002-07:00

Definitely worth a read, the main editorial

http://www.worldoil.com/Magazine/MAGAZINE_DETAIL.asp?ART_ID=3449&MONTH_YEAR=Feb-2008

followed by the feature article by Matt Simmons:

http://www.worldoil.com/Magazine/MAGAZINE_DETAIL.asp?ART_ID=3432&MONTH_YEAR=Feb-2008

Warren Buffet on peak oil

2008-03-04T22:05:00.002-07:00

Peak oil is slowly going mainstream:

http://www.theoildrum.com/node/3697

Paul Ziff: The Roots And Future Risks Of Alberta's Gas Recession

2008-03-04T12:45:00.001-07:00

Many people talk about an 'oil and gas' industry in Canada - the truth is that the conventional industry is mainly gas now --- the main oil is Oil Sands! Since 1998 gas drilling has surpassed oil drilling activity, with more than two gas wells for each oil well in 2007. Drilling for natural gas, not oil, drives the massive service industry, which stretches all across Alberta, especially rural towns. Figure 1 shows the dominance of gas drilling over the past decade.

Full article here

Chevron Replaced About 11% Of 2007 Production

2008-03-04T12:25:00.002-07:00

YIKES! I think this is more symptomatic of the lack of large scale investment opportunities in energy than a "Chevron problem". I note Chevron isn't alone in replacing production. That is all a long-winded way of saying we might be at "peak oil".

(Reuters) - Integrated oil and gas company Chevron Corp. replaced only about 11% of the oil and gas it produced in 2007, as its total reserves slipped about seven per cent year over year.

The company's net proved oil and gas reserves, including affiliate companies, fell to 10.77 billion bbls of oil equivalent at the end of 2007, down from 11.62 billion bbls of oil equivalent at the end of 2006. The company reported the figure in its annual report with the Securities and Exchange Commission on Thursday.

That means the company only added around 103 million bbls of oil and gas reserves through exploration or acquisitions in 2007. Based on total production in 2007 of around 946 million bbls of oil, that means the company has a reserve replacement rate of about 11%. Industry analysts typically expect oil and gas companies to replace more than 100% of their annual production as a sign that they are growing.

On the company's fourth-quarter earnings conference call, Chevron had said the company's reserve replacement rate would be in the 10% to 15% range.

Oil Tops Inflation-Adjusted Record Set in 1980

2008-03-04T12:22:00.003-07:00

Capping a relentless rise in recent years, oil prices hit a record high during the day on Monday, then pulled back to close below the record.

More here

Famed geneticist creating life form that turns CO2 to fuel

2008-02-29T23:45:00.000-07:00

MONTEREY, California (AFP) — A scientist who mapped his genome and the genetic diversity of the oceans said Thursday he is creating a life form that feeds on climate-ruining carbon dioxide to produce fuel.

Geneticist Craig Venter disclosed his potentially world-changing "fourth-generation fuel" project at an elite Technology, Entertainment and Design conference in Monterey, California.

"We have modest goals of replacing the whole petrochemical industry and becoming a major source of energy," Venter told an audience that included global warming fighter Al Gore and Google co-founder Larry Page.

"We think we will have fourth-generation fuels in about 18 months, with CO2 as the fuel stock."

Simple organisms can be genetically re-engineered to produce vaccines or octane-based fuels as waste, according to Venter.

Biofuel alternatives to oil are third-generation. The next step is life forms that feed on CO2 and give off fuel such as methane gas as waste, according to Venter.

"We have 20 million genes which I call the design components of the future," Venter said. "We are limited here only by our imagination."

His team is using synthetic chromosomes to modify organisms that already exist, not making new life, he said. Organisms already exist that produce octane, but not in amounts needed to be a fuel supply.

"If they could produce things on the scale we need, this would be a methane planet," Venter said. "The scale is what is critical; which is why we need to genetically design them."

The genetics of octane-producing organisms can be tinkered with to increase the amount of CO2 they eat and octane they excrete, according to Venter.

The limiting part of the equation isn't designing an organism, it's the difficulty of extracting high concentrations of CO2 from the air to feed the organisms, the scientist said in answer to a question from Page.

Scientists put "suicide genes" into their living creations so that if they escape the lab, they can be triggered to kill themselves.

Venter said he is also working on organisms that make vaccines for the flu and other illnesses.

"We will see an exponential change in the pace of the sophistication of organisms and what they can do," Venter said.

"We are a ways away from designing people. Our goal is just to make sure they survive long enough to do that."

http://afp.google.com/article/ALeqM5iYXm1UNEI-ViI-p5S6TAaogyDv8Q

Rating the real cost of inflation

2008-02-28T23:11:00.000-07:00

The fedaral government says that inflation is under control at 2% to 3% a year – with prices up 15 percent since 2002 – but some key prices have risen much faster, and critics charge that the government is undercounting the pace of inflation

By Dean Calbreath

UNION-TRIBUNE STAFF WRITER

September 30, 2007

If you're like the average American, when you fill your car up at the gas pump, you're paying 84 percent more than you were in 2000, for an average price rise of 12 percent per year, according to the latest data from the U.S. Bureau of Labor Statistics.

Many of the goods in your grocery basket – such as bread, eggs, orange juice, lettuce, tomatoes and ground chuck – have risen between 4 percent and 5 percent per year. The cost of electricity has risen 4 percent a year, while natural gas has risen 8 percent. And medical care has gone up about 5 percent a year, according to those same data.

Those rates of inflation – the kind of price rises that Americans feel on a daily basis – are often far higher than the official rate of inflation, which has increased an average of 2.6 percent per year since 2000.

Although the official inflation rate includes many items that decline in price, such as consumer electronics, discrepancies such as that lead many economists to question whether the government is undercounting the inflation rate.

“Any housewife can tell you that the official inflation rate is just not true,” said William Rutherford, a former Oregon state treasurer who runs an investment management firm near Portland.

“If you don't drive or don't eat, maybe the CPI (consumer price index) has a little resemblance to your life. But I don't see how anybody with any ordinary experience could see the CPI is being accurate,” Rutherford said.

Rudolph-Riad Younes, a co-manager of the Julius Baer International Equity Fund, told Barron's magazine this month that if the government counted home prices and energy correctly, the real inflation rate would be between 7 percent and 10 percent.

John Williams, a Dartmouth-trained economist who works as a consultant for a number of Fortune 500 companies, says the only reason the inflation rate is so low is because the Reagan and Clinton administrations rewrote the way the CPI is calculated.

In his monthly online newsletter Shadow Government Statistics, Williams has painstakingly attempted to recreate the inflation rate using its older guidelines. Under his calculations, inflation is actually running at an annualized rate of 9.95 percent.

Steve Reed, an economist at the Bureau of Labor Standards, which maintains the CPI, conceded that “you do get a lower (CPI) because of the changes we've made.” He said that today's CPI might be between half a point and a full point higher using the old methods of calculation.

“The numbers (that Williams uses) don't jive with what I've seen,” Reed said.

He said the current CPI rate is accurate, but added that the government does have a vested benefit in keeping the rate lower.

Understating the inflation rate can save businesses and the government money, although it can be a burden on the elderly, people on fixed incomes or salaried workers, since wage raises, pension benefits, welfare payments, Social Security payments and other items are tied to the CPI.

“Even if the CPI was one percentage point higher, it could cost the government hundreds of millions of dollars,” Reed said.

Inflation is likely to spike further, thanks to the Federal Reserve, which last month pumped money into the economy to support an interest rate cut.

“Since the increased supply of money does not come from productivity and savings, there is no increase in goods and services to absorb the new money,” said Michael Pento, a market strategist with Delta Global Advisors in Huntington Beach. “And therein lies the problem: The result of an increased money supply without increases in productivity is higher prices. Inflation.”

One of the first major revisions to the CPI came in 1983, in Ronald Reagan's first term in the White House. One of Reagan's campaign themes was an attack on the inflation rate, which averaged more than 12 percent in the last two years of Jimmy Carter's presidency.

Inflation remained at 10 percent in 1981, Reagan's first year in office. Thanks to Fed Chairman Paul Volcker's restrictive monetary policies, it dropped to 6 percent the next year. But it took some changes to the method of counting inflation to get it to 3 percent in 1983.

Toward the end of the Clinton administration, the inflation rate was still 3 percent. But economists in the government and Alan Greenspan's Federal Reserve said that was too high and once again changed the way inflation was calculated. In 1998, the first year after the recalculation, the CPI was cut in half to 1.6 percent – the lowest rate since 1965.

One change that draws criticism is the CPI's use of “substitutions.”

The consumer price index assumes that if prices get too high, consumers will start buying cheaper products. For instance, if steak gets too expensive, they will switch to ground beef.

As a result, when items in the CPI's basket of goods get too expensive, the weight that they are given in the index is lessened and more weight is put on cheaper substitutes. Naturally, that helps keep the CPI lower.

Williams said that such a move “violates the original intent, purpose and concept of the CPI,” which was to measure the costs of the same goods year after year.

Reed disagreed. “We're not substituting beef for chicken, or driving for flying,” he said. “The weight of academic expertise would argue that what we did was right.”

Another factor that draws ire is the CPI's reliance on high-ticket items – DVD players, audio equipment, televisions. Six percent of the CPI is based on video and audio equipment, sporting goods, cameras and recreation, compared with 8 percent that is spent on food at home.

Critics say that the concentration on high-tech items – which typically decline in price over time – disguises the price rises in other areas. They also say that the CPI reflects upper-class tastes and expenses that might not catch the price hikes for poorer individuals.

“If I'm not a terribly wealthy person, that might not reflect how I'm spending my money,” Reed said.

The mix of items in the CPI has left some critics scratching their heads.

Since the Reagan administration, for instance, the CPI costs for housing have been based on rental costs, rather than home ownership. As a result, between 2000 and 2006, when home prices were skyrocketing, the CPI showed a price rise of only 3.3 percent per year. Property tax payments, which typically rise with the value of a house, are not counted in the CPI.

“We wanted to be out of the business of dealing with interest rates and interest expenditures,” Reed said. “The true value is more accurately reflected in its rental value.”

The low growth rate in the CPI can have surprising consequences.

Over the past four years, for instance, the cost of construction materials rose 28 percent, while the CPI rose only about 13 percent.

When construction companies work on government projects – where contracts are typically tied to the CPI – they sometimes have to cut corners to make up for the fact that their supply costs are rising more than twice as fast as the inflation rate, said Kenneth Simonson, an economist for the Associated General Contractors.

John Browne, a former British parliamentarian who is now a financial commentator in Florida, said the low inflation rate also helped fuel the bubbles in dot-com stocks and real estate.

“The great inflation lie enabled the banking system – first under Greenspan and now under Bernanke – to lend lots of money at rates that were sometimes below the rate of inflation,” Browne said. “If you can borrow for less than inflation, you can buy anything, including assets like houses.”

Now that the housing bubble is bursting, Bernanke's response has been to inject more money into the economy, which economists fear will create more inflation.

Market strategist Pento says that even if the CPI doesn't show strong inflation now, other measures do, including this year's surges in the price of gold and the money supply.

“Gold and the money supply are true inflationary indicators,” Pento said. “If they're growing at that pace, inflation is at least in the upper single digits. At least.”

Pento warned that it is risky for the Federal Reserve to start cutting interest rates when inflation is running at such “very dangerous levels.”

David Joy, chief market strategist for RiverSource Investment, said he worries that the latest interest rate cut means that “eventually, and possibly sooner now than otherwise, the Fed will be forced to deal with higher inflation, accelerating the day of reckoning and making it more painful.”

"Honest to God boss, I was at my desk!"

2008-02-27T23:23:00.003-07:00

Desiree Palmen's photos of camouflaged people

Rotterdam-based artist Desiree Palmen creates incredible photographs of highly camouflaged people.

Whole article is here

Photo in the News: Viking Women Wore "Sexy" Outfits

2008-02-27T23:04:00.004-07:00

WTF Journal's equivalent to the Page 3 girl! And Sven the Viking with a real big sword to boot for equal opportunity gratuitous imagery.

Damn National Geographic. They sure used to show far more risque pictures of topless stone age ladies in New Guinea or pygmy boobies from Africa. Here they have a chance to unload some hot pictures of Nordic Viking Honey's and..... we get photos that are a bit less than provocative? Looks like Hustler's market share is safe.

LOL. Yeah, not taking any of this seriously at all.

Photo in the News: Viking Women Wore "Sexy" Outfits

February 27, 2007—Call it the Viking version of a low-cut top.

A modern reconstruction of a Norse outfit (worn above by textile researcher Annika Larsson of Uppsala University in Sweden) is a single piece of fabric held in place by clasps that sit on the middle of each breast.

Such a provocative outfit was probably common among Viking women before Christianity took hold in Scandinavia, Larsson said in a statement. She recently analyzed ancient textiles from the Lake Mälaren Valley, which was inhabited during the "Viking Age" from about A.D. 750 to 1050.

More at http://news.nationalgeographic.com/news/2008/02/080227-viking-picture.html

Creepiest Story I've Read in a Long Time

2008-02-27T22:43:00.002-07:00

This story is nearly as creepy as the plumetting EROI of North American gas.

LOL.

Full text below as the link will probably go dead in time:

Prepare to be creeped out - but in a good way

Mark Morford

Wednesday, February 27, 2008

I admit only to this: I can get deeply creeped out, down to my very core, now and then and hopefully not all that often because, well, I still like to sleep at night.

Ah, but the occult. The paranormal. The deeply weird, mysterious, unsolvable, disturbing. That can get to me. A good creep-out, those unknowable things that get under your skin and crawl around and tug at the shirtsleeves of your fears, those are the things that can last for years. Lifetimes. I love that. I hate that.

The final shot in "The Blair Witch Project." A possessed Linda Blair crawling down the stairs on all fours, upside down, backward, in a full backbend, on her toes and fingertips, in the uncut version of "The Exorcist." The ending to (and overall creepy feel of) "Don't Look Now," the famous cult horror movie from the '70s with Donald Sutherland, Julie Christie and the little midget in the red robe. Peter Weir's "Picnic at Hanging Rock," another classic '70s occult flick, chaste schoolgirls disappearing up a bizarrely haunted mountain - entirely fictional, but plays all too damn real.

Still, they're just movies. Fiction, mostly. No matter how good they are, they all kneel before the one true god of interminable creepiness: reality.

Here's one. It's called the Dyatlov Pass Accident. I stumbled over this delicious tale just recently over at Metafilter, and it's one of those stories that contains all the best elements of a deep, resonant creep-out. Inexplicable behavior. Bizarre factoids. Inconclusive evidence. Missing body parts. And not a single clue, almost 50 years later, as to what really happened.

The nutshell: In 1959, nine experienced Russian cross-country skiers - seven men and two women, including the leader, Igor Dyatlov - head to the Ural Mountains, to a slope called Kholat Syakhl (Mansi language for "Mountain of the Dead," ahem) for a rugged, wintry trek. On their way up, they are apparently hit by inclement weather, veer off course and decide to set up camp and wait it out. All is calm. All is fine and good. They even take pictures of camp, the scenery, each other. The weather isn't so bad. They go to sleep.

Then, something happens. In the middle of the night, all nine suddenly leap out of their tents as fast as possible, ripping them open from the inside (not even enough time to untie the doors) and race out into the sub-zero temps, without coats or boots or skis, most in their underwear, some even barefoot or with a single sock or boot. It is 30 degrees below zero, Celsius. A few make it as far as a kilometer and a half down the slope. All nine, as you might expect, quickly die.

And so it begins.

Why did they rush out, unable to even grab a coat or blanket? What came at them? The three-month investigation revealed that five of the trekkers died from simple hypothermia, with no apparent trauma at all, no signs of attack, struggle, no outward injuries of any kind. However, two of the other four apparently suffered massive internal traumas to the chest, like you would if you were hit by a car. One's skull was crushed. All four of these were found far from the other five. But still, no signs of external injuries.

Not good enough? How about this: One of the women was missing her tongue.

Oh, it gets better. And weirder.

Tests of the few scraps of clothing revealed very high levels of radiation. Evidence found at the campsite indicates the trekkers might've been blinded. Eyewitnesses around the area report seeing "bright orange spheres" in the sky during the same months. And, oh yes, relatives at the funeral swear the skin of their dead loved ones was tanned, tinted dark orange or brown. And their hair had all turned completely gray.

Wait, what?

The final, official explanation as to what caused such bizarre behavior from otherwise well-trained, experienced mountaineers? An "unknown compelling force." Indeed.

Here's the problem: All the convenient, logical explanations - avalanche, animal attack, secret military nuke test - fail. Russian authorities held a three-month investigation. Rescuers and experts picked through every piece of evidence. There were no signs of natural disaster. And if it was just an avalanche, why was the area closed off for three years following the event, and all related documents put in a secret Russian archive until 1990? If it was some sort of weird nuclear megablast (which I suppose may tint you orange, but won't turn your hair gray), what the hell happened to her tongue?

I love stories like this. I hate stories like this.

Sure, you want to go for the logical. Hell, who knows what hellish weaponry they were testing in the mountains in Khrushchev's Russia in the late '50s? Who knows what dark mysteries are buried in the landscape by the world's militaries as they test their dark deeds? The rule goes like this: Any weapon of horror and death man's mind can conceive, odds are gruesomely good the government or military has considered it. Or even built it.

