Twilight In The Desert ?  

Posted by Big Gav

The Oil Drum's Stuart Staniford is making the case that Suadi Arabian production has passed its peak, with an implied decline rate for 2006 of 8%. While some are declaring that this means Saudi production is definitely in decline and the world has therefore passed its peak, I'd be a little wary, for a number of reasons. In no particular order, (a) I'm not aware that worldwide production has showed any sign of decline, (b) US$ oil prices certainly have declined a lot from their peak, and aren't showing any particular signs of jumping again, (c) the US$ itself has plenty of skeptics muttering about the now-extinct M3 measure of money supply and a tidal wave of global liquidity, and (d) its theoretically possible (although not practical at the present time) for Iraq to produce at least as much oil as Saudi Arabia currently does (ie. another 9 million barrels a day) - a fact propaganda trolls use to try and paint the invasion in a positive light from time to time.

So don't get too excited about this report just yet...

What I did in this post was to look in more detail at what happened from the beginning of 2006 on, which is when the apparent decline begins. I added data from a fourth source (the OPEC Monthly Oil Market Review), and for each of the four sources of data, I fit a linear trend:



The resulting graph is extremely striking, I think. The four different sources all estimate Saudi production slightly differently - they fluctuate in different ways month to month, and disagree over the absolute level (that last may be differences in exactly what is defined as oil). However, the regressions make clear that all four sources are in strong agreement about the nature of the decline. The slopes of the lines are very similar.

The implied decline rate through the year is 8% ± 0.1%. (Note that the year on year decline from 2005 to 2006 will only be about half that, as the decline only began at the beginning of 2006). As far as I know, there are no known accidents or problems that would explain any restrictions on oil supply, and the Saudis themselves have maintained publicly that their production is unproblematic and they intend to increase it.

It's interesting to note the pattern in the underlying data where declines start, are interrupted in the middle of the year, and then resume. I take this to be due to the coming onstream of the 300kbpd of liquids from the Haradh III megaproject. [...]

It seems this did not do more than briefly interrupt the declines. We can get a clearer picture as follows. What I did was average the EIA, IEA, and JODI series for 2005 and 2006 into a single estimate. Onto that, I've hand drawn a couple of guidelines that are 300 kbpd apart vertically:



My intepretation is that the bump in the middle of the year that separates the two lines is due to the impact of Haradh III coming on stream. So that tells us that, given some extra production capacity, Saudi Aramco immediately threw it into the production mix. And the effect of that? It lifted the plummeting production curve up by 300kbpd, but did nothing to change the gradient of the plummet. That suggests that the Saudis had nothing else to throw at the problem.

It also suggests that last year's underlying Type II decline rate, before megaprojects like Haradh III, was 14%.

Overall, I feel this data is clear enough that I'm willing to go out on a limb and conclude the following:

# Saudi Arabian oil production is now in decline.
# The decline rate during the first year is very high (8%), akin to decline rates in other places developed with modern horizontal drilling techniques such as the North Sea.
# Declines are rather unlikely to be arrested, and may well accelerate. ...

I suggest that this is likely to place severe political strains on Saudi Arabia within a year or two at most. ...

I'll bet $1000 with the first person who cares to take me up on it that the international oil agencies will never report sustained Saudi production of crude+condensate of 10.7 million barrels or more.

The Christian Science Monitor predicts that Iraq's new oil law won't last.
With considerable fanfare, Iraq's cabinet last week announced approval of a draft law that would permit foreign investment in the nation's oil industry and provide for distribution of oil revenues among the regions and thus the country's main sectarian blocs.

Details of the draft are tricky. Revenues from current oil fields are to be shared according to population. Yet no recent census has been taken. The Kurdish region in the north and the provinces can sign new oil contracts, but these must be reviewed by an independent federal committee, not yet appointed. There is concern that foreign oil companies might try to get better terms by playing the provinces against one another.

But some oil experts are skeptical of the significance of the measure. "It will not mean anything on the ground," says A.F. Alhajji, an oil economist at Ohio Northern University in Ada. As long as Iraq suffers from political instability, major oil companies will shy away. "The situation is so bad no one in his right mind wants to go there to be attacked or nationalized a second time." Fearing the consequences, "The oil companies never supported the invasion," Dr. Alhajji adds.

Iraq's oil remains important to a world highly reliant on petroleum and its byproducts. Iraq has proven reserves of 115 billion barrels and, according to Iraqi oil economist Muhammad-Ali Zainy, another 215 billion to 240 billion barrels not yet proven. Some of that new oil may cost as little as $1 a barrel to extract.

By comparison, Saudi Arabia has 264 billion barrels of proven reserves.

Because of sabotage by insurgents, Iraqi oil production has been running at less than 2 million barrels per day, down from 2.8 million barrels before the invasion of Iraq in March 2003, says Mr. Zainy, now with the Global Center for Energy Studies in London.

To Alhajji, the "rush" to approve the draft law reflects the need of the Iraqi government and the Bush administration to show some success – "even if it is as cosmetic as the new oil law." Zalmay Khalilzad, US ambassador in Iraq, stated the draft was the "first time since 2003 that all major Iraqi communities have come together on a defining piece of legislation."

Iraq's government hopes the nation's 275-member parliament will approve the draft before the end of May. The legislation will be extremely controversial. Opposition is expected from the powerful Oil Workers Union of Basra. It staged strikes in 2005 objecting to America's plan to privatize Iraq's oil industry. A reviving Communist Party will oppose it. Much of the Iraqi press also objects to aspects of the law. ...

During the 20th century, oil became the fulcrum of politics in the Middle East, with countries nationalizing their oil resources and winning better oil deals. The draft law "reverses everything that has happened in the Middle East since 1901," charges Rashid Khalidi, director of the Middle East Institute at Columbia University in New York. Implying that American occupiers have had much influence on the measure, Mr. Khalidi asks: "Does [Vice President] Cheney think he can stand against history?"

Khalidi's latest book, "Resurrecting Empire," spells out the history of foreign exploitation of Iraqi oil, noting that resentment over "insufficient benefits" to Iraqis led to the popularity of the Baath government and nationalization of the oil industry in 1975. Khalidi doubts the draft law will pass parliament. "It is so manifestly against the interests of Iraq," he says. If it does, though, he doesn't expect the law to last. Presumably, an Iraq no longer occupied would seek better terms for any deal reached under the proposed law.

Alhajji notes that contracts signed "under duress" are not legally binding. After Iran nationalized its oil industry in the 1950s, British lawyers for the Anglo-Persian Oil Company (now British Petroleum) contested the action in the International Court in the Hague and lost, despite Britain's superpower status then.

In the future, Iraqi lawyers could similarly argue that any oil deal signed while Iraq was occupied was done under duress and thus was invalid. After reading the draft law in Arabic last week, Alhajji says, "It is so broad and loose, it has no significance." Often, he says, nationalism in oil-rich nations rises during and after occupation by foreigners. That "will cause problems."

Democracy Now has a fairly interesting interview with Wesley Clark, who has some worthwhile comments on a number of topics, including the claim that the US had plans in 2001 to invade seven countries in five years "starting with Iraq, and then Syria, Lebanon, Libya, Somalia, Sudan and, finishing off, Iran".
AMY GOODMAN: Now, let’s talk about Iran. You have a whole website devoted to stopping war.

GEN. WESLEY CLARK: Www.stopiranwar.com.

AMY GOODMAN: Do you see a replay in what happened in the lead-up to the war with Iraq -- the allegations of the weapons of mass destruction, the media leaping onto the bandwagon?

GEN. WESLEY CLARK: Well, in a way. But, you know, history doesn’t repeat itself exactly twice. What I did warn about when I testified in front of Congress in 2002, I said if you want to worry about a state, it shouldn’t be Iraq, it should be Iran. But this government, our administration, wanted to worry about Iraq, not Iran.

I knew why, because I had been through the Pentagon right after 9/11. About ten days after 9/11, I went through the Pentagon and I saw Secretary Rumsfeld and Deputy Secretary Wolfowitz. I went downstairs just to say hello to some of the people on the Joint Staff who used to work for me, and one of the generals called me in. He said, “Sir, you’ve got to come in and talk to me a second.” I said, “Well, you’re too busy.” He said, “No, no.” He says, “We’ve made the decision we’re going to war with Iraq.” This was on or about the 20th of September. I said, “We’re going to war with Iraq? Why?” He said, “I don’t know.” He said, “I guess they don’t know what else to do.” So I said, “Well, did they find some information connecting Saddam to al-Qaeda?” He said, “No, no.” He says, “There’s nothing new that way. They just made the decision to go to war with Iraq.” He said, “I guess it’s like we don’t know what to do about terrorists, but we’ve got a good military and we can take down governments.” And he said, “I guess if the only tool you have is a hammer, every problem has to look like a nail.”

So I came back to see him a few weeks later, and by that time we were bombing in Afghanistan. I said, “Are we still going to war with Iraq?” And he said, “Oh, it’s worse than that.” He reached over on his desk. He picked up a piece of paper. And he said, “I just got this down from upstairs” -- meaning the Secretary of Defense’s office -- “today.” And he said, “This is a memo that describes how we’re going to take out seven countries in five years, starting with Iraq, and then Syria, Lebanon, Libya, Somalia, Sudan and, finishing off, Iran.” I said, “Is it classified?” He said, “Yes, sir.” I said, “Well, don’t show it to me.” And I saw him a year or so ago, and I said, “You remember that?” He said, “Sir, I didn’t show you that memo! I didn’t show it to you!”

AMY GOODMAN: I’m sorry. What did you say his name was?

GEN. WESLEY CLARK: I’m not going to give you his name.

AMY GOODMAN: So, go through the countries again.

GEN. WESLEY CLARK: Well, starting with Iraq, then Syria and Lebanon, then Libya, then Somalia and Sudan, and back to Iran. So when you look at Iran, you say, “Is it a replay?” It’s not exactly a replay. But here’s the truth: that Iran, from the beginning, has seen that the presence of the United States in Iraq was a threat -- a blessing, because we took out Saddam Hussein and the Baathists. They couldn’t handle them. We took care of it for them. But also a threat, because they knew that they were next on the hit list. And so, of course, they got engaged. They lost a million people during the war with Iraq, and they’ve got a long and unprotectable, unsecurable border. So it was in their vital interest to be deeply involved inside Iraq. They tolerated our attacks on the Baathists. They were happy we captured Saddam Hussein.

But they're building up their own network of influence, and to cement it, they occasionally give some military assistance and training and advice, either directly or indirectly, to both the insurgents and to the militias. And in that sense, it's not exactly parallel, because there has been, I believe, continuous Iranian engagement, some of it legitimate, some of it illegitimate. I mean, you can hardly fault Iran because they're offering to do eye operations for Iraqis who need medical attention. That's not an offense that you can go to war over, perhaps. But it is an effort to gain influence.

And the administration has stubbornly refused to talk with Iran about their perception, in part because they don't want to pay the price with their domestic -- our US domestic political base, the rightwing base, but also because they don't want to legitimate a government that they've been trying to overthrow. If you were Iran, you'd probably believe that you were mostly already at war with the United States anyway, since we've asserted that their government needs regime change, and we've asked congress to appropriate $75 million to do it, and we are supporting terrorist groups, apparently, who are infiltrating and blowing up things inside Iraq -- Iran. And if we're not doing it, let's put it this way: we're probably cognizant of it and encouraging it. So it's not surprising that we're moving to a point of confrontation and crisis with Iran.

My point on this is not that the Iranians are good guys -- they're not -- but that you shouldn't use force, except as a last, last, last resort. There is a military option, but it's a bad one. ...

AMY GOODMAN: General Clark, do you think Guantanamo Bay should be closed?

GEN. WESLEY CLARK: Absolutely.

AMY GOODMAN: If Congress cut off funds for the prison there, it would be closed. Should they?

GEN. WESLEY CLARK: Well, I think the first thing Congress should do is repeal the Military Commissions Act. I’m very disturbed that a number of people who are looking at the highest office in the land have supported an act which advertently or inadvertently authorizes the admission into evidence of information gained through torture. That's not the America that I believe in. And the America that I believe in doesn't detain people indefinitely without charges. So I’d start with the Military Commissions Act.

Then I’d get our NATO allies into the act. They've said they don't like Guantanamo either. So I’d like to create an international tribunal, not a kangaroo court of military commissions. And let's go back through the evidence. And let's lay it out. Who are these people that have been held down there? And what have they been held for? And which ones can be released? And which ones should be tried in court and convicted?

You see, essentially, you cannot win the war on terror by military force. It is first and foremost a battle of ideas. It is secondly a law enforcement effort and a cooperative effort among nations. And only as a last resort do you use military force. This president has distorted the capabilities of the United States Armed Forces. He's used our men and women in uniform improperly in Guantanamo and engaged in actions that I think are totally against the Uniform Code of Military Justice and against what we stand for as the American people.

AMY GOODMAN: Do you think that President Bush should be impeached?

GEN. WESLEY CLARK: Well, I think we ought to do first thing's first, which is, we really need to understand and finish the job that Congress started with respect to the Iraq war investigation. Do you remember that there was going to be a study released by the Senate, that the senator from Iowa or from Kansas who was the Republican head of the Senate Intelligence Committee was going to do this study to determine whether the administration had, in fact, misused the intelligence information to mislead us into the war with Iraq? Well, I’ve never seen that study. I’d like to know where that study is. I’d like to know why we’ve spent three years investigating Scooter Libby, when we should have been investigating why this country went to war in Iraq.

AMY GOODMAN: The Center for Constitutional Rights has filed a complaint against Donald Rumsfeld, General Miller and others in a German court, because they have universal jurisdiction. Do you think that Donald Rumsfