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	<title>Peak Oil News and Message Boards</title>
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	<link>http://peakoil.com</link>
	<description>Exploring Hydrocarbon Depletion</description>
	<lastBuildDate>Wed, 16 May 2012 12:11:33 +0000</lastBuildDate>
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		<title>US Leads Largest military exercises in Middle East in 10 years</title>
		<link>http://peakoil.com/publicpolicy/us-leads-largest-military-exercises-in-middle-east-in-10-years/</link>
		<comments>http://peakoil.com/publicpolicy/us-leads-largest-military-exercises-in-middle-east-in-10-years/#comments</comments>
		<pubDate>Wed, 16 May 2012 12:11:33 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Public Policy]]></category>

		<guid isPermaLink="false">http://peakoil.com/?p=76430</guid>
		<description><![CDATA[<img src="http://peakoil.com/catimages/policy.jpg" width="138" height="138" alt="" title="Public Policy" /><br/>The United States is leading what it described as the &#8220;largest military exercises in the Middle East in 10 years&#8221; in Jordan on Tuesday. Eager Lion 2012 “is the largest exercise held in the region in the past ten years,” Major General Ken Tovo, head of the US Special Operations Forces, told reporters in Amman. [...]]]></description>
			<content:encoded><![CDATA[<img src="http://peakoil.com/catimages/policy.jpg" width="138" height="138" alt="" title="Public Policy" /><br/><p>The United States is leading what it described as the &#8220;largest military exercises in the Middle East in 10 years&#8221; in Jordan on Tuesday.</p>
<p>Eager Lion 2012 “is the largest exercise held in the region in the past ten years,” Major General Ken Tovo, head of the US Special Operations Forces, told reporters in Amman.</p>
<p>“Yesterday we began to apply the skills that we have developed over the last weeks in an irregular warfare scenario … They will last for approximately the coming two weeks,” he added.</p>
<p>“The message that I want to send through this exercise is that we have developed the right partners throughout the region and across the world … insuring that we have the ability to … meet challenges that are coming to our nations,” Tovo said.</p>
<p>Over 12,000 soldiers are taking part in the war games, representing 19 countries, including Bahrain, Egypt, Iraq, Jordan, Saudi Arabia, Lebanon, Pakistan, Qatar, Britain, France, Italy, Spain and Australia.</p>
<p>Jordanian army operations and training chief Major General Awni Adwan said the military exercise “has been in the planning phase for the past three years.”</p>
<p>“No forces will be deployed north … the exercise is not connected to any real world event,” Adwan said when asked if the war games were related to the ongoing violence in Jordan’s northern neighbor Syria.</p>
<p>&#8220;This has nothing to do with Syria. We respect the sovereignty of Syria. There is no tension between the Syrians and us. Our objectives are clear,” Adwan said.</p>
<p>Israel – despite having extensive security agreements with Jordan – was not invited to participate in the exercises. Several Arab nations participating in the drill are still formally at war with the Jewish state.</p>
<p>Washington has granted Amman $2.4 billion in military and economic aid in the past five years, according to official figures</p>
<p><a href="http://www.israelnationalnews.com/News/News.aspx/155840#.T7OXNsVVkqJ">israelnationalnews</a></p>
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		<title>Iran Seen Losing 500000 Barrels of Oil Shipments Daily</title>
		<link>http://peakoil.com/production/iran-seen-losing-500000-barrels-of-oil-shipments-daily/</link>
		<comments>http://peakoil.com/production/iran-seen-losing-500000-barrels-of-oil-shipments-daily/#comments</comments>
		<pubDate>Wed, 16 May 2012 11:57:52 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Production]]></category>

		<guid isPermaLink="false">http://peakoil.com/?p=76428</guid>
		<description><![CDATA[<img src="http://peakoil.com/catimages/ctproduction.jpg" width="130" height="130" alt="" title="Production" /><br/>Iran’s oil exports have the potential to fall another 300,000 to 500,000 barrels a day or more when the European Union’s embargo takes effect in July, according to Barclays Plc. The decline will extend existing losses of 500,000 barrels a day, Barclays analysts led by Helima Croft in London said in an e-mailed report yesterday. [...]]]></description>
			<content:encoded><![CDATA[<img src="http://peakoil.com/catimages/ctproduction.jpg" width="130" height="130" alt="" title="Production" /><br/><p>Iran’s oil exports have the potential to fall another 300,000 to 500,000 barrels a day or more when the European Union’s embargo takes effect in July, according to Barclays Plc.</p>
<p>The decline will extend existing losses of 500,000 barrels a day, Barclays analysts led by Helima Croft in London said in an e-mailed report yesterday. Iranian exports may fall even further because of the unavailability of shipping insurance, she said.</p>
<p>“The risk from the lack of shipping reinsurance is that in a market in which fundamentals are set to tighten in coming months, any loss of Iranian output sustainably beyond 1.5 million barrels a day can provide a significant upside to prices,” the analysts said.</p>
<p>The EU banned the purchase, transportation, financing and insurance of Iranian oil. That affects 95 percent of the world’s tankers because they’re covered by the 13 members of the London- based International Group of P&amp;I Clubs.</p>
<p>The U.S. and EU are trying to pressure Iran over its nuclear program, which they say is aimed at producing atomic weapons. The government in Tehran, facing four sets of United Nations sanctions, says the project is for civilian purposes.</p>
<p><a href="http://www.bloomberg.com/news/2012-05-16/iran-seen-losing-500-000-barrels-of-oil-shipments-daily.html"> - Bloomberg</a></p>
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		<title>Free energy does not occur in nature</title>
		<link>http://peakoil.com/generalideas/free-energy-does-not-occur-in-nature/</link>
		<comments>http://peakoil.com/generalideas/free-energy-does-not-occur-in-nature/#comments</comments>
		<pubDate>Wed, 16 May 2012 11:56:18 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[General Ideas]]></category>

		<guid isPermaLink="false">http://peakoil.com/?p=76427</guid>
		<description><![CDATA[<img src="http://peakoil.com/catimages/oilfield.png" width="200" height="147" alt="" title="General Ideas" /><br/>[F]ree energy does not occur in nature&#8230; There&#8217;s one thing about that Orlov quote that has struck me over the years: how it applies more broadly than he originally meant it. It&#8217;s not just that what we generally think of as free energy doesn&#8217;t occur in nature, but also that free energy does occur in [...]]]></description>
			<content:encoded><![CDATA[<img src="http://peakoil.com/catimages/oilfield.png" width="200" height="147" alt="" title="General Ideas" /><br/><blockquote><p>[F]ree energy does not occur in nature&#8230;</p></blockquote>
<p>There&#8217;s one thing about that <a href="http://www.energybulletin.net/node/23259">Orlov quote</a> that has struck me over the years: how it applies more broadly than he originally meant it.</p>
<p>It&#8217;s not just that what we generally think of as free energy doesn&#8217;t occur in nature, but also that free energy <strong>does</strong> occur in the everyday lived environments of people in industrial nations, which we might thus say are unnatural. (To apply the name of this blog: if nature implies a lack of free energy, then the presence free energy implies a lack of nature.)</p>
<p>So what are instances of free energy that we experience in our lives, and why do they matter? They matter for two reasons: a) they&#8217;re the easiest places to save energy (and money) and b) they&#8217;re likely to go away in the coming decades. Before we get to some instances of the former, a couple of clarifications:</p>
<p><strong>What does &#8220;free&#8221; mean in this context?</strong> It means someone pays for the energy in question, just not a member of the public who can receive that energy at no direct cost.</p>
<p><strong>And what forms free energy are of interest?</strong> Obviously the sun&#8217;s energy isn&#8217;t an interesting thing to include, though it is &#8220;free energy&#8221; for some reasonable definitions of free and energy. What I&#8217;m most interested in is instances of energy provided for free (whatever the intent) to the public at large in everyday environments. Here I&#8217;m not going to include energy consumed by the government on my behalf (because all government action would fall into that category).</p>
<p>Put another way, I&#8217;d like to consider things that are free now that are unlikely to continue to be free in the coming years. They all represent slack in the system, symptoms of energy wealth. It&#8217;s in the disappearance of these items that a country like the United States might become more like a country like India is today.</p>
<p>So, to the list. I&#8217;ve organized it around the free energy in question:</p>
<p><strong>Electricity.</strong> Go to any coffee shop, university building, or transit station, and you can get electricity for free. Just plug in to one of the outlets and draw as much juice as the outlet can handle.</p>
<p><strong>Internet service.</strong> Many of the same institutions above provide free Internet service to users, which represents energy usage on the provider&#8217;s end on behalf of those users.</p>
<p><strong>Air conditioning.</strong> Many public spaces&#8212;malls, public buildings, businesses, etc.&#8212;even <a href="http://en.wikipedia.org/wiki/Mall_of_America">extraordinarily large ones</a>, are air conditioned in the summer and heated in the winter.</p>
<p><strong>Refrigeration.</strong> Many stores keep non-perishable items such as sodas refrigerated. In addition, many if not most public water fountains have built-in refrigeration.</p>
<p><strong>Foods.</strong> Due to long-standing agriculture policy in the U.S. we have an energy subsidy that&#8217;s delivered to us through most processed foods and nearly all meats due to subsidized corn and soy that are farmed using industrial agriculture.</p>
<p><strong>Personal motion assistance.</strong> In most multi-level public places there are escalators and elevators to provide motion assistance. Some larger buildings such as airports even have moving walkways. Many of these devices don&#8217;t detect whether they&#8217;re in use: they just run continually. Automatic doors (both sliding and swing) are also ubiquitous, and often can&#8217;t even be avoided.</p>
<p><strong>Disposable items.</strong> Paper and plastic shopping bags are the most common instance of free disposable items that have only recently been identified (by policymakers) as wasteful. Many other businesses provide other free disposable items, from disposable dishware, cups, and utensils to single-serving packages of just about everything.</p>
<p><strong>Air travel.</strong> One of the most amazing sources of free energy is that of frequent flier mile rewards. Websites like <a href="http://www.flyertalk.com/">flyertalk</a> have long dedicated themselves to figuring out how to squeeze the most miles out of airline credit card offers, often with amazing (and ridiculous) results. With enough effort one can&#8212;apparently completely within the rules&#8212;get hundreds of thousands of frequent flier miles per year for zero personal financial cost, worth several trips around the world and vast quantities of jet fuel.</p>
<p><strong>Oil.</strong> Finally, the strangest example of them all, one that deserves greater discussion: on a national level, Western (net oil importing) nations have deep deficits. That means they are borrowing many billions of dollars a day via bond issuance. However, via quantitative easing and other similar mechanisms, central banks are buying up a large fraction of those bonds. The proceeds, once the bonds mature, will be deposited back at the treasury (at least here in the U.S.). The money the central bank buys the treasuries with is created in a spreadsheet for that purpose, thereby increasing the money supply. Once this money is in the government&#8217;s books, it can, through its fiscal policy, do what governments do: use the money for various national priorities and thus disburse the money to businesses and individuals. That money, now in the hands of businesses and individuals can be used to buy oil and other commodities on the (global) market.</p>
<p>And that brings us <a href="http://www.energybulletin.net/node/23259">full circle</a>:</p>
<p>An economic arrangement can continue for quite some time after it becomes untenable, through sheer inertia. But at some point a tide of broken promises and invalidated assumptions sweeps it all out to sea. One such untenable arrangement rests on the notion that it is possible to perpetually borrow more and more money from abroad, to pay for more and more energy imports, while the price of these imports continues to double every few years. Free money with which to buy energy equals free energy, and free energy does not occur in nature. This must therefore be a transient condition. When the flow of energy snaps back toward equilibrium, much of the US economy will be forced to shut down.</p>
<p><a href="http://contraposition.org/blog/2012/05/14/free-energy-does-not-occur-in-nature/">contraposition</a></p>
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		<title>Stuart Staniford: Feeling my Inner Kunstler</title>
		<link>http://peakoil.com/consumption/stuart-staniford-feeling-my-inner-kunstler/</link>
		<comments>http://peakoil.com/consumption/stuart-staniford-feeling-my-inner-kunstler/#comments</comments>
		<pubDate>Wed, 16 May 2012 11:54:28 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Consumption]]></category>

		<guid isPermaLink="false">http://peakoil.com/?p=76425</guid>
		<description><![CDATA[<img src="http://peakoil.com/catimages/consumption.jpg" width="138" height="138" alt="" title="Consumption" /><br/>I&#8217;m currently in Surfer&#8217;s Paradise on the Gold Coast of Australia in order to give a talk for work.  If you are in a bad mood when you frame the photo, the place looks like the above.  Or like this if you try to make it look good (say be capturing the sunrise from your [...]]]></description>
			<content:encoded><![CDATA[<img src="http://peakoil.com/catimages/consumption.jpg" width="138" height="138" alt="" title="Consumption" /><br/><div><a href="http://2.bp.blogspot.com/-CWIgbPGCvuk/T7LyJx3IJAI/AAAAAAAACtE/3MB63o76rts/s1600/IMG_0394.jpg" target="_blank"><img src="http://2.bp.blogspot.com/-CWIgbPGCvuk/T7LyJx3IJAI/AAAAAAAACtE/3MB63o76rts/s400/IMG_0394.jpg" alt="" width="400" height="300" border="0" /></a></div>
<p><a name="more" target="_blank"></a>I&#8217;m currently in Surfer&#8217;s Paradise on the Gold Coast of Australia in order to give a <a href="http://conference.auscert.org.au/conf2012/program_main.html" target="_blank">talk</a> for work.  If you are in a bad mood when you frame the photo, the place looks like the above.  Or like this if you try to make it look good (say be capturing the sunrise from your hotel):</p>
<div><a href="http://2.bp.blogspot.com/-qKiE71weIO0/T7LyC7Z4UUI/AAAAAAAACs8/E-4jkgUH-3A/s1600/IMG_0393.jpg" target="_blank"><img src="http://2.bp.blogspot.com/-qKiE71weIO0/T7LyC7Z4UUI/AAAAAAAACs8/E-4jkgUH-3A/s400/IMG_0393.jpg" alt="" width="400" height="300" border="0" /></a></div>
<p>I absolutely detest this kind of place &#8211; there&#8217;s nothing that destroys the spirit of a once beautiful place quite as effectively as a bunch of 20-100 story concrete and glass hotel towers.  I went for a walk early this morning, and by the time I came back, I was seething.</p>
<p>I was trying to figure out why places like this make me so mad.  I don&#8217;t mind major cities nearly as much as this kind of beach+concrete-jungle resort.  I don&#8217;t like to live in cities &#8211; being that far removed from nature feels oppressive to my soul.  But on a visit I can appreciate their liveliness and intensity and grand scale.  I think maybe it has something to do with the fact that big cities have been there a long time and the original spirit of that place has been completely replaced with the ambience of the city itself.  Whereas, at a resort, there is still a little bit left of whatever natural beauty it was that made people come here in the first place, and that makes it so much worse.  The crassness and insensitivity of the people that developed all these towers is made achingly painful by the fact that there is still clean sand and soft breezes and strange tropical sounding birds whistling in the trees between all the unspeakable ugliness that the humans have brought to the landscape.</p>
<p>And maybe it also has to do with the fact that it&#8217;s clear that thousands on thousands of people must choose to come here and stay in all these concrete towers with their own money &#8211; to a place I experience as a kind of spiritual torture and never would come to if I wasn&#8217;t being well paid to do it &#8211; and then I feel very isolated from my own kind.</p>
<div><a href="http://2.bp.blogspot.com/-8rY5yCd9Jhs/T7L07iwCtkI/AAAAAAAACtU/01aoCPZdl0I/s1600/IMG_0395.jpg" target="_blank"><img src="http://2.bp.blogspot.com/-8rY5yCd9Jhs/T7L07iwCtkI/AAAAAAAACtU/01aoCPZdl0I/s400/IMG_0395.jpg" alt="" width="400" height="222" border="0" /></a></div>
<p>How does anyone expect to feel a sense of the universe&#8217;s mystery in a building that looks like that?</p>
<div></div>
<div>There are days when I can&#8217;t wait for the robots and algorithms to complete their take over &#8211; how can they screw the planet up any worse than we do?</div>
<div><a href="http://earlywarn.blogspot.com/2012/05/feeling-my-inner-kunstler.html">Early Warning</a></div>
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		<title>Medical Records Could Yield Answers On Fracking</title>
		<link>http://peakoil.com/enviroment/medical-records-could-yield-answers-on-fracking/</link>
		<comments>http://peakoil.com/enviroment/medical-records-could-yield-answers-on-fracking/#comments</comments>
		<pubDate>Wed, 16 May 2012 11:52:40 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Enviroment]]></category>

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		<description><![CDATA[<img src="http://peakoil.com/catimages/ctenviroment.jpg" width="134" height="134" alt="" title="Enviroment" /><br/>A proposed study of people in northern Pennsylvania could help resolve a national debate about whether the natural gas boom is making people sick. The study would look at detailed health histories on hundreds of thousands of people who live near the Marcellus Shale, a rock formation in which energy companies have already drilled about [...]]]></description>
			<content:encoded><![CDATA[<img src="http://peakoil.com/catimages/ctenviroment.jpg" width="134" height="134" alt="" title="Enviroment" /><br/><p>A proposed study of people in northern Pennsylvania could help resolve a national debate about whether the natural gas boom is making people sick.</p>
<p>The study would look at detailed health histories on hundreds of thousands of people who live near the Marcellus Shale, a rock formation in which energy companies have already drilled about 5,000 natural gas wells.</p>
<p>If the study goes forward, it would be the first large-scale, scientifically rigorous assessment of the health effects of gas production.</p>
<p><strong></strong><strong>Secret Weapon: A Very Large Database<br />
</strong></p>
<p>In recent years, there have been lots of anecdotal reports about people who say they have been harmed by the chemicals associated with gas wells and the drilling technique known as hydraulic fracturing, or fracking.</p>
<p>ut &#8220;there doesn&#8217;t seem to be a lot of hard data to either support or refute those claims,&#8221; says David Carey, associate chief research officer of the Geisinger Health System, which provides care to more than 2 million Pennsylvanians.</p>
<p>So the Geisinger system wants to use its huge database of electronic health records to help researchers get definitive answers, Carey says.</p>
<p>The long-term goal is to learn whether gas operations increase the incidence of diseases such as diabetes and cancer, Carey says. But first, he says, researchers want to take a quick look at whether air pollutants associated with gas drilling are affecting people with asthma and other lung problems.</p>
<p>The asthma study is possible because Geisinger&#8217;s database includes tens of thousands of people with asthma, says Dr. Paul Simonelli, the system&#8217;s director of thoracic medicine.</p>
<p>From his office in Geisinger&#8217;s gleaming medical center in Danville, Pa., Simonelli demonstrates why the database is so valuable. With just a few computer keystrokes, he brings up the record for an asthma patient.</p>
<p>&#8220;This patient&#8217;s been seen in our system well over a dozen times,&#8221; he says, scrolling through the record. &#8220;And this dates back to 2001.&#8221;</p>
<p><strong>Looking For Clues In Asthma And Ozone<br />
</strong></p>
<p>Researchers want to start with asthma patients because they are very sensitive to ground-level ozone, a pollutant that often forms near gas wells, Simonelli says.</p>
<p>When ozone levels rise, he says, many asthma patients begin to have trouble breathing and seek help.</p>
<p>Primary care physicians are usually the first people patients call, Simonelli says. Then, he says, &#8220;we see it in the specialty clinics such as my own, where we&#8217;ll be messaged by lots of patients that [say,] &#8216;I&#8217;m getting worse, what should I do?&#8217; &#8221;</p>
<p>When ozone levels get really high, he says, asthma patients start showing up in emergency rooms.</p>
<p>About 6 percent of people in the United States have asthma, Simonelli says, &#8220;so we&#8217;re talking about an enormous number of people who are potentially at risk to have their conditions worsened by these exposures.&#8221;</p>
<p>And the Geisinger database contains such detailed information that it&#8217;s possible to figure out things like precisely how far each asthma patient lives from a gas well, says Brian Schwartz, an environmental epidemiologist at Johns Hopkins University in Baltimore.</p>
<p>Schwartz, who is working with Geisinger on the project, says the plan is to use air quality data from the Environmental Protection Agency to identify days when ozone levels are high, then use the database to answer a series of questions about asthma patients. Questions such as: &#8220;Are they being admitted to the hospital? Are they requiring emergency department visits? Are they using more inhalers?&#8221;</p>
<p><strong>&#8216;We Just Want The Facts To Lead Us&#8217;</strong></p>
<p>Northern Pennsylvania is a particularly good place to ask those questions because gas operations are the primary source of ozone and only began a few years ago, Schwartz says.</p>
<p>&#8220;Because we have 10 years of health data, but the drilling has mainly been for the past five years, we have a period with information on asthma patients and controls before drilling, [as well as] a period after drilling,&#8221; he says.</p>
<p>There&#8217;s one big hitch, though, Schwartz says. The asthma study alone is likely to cost nearly a million dollars — and no one has offered to pay for it yet.</p>
<p>Even so, Schwartz is optimistic. One reason, he says, is that the research has strong support at Geisinger — from the CEO on down.</p>
<p>There&#8217;s a good reason for Geisinger&#8217;s commitment, Carey says. &#8220;If you look at the map, the geographic footprint of our patient catchment area, this is literally going on in our backyard.&#8221;</p>
<p>So Carey and other Geisinger officials have been working to build support for the study among scientists, and capture the interest of funding agencies.</p>
<p>And so far the response has been positive, Carey says, in part because Geisinger is seen as a neutral party in the national debate about fracking and shale gas production.</p>
<p>&#8220;We&#8217;re not out to get anybody,&#8221; he says. &#8220;We just want to let the facts lead us wherever they will. So if we do find that there are environmental exposures that are harming people&#8217;s health, we&#8217;ll say it. If we find evidence that there&#8217;s nothing to worry about, we&#8217;ll say that, too.&#8221;</p>
<p><a href="http://www.npr.org/2012/05/16/151762133/medical-records-could-yield-answers-on-fracking">NPS</a></p>
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		<title>At Least One Million Will Die From Fukushima Radiation</title>
		<link>http://peakoil.com/enviroment/at-least-one-million-will-die-from-fukushima-radiation/</link>
		<comments>http://peakoil.com/enviroment/at-least-one-million-will-die-from-fukushima-radiation/#comments</comments>
		<pubDate>Wed, 16 May 2012 11:50:47 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Enviroment]]></category>

		<guid isPermaLink="false">http://peakoil.com/?p=76423</guid>
		<description><![CDATA[<img src="http://peakoil.com/catimages/ctenviroment.jpg" width="134" height="134" alt="" title="Enviroment" /><br/>Fukushima Video by The Japanese College of Intravenous Therapy The government of Japan has failed to protect its people and is hiding the dangers of radiation from Fukushima. There are options for radio-protection that have not been disclosed. When people cannot avoid radioactive contamination there are safe radioprotectants that can help prevent the damage.]]></description>
			<content:encoded><![CDATA[<img src="http://peakoil.com/catimages/ctenviroment.jpg" width="134" height="134" alt="" title="Enviroment" /><br/><p>Fukushima Video by The Japanese College of Intravenous Therapy</p>
<p>The government of Japan has failed to protect its people and is hiding the dangers of radiation from Fukushima. There are options for radio-protection that have not been disclosed.</p>
<p>When people cannot avoid radioactive contamination there are safe radioprotectants that can help prevent the damage.</p>
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		<title>Acknowledging The Arrival Of Peak Government</title>
		<link>http://peakoil.com/publicpolicy/acknowledging-the-arrival-of-peak-government/</link>
		<comments>http://peakoil.com/publicpolicy/acknowledging-the-arrival-of-peak-government/#comments</comments>
		<pubDate>Wed, 16 May 2012 00:06:31 +0000</pubDate>
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				<category><![CDATA[Public Policy]]></category>

		<guid isPermaLink="false">http://peakoil.com/?p=76420</guid>
		<description><![CDATA[<img src="http://peakoil.com/catimages/policy.jpg" width="138" height="138" alt="" title="Public Policy" /><br/>Most informed people are familiar with the concept of Peak Oil, but fewer are aware that we’re also entering the era of Peak Government. The central misconception of Peak Oil &#8212; that it’s not about “running out of oil,” it’s about running out of cheap, easy-to-access oil &#8212; can also be applied to Peak Government: It’s [...]]]></description>
			<content:encoded><![CDATA[<img src="http://peakoil.com/catimages/policy.jpg" width="138" height="138" alt="" title="Public Policy" /><br/><p>Most informed people are familiar with the concept of Peak Oil, but fewer are aware that we’re also entering the era of Peak Government. The central misconception of Peak Oil &#8212; that it’s not about “running out of oil,” it’s about running out of cheap, easy-to-access oil &#8212; can also be applied to Peak Government: It’s not about government disappearing, it’s about government <em>shrinking</em>.</p>
<p>Central government &#8212; the Central State &#8212; has been in the expansion mode for so long that the process of contracting government is completely alien to the nation, to those who work for the State, and to those who are dependent on the State. Thus we have little recent historical experience of Peak Government and few if any conceptual guideposts to help us understand this contraction.</p>
<p>Peak Government is not a reflection of government services or the millions of individuals who work in government; it is a reflection of four key systemic forces that drove State expansion are now either declining or reversing.</p>
<h2><strong>The Four Key Drivers of State Expansion</strong></h2>
<p>The twin peaks of oil and government are causally linked: central government&#8217;s great era of expansion has been fueled by <strong>abundant, cheap liquid fuels</strong>. As economies powered by abundant cheap energy expanded, so did tax revenues.</p>
<p><strong>Demographics</strong> also aided Central States’ expansion: as the population of working-age citizens grew, so did the work force and the taxes paid by workers and enterprises.</p>
<p>The third support of Central State expansion was <strong>debt, and more broadly, financialization</strong>, which includes debt, leverage, and institutionalized incentives for speculation and misallocation of capital. Not only have Central States benefited from the higher tax revenues generated by speculative bubbles, they now depend on debt to finance their annual spending. In the U.S., roughly one-third of Federal expenditures are borrowed every year. In Japan &#8212; which is further along on this timeline, relative to America &#8212; tax revenues barely cover social security payments and interest on central government debt; all other spending is funded with borrowed money.</p>
<p>The fourth dynamic of Central State expansion is the State’s <strong><em>ontological imperative</em> to expand</strong>. The State has only one mode of being, expansion. It has no concept of, or mechanisms for, contraction.</p>
<p>In my book <em><a href="http://www.amazon.com/gp/product/1468065084/ref=as_li_ss_tl?ie=UTF8&amp;tag=chrismartenso-20&amp;linkCode=as2&amp;camp=1789&amp;creative=390957&amp;creativeASIN=1468065084" target="_blank">Resistance, Revolution, Liberation: A Model for Positive Change</a></em>, I explain this ontological imperative in terms of risk and gain. From the Central State’s point of view, everything outside its control poses a risk. The best way to lower risk is to control everything that can be controlled. Once the potential sources of risk are controlled, then risk can be shifted to others.</p>
<p>Put another way, once the State controls the entire economy and society, it can transfer systemic risk to others: to other nations, to taxpayers, etc.</p>
<p>In effect, the State’s prime directive is to cut the causal connection between risk and gain so that the State can retain the gain and transfer the risk to others. The separation of risk from gain is called moral hazard, and the key characteristic of moral hazard can be stated very simply: People who are exposed to risk and consequence act very differently than those who are not exposed to risk and consequence.</p>
<p>Every time the Central State guarantees something, it disconnects risk from consequence and institutionalizes moral hazard.</p>
<p>To take but one example of many, when the Central State guarantees mortgages so lenders and originators cannot lose and the borrower can’t lose more than his modest 3% down payment, then everyone in the chain is encouraged to pursue risky speculations because the State has disconnected risk from the consequence of a potentially large loss. The risk hasn’t vanished; it has simply been transferred to the taxpayers, who absorb the inevitable losses that result when speculation is encouraged.</p>
<p>Separating risk from gain inevitably generates systemic instability. The entire credit-housing bubble can be seen as proof of this dynamic.</p>
<p>All four of the causal factors itemized above are turning against continued expansion:</p>
<ul>
<li>The key energy source of global transportation, liquid fuel, is no longer cheap and easy to access.</li>
<li>The demographics have reversed as the population of State dependents is soaring.</li>
<li>Debt has expanded to the point that servicing that debt now threatens the financial stability of the State and its currency.</li>
<li>The State’s separation of risk and consequence is generating systemic instability.</li>
</ul>
<p>There are plenty of models of State expansion &#8212; democracy, socialism, communism, theocracy, and so on &#8212; and none for State contraction. This suggests that the down slope of Peak Government will be disorderly and rife with unintended consequences.</p>
<h5><strong>The Failure of Separation of Powers</strong></h5>
<p>The predominant Western model of governance assumes, incorrectly, that a “separation of powers” within the State will limit the State’s appetite for control. But rather than limit the State’s expansion, the State’s subsystems &#8212; the institutions of executive power, legislative power and judicial power &#8212; are competing to gain as much control as possible over both the State itself and the nation’s social and financial systems.</p>
<p>This competition doesn’t weaken or limit the State; rather, it lends the State a fearsome competitive advantage, as each institution gains power as the State expands. So even though the competition between the three may appear to limit the power of each, in aggregate this competition only increases the State’s expansion as each seeks to outdo the others in reach, influence, and power.</p>
<p>Regardless of which institution wins or loses a particular squabble, the State inexorably expands its control and power. And just as inexorably, elites within the State &#8212; systemically protected from the risk created by their policies &#8212; will experience a rising sense of omnipotence as their private power rises in tandem with the State’s expansion.</p>
<p>These powers also offer State elites a way to radically lower their own risk and dramatically increase their private gain by leveraging the State’s vast powers to their own private benefit.</p>
<p>In other words, not only does each agency and branch of the State seek to expand its reach and power, so, too, does every individual within the State who can leverage the power of the State to protect his/her own individual gain.</p>
<h2><strong>The State as Protector of Private Gain</strong></h2>
<p>The Central State is granted unique powers of coercion by its membership (the citizenry) to protect them from the predation of foreign powers, individuals, and subgroups seeking monopoly. The citizens grant the State this extraordinary power to protect their freedom of faith, movement, expression, enterprise and association and to insure that no subgroup can dominate the nation for their private gain.</p>
<p>Granting this power to the State creates a risk that the State itself may become predatory. To counter this potential, the State has the self-limiting mechanisms of a separation of powers such that no one institution or agency can dominate the State and thus the nation.</p>
<p>But as we have seen, the separation of powers has failed to limit the expansion of the State; rather, it has become a competitive advantage, feeding the State’s expansion. There are no State-based limits on the State’s concentration of wealth and power.</p>
<p>There is a great irony in this concentration of power in the State: the power is concentrated to protect the citizenry from predation and exploitation, but that concentration becomes an irresistible attractor for all those seeking to increase their private gain via monopoly, cartels, collusion, fraud, and other forms of predation.</p>
<p>The wealth that can be concentrated in private hands is not limited or self-regulated, and so private concentrations of wealth inevitably exceed the ethical threshold of individuals within the State (i.e., their resistance to bribes and self-interest). This structural imbalance leaves the State intrinsically vulnerable to the influence of private wealth. Once this wealth has a foothold of influence within the State, it can then bypass the State’s internal controls and become the financial equivalent of cancer: a blindly self-interested organism bent solely on growth at the expense of the system as a whole.</p>
<p>Rather than protect the citizens from exploitation, the State’s primary role becomes protecting the private gains of elites who have taken effective control of the State’s vast powers.</p>
<h2><strong>The Death Spiral of an Expansive State </strong></h2>
<p>We can now see that the Central State faces an impossible contradiction: to pursue its primary purpose of protecting the citizenry from predation, it is granted powers that enable it to evade its own self-limiting mechanisms. Private concentrations of wealth gain control over the State’s machinery of governance, and the resulting partnership of private and State elites suppress the mechanisms that were intended to limit private influence over State power.</p>
<p>To enhance their own power, these elites increase the State’s reach until it dominates the entire political, social, and economic system. This sets up an inherently self-destructive feedback loop in which the State’s actions to protect its self-serving elites weaken both the State and the nation. The State’s inefficiencies pressure the nation’s output, even as the State increases its share of the national income to maintain its self-serving elites and quiet its potentially restive dependents. The more the State expropriates, the less surplus is left for productive investment, and so the nation’s output continues to decline.</p>
<p>This dynamic creates a positive feedback loop (i.e., a death spiral) of higher taxes and lower investment in productive assets.</p>
<h2>Post Peak-Government Living</h2>
<p>In<a href="http://www.chrismartenson.com/martensonreport/end-free-lunch" target="_blank"> Part II: The End of the Free Lunch</a>, we consider what citizens can do to limit their own risk as the Central State contracts.</p>
<p>We explain how the State has unfairly used taxpayer-funded subsidies to erode participation commerce and investment at the local level that in ages past provided transparency into the true value of labor.</p>
<p>Now that the artificial influence of these subsidies is waning as the State can longer longer afford them, reactivating the infrastructure and processes for enterprise at the community level will be critical to transitioning to a sustainable and more resilient economic model.</p>
<p><a href="http://www.zerohedge.com/news/acknowledging-arrival-peak-government">ZeroHedge</a></p>
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		<title>Tom Murphy: Time to be honest with ourselves about our looming energy risks</title>
		<link>http://peakoil.com/generalideas/tom-murphy-time-to-be-honest-with-ourselves-about-our-looming-energy-risks/</link>
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		<pubDate>Tue, 15 May 2012 16:26:52 +0000</pubDate>
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				<category><![CDATA[General Ideas]]></category>

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		<description><![CDATA[<img src="http://peakoil.com/catimages/oilfield.png" width="200" height="147" alt="" title="General Ideas" /><br/>Chris Martenson:  Hello. Welcome to another ChrisMartenson.com podcast. I am your host, of course; Chris Martenson. And today we have the very good fortune of speaking with Tom Murphy, Associate Professor of Physics at the University of California, San Diego, and an avid writer on energy and growth-related matters on his website, Do The Math, [...]]]></description>
			<content:encoded><![CDATA[<img src="http://peakoil.com/catimages/oilfield.png" width="200" height="147" alt="" title="General Ideas" /><br/><div>
<p><strong>Chris Martenson:</strong>  Hello. Welcome to another ChrisMartenson.com podcast. I am your host, of course; Chris Martenson. And today we have the very good fortune of speaking with Tom Murphy, Associate Professor of Physics at the University of California, San Diego, and an avid writer on energy and growth-related matters on his website, <a href="http://physics.ucsd.edu/dothemath">Do The Math</a>, which I believe is found at physics.ucsd.edu/dothemath. Tom uses simple, easy-to-understand math &#8212; yes, that four-letter word &#8212; to logically &#8212; I say <em>quite </em>logically &#8212; make the case that simply extrapolating past trends in energy and economic growth is not going to cut it. Instead, we face gigantic challenges and significant risks to our current model. Not least of which is, when asked what we will use when fossil fuels dwindle away, the most typical answer is <em>I’m sure we will think of something.</em> That is, our future of energy is a question mark right now. Here today to discuss that question mark with us is Tom. A real pleasure to have you here.</p>
<p><strong>Tom Murphy:</strong>  Thanks, Chris. A real pleasure to be here.</p>
<p><strong>Chris Martenson:</strong>  First, your background for listeners, please, so they know how you came to write so eloquently about economic and energy matters.</p>
<p><strong>Tom Murphy:</strong>  Well, I don’t know if I can really explain that. That is really sort of a fluke. My background is in science and physics and astronomy. I have been an avid fan of astronomy since high school. I built a large telescope in high school and was hooked on exploring the universe right away. Went to graduate school at CalTech where I had the fortune to work on the venerable 200 inch telescope &#8212; the Palomar Telescope &#8212; and built a spectrograph to look at colliding galaxies. It was the first cryogenic, integral-fueled spectrograph ever built. So that was kind of fun to do. After grad school I saw the PhD as a license to have fun. So rather than take the safe route of doing the same kind of infrared instrumentation for telescopes that I had been doing &#8212; and I had lots of opportunities to do that &#8212; I found a fledgling that really I could start with a couple of guys at the University of Washington to do lunar laser raging at the millimeter precision. And this is really about measuring the earth-moon distance to one-millimeter precision as a test of general relativity, because we can map the shape of the moon’s orbit and ask the question, does the moon’s orbit follow a prescription provided by general relativity, Einstein’s theory of gravity? This was the perfect thing for me. It involves building instrumentation, optics, lasers on a telescope, but for a really interesting physics fundamental question.</p>
<p>So I had all that I wanted. My dreams were satisfied. And then my big hit came. I took an assignment at UCSD in 2004 to teach a course on energy and the environment. I went in bright-eyed and thinking <em>our future is going to be fantastic, that much I’m sure. I want to piece together what it was going to look like. </em>I was vaguely aware that fossil fuels would play a diminishing role into the future. But solar, wind, geothermal, nuclear, all of these things surely would be enough. I came out fairly confused by the process. Because as I applied my physics and estimation skills to sort of set the scale of different things, how much tidal power provide or wind or wave, the theme was disappointment.</p>
<p>I became really worried and spent years in this state. Finally, I decided I had to do something about it, for no other reason than for myself to write down what I had been thinking about, some of the calculations I had done, and that is where Do The Math was born.</p>
<p><strong>Chris Martenson:</strong>  Fantastic. So the themes I am getting at here are, you have rolled up your sleeves and used technology. You love technology. You know what it can do. You have built instrumentation. So you have hands-on, real-world experience of what technology can &#8212; and in many cases can’t &#8212; do. You ran the numbers and the numbers here are really the important part of the story. Most people are, I think, unaware of just the extraordinary throughput of energy we are getting from fossil fuels, which I believe in one of your posts you liken to the fossil fuels we are using like a battery. The sun was raining all of this energy down on the earth and it was being slowly, carefully, accreted away and stored up to these things that we are now discharging in what, historically speaking, has to be a rather abrupt period of time.</p>
<p><strong>Tom Murphy:</strong>  Almost a short circuit.</p>
<p><strong>Chris Martenson:</strong>  Almost a short circuit. Done. Right? There was this huge potential energy, and a live grounding wire wandered over and touched it. That was our species. So there we are. Al lright, let’s do some numbers then. I am convinced you and I, everybody alive today, is at a very unique, very critical point in human history, not just US history or Asian history or European, [but] human history. Here are some numbers: 7 billion, heading to 8 billion, 100 quadrillion BTUs per year for the US alone. Depletion rates of underground liquids of all sorts running at 3%, 4%, 5%, maybe even 10% or more, depending on what we are talking about. Are these the sorts of numbers you were looking at, and if so, why are these important? Why should average people suddenly concern themselves with this?</p>
<p><strong>Tom Murphy:</strong>  I agree with the statement we are at a very special time. The way I like to visualize this in my own head is to be if you plot the use of fossil fuels over a very long period of time, say go back 10,000 years in the past, plot 10,000 years in the future, most of that is absolutely devoid of activity on the fossil fuel front. We just have a local blip that only lasts a few hundred years around now. I think just on the fossil fuel part of the story we are absolutely at a special time. This is the time where humanity has discovered the earth’s battery, and you know, I also like to think we hooked up Las Vegas and there is your short circuit and it&#8217;s profligate this energy we use. And we have made good use of that energy. I am a huge fan of what we have accomplished as a byproduct of using this source of energy. We have the tendency to extrapolate our future based on even a few generations, which is too short, end of story, because of the special blip of fossil fuels. So I think, in my mind, stuff out to the right of this blip is a gigantic question mark. I am careful not to predict that the future will be brilliant or dismal, but the main message I want to get across is [that] we really do not know. And to try to delude ourselves. We know what is coming is a very dangerous, a very dangerous position. And we should approach this uncertain future with a lot more trepidation than I tend to see in the world around us.</p>
<p><strong>Chris Martenson:</strong>  I agree. I think there is a certain logical case, almost like a prosecutor, that can be built out, which starts with, <em>well, listen. There are some very clever things we can do with technology and we are hoping that we are going to apply some great technological solutions and maybe even some disruptive brand new technologies that nobody has thought of that will really give us a bright future. Deductively, we come one step back and say in order for that technology to exist it is very complex, all the moving parts required and all the knowledge necessary to build that technology requires a complex economy. And for the economy to function therefore, one step from that, we are going to need constant throughputs of energy to maintain that complexity. And so as we rather build this string through everything to me, sort of hinges on we need to have not just energy flowing through but high net energy flowing through.</em></p>
<p>So to get at this conversation, I want to start all the way out at that far end, back at the beginning of this. So to talk about just the economy for a minute. You had an excellent blog post entitled “Can Economic Growth Last.” You posited that perpetual economic growth it is just not mathematically improbable, but it is impossible. Let’s start at the highest level. Why is that so?</p>
<p><strong>Tom Murphy:</strong> I think fundamentally, economic activity is tied to energy and you can have certainly activities that use. Some use more energy some use less energy and you have a lot of the bright future believers thinking that well our answer is simply to transition to low energy economic activities. And sure, there will be pressures to do those things. But you can’t do 100% of your economy on low energy things, not to mention no energy things. And so the point and it is almost silly. It is mathematical. Energy can’t grow forever and I think most of us would agree that on a finite planet we can’t just keep ramping up the raw energy use. Then the fraction of our economy that is devoted to energy would have to trend toward absolute zero in order to keep the economy growing on top of a fixed energy supply. And that is just a non-starter for actual real activities that involve, for instance, eating. Nothing will ever go to zero energy. And as long as that is finite and occupies a finite fraction of our economic activity, then the economy is capped.</p>
<p><strong>Chris Martenson:</strong> Right. Well we get out to some future point where we hit some steady state of energy usage and I’ll get to the excellent post you had about the silliness of thinking we will just grow energy forever. But what a lot of people would say a rejoinder to that is what about efficiency? Yea, even if we have less energy we are going to use it more efficiently. So maybe we can just count on us tinkering our way to a better future.</p>
<p><strong>Tom Murphy:</strong> Yea. And I think certainly, here is another case where yes, that will happen. And that is absolutely valuable goal to pursue. But it is not going to become the entire story and it can’t’ go forever. There are lots of examples if you just think what are typical efficiencies of devices today you are going to come up with numbers between 10 and 90%. How much can you grow that before you cap out at 100? So right away, you can see that efficiency just doesn’t take off and it can’t grow exponentially. Typical rates of efficiency improvement are something like 1% per year. We have maybe a factor of two or optimistically four or something in that neighborhood to achieve and have efficiency improvements. But there are real physical thermodynamic limits to all of this. So you can’t expect at 1% per year you double in seven years. So we are talking about no more than a few centuries at most of progress at a 1% clip and that rate would likely, actually diminish over time because it gets harder and harder to improve efficiency. The low hanging fruit is already gone.</p>
<p><strong>Chris Martenson:</strong> Right. And to already improve efficiency it is a slog, right? So this is very careful work. It takes a lot of people. Let’s start with electric motors already 90% efficient. So there is really not a lot of either impetus or probably opportunity to really expand this much further. We could, but you know we are getting very, very incremental changes there. So this 1-2% efficiency game which is per year that seems reasonable. Where are we in the fossil fuel story in your mind?</p>
<p><strong>Tom Murphy:</strong> Well, I would say a typical heat engine is how we tend to use fossil fuels &#8212; we burn them. And the heat engines have realized efficiencies going from maybe 10% for a generator at Home Depot, up to 15, 20% for cars, and 30 to 40% for power plant. The highest kinds of numbers I tend to see are maybe 50% for a large diesel engine in a submarine or a ship. That is kind of where we are. The thermodynamic limit if you just look at an entropy kind of let me see – an entropy controlled process, the total entropy in a whole system cannot decrease you end up with a thermodynamic limit that is proportionate to a thermodynamic difference between a hot source and a cold source divided by the temperature of the hot source. You have to do this all in absolute temperature. If you just do that calculation for a typical fossil fuel heat engine you max out at something like 70 or 80%. Engineering practicalities tend to pull us back to half of the theoretical mass. You know, even if we slogged our way through the engineering practicalities and ended up at the thermo dynamic limit we have a factor of two to gain. Even that I think is unrealistic.</p>
<p><strong>Chris Martenson:</strong> So fact of two. For the sake of argument we stop all production of new combustion engines today. Whether they are for ships, cars, trucks, or trains, whatever. We stop it today and we just start slogging along assuming we could swap these engines out. We might be able to cut our fuel use in half over a pretty significant time with a lot of effort. And so let’s cast back to the economy for a minute, which is constantly growing. So even if we were developing these fancy, fancy new engines, which were much more efficient than current. I will note that China just increased its car consumption by 12.5% over the prior year and that their projections, if you just keep going at their current rate linearly they will be buying 30 million vehicles per year by 2020. Just almost twice what the US was consuming at its highest clip.</p>
<p>So we see this massive growth in these combustion engines going on just as the rest of the world wants to catch up with US standards. So the idea to me here is that additional incremental growth in the ways in which we traditionally consume energy in this part of the story I’m using standard internal combustion engines bought by Chinese citizens for cars. That the rate of growth of that 12.5% more cars this year and last year will swamp in a 1 or 2% improvement assuming those are happening.</p>
<p><strong>Tom Murphy:</strong> Yea, absolutely. You know the numbers you put out are very scary in the sense that we are really having trouble holding it together at today’s world energy consumption levels. The US uses about a quarter of the world’s energy 20%, 25% somewhere in that range and with 5% of the population so that means that the US uses typically about five times the average energy use per person. And if the rest of the world wanted to come up to the United States standards we would see the world using five times as much energy tomorrow as we do today. It is just not clear where that prosperity comes from, that energy prosperity. So we can maybe dream of that future, but right now we really don’t have a road map to go from here to there.</p>
<p><strong>Chris Martenson:</strong> I notice that all the projections for fossil fuel or liquid fuels growth in the world maybe by the next 10 years will expand by about 9% not 500% as you are describing. So yes, there are some constraints happening there. Now, to me, the thing that is the risk in this whole story is that economies don’t have to grow. There is no law written down. No world convention got together and cast it in stone and this is how it has to be, but in truth our money system because it is based on debt based money does reasonably well when it is expanding and does extremely poorly as soon as it stagnates, let alone declines. To me that is a lot of the metaphor of what we see happening in Europe; the pie stopped expanding and the whole thing sort of fell apart. That is true for every exponential system like this that I have examined. It is like kind of the reindeer on the island are expanding exponentially or they are you know, collapsing exponentially. These systems tend to have you know, two states up or down. They have a very hard time transitioning to that steady state in between.</p>
<p>So here we are. I want to get to the blog post you had that I love the most which is sort of this existential disconnect between you and an economist. And the blog post is “Exponential Economist Meets Finite Physicist”. Everybody should go out and google that, find that article, read it. Because in there you had some really good points. Just before I get into those I just wonder you had some time to reflect on that conversation and can you just characterize, set the stage for people what that conversation was all about?</p>
<p><strong>Tom Murphy:</strong> I was at a conference and there was a keynote dinner &#8212; a banquet dinner. I happened to sit next to a guy by random chance, that I had seen earlier that day give a talk where he even talked about the chess board with grains of rice and how quickly that got out of hand and I was really excited when I saw the talk about he was going to deliver the punch here. And he didn’t. He didn’t then claim, for instance, that economic growth would continue forever which I thought would have been fantastic coming from an economist. He stopped short of that. Finding myself next to him I decided to see what he would do with the statement you know a blunt statement from me that economic growth can’t last forever. So he had the predictary response woah, woah. So we got into it and had a very interesting conversation. I think we were both very much engaged and doing our best to make our case. Now I should mention for people who read the blog post that I tried to recreate his points of view and that of course is not going to be a perfect process. I didn’t have a recorder at the time. He did send me an email. He happened upon it and said he commended me for a job well done. He said he thinks I captured it very well. He said maybe not all the points I made the way I made them or you know, but the essence was there. So I was very pleased with that.</p>
<p><strong>Chris Martenson:</strong> Excellent.</p>
<p><strong>Tom Murphy:</strong> So in the end – yes, there are disconnects. I have been thinking about those disconnects. I think it is very important to try to understand what they are. In fact, this economist and I are going to try and work on a project to try and sharpen up that conversation. So I hope that goes forward. But the disconnect, there is several. One is that the economist speaks of growth and utility. And that utility doesn’t have to be connected to physical form necessarily so that you can make improvements in the way your life is run. The way your house is configured, whatever that don’t necessarily require more energy. Some could require less energy, but are more pleasing in the end. So this gets very subjective very quickly. What might be pleasing one person may not be pleasing the other. Fundamental question and he and I touched on this during the conversation is that someone 400 years in the future do they have a lifestyle or elements of their lifestyle that are unambiguously better to someone 400 years in the past. So are there objectively – objective improvements in utility that can continue to essentially promote continued growth. I would say that there probably are some of those things. So I am trying to wrestle with how important are those? What fraction of what we do – we still have to eat, we still have to consume energy. What fraction of our economy can be in this form of unambiguous utility gain?</p>
<p><strong>Chris Martenson:</strong> Well, now this is an interesting conversation and it is very important because as I cast back I am thinking back to the Monty Python movie, Holy Grail and you got the two serfs slopping around in the field and they were living a very low energy existence at that point. I would argue that when we say better one of the defining characteristics of our current lifestyle, that people would defend to the death I think is that it is easy. We have this energy subsidy quietly, so quietly and so ubiquitously surrounding us that it is like being Neo in the <em>Matrix</em>. It is like you can’t even see it. And to me I am often filled with gratitude and very thankful of how many energy slaves I have humming around quietly unseen, but certainly not unfelt in terms of the ease that is delivered to my life. Where I carry this is to cast 400 years into the future I understand we are going to make some improvements that will be energy neutral. Maybe even require less energy, but on balance. Staying warm. Moving myself from point A to point B and being fed are extraordinarily energy intensive endeavors today.</p>
<p><strong>Tom Murphy:</strong> And important. And will never cease to be important.</p>
<p><strong>Chris Martenson:</strong> Those all are in body work. Protecting myself from the elements so I am comfortably warm or cool is work being performed? Just very unseen and very quiet.</p>
<p><strong>Tom Murphy:</strong> As a physicist I have to point out that it will never take less energy to heat a coffee mug by 60 degrees C. In the future it is going to cost the same number joules as it does today to inject thermal energy into that coffee mug. So there are some things that are just in violet in that sense.</p>
<p><strong>Chris Martenson:</strong> So any story of the future then really has to articulate where are these quadrillions of BTUs going to come from, right? I mean fundamentally that is the story. And so as we look into our current energy landscape we see that, yes, we have this extraordinary flow coming from fossil fuels. Deposited over call it 400 million years. One of my favorite statistics is that in the last 22 years so that somebody who is listening to this today is 22 years old they have been alive when half of all the oil ever burned has been burned. So even in the last 22 years that is a very different experience from all of the years preceding those years. That is an extraordinary throughput of energy and that energy per capita has been rather explosively expanded in just the last 100 years, 200 years for sure and so if we are going to maintain that same number of say however we want to measure that kilowatts per person per day however we want to look at that. And we include the idea that the rest of the world, in order for the rest of the world not to. One of the arguments for why population is going to auto-stabilize is because living standards will come up across the whole world. And that is one of the only and probably the strongest correlating factor to why family sizes go down is economic opportunities improve, infant mortality declines. People feel safe in having smaller family seizes. Bing. That happens. In order for that to happen we have to imagine that energy use in the rest of the world as you mentioned a few minutes ago, that will also have to expand rather extraordinarily.</p>
<p>When we are talking at this scale though, I am glad you had that course on energy, talk to me about the gap that exists currently between what we might get from let’s call it renewables, but it is anything, geothermal, solar, plus wind so we got and tidal. I think that is everything except for nuclear that doesn’t come from fossil fuels. What is the gap that currently exists between the number of BTUs we are currently getting from that and what we would have to embark on in order to significantly and then entirely replace from what we get from fossil fuels?</p>
<p><strong>Tom Murphy:</strong> Yea the gap currently is huge. Almost all of our energy comes from fossil fuels. But you know, the optimist would say that is just because it is easier and cheaper right now. We could easily transition to solar, for instance, which is super abundant in its delivery of energy to the planet’s surface. The numbers there are quite impressively large. Wind, less so. That is a secondary manifestation of solar power. Waves are a tertiary manifestation of solar power through wind. So as you cascade down you get less and less energy in hydro-electric, for instance. So all of the neat and fancy ideas that we hear about are maybe clever but just don’t stack up in terms of abundance. There are some that are truly abundant in nature, solar being one of them. But there is a real disconnect between what solar offers and what we are trying to replace. It turns out we don’t have much trouble generating electricity. There are loads of ways to make electricity. What we are really missing is the liquid fuels. It is very difficult to transition from solar, nuclear, whatever you want into the liquid fuels which allows us to move ourselves around, it is very important in agriculture. And it is I think that is where the pinch point will come. There are certainly sources that can be labeled as abundant.</p>
<p>The gulf is really one of practicality more than one of the sheer energy scale. That is a little bit harder to quantify. So you can quantify the abundance and how much you might get out of a certain source. But it is very hard to quantify things like public acceptance or how difficult it will be to pull off things like intermittency, how to deal with the storage, practical storage solutions. All of these are very tricky. And I guess, you know, one perspective is that we have known since 1970 roughly that fossil fuel peak was coming at some point. We knew that we needed alternatives in the 70s. We had lots of discussion of alternative energies. Forty years later we really aren’t that much further along. We sort of don’t have any new players and it feels to me that if the liquid fuels decline in the next few decades, which I think is likely, we have already got the players on the stage right now. And so all of these technologies take a long time to develop and mature and scale. Even though I am a fan of technology, I am not a fan of gambling on the sense that an entirely new source will come along that is as yet unappreciated. The fact is that our alternatives are deficient in various ways compared to the ease and abundance and convenience of the fossil fuels.</p>
<p><strong>Chris Martenson:</strong> Right. I want to just take a moment here to note that you ran the calculations and said that if we grow our energy consumption at a steady 2.3% per year, which gives us a handy little device, which I believe, is what in 100 years we increase our use of energy by a factor of ten?</p>
<p><strong>Tom Murphy:</strong> Right.</p>
<p><strong>Chris Martenson:</strong> That is very modest, 2.3% is less than we have been expanding since the 1600s. So 2.3% per year from here on out. In 440 years say the surface of the earth is now at the temperature which water boils just because of the waste heat of the energy that we are consuming. Let’s imagine for a moment this low energy nuclear reaction is real or some other fancy thing where we can actually get unlimited energy. In fact, if we just that in a status quo way of expanding on a constant basis we hopefully, we would figure out well before the earth’s surface reached the temperature of boiling water we would say this is a bad idea. We have to change something here. And that within less than a thousand years the earth’s surface would be at the temperature of the sun if we were going to continue that process out.</p>
<p>Those might sound like big sweeps of time oh 1,000 years we have time to figure that out. I want to mention that historically, it is not a huge amount of time. Here is a fact that sort of caught me short when I heard it: Cleopatra was born closer to the launching of the space shuttle than she was to the building of the Great Pyramids, by 500 years. So it turns out if you are talking to an Egyptian that several thousand years of history is actually nothing. There is you know, so historically speaking we know that somewhere between here and there we have to find a way to get to a steady state model of some kind.</p>
<p><strong>Tom Murphy:</strong> At best. So that implies a gigantic transition. It is not a transition that many people are talking about. The fundamental assumption that seems to on is that it is more of the same and we just extrapolate.</p>
<p><strong>Chris Martenson:</strong> Exactly. So here we are &#8212; I just read in the paper, very disappointing piece of news to me, that some senators are very excited by pushing an idea to build some more LNG terminals because Asia is really hungry for LNG, particularly, Japan. Right now we have got a lot of gas so we will build these terminals. Disappointing to me because the mindset embodied in that is to say look, we have these resources. Our job is to build it up as fast as possible. And since we can’t use it fast enough on our own soil is what we will do is we will liquefy it, at great energetic cost. It costs a lot of energy to take a gas and turn it into a liquid, especially when we are talking about methane. You might lose 25% of the embodied energy that was existing in that gas before you ran it through that process. And so this makes sense to us. It makes sense economically. It makes sense politically. It might even make sense socially from a jobs perspective, but it doesn’t make energetic sense and it doesn’t make historical sense. So the question becomes how do we start to reshape that narrative so we can start at least having the right discussion it has got to involve these numbers. What sort of a reception do you have in trying to get these numbers out there? Do you just end up talking to other numerate individuals? I like the success you have had with the economist but I consider them to be very numerate. That is their profession.</p>
<p><strong>Tom Murphy:</strong> I don’t think I would characterize it as success, actually. I don’t really think I would change the economist that I talked to; I don’t really think I changed his mind fundamentally. I think he sort of understood that okay maybe energy is capped. And he did sort of make some progress during conversation in my view. I don’t think, fundamentally, he walked away thinking growth doesn’t go on forever. I don’t think I changed his mind on that at all in the economic sense. I think that is fundamentally important that we need to get over the notion that growth is just a constant of nature; it is part of who we are. It is part of who we have been for quite a few generations now.</p>
<p>I would like to throw out a couple of examples of cases where that is not really true. In the early part of the 20<sup>th</sup> Century, we had this amazing pair of technological progress. From the time it was conceived that a nuclear reaction could take place in the late 30s or the time that maybe it was earlier – the time scale from the discovery of that process of fission to a reactor was less than a decade. And so then it was thought that nuclear fusion was the next big goal. Okay, we have achieved that in nuclear bombs but not in some steady, controlled sense. That has been 60 years since the first attempts at fusion with no success. We sort of hit a wall. Some of our expectations haven’t been satisfied. When we broke the sound barrier, people thought okay there is the next step in transportation, we even got the Concord, but that doesn’t fly anymore. It was beyond our means to sustain that expensive mode of travel. I will also point out that we went to the moon in the late 60s and thought that this was our destiny to be a space race of people. And the US no longer has the capability to launch a human into space. Those should be red flags waving at us. That our assumptions about this ever up trajectory are sometimes extraordinarily wrong.</p>
<p><strong>Chris Martenson:</strong> Great point. We have the Moore’s Law, which gets waved at me quite regularly because we have had tremendous success at pushing these boundaries with one aspect of technology, which is on silicon chips. And so I guess the extrapolation from there is therefore we don’t experience boundaries on anything we do. You just identified a number of places where we ran up against some walls and found that pushing beyond those walls was, for whatever reason, extraordinarily expensive in some terms that caused us to have to back off of that and say you know, maybe 500 miles an hour is a good speed for a plane and that makes sense.</p>
<p>As I look at this I am just looking at the time, the cost of just trying to meet the scale and see the predicament of declining net energy and soon to be declining over all amounts of aggregate forms of energy from fossil fuels. Whether that is this year, 10 years or 20 years blink of an eye historically speaking. And certainly given the level of implications of what that repercussions of that might be, extraordinary. And there are opportunities embedded in that story and there are challenges. But given the challenges, one of the things I have come to in my life you know, very high chance, I am a betting man so I’m throwing a six-sided die. I think five sides of that die &#8212; say higher energy prices going forward. There is a chance maybe I will be surprised and energy becomes less of my disposable income. But my response to that was to make my house as energy resilient as possible. Air sealing, figuring out how we use energy. Putting some solar thermal panels on, manage to without really a whole lot of effort cut my energy use a lot without noticeably impacting my standard of living or quality of life in particular.</p>
<p><strong>Tom Murphy:</strong> I’m down the same road and I agree exactly with your conclusion.</p>
<p><strong>Chris Martenson:</strong> Tell us what you have done there?</p>
<p><strong>Tom Murphy:</strong> Most of it really comes through consciousness. Realizing that energy is a precious thing that we can’t rely on it being ever abundant, every cheap. So I wanted to understand what does it mean to reduce energy use. Most of it was just kind of waking up, looking at what I do, measuring, metering, I’m a huge fan of data collection and measurement. So that formed a baseline against which I can judge my actions. So we stopped heating our house. I live in San Diego and many people might get angry hearing that is a bit factor but it is unusual in San Diego for someone to not use heat in the house. We line dry our clothes, I take the bus to work, I put on some solar panels that I built up this system myself with batteries, it is off grid. I have a dual electric system in my house. Some things run on solar, some on utility. But overall, including those I am at less than 5 kilowatt hours a day and a factor of five or so below the national average and a factor of maybe three or four below the San Diego average. There are lots of places where I have made large cuts factors of two or three or four or bigger compared to even my local cohort. And yea, I still live the same basic life I did before. That has given me a lot of encouragement. Large cuts are possible. That can have a tremendous sort of purchase power if you will when we are hit with an energy decline scenario.</p>
<p>Now, my changes were voluntary, your changes were voluntary. I think these things feel a lot different when they are not which is part of my reasoning for deciding to take control of it rather than be controlled. But you know there is this one phenomenon that I call the energy trap that I think we really need to pay some attention to. Which is once we enter into a say energy decline a year by year decline and realize that oh shoot, this is fossil fuels are peaking out. Liquid fuels will be first, petroleum, we really need to invest heavily in an energy infrastructure, new infrastructure to replace our fossil fuel use. That is going to take a lot of energy. And if you are already running short on energy that demand for a new significant influx of energy has to come from somewhere. It makes your perceived energy decline steeper. That is politically very difficult to affect.</p>
<p><strong>Chris Martenson:</strong> Yes. But if we had the right story we could do it. One of my favorite examples is people, what today would be considered sacrificed a lot for World War II, they didn’t call it sacrificed at the time. It was the war effort and they were all behind it because we had a narrative that said we were going to defeat Nazi’s and it was worth it and we did it. Right now I don’t think anybody is really looking at the story and saying this is something that we really have to do. In fact, we are still talking about how we can use our energy up as fast as possible instead of saying where do we want to be in 40, 50 years and how are we going to get there? And that is what every good business has to do every –we should do that in our own lives. But as a former strategy consultant we would wander into businesses and say where do you want to be? How are you going to get there? That is all that is required for a good strategy. And I don’t know that we have either of those two conversations happening at the national level right now. Which is I guess why you do what you do and why I do what I do.</p>
<p><strong>Tom Murphy:</strong> Exactly. I do think it is physically possible to navigate ourselves to a steady state and technologically advanced future. But it is psychologically very difficult to make the sacrifices that in near terms are going to be needed. I think the other difficult here is that when we rose to gigantic challenges in the past, World War II, we had an enemy with a human face. And that human face could be demonized, that is what we tend to do during war time. If it is a problem of energy and energy use we are our own enemies. That is the psychological problem. We have to acknowledge that we are our own problem and the changes that we need to make are directed at our own habit. So in World War II you might have somebody motivated to go work in a bomb factory and painting “Die you”, whatever &#8211; fill in the enemy at the time on the side of the bomb shell, how are we going to mobilize people? In World War II, we have hate on our side. That is a very powerful motivator. How are we going to learn to hate our own energy use enough to do something significant about it at that scale.</p>
<p><strong>Chris Martenson:</strong> I agree. And that is why the narrative has to be framed around the hope side. We can wrap in legacy, we can talk about what is being responsible. We can talk about ultimately I see us as the larger metaphor here is that we as a culture came through our adolescence, right? And like all good adolescents we were growing. That is what your body does. But sooner or later your body stops growing and you have to adjust to that or you will end up being very heavy. And so here we are at the point where there are no more horizons to go over. There are no more big untapped resources. We pretty much have it all mapped out so the question is how are we going to manage that now? So ultimately we are talking about a transition into adulthood and so that I think is a very hopeful conversation because it says what was important to us in the past as teenagers, might not be the same things that were as important to us as adults. And that is okay. That is perfectly normal. It is natural. We got analogs for it. Ultimately, my personal story around this is I cut my standard of living in half. I probably doubled my quality of life. I am pretty sure that if I can do it anybody can do it. That this consumptive treadmill I was on turned out to be something I was very good at. I was born, bred, raised and trained for it. When I got off of it it initially motivated by some anxiety if not fear about what I saw coming. I realize now I would willingly jump into that landscape because of what I find there. That is I am getting pulled rather than pushed towards it.</p>
<p>And so to me, that is my motivation is to say not only can we get off of this ridiculous treadmill we are on, which has no future, by the way, unsustainable. And step into this new life. But it is actually something we want to do and it is time to do that. We either do it or we don’t. I am a scientist at heart. Trained in the physical sciences, natural sciences and I just know that limits are limits. And we will, like any organism discover our limits. And we will either discover that on our own terms or on some other terms.</p>
<p><strong>Tom Murphy:</strong> Well, I think part of my difficulty in all this is I have the sense and the intuition that we face unprecedented challenges that will prohibit us from continuing our pace, from growing. And I have the sense that the technologies that we would like to use to replace fossil fuels are impractical from the point of view that it is easy to make electricity and we can make that in all kinds of renewable ways that don’t involve fossil fuels, but getting that into the transportation fleet requires electric vehicles. And yes, we can do that, but how many people can afford them? Do we price ourselves out of a post fossil future that looks much like today’s world. And so I have a sense that all of that is very, very hard and may be a challenge that humanity is up for. But the awkward aspect of this that as a scientist I can’t prove that. I just have an intuition that same intuition has been very useful and an extremely powerful guide for me as a scientist to pick problems that are approachable and to pick technologies that don’t have show stoppers. I have explored plenty of possibly projects in science that I just had an uneasy feeling about the technological state and shied away and in hindsight, those were all very good decisions. I think I have to trust my own intuition at some level. And feel that if this is a really hard, unprecedented time in the progress of humanity. And we should just pay attention to that. It is a message that most people don’t want to hear. So it is a real challenge to get people to accept that maybe we should slow down. Maybe we should aim for steady state even if it is just a temporary phase and then we realize oh, was it really necessary in the most optimistic of scenarios.</p>
<p>I am realizing I have conservative tendencies here. I want to take the lowest risk approach to the future. So much is riding on it. And personally I feel that the scientific progress I have made over the last few hundred years is astounding. I don’t want to lose that. I think that is a gift to the future and I don’t want to run the risk of a collapse that could destroy all that we have. Even if you think the collapse is a low probability. Let’s say it is 5%, 10% probability. It is an asymmetric risk. The downsides of not treating it seriously are huge. I mean you buy fire insurance for a house even if it is a .1% probability that your house will burn down in your lifetime. But the consequences are so negative that you do it. And I think when you are talking about the accomplishments of all civilizations, we need to buy insurance and treat that with the respect it deserves.</p>
<p><strong>Chris Martenson:</strong> Very well said. I couldn’t agree more. We are going to have to leave it at that today. I do wish you the best with the economist. I do hope that you two can continue your conversation. I would love to be privy to whatever comes from that and hear about it. It is a very important conversation. We have to start having it. And I want to thank you for our conversation today. Just incredible stuff you have done. I love your blog. Just quickly, tell people how they can follow you more closely?</p>
<p><strong>Tom Murphy:</strong> I would just say google Do the Math you will find my blog. I have kept a weekly pace up for the last almost a year, but I am dropping off to once every two weeks for a while while I get other aspects of my life in order. It is a very time consuming thing it turns out. It has been a nights and weekends deal because my job is very demanding. So I am sort of I feel like I just ran a marathon. I will continue to post on all of these same kinds of topics.</p>
<p><strong>Chris Martenson:</strong> It is an important body of work that is already there. I would invite people to wander over and read through it. It is very good. Do the Math. Tom, thank you so much for your time today and an engaging conversation.</p>
<p><strong>Tom Murphy:</strong> Yea, thanks. It’s been fun.</p>
<p><a href="http://www.chrismartenson.com/page/transcript-tom-murphy">chrismartenson.com</a></p>
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		<title>India will cut oil imports from Iran by 11%</title>
		<link>http://peakoil.com/publicpolicy/india-will-cut-oil-imports-from-iran-by-11/</link>
		<comments>http://peakoil.com/publicpolicy/india-will-cut-oil-imports-from-iran-by-11/#comments</comments>
		<pubDate>Tue, 15 May 2012 16:23:10 +0000</pubDate>
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				<category><![CDATA[Public Policy]]></category>

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		<description><![CDATA[<img src="http://peakoil.com/catimages/policy.jpg" width="138" height="138" alt="" title="Public Policy" /><br/>A week after Secretary of State Hillary Clinton urged New Delhi to reduce its engagement with Tehran, India said it would cut Iranian oil imports by 11 percent in the coming year. The promised cut could constitute a significant step for India toward securing a waiver from U.S. sanctions before a June deadline — although [...]]]></description>
			<content:encoded><![CDATA[<img src="http://peakoil.com/catimages/policy.jpg" width="138" height="138" alt="" title="Public Policy" /><br/><p>A week after Secretary of State Hillary Clinton <a href="http://www.washingtonpost.com/world/asia_pacific/clinton-arrives-in-india-urges-cooperation-on-iran/2012/05/07/gIQAZjry7T_story.html" data-xslt="_http">urged New Delhi to reduce its engagement with Tehran</a>, India said it would cut Iranian oil imports by 11 percent in the coming year.</p>
<p>The promised cut could constitute a significant step for India toward securing a waiver from <a href="http://www.washingtonpost.com/world/national-security/white-house-sees-more-pain-for-iran-as-it-clears-way-for-further-sanctions/2012/03/30/gIQAj9yAmS_story.html" data-xslt="_http">U.S. sanctions</a> before a June deadline — although officials here denied that they were motivated by U.S. pressure and some analysts questioned whether the move would be enough to satisfy Washington.</p>
<p>The United States has already granted sanction waivers to Japan and 10 European countries after they announced cuts, but it has not yet included India or China, two of the biggest importers of Iranian oil.</p>
<p>Deputy oil minister R.P.N. Singh told parliament Tuesday that imports from Iran would be reduced to 113.6 million barrels in the financial year ending next March, down from 127.8 million tons the previous year.</p>
<p>In the past few months, New Delhi has come under enormous pressure from Washington to join international sanctions aimed at forcing Iran to stop its military nuclear program. But India’s historical ties with Iran, and especially its reliance on Iranian oil, have posed a<a href="http://www.washingtonpost.com/world/national-security/white-house-sees-more-pain-for-iran-as-it-clears-way-for-further-sanctions/2012/03/30/gIQAj9yAmS_story.html" data-xslt="_http"> severe foreign policy dilemma </a>here.</p>
<p>Fiercely independent in its foreign policy making, and wary of angering its huge Muslim population, India says it will respect only sanctions agreed to by the United Nations. Officials would never publicly admit that any reduction in oil imports from Iran has come as a result of U.S. pressure.</p>
<p>“In order to reduce its dependence on any particular region of the world, India has been consciously trying to diversify its sources of crude oil imports to strengthen the country’s energy security,” Singh told lawmakers in a written statement Tuesday.</p>
<p>A foreign ministry official sought to play down the announcement by saying that it was dictated by the market conditions.</p>
<p>“The cut is a direct result of constraints faced by financial institutions to channelize payments for Iranian oil,” said a foreign ministry official. “These constraints are bound to have an impact, regardless of what the governments decide. There is no intention on our part to seek a waiver from the U.S.”</p>
<p>India imports 80 percent of its oil, from more than 30 countries. Iran accounts for almost 12 percent of its total imports.</p>
<p>Indian officials privately say that it is difficult to restrain India’s growing appetite for energy, which is desperately needed to fuel industrial expansion and economic growth. But U.S.-led sanctions have already made it much harder for India to ship and pay for Iranian oil.</p>
<p>A U.S. special envoy, Carlos Pascual, met officials in New Delhi on Tuesday to follow up on Clinton’s discussions with Indian officials. The foreign ministry official said the discussion with the envoy was about India’s long-term energy needs and “included the Iran issue, but it was not the primary focus today.”</p>
<p>“We have already scaled back imports because we have been facing difficulties in paying for the oil and having trouble finding enough tankers to lift the oil,” said K. C. Singh, a retired diplomat who was India’s ambassador to Tehran. “Today’s announcement may be okay for the time being, but I suspect that Americans would want us to do more. India has to do a tough balancing act between Iran and America. We have to ensure that our strategic engagement with the U.S. continues.”</p>
<p>Under pressure from the U.S. Treasury, India withdrew in December 2010 from the Asian Clearing Union, a mechanism set up a few years ago to make payments from the South Asian region to Iran. But Iran continued to supply oil on credit, with debts ballooning to $3 billion earlier this year.</p>
<p>In March, Iran agreed to receive part of the payment in Indian rupees, through Indian banks. The option of paying with either dollars or euros has been choked off because of international pressure.</p>
<p><a href="http://www.washingtonpost.com/world/india-will-cut-its-oil-imports-from-iran-by-11-percent/2012/05/15/gIQAyp8GRU_story.html">Washington Post</a></p>
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		<title>U.S. coal generation drops 19 percent in one year, leaving coal with 36 percent share of electricity</title>
		<link>http://peakoil.com/consumption/u-s-coal-generation-drops-19-percent-in-one-year-leaving-coal-with-36-percent-share-of-electricity/</link>
		<comments>http://peakoil.com/consumption/u-s-coal-generation-drops-19-percent-in-one-year-leaving-coal-with-36-percent-share-of-electricity/#comments</comments>
		<pubDate>Tue, 15 May 2012 13:19:37 +0000</pubDate>
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				<category><![CDATA[Consumption]]></category>

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		<description><![CDATA[<img src="http://peakoil.com/catimages/consumption.jpg" width="138" height="138" alt="" title="Consumption" /><br/>Power generation from coal is falling quickly. According to new figuresfrom the U.S. Energy Information Administration, coal made up 36 percent of U.S. electricity in the first quarter of 2012 — down from 44.6 percent in the first quarter of 2011. That stunning drop, which represented almost a 20 percent decline in coal generation over [...]]]></description>
			<content:encoded><![CDATA[<img src="http://peakoil.com/catimages/consumption.jpg" width="138" height="138" alt="" title="Consumption" /><br/><p>Power generation from coal is falling quickly. According to <a title="eia" href="http://www.eia.gov/forecasts/steo/" target="_blank">new figures</a>from the U.S. Energy Information Administration, coal made up 36 percent of U.S. electricity in the first quarter of 2012 — down from 44.6 percent in the first quarter of 2011.</p>
<p>That stunning drop, which represented almost a 20 percent decline in coal generation over the last year, was primarily due to low natural gas prices. As EIA explains, natural gas generation will climb steadily this year, while coal will see a double-digit drop by the end of 2012:</p>
<blockquote><p>Natural‐gas‐fired generation continues to expand its share of total generation at the expense of coal‐fired generation. <strong>During the first quarter of 2012, natural gas accounted for 28.7 percent of total generation compared with 20.7 percent during the same quarter last year. In contrast, coal’s share of total generation declined from 44.6 percent to 36.0 percent over the same period.</strong></p>
<p>Prices for natural gas delivered to the electric power industry fell by 7.5 percent in 2011, which contributed to a significant increase in the share of natural‐gas‐fired generation. <strong>EIA expects this trend to continue in 2012, with</strong><strong> electric power sector coal consumption falling by 14 percent.</strong> Natural gas in the electric power sector grows by almost 21 percent in 2012, primarily driven by the increasing relative cost advantages of natural gas over coal for power generation in some regions.</p></blockquote>
<p><a href="http://thinkprogress.org/wp-content/uploads/2012/05/Screen-shot-2012-05-14-at-7.39.06-AM.png"><img title="Screen shot 2012-05-14 at 7.39.06 AM" src="http://thinkprogress.org/wp-content/uploads/2012/05/Screen-shot-2012-05-14-at-7.39.06-AM.png" alt="" width="569" height="382" /></a></p>
<p>EIA also projects that coal production at mines will fall by more than 10 percent this year. However, with prices falling due to an increase in secondary inventories, the agency predicts that domestic consumption may rise by just over 1 percent next year.</p>
<p>The U.S. coal industry if facing major headwinds. The current drop in generation is mostly due to competition from natural gas. But there are other factors that will assist in pushing coal out of the electricity mix: An aging fleet of plants, cost-competitive renewables, new clean air regulations, and a strong anti-coal movement are working together to reduce the attractiveness of coal. Since 2010, plant operators <a title="coal" href="http://thinkprogress.org/climate/2012/02/29/435012/dirty-aging-coal-plants-set-to-close/" target="_blank">have announced 106 retirements</a> of coal facilities — representing 13 percent of the U.S. fleet, according to the Sierra Club.</p>
<p>The continued decline in domestic coal generation is good news for reducing greenhouse gas emissions. Carbon dioxide emissions from the fossil fuel sector are expected to decline by almost 3 percent this year — continuing the 1.9 percent decrease seen in 2011. Emissions from natural gas will rise by 5.5 percent, while emissions from coal will fall by almost 12 percent.</p>
<p><a href="http://thinkprogress.org/climate/2012/05/14/483432/us-coal-generation-drops-19-percent-in-one-year-leaving-coal-with-36-percent-share-of-electricity/">Climate Progress</a></p>
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