This is both the joy and horror of stories like Dyatlov: They make your mind jump and bend and struggle. Logic fails quickly. Easy explanations don't work. Complicated ones feel incomplete. The creepiness takes hold, begins to burrow, make you squirm. Because the bizarre military-testing explanation? It fails, too.

So of course, you jump further. You reach for the paranormal, metaphysical, unknowable, to things like UFOs and spirits and ghosts, dark forces and mysticism and the occult, because, well, that's where the action is. That's where we get to touch the void, dance on the edge of perception, realize how little we truly know of anything.

After all, if you really think all there is to this world is what your five senses show you, if you think there's always got to be a logical, earthbound explanation for stories like Dyatlov, well, you might as well just join a megachurch and wipe your brain and your intuition and your deep, dark curiosity clean right now.

As Dyatlov himself might say, his skin orange and hair gray and eyes wide wide wide, you think you know, but you have no idea.

-- Mark Morford columns with inset links to related material can be found at sfgate.com/columnists/morford.

Mark Morford's column appears Wednesdays and Fridays in Datebook and on sfgate.com. E-mail him at mmorford@sfgate.com.

This article appeared on page E - 5 of the San Francisco Chronicle

North American Natural Gas Production and EROI Decline

2008-02-27T22:33:00.002-07:00

Very interesting article, a real "must read" along with some of the comments that follow it.

The general public, and even most petroleum industry insiders are not aware of the massive decrease in Energy Return on Investment (EROI) that is occurring in petroleum developments. The implications of EROI falling off a cliff are even less understood by nearly all.

I intuitively thought that we were experiencing rapid decreases in EROI but didn't know how to quantify. This was based on observations of some plays I thought would have many years of development essentially stopping, and observations of statistics I'd done on WCSB gas production on wells by vintage. The stats were shocking, to put it mildly. The article below fills in some blanks on how to calculate EROI and also describes what the implications are.

North American Natural Gas Production and EROI Decline

Many energy stocks, including Encana and Breaker were at or very close to all time highs today.

Energy Prices, Inflation and Denial

2008-02-05T23:10:00.000-07:00

Higher energy prices are feeding through to rampant consumer energy price inflation. And yet the authorities and many investment houses still see energy prices falling in the future. This naive view of global energy supplies is starving energy markets of the capital required to expand conventional and alternative energy supplies.

Whole story is here - note interesting graph of spot natural gas prices in the world

Multinationals control only 10% of world oil reserves

2008-02-05T23:08:00.000-07:00

The share of the world's oil reserves controlled by the big Western oil companies, such as BP, Shell and ExxonMobil, has fallen to less than 10 per cent, compared with 70 per cent in 1978.

The world's reserves are dominated increasingly by government-controlled national oil companies in big producer countries such as Saudi Arabia, Russia, Iran and Venezuela. These groups control about 90 per cent, according to a book due to be published this year. The figures in the book point to the diminishing power of international oil companies by comparing the reserves held by what were in 1978 the eight largest global oil companies — Exxon, Shell, BP, Gulf, Texaco, Mobil, Socal (Chevron) and the Compagnie Françaises Des Petroles (CFP-Total) — with those of the five companies they have merged into today.

“In 1978, these companies together held roughly 70 per cent of world reserves,” Wajid Rasheed, the author of The Hydrocarbon Highway, says. “Today, there are ‘five sisters': ExxonMobil, Shell, BP, ChevronTexaco and Total and their reserves amount to approximately 10 per cent of world reserves.”

Whole story is here

Pig brains are fine for hot dogs but......

2008-02-05T22:55:00.000-07:00

Paralysis Outbreak In Meat Workers Handling Pigs' Brains

Article Date: 04 Feb 2008 - 6:00 PST

The US Centers for Disease Control and Prevention issued an update last week to its investigation of an outbreak of a paralysing condition that is affecting certain meat processing plant workers who use compressed air to remove the brains from the heads of pig carcases.

The illness is called Progressive Inflammatory Neuropathy (PIN) and its symptoms range from acute paralysis to gradual increase of weakness on both sides of the body, which in some cases happens over 8 days and in others over 213 days. The symptoms vary in severity from slight weakness and numbness to paralysis that affects mobility, mostly in the lower extremities.

Whole story here

BP Layoffs at $90/bbl Oil

2008-02-05T22:51:00.000-07:00

BP slashes jobs as profit falls 20pc

By Angela Monaghan
Last Updated: 2:15am GMT 06/02/2008

Oil giant BP is to cut 5,000 jobs by the middle of next year following a near 20pc fall in full-year profits for 2007, but is softening the blow with a fourth-quarter dividend rise of 31pc.

The tumble in profits follows poor production levels as BP failed to get oil out of the ground quick enough to take advantage of its soaring cost, as well as weaker refining margins.

full story here

Iranian Bourse to Devalue US Dollar?

2008-02-05T22:49:00.000-07:00

Iran Oil Bourse to deal blow to dollar

Fri, 04 Jan 2008 20:45:41

The long-awaited Iranian Oil Bourse, a place for trading oil, petrochemicals and gas in various non-dollar currencies, will soon open.

Iran's Finance Minister Davoud Danesh-Jafari told reporters the bourse will be inaugurated during the anniversary of the Islamic Revolution (February 1-11) at the latest.

"All preparations have been made to launch the bourse; it will open during the Ten-Day Dawn (the ceremonies marking the victory of the 1979 Islamic Revolution in Iran)," he said.

The Minister had earlier stated that the Oil Bourse is located on the Persian Gulf island of Kish.

Some expert opinions hold inauguration of the bourse cold significantly devalue the greenback.

Fischer-Tropsch in the Deep Sea

2008-02-05T22:33:00.000-07:00

The wonders never cease.

Ocean hydrocarbons made from rocks

31 January 2008

Researchers investigating 60-metre high carbonate chimneys in the Atlantic Ocean - the so-called 'Lost City' deep ocean vent field - have discovered that hydrocarbons seeping out from the vents don't come from a biological source such as bacteria, plants or animal matter.

Instead, say Giora Proskurowski from the University of Washington, US, and colleagues, inorganic carbon leaching from surrounding sea-floor rock (which has risen from the Earth's mantle) combines with hydrogen, heat and water to make the hydrocarbons. These Fischer-Tropsch style reactions have been shown to be plausible in the laboratory, but the team's observations were the first consistent evidence measured in situ on the ocean floor, co-author Gretchen Früh-Green, of the Swiss Federal Institute for Technology, told Chemistry World.

The mantle-derived rocks in the Lost City field have been active for over 30,000 years, and the researchers think many other similar formations could exist, undiscovered, in the deep Atlantic Ocean. 'Hydrocarbon production by Fischer-Tropsch type chemistry could be a common means for producing precursors of life-essential building blocks in ocean-floor environments,' they conclude.

There's not enough evidence, though, to substantially rewrite the familiar story that fossil fuels are formed from the carbon in compressed plant and animal matter, said Früh-Green. 'We haven't done the calculations to suggest whether hydrocarbons originate more from mantle-derived rocks than from a biological source like organic-rich sediments or methane hydrates. It will be hard to honestly quantify,' she said.

THE BIG CHILL

2008-02-05T15:03:00.000-07:00

http://www.allheadlinenews.com/articles/7009739004

Jupiter Kalambakal - AHN News Writer

Moscow, Russia (AHN) - Russians are bracing for temperatures of as low as minus 55 degrees Celsius (minus 67 degrees Fahrenheit) in Siberia as Russia's emergencies ministry warns on Wednesday of its impending dangers in the coming weeks.

Government agencies were placed on high alert, reports AFP. The ministry ordered local administration officials to prepare for the extreme chill expected to last until Jan. 21.

The ministry warned that the unusually cold weather could kill, cause frost-bite, conk heaters and cut electricity to homes, disrupt transport, increase the rate of car accidents and even destroy buildings across Siberia.

The freezing temperatures have already caused overloading of electricity grids and power interruptions in the regions of Irkutsk and Tomsk because of overused heaters in homes. Two people have already died and more than 30 others hospitalized with forst-bite in Irkutsk, reports AFP citing state media.

Bloomberg reports that worst hit will be the Siberian region of Evenkiya, while neighbor Georgia, whose climate is subtropical, already plunged to as low as minus 35 degrees Celsius. Lake Paliastomi in the western Georgia froze for the first time in 50 years, reports Rustavi-2 television.

Average temperatures in large Siberian cities in January usually range between minus 15 degrees Celsius and minus 39 degrees Celsius, according to data from weatherbase.com. Schools have been closed down in at least four regions because of the cold.

Turning physics on its ear

2008-02-05T15:00:00.000-07:00

Has college dropout done the impossible and created a perpetual motion machine?

February 04, 2008
Tyler Hamilton
Energy Reporter

Thane Heins is nervous and hopeful. It's Jan. 24, a Thursday afternoon, and in four days the Ottawa-area native will travel to Boston where he'll demonstrate an invention that appears – though he doesn't dare say it – to operate as a perpetual motion machine.

The audience, esteemed Massachusetts Institute of Technology professor Markus Zahn, could either deflate Heins' heretical claims or add momentum to a 20-year obsession that has broken up his marriage and lost him custody of his two young daughters.

Zahn is a leading expert on electromagnetic and electronic systems. In a rare move for any reputable academic, he has agreed to give Heins' creation an open-minded look rather than greet it with outright dismissal.

It's a pivotal moment. The invention, at its very least, could moderately improve the efficiency of induction motors, used in everything from electric cars to ceiling fans. At best it means a way of tapping the mysterious powers of electromagnetic fields to produce more work out of less effort, seemingly creating electricity from nothing.

Such an unbelievable invention would challenge the laws of physics, a no-no in the rigid world of serious science. Imagine a battery system in an all-electric car that can be recharged almost exclusively by braking and accelerating, or what Heins calls "regenerative acceleration."

No charging from the grid. No assistance from gasoline. No cost of fuelling up. No way, say the skeptics.

"It sounds too good to be true," concedes Heins, who formed a company in 2005 called Potential Difference Inc. to develop and market his invention. "We get dismissed pretty quickly sometimes."

It's for this reason the 46-year-old inventor has learned to walk on thin ice when dealing with academics and engineers, who he must win over to be taken seriously. Credibility, after all, can't be invented. It must be earned. "I have to be humble. If you say the wrong thing at the wrong time, you can lose support."

The creation in question is a new kind of generator called the Perepiteia (read related story "Holy crap, this is really scary"), which in Greek theatre means an action that has the opposite effect of what its doer intended. Heins torques up the definition to mean "a sudden reversal of fortune that's a windfall for humanity."

Deep down, Heins has high hopes. But he also realizes that merely using those controversial words – "perpetual motion" – usually brands a person as batty. In 2006, an Irish company called Steorn placed an advertisement in The Economist calling on all the world's scientists to validate its magnet-based "free energy" technology.

Steorn was met with intense skepticism and accused of being a scam or hoax. Seventeen months later the company has failed, despite worldwide attention, to prove anything under scrutiny. Well-educated people, from Leonardo da Vinci to Harvard-trained engineer Bruce De Palma (older brother of film director Brian De Palma), have made similar claims of perpetual motion only to be slammed down by the mainstream scientific community.

Heins has an even greater uphill battle. He isn't an engineer. He doesn't have a graduate degrees in physics. He never even finished his electronics program at Heritage College in Gatineau, Quebec. "I have mild dyslexia and don't do well in math, so I didn't do very well in school," he says.

What he does have is a chef's diploma, and spent time as chef at the Canadian Museum of Civilization before launching his own restaurant in Renfrew called the Old Town Hall Tea Room. He has also had political ambitions. In 1999 he ran unsuccessfully as a candidate for the Green Party of Ontario, deciding a year later to run as an independent in the federal election.

Today, Heins is focused on showing his invention to anybody willing to see it, in hopes that somebody smarter than him will give it credibility. His long-time friend, Kim Cunningham, manager of communications and government relations at the Ottawa Centre for Research and Innovation (OCRI) is working part-time with Potential Difference to help get the message out.

Together, they have demonstrated the Perepiteia to a number of labs and universities across North America, including the University of Virginia, Michigan State University, the University of Toronto and Queens University.

"It's generally always the same reaction," says Heins. "There's a bit of a scramble on the part of the observer to put what they're seeing into some sort of context with what they know. They can't explain it. They don't know what it is."

He'd be happy if somebody did, even if the news was bad. His wife has kicked him out. He doesn't earn an income. He can't pay child support. The certainty would be welcome. "I've tried to quit many times, and thought if I could just be a normal guy I would have a normal life ... But I had this idea and I believe it works."

Others want to believe – or at least help out. Cunningham, whose brother is general manager at Angus Glen Golf Club, introduced Heins to the club's president, Kevin Thistle. For two years Thistle has acted as angel investor, providing start-up capital needed to incorporate Potential Difference, file patents and continue research.

Cunningham's boss, OCRI president Jeffrey Dale, helped open doors at the University of Ottawa and make introductions to its dean of engineering. As a result, Heins teamed up last fall with Riadh Habash, a professor at the university's school of information technology and engineering.

"Dr. Habash has essentially rolled out the red carpet," says Heins, explaining that he now has access to a university lab and all the equipment he needs to test and simulate his generator.

In an interview with the Toronto Star, Habash was cautious but matter-of-fact with what he's seen so far. "It accelerates, but when it comes to an explanation, there is no backing theory for it. That's why we're consulting MIT. But at this time we can't support any claim."

In the meantime, Heins has been on a letter-writing campaign to raise money for his mission. He's written former U.S. vice-president Al Gore, Virgin Group founder and billionaire Richard Branson and John Doerr at venture capital powerhouse Kleiner Perkins Caufield & Byers. He's also tried to contact entrepreneur Elon Musk, chairman of electric car upstart Tesla Motors, and the "ReCharge IT" project run by Google's philanthropic arm.

So far no bites, though there have been nibbles. Heins has had discussions with a well-known investor in Oregon, known to many as the "godfather of start-ups," who is apparently flirting with the idea of investing in Potential Difference. "We got the impression ... he's not necessarily interested in making a tonne of money, he just wants to see us succeed."

Just before the big day at MIT, the Star spoke with professor Markus Zahn about what he expected to observe.

"It's hard for me to give an opinion," said Zahn, who admitted he was excited to see the demonstration. "I don't believe it will violate the laws of physics. You're not going to get more energy out than you put in."

He said it's easy for people to set up their tests wrong and misinterpret what they see. "You've got to look closely."

It's now Jan. 28 – D Day. Heins has modified his test so the effects observed are difficult to deny. He holds a permanent magnet a few centimetres away from the driveshaft of an electric motor, and the magnetic field it creates causes the motor to accelerate. It went well.

Contacted by phone a few hours after the test, Zahn is genuinely stumped – and surprised. He said the magnet shouldn't cause acceleration. "It's an unusual phenomena I wouldn't have predicted in advance. But I saw it. It's real. Now I'm just trying to figure it out."

There's no talk of perpetual motion. No whisper of broken scientific laws or free energy. Zahn would never go there – at least not yet. But he does see the potential for making electric motors more efficient, and this itself is no small feat.

"To my mind this is unexpected and new, and it's worth exploring all the possible advantages once you're convinced it's a real effect," he added. "There are an infinite number of induction machines in people's homes and everywhere around the world. If you could make them more efficient, cumulatively, it could make a big difference."

Driving home – he can't afford to fly – Heins is exhausted but encouraged. He says Zahn will, and must, evaluate what he saw on his own terms and time. What's preventing the engineer from grasping it right away, he says, is his education, his scientific training.

Step by step, Heins is making progress, but where it will all lead remains uncertain.

New All Time High Oil Production

2008-01-31T21:53:00.001-07:00

Quite a ramp up in worldwide production over the last few months, much to everyone's surprise. 85.26mmboe/d according to EIA.

Article is here

Former CEO of Talisman Energy: Peak oil is 'here or hereabouts'

2008-01-31T21:50:00.000-07:00

From ABC Radio, via Energy Bulletin

MARK COLVIN: Meanwhile, 'peak oil' - the idea that the world's supplies of oil have either peaked or will soon start declining, has suddenly gained new respectability. It's been derided by the big oil companies for years, but at the end of last week came a turnabout. The Chief Executive of the oil giant Royal Dutch Shell, Jeroen van der Veer put out a paper on Friday forecasting the end of easy oil. Mr Van der Veer said the result could be a worldwide scramble to mitigate climate change.

Dr Jim Buckee has just retired as President and CEO of Talisman Energy, a major independent Canadian oil company with a market capitalisation of $25-billion. On the phone from Perth, Dr Buckee told me that 'peak oil' was now either here, or very close.

JIM BUCKEE: It is the underlying decline of the world's major fields that is the dominant driving factor here. If you think that at the moment the world is consuming 30-plus billion barrels a year of oil and is finding seven or eight billion barrels a year. And this state of affairs has been going on now for 20 or more years. It's obviously unsustainable and the world is increasingly drawing on the bigger older fields. You couple that notion with the irreversibility of decline and you've got a very alarming picture.

MARK COLVIN: Now this was a very unfashionable notion among the oil companies until pretty recently. But just last week the Chief Executive of Shell came out and said that easy oil was coming to an end. Did that surprise you?

JIM BUCKEE: I think it was only a matter of time before one of them had to say that and the pronouncements of the majors are inscrutable at best and I believe they often have a very political overturn.

MARK COLVIN: What are the politics there?

JIM BUCKEE: I think it's pretty alarmist if one or more of the worlds largest oil companies say, listen guys, supplies of oil are gonna get tight. The ramifications are immense.

Always the line of the major oil companies, Exxon, Shell, BP has been, 'there's plenty of oil, you know technology will overcome shortages; we'll find it'.

They changed a little bit to, 'there's plenty of oil, but access is difficult' and then this is a change again saying, 'well actually, it looks like it's finite and you know we're looking over the hill'.

MARK COLVIN: Global warming has brought a worldwide debate as to what to do about it, centring around, whether there should be a carbon tax or cap in trade. Is this peak oil going to just force everybody's hand anyway because the oil will run out?

JIM BUCKEE: Oil running out is sort of wrong terminology. It will continue to produce in large quantities, but increasingly less quantities at higher prices. So we'll still be using a lot of oil in 20 or 30 years time, but it'll be rationed by price to the most essential uses of oil and that's generally transportation.

MARK COLVIN: So we won't be able to make plastic bottles out of it to put water in?

JIM BUCKEE: Well…quite right.

And in passing of course we pay more for water than we do for petrol at the moment, which is insane. But that sort of thing will rectify.

So another point here is that the amount of carbon generated by hydrocarbons will be nowhere near that envisaged in e.g. the Stern report.

MARK COLVIN: How high can oil go now?

JIM BUCKEE: I don't think that really we've seen any rationing of consumption by price. We did see it in '79, '80 and that was largely because of the sudden quadrupling of the price of oil. Now we've seen a relatively gentle approach and people have accommodated it.

So I would say you need to see oil in the $150, $200 a barrel range before it would have any particular impact on demand.

MARK COLVIN: When do you think we'll reach that?

JIM BUCKEE: The situation is always very tight in the fourth quarter because Northern Hemisphere demand increases; it's the sort of highest quarter for demands. So I'd say we'll see stress again in the third and fourth quarter of ‘08.

MARK COLVIN: Do you think it'll get to $150, 200 by then?

JIM BUCKEE: I think that's the number that's required to ration demand and I'd say so yes.

MARK COLVIN: That's really racing up on us.

JIM BUCKEE: Well I think the whole situation it's here. It's snuck up on us without any people really paying attention to it. And it's very important. I mean things like layouts of cities and future plans all have to take this sort of thing into account.

I mean if you look at a city like Los Angeles, if the supply of gasoline became tight, it'd be a big problem; how to run Los Angeles and the same problem, smaller in lots of other places. Where you have work at point A, residence at point B, shops at point C and they're all miles apart.

MARK COLVIN: You'd have to include most of Australia's big cities in that wouldn't you?

JIM BUCKEE: Yes I think so. But I mean Perth isn't quite there yet I don't think but yes in general it ignores the distances, yes.

MARK COLVIN: Dr Jim Buckee, former president and CEO of the Big Canadian independent oil company Talisman Energy, on the phone from Perth.

Russian scientist says Earth could soon face new Ice Age

2008-01-31T21:40:00.000-07:00

14:31 22/ 01/ 2008

ST. PETERSBURG, January 22 (RIA Novosti) - Temperatures on Earth have stabilized in the past decade, and the planet should brace itself for a new Ice Age rather than global warming, a Russian scientist said in an interview with RIA Novosti Tuesday.

"Russian and foreign research data confirm that global temperatures in 2007 were practically similar to those in 2006, and, in general, identical to 1998-2006 temperatures, which, basically, means that the Earth passed the peak of global warming in 1998-2005," said Khabibullo Abdusamatov, head of a space research lab at the Pulkovo observatory in St. Petersburg.

According to the scientist, the concentration of carbon dioxide in the Earth's atmosphere has risen more than 4% in the past decade, but global warming has practically stopped. It confirms the theory of "solar" impact on changes in the Earth's climate, because the amount of solar energy reaching the planet has drastically decreased during the same period, the scientist said.

Had global temperatures directly responded to concentrations of "greenhouse" gases in the atmosphere, they would have risen by at least 0.1 Celsius in the past ten years, however, it never happened, he said.

"A year ago, many meteorologists predicted that higher levels of carbon dioxide in the atmosphere would make the year 2007 the hottest in the last decade, but, fortunately, these predictions did not become reality," Abdusamatov said.

He also said that in 2008, global temperatures would drop slightly, rather than rise, due to unprecedentedly low solar radiation in the past 30 years, and would continue decreasing even if industrial emissions of carbon dioxide reach record levels.

By 2041, solar activity will reach its minimum according to a 200-year cycle, and a deep cooling period will hit the Earth approximately in 2055-2060. It will last for about 45-65 years, the scientist added.

"By the mid-21st century the planet will face another Little Ice Age, similar to the Maunder Minimum, because the amount of solar radiation hitting the Earth has been constantly decreasing since the 1990s and will reach its minimum approximately in 2041," he said.

The Maunder Minimum occurred between 1645 and 1715, when only about 50 spots appeared on the Sun, as opposed to the typical 40,000-50,000 spots.

It coincided with the middle and coldest part of the so called Little Ice Age, during which Europe and North America were subjected to bitterly cold winters.

"However, the thermal inertia of the world's oceans and seas will delay a 'deep cooling' of the planet, and the new Ice Age will begin sometime during 2055-2060, probably lasting for several decades," Abdusamatov said.

Therefore, the Earth must brace itself for a growing ice cap, rather than rising waters in global oceans caused by ice melting.

Mankind will face serious economic, social, and demographic consequences of the coming Ice Age because it will directly affect more than 80% of the earth's population, the scientist concluded.

Bizarre DNA Property

2008-01-31T21:39:00.000-07:00

Genetic 'telepathy'? A bizarre new property of DNA

Scientists are reporting evidence that intact, double-stranded DNA has the “amazing” ability to recognize similarities in other DNA strands from a distance. And then like friends with similar interests, the bits of genetic material hangout or congregate together. The recognition — of similar sequences in DNA’s chemical subunits — occurs in a way once regarded as impossible, the researchers suggest in a study scheduled for the Jan. 31 issue of ACS’ Journal of Physical Chemistry B.

Full story here

The Coldest Winter for Many Years

2008-01-24T23:32:00.000-07:00

So much for global warming! Amazing we are not hearing about this in the mainstream media. Click here for full story. Excerpt below:

In the beginning of December it came to my attention that the coming Winter might be colder than usual, during the previous month the Arctic Sea Ice area grew by almost 4 million Km2, the fastest build up ever recorded. Although still 1 million Km2 below the reference average, it meant a significant temperature drop in the Arctic. During the following days temperatures in Europe drop enough to set new energy consumption records in France and Spain. December of 2007 turned out to be the coldest month since 2000.

This colder than usual winter had already been forecast by some meteorologic agencies, but in the beginning of January an extremely acute forecast by the polemic meteorologist Piers Corbyn warned of abnormally cold temperatures for central Europe. As the month draws to a close, it is clear that such forecast was correct for everywhere in the Northern Hemisphere but central Europe.

During the first week of January temperatures as low as -15ºC were felt in Greece and Bulgaria. Some days later bitter cold and snow storms reached Central Asia with Turkmenistan, Uzbekistan, Iran, Afghanistan and Pakistan being affected first. At latitudes under 40º, some places of Iran recorded temperatures of -25ºC. This would result in a series of Natural Gas supply cuts that would cascade as far as Greece, as reported earlier by Heading Out.

On the 11h of January it snowed in centre Baghdad, something that probably never happened during the XX century; during the same day it would snow in the north of Saudi Arabia. This abnormal weather has perdured across Central Asia; in Afghanistan more than 300 people have already died by cold or in consequence of avalanches.

Chinese prepare for US car market invasion

2008-01-24T23:23:00.000-07:00

Remember how the Japanese imports really hammered the US auto industry.

That was probably a mild preview of what is coming.

Bright and enterprising individuals wanting to participate in auto marketing should be trying to line up distributorships. Imagine if you'd have gotten the Toyota or Honda rights to a big geographic area in 1970......

Chinese prepare for US car market invasion

Jan 15, 2008

DETROIT, Michigan (AFP) — Chinese automakers are actively preparing for entry into the US car market, the biggest in the world, in a move that has not gone unnoticed by American and Japanese rivals.

With a record presence at the North American International Auto Show in Detroit, Michigan this year, China has made a splash with four manufacturers -- Geely, BYD, Changfeng, Li Shi Guangming -- and a distributor, Chamco.

Admittedly, the Chinese debutantes have only modest visibility, with three of them sharing space for their prototypes and equipment in the basement, while two others are located in the entry area of the exhibit hall.

Nevertheless, news conferences by Changfeng, BYD and Geely have drawn packed crowds, even as no straight answer has been given to burning queries: when will Chinese cars debut in the United States? which kinds? how many?

Chamco aims to become by the end of 2008 the premier importer of made-in-China cars to the United States, Mexico and Canada.

A spokesman for Geely, the largest private manufacturer of Chinese cars, said the nuts and bolts of its US market entry are under wraps because "at this stage it's very strategic, so we don't go into these details."

Changfeng aims for its splash between now and 2009.

"It's important for us to develop quickly, but in the US, we take our time," a Changfeng spokesman said.

Henry Li, a BYD company official, said its aim is to first "learn from the US manufacturers ... try to get some market feedback ... talk to a lot of people, dealers, analysts, distributors."

When it comes to vehicles, the Chinese are focusing on clean technology, despite detractors who criticize economy models on the basis that they don't fit in with American tastes for top-of-the-line, big and fast luxury cars.

Changfeng is presenting fuel efficient 4x4s, BYD boasts clean technology with "classic" hybrids and hybrids with a 100 percent electric option, while Chamco dreams of importing 4x4s and pickup trucks.

The Chinese carmakers' ambitions are met by US market stalwarts with a touch of condescension, mingled with admiration.

Rick Wagoner, the CEO of General Motors, brushed aside the possibility of any imminent Chinese arrival on the US market, estimating that serious Chinese competition would not come until the next five to 10 years because the Chinese market is currently too fragmented, with more than 300 manufacturers.

"If they get 100 Chinese domestically owned manufacturers exporting, that is not going to work for anybody," Wagoner said.

In addition, the Chinese must be sure to fully comply with US safety and security standards, according to Wagoner, a point which Chamco insists it is in the process of assuring by obtaining certifications on its imports.

"The Chinese are very good at learning from the past so they will know that when the Japanese came in, it took a long time to repair from the (problems with) the initial entry," Wagoner said.

John Mendel, vice president of Honda North America, said a degree of mimicry is likely to be seen in the early Chinese models.

"They're very good in developing copies," Mendel said. "I think it's a quick way to get credibility, as they know the new entrants always suffer from a notoriety deficit."

Another important barrier to market entry is distribution networks, a point on which these outsider manufacturer have remained tight-lipped.

"Distribution is the key," said Tan Mingan, who heads an association for the promotion of Chinese businesses in Detroit.

"There are a multiplicity of Chinese automakers who are willing to compete in the US. The quality and security standards is just a step. But having a distribution partner, this is a crucial point in the strategy, and how you can succeed or not to enter the market."

Soros Predicts the End of US Dollar Dominance

2008-01-24T23:20:00.000-07:00

"George Soros, the financier who made a fortune betting against the pound, went so far Wednesday as to say that the downturn would put an end to the long status of the dollar as the world's default currency."

Supersonic Cruise Missles

2008-01-24T23:07:00.000-07:00

Supersonic cruise missile technology has possibly made the US Navy's capital ships obsolete. A report on the latest Russian version is below:

Russian Navy uses supersonic cruise missile to hit test target

MOSCOW, January 22 (RIA Novosti) - The flagship of Russia's Black Sea Fleet has effectively engaged a designated target with a supersonic cruise missile as part of a Navy exercise in the northern Atlantic, a Navy spokesman said Tuesday.

The Moskva guided-missile cruiser launched the P-500 Bazalt (NATO reporting name SS-N-12 Sandbox), a liquid-propellant supersonic cruise missile, last used in 2003.

The P-500 Bazalt, which entered service in 1973, has a 550 km range and a payload of 1,000 kg, enabling it to carry a 350 kT nuclear or a 950kg semi-armor-piercing high explosive warhead.

A Joint Naval Task Force, comprising the Admiral Kuznetsov aircraft carrier, the Udaloy-Class destroyers Admiral Levchenko and Admiral Chabanenko, as well as auxiliary vessels, is currently on a two-month tour of duty in the Mediterranean Sea and the North Atlantic.

"The missile system used for launches has no match in performance terms," Capt. 1st Rank Igor Dygalo, an aide to the Navy commander, said Monday.

Russian warships will also practice interoperability with naval aviation and strategic bombers for several days.

The operation is the first large-scale Russian Navy exercise in the Atlantic for 15 years. All the warships and aircraft involved are carrying full combat ammunition loads, the Navy said.

Vice-Admiral Nikolai Maksimov, commander of Russia's Northern Fleet who is heading the task force, earlier said that the current tour of duty to the Mediterranean, which started on December 5, was aimed at ensuring Russia's naval presence "in key operational areas of the world's oceans" and establishing conditions for secure Russian maritime navigation.

Dwarves zipped in suitcases steal from Swedes

2008-01-24T21:33:00.000-07:00

From the "shit you couldn't make up" file:

Dwarves zipped in suitcases steal from Swedes

By Lucy Cockcroft
Last Updated: 2:07pm GMT 24/01/2008

Criminal gangs are using dwarves in a ruse to steal from the luggage holds of long-distance coaches, by hiding them inside suitcases, according to police.

The bizarre crime is on the rise in Sweden and officers say thieves have got away with thousands of pounds in cash, jewellery and other valuables in recent months.

Gangs are said to sneak the dwarves into the luggage hold, hidden inside baggage.

Then, once the journey has begun, the stowaways are free to rifle through the bags of other passengers without fear of being apprehended.

Before the coach arrives at its destination the dwarves take their loot back into their suitcase, zip themselves inside and wait to be collected by their partners in crime.

Swebus, which takes thousands of British tourists on holiday across Sweden, is among the coach firms targeted.

A spokesman said: “We have had reports about several thefts by dwarves on the stretch between Vasteras and Stockholm.

“We’re thinking of installing video cameras.”

Police in Stockholm have warned the scam is becoming a problem.

A spokesman said: “We are looking at our records to identify criminals of limited stature.”

Criminal dwarves have often been featured in books, film and folklore.

The Artemis Fowl book series by Irish fiction author Eoin Colfer has a character called Mulch Diggums, a kleptomaniac dwarf.

And in the Austin Powers spoof spy movies Dr Evil’s equally villainous side-kick is a dwarf named Mini-Me.

Updates from China

2008-01-23T12:40:00.001-07:00

Energy crisis is hitting China badly.

Whole story is here, extract below:

Record Power Shortage Hits China
BEIJING/HONG KONG (Reuters) - China is facing its most severe power shortage ever as some plants struggle to secure increasingly costly coal and others shut down capacity rather than rack up losses by selling electricity at low rates.
The rebellion by power plant managers unwilling to generate at a loss is likely to worry policymakers still haunted by the nationwide diesel supply crisis last autumn, when refiners under similar pressure quietly curbed output and forced the government to make an unplanned and unwanted rise in fuel prices.

and this story too is interesting; extract below:

In a snow-covered China, entire regions are without electricity and gas

The energy shortfall has reached 70 gigawatts, equal to the production of all of Great Britain. There is a shortage of coal because of the closure of many non-compliant mines and the imposition of price caps. The snow is blocking the roads and preventing fuel delivery. The cold is also impacting water and gas suppliers.

Drought could force nuke-plant shutdowns

2008-01-23T12:36:00.001-07:00

I'd never heard of water shortages affecting the ability to run nuclear plants. Wow.

Full article here, extract below:

LAKE NORMAN, N.C. - Nuclear reactors across the Southeast could be forced to throttle back or temporarily shut down later this year because drought is drying up the rivers and lakes that supply power plants with the awesome amounts of cooling water they need to operate.
Utility officials say such shutdowns probably wouldn't result in blackouts. But they could lead to shockingly higher electric bills for millions of Southerners, because the region's utilities could be forced to buy expensive replacement power from other energy companies.

Already, there has been one brief, drought-related shutdown, at a reactor in Alabama over the summer.

"Water is the nuclear industry's Achilles' heel," said Jim Warren, executive director of N.C. Waste Awareness and Reduction Network, an environmental group critical of nuclear power. "You need a lot of water to operate nuclear plants." He added: "This is becoming a crisis."

Development Cost Issues

2008-01-23T12:29:00.001-07:00

Worldwide there is extreme cost inflation to undertake energy projects. Increased costs in Alberta were not entirely due to the unprecidented activity levels.

A good example of capital cost inflation is quoted below:

Total Says "Huge Cost Issues" On Iran LNG Project

Dubai (Reuters) - France's Total said Tuesday it is facing "huge cost issues" on its Iran liquefied natural gas project and is reviewing plans with the Iranian government.

"We are restudying the project. We are facing huge cost issues," Philippe Boisseau, president of gas and power at Total, told Reuters. "We are reviewing the project with the Iranian government and it could take some time."

He declined to give an estimate on the latest cost of the project or say when Total might make an investment decision.

Note an additional point of interest is that the LNG that is projected to crush the domestic North American gas markets will be high cost developments.

Oilfield Equipment Moving South

2008-01-23T12:25:00.000-07:00

Post Royalty Review, capital, capital resources and jobs are moving out of Alberta as predicted by industry observers. A good example came out today:

Western Expands In U.S.

Western Energy Services Corp. has completed a purchase of nitrogen pumping and transport equipment that will increase the size of its U.S. based nitrogen fleet by 50%.

The purchase will be debt financed using facilities made available to the company from its U.S. based commercial bank.

"The current distressed market for oilfield services in Canada is a significant opportunity to acquire quality equipment at a fraction of what we would have paid to have it built," said Jim McQuarrie, president & CEO. "This equipment will be immediately deployed to our new operations centre in Ashdown, Arkansas."

Bond Insurer Going Down

2008-01-22T22:26:00.000-07:00

See chart:
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=AMBAC&time=&freq=

and some perspective from this video

and article below. This is bad stuff.

Ambac Looks at ‘Alternatives’ After $3.26 Billion Loss

By MICHAEL J. de la MERCED
Published: January 23, 2008

The Ambac Financial Group, one of the largest companies that insures against bond losses, said Tuesday that it was exploring “strategic alternatives” as it announced a $3.26 billion loss for its fourth quarter.

Ambac’s shares surged more than 28 percent on the disclosure that it was in talks with “potential parties.” In Wall Street’s parlance, strategic alternatives mean, among other things, a potential sale or outside investment. Either would help ease concerns that Ambac lacks enough capital to pay claims.

Driving the company’s loss, which amounts to $31.85 a share, was a $5.21 billion write-down on its portfolio of credit derivatives. About $1.11 billion was tied to financial instruments backed by subprime mortgages.

The news reflects the continued woes of Ambac and others in the bond insurance industry. On Friday, after abandoning a plan to raise $1 billion in new capital, the company lost its most valuable asset: a AAA credit rating that allowed it to guarantee lower-rated debt.

That move by Fitch Ratings — and the threat of further downgrades by the other two major ratings agencies, Standard & Poor’s and Moody’s Investors Service — capped a week in which Ambac lost nearly three-fourths of its market value. Last Wednesday, Ambac ousted its chief executive and said it would cut its stock dividend by 67 percent.

“We view the current perceptions of Ambac’s business by both the market and ratings agencies as underestimating Ambac’s strengths and future potential,” Michael A. Callen, the company’s new chairman and interim chief executive, said in a statement. “As the market normalizes and perceptions correspond more closely to reality, the market will more accurately assess our assets and strengths.”

A sale or investment offers no guarantee of salvation, however. Last month, MBIA, Ambac’s biggest rival, sold a $1 billion stake to the private equity firm Warburg Pincus. Even after that deal was announced, the company’s shares slid another 73 percent. (MBIA shares rose 47 percent on Tuesday, largely because of a Barron’s article arguing that the company is in better financial health than Ambac.)

Until a few months ago, bond insurance was a little-known industry that guaranteed staid municipal bonds from default. The service allowed state and local governments to issue bonds to raise money in the capital markets at lower cost.

But companies like Ambac, moving far beyond their original mission, also insured hundreds of billions of dollars in debt tied to risky subprime home loans. As the market for those loans collapsed, the companies found themselves facing steep losses.

The pain suffered by Ambac and other insurers has spread far beyond the industry. State and local government bonds insured by the company have already dropped in value. Those governments may also find it more expensive to issue new debt.

Financial giants like Merrill Lynch and Canadian Imperial Bank of Commerce have also felt the ripples from Ambac’s troubles. Subprime-backed bonds issued by those firms and insured by Ambac have dropped in value, raising the prospect of even steeper losses for those banks.

Burning biofuels may be worse than coal and oil, say experts

2008-01-17T21:11:00.000-07:00

· Scientists point to cost in biodiversity and farmland
· Razing tropical forests 'will increase carbon'

Alok Jha, science correspondent

This article appeared in the Guardian on Friday January 04 2008 on p12 of the UK news section. It was last updated at 09:53 on January 04 2008.

Using biofuels made from corn, sugar cane and soy could have a greater environmental impact than burning fossil fuels, according to experts. Although the fuels themselves emit fewer greenhouse gases, they all have higher costs in terms of biodiversity loss and destruction of farmland.

The problems of climate change and the rising cost of oil have led to a race to develop environmentally-friendly biofuels, such as palm oil or ethanol derived from corn and sugar cane. The EU has proposed that 10% of all fuel used in transport should come from biofuels by 2020 and the emerging global market is expected to be worth billions of dollars a year.

But the new fuels have attracted controversy. "Regardless of how effective sugar cane is for producing ethanol, its benefits quickly diminish if carbon-rich tropical forests are being razed to make the sugar cane fields, thereby causing vast greenhouse-gas emission increases," Jörn Scharlemann and William Laurance, of the Smithsonian Tropical Research Institute in Panama, write in Science today.

"Such comparisons become even more lopsided if the full environmental benefits of tropical forests - for example, for biodiversity conservation, hydrological functioning, and soil protection - are included."

Efforts to work out which crops are most environmentally friendly have, until now, focused only on the amount of greenhouse gases a fuel emits when it is burned. Scharlemann and Laurance highlighted a more comprehensive method, developed by Rainer Zah of the Empa Research Institute in Switzerland, that can take total environmental impacts - such as loss of forests and farmland and effects on biodiversity - into account.

In a study of 26 biofuels the Swiss method showed that 21 fuels reduced greenhouse-gas emissions by more than 30% compared with gasoline when burned. But almost half of the biofuels, a total of 12, had greater total environmental impacts than fossil fuels. These included economically-significant fuels such as US corn ethanol, Brazilian sugar cane ethanol and soy diesel, and Malaysian palm-oil diesel. Biofuels that fared best were those produced from waste products such as recycled cooking oil, as well as ethanol from grass or wood.

Scharlemann and Laurance also pointed to "perverse" government initiatives that had resulted in unintended environmental impacts. In the US, for example, farmers have been offered incentives to shift from growing soy to growing corn for biofuels. "This is helping to drive up global soy prices, which in turn amplifies economic incentives to destroy Amazonian forests and Brazilian tropical savannas for soy production."

They added: "The findings highlight the enormous differences in costs and benefits among different biofuels. There is a clear need to consider more than just energy and greenhouse gas emissions when evaluating different biofuels and to pursue new biofuel crops and technologies."

Andy Tait, campaign manager at Greenpeace, said: "We're already bought into mandatory targets for the use of biofuels with very little thought of what the environmental impacts will be. This study further confirms that there are serious risks associated with first generation biofuels, particularly from corn, soya and palm oil."

He said that the biofuel technology had been oversold by industry and politicians. "It's clear that what government and industry are trying to do is find a neat, drop-in solution that allows people to continue business as usual.

"If you're looking at the emissions from the transport sector, the first thing you need to look at is fuel efficiency and massively increasing it. That needs to come before you even get to the point of discussing which biofuels might be good or bad."

Alberta Now Has Net Outflow of People to Other Provinces

2008-01-11T23:34:00.000-07:00

The impact of bad decisions in Alberta, including the royalty review is starting to show:

"the main engine of Alberta's demographic growth—interprovincial migration—has lost some of its importance. Alberta, which has led the provinces in population growth for the last few years, has started to lose more people to other regions than it has received.

Over the third quarter, Alberta recorded a net interprovincial migration outflow estimated at 3,300 people. The last time the province recorded a net outflow to other jurisdictions occurred in the fourth quarter of 1994."

More at http://www.statcan.ca/Daily/English/071219/d071219b.htm

Super Soaker Inventor Aims to Cut Solar Costs in Half

2008-01-10T22:00:00.000-07:00

http://www.popularmechanics.com/science/earth/4243793.html

Solar energy technology is enjoying its day in the sun with the advent of innovations from flexible photovoltaic (PV) materials to thermal power plants that concentrate the sun’s heat to drive turbines. But even the best system converts only about 30 percent of received solar energy into electricity—making solar more expensive than burning coal or oil. That will change if Lonnie Johnson’s invention works. The Atlanta-based independent inventor of the Super Soaker squirt gun (a true technological milestone) says he can achieve a conversion efficiency rate that tops 60 percent with a new solid-state heat engine. It represents a breakthrough new way to turn heat into power.

Johnson, a nuclear engineer who holds more than 100 patents, calls his invention the Johnson Thermoelectric Energy Conversion System, or JTEC for short. This is not PV technology, in which semiconducting silicon converts light into electricity. And unlike a Stirling engine, in which pistons are powered by the expansion and compression of a contained gas, there are no moving parts in the JTEC. It’s sort of like a fuel cell: JTEC circulates hydrogen between two membrane-electrode assemblies (MEA). Unlike a fuel cell, however, JTEC is a closed system. No external hydrogen source. No oxygen input. No wastewater output. Other than a jolt of electricity that acts like the ignition spark in an internal-combustion engine, the only input is heat.

Here’s how it works: One MEA stack is coupled to a high- temperature heat source (such as solar heat concentrated by mirrors), and the other to a low-temperature heat sink (ambient air). The low-temperature stack acts as the compressor stage while the high-temperature stack functions as the power stage. Once the cycle is started by the electrical jolt, the resulting pressure differential produces voltage across each of the MEA stacks. The higher voltage at the high-temperature stack forces the low-temperature stack to pump hydrogen from low pressure to high pressure, maintaining the pressure differential. Meanwhile hydrogen passing through the high-temperature stack generates power.

“It’s like a conventional heat engine,” explains Paul Werbos, program director at the National Science Foundation, which has provided funding for JTEC. “It still uses temperature differences to create pressure gradients. Only instead of using those pressure gradients to move an axle or wheel, he’s using them to force ions through a membrane. It’s a totally new way of generating electricity from heat.”

The bigger the temperature differential, the higher the efficiency. With the help of Heshmat Aglan, a professor of mechanical engineering at Alabama’s Tuskegee University, Johnson hopes to have a low-temperature prototype (200-degree centigrade) completed within a year’s time. The pair is experimenting with high-temperature membranes made of a novel ceramic material of micron-scale thickness. Johnson envisions a first-generation system capable of handling temperatures up to 600 degrees. (Currently, solar concentration using parabolic mirrors tops 800 degrees centigrade.) Based on the theoretical Carnot thermodynamic cycle, at 600 degrees efficiency rates approach 60 percent, twice those of today’s solar Stirling engines.

This engine, Johnson says, can operate on tiny scales, or generate megawatts of power. If it proves feasible, drastically reducing the cost of solar power would only be a start. JTEC could potentially harvest waste heat from internal combustion engines and combustion turbines, perhaps even the human body. And no moving parts means no friction and fewer mechanical failures.

As an engineer, Johnson says he has always been interested in energy conversion. In fact, it was while working on an idea for an environmentally friendly heat pump (one that would not require Freon) that he came up with the Super Soaker, which earned him millions of dollars in royalties. That money allowed Johnson to quit NASA’s Jet Propulsion Lab (where he worked on the Galileo Mission, among other projects) and go independent. His toy profits have funded his research in advanced battery technology, specifically thin-film lithium-ion conductive membranes. And that work sparked the idea for JTEC. Besides, he jokes, “All inventors have to have an engine. It’s like a rite of passage.”

Micro and small nuclear reactors

2007-12-22T23:25:00.000-07:00

Very intereresting; full site is here and it leads with the text below:

More than 50 new small and medium size reactor designs were developed and are being considered by research groups around the world in 2006.

There are a number of small and medium nuclear reactors that are in funded development.

Toshiba has designs for a micro nuclear reactor that generates 200 kw for 40 years

The 200 kilowatt Toshiba designed reactor is engineered to be fail-safe and totally automatic and will not overheat. Unlike traditional nuclear reactors the new micro reactor uses no control rods to initiate the reaction. The new revolutionary technology uses reservoirs of liquid lithium-6, an isotope that is effective at absorbing neutrons. The Lithium-6 reservoirs are connected to a vertical tube that fits into the reactor core. The whole whole process is self sustaining and can last for up to 40 years, producing electricity for only 5 cents per kilowatt hour, about half the cost of grid energy. It has dimensions of 20 feet by 6 feet.

Toshiba expects to install the first reactor in Japan in 2008 and to begin marketing the new system in Europe and America in 2009.

Mammoth tusks show up meteorite shower

2007-12-13T12:39:00.000-07:00

Fossils could provide a new gold mine for micrometeorite hunters.

Rex Dalton

Bullet-like pieces of what is thought to be an ancient meteorite shower have been found embedded in mammoth tusks and bison bone.

The discovery of the 2–5 millimetre holes left by meteorites opens a window into a impact event thought to have happened over Alaska and Russia tens of thousands of years ago. And it could provide a whole new way to chart impacts from space.

Click above for the whole story

The $1mm Personal Jet

2007-12-12T23:47:00.000-07:00

Eclipse Concept Jet. Nice toy for sure.

http://www.youtube.com/watch?v=bxOOX8oMnfw

Map that named America is a puzzle for researchers

2007-12-12T23:07:00.000-07:00

Interesting puzzle.

By David Alexander Mon Dec 3, 12:19 PM ET

WASHINGTON (Reuters) - The only surviving copy of the 500-year-old map that first used the name America goes on permanent display this month at the Library of Congress, but even as it prepares for its debut, the 1507 Waldseemuller map remains a puzzle for researchers.

Why did the mapmaker name the territory America and then change his mind later? How was he able to draw South America so accurately? Why did he put a huge ocean west of America years before European explorers discovered the Pacific?

"That's the kind of conundrum, the question, that is still out there," said John Hebert, chief of the geography and map division of the Library of Congress.

The 12 sheets that make up the map, purchased from German Prince Johannes Waldburg-Wolfegg for $10 million in 2003, were mounted on Monday in a huge 6-foot by 9.5-foot (1.85 meter by 2.95 meter) display case machined from a single block of aluminum.

The case will be flooded with inert argon gas to prevent deterioration when it goes on public display December 13.

Researchers are hopeful that putting the rarely shown map on permanent display for the first time since it was discovered in the Waldburg-Wolfegg castle archives in 1901 may stimulate interest in finding out more about the documents used to produce it.

The map was created by the German monk Martin Waldseemuller. Thirteen years after Christopher Columbus first landed in the Western Hemisphere, the Duke of Lorraine brought Waldseemuller and a group of scholars together at a monastery in Saint-Die in France to create a new map of the world.

The result, published two years later, is stunningly accurate and surprisingly modern.

"The actual shape of South America is correct," said Hebert. "The width of South America at certain key points is correct within 70 miles of accuracy."

Given what Europeans are believed to have known about the world at the time, it should not have been possible for the mapmakers to produce it, he said.

The map gives a reasonably correct depiction of the west coast of South America. But according to history, Vasco Nunez de Balboa did not reach the Pacific by land until 1513, and Ferdinand Magellan did not round the southern tip of the continent until 1520.

"So this is a rather compelling map to say, 'How did they come to that conclusion,"' Hebert said.

The mapmakers say they based it on the 1,300-year-old works of the Egyptian geographer Ptolemy as well as letters Florentine navigator Amerigo Vespucci wrote describing his voyages to the new world. But Hebert said there must have been something more.

"From the writings of Vespucci you couldn't have prepared the map," Hebert said. "There had to be something cartographic with it."

MISGIVINGS ABOUT AMERICA

Waldseemuller made it clear he was naming the new land after Vespucci, describing how he came up with the name America based on the navigator's first name.

But he soon had misgivings about what he had done. An atlas Waldseemuller produced six years later shows only part of the east coast of the Americas, and refers to it as Terra Incognita -- unknown land.

"America has gone out of his lexicon," Hebert said. "(No) place in the atlas -- in the text or in the maps -- does the name America appear."

His 1516 mariner's map, on the same scale as the 1507 map, steps back even further, showing only parts of the new continents and reconnecting the north to Asia. South America is labeled Terra Nova -- New World -- and North America is labeled Terra de Cuba -- Land of Cuba.

"Essentially he's reconnecting North America to the Asian mainland, suggesting a continual world of land mass rather than separated by those bodies of water that separate us from Europe and Asia," Hebert said.

Why the rollback? No one knows.

In writings accompanying the 1516 map, Waldseemuller comes across as if he "has seen the better of his error and is now correcting it," Hebert said.

He speculated that power politics played a role. Spain and Portugal divided the globe between them in 1494, two years after Columbus, with territory to the east going to Portugal and land to the west to Spain.

That demarcation line is oddly absent from the 1507 Waldseemuller map, and flags marking territorial claims in South America suggest Portugal controls the region's southernmost land, even though it is in Spain's area of influence. On the later map, the southernmost flag is Spanish, Hebert said.

"It is possible one could say the 1507 map is influenced strongly by Portuguese sources and conceivably the 1516 map may be influenced more by Spanish sources," he said.

Although the map conceals many mysteries, one thing is clear: it represents a revolutionary shift in the way Europe viewed the world.

"This is ... essentially the beginning or first map of the modern age, and it's one that everything builds on from that point forward," Hebert said. "It becomes a keystone map."

Ethanol/Alternative Fuel FAQ

2007-12-12T22:49:00.000-07:00

Good resource on biofuels:

http://i-r-squared.blogspot.com/2007/08/ethanolalternative-fuel-faq.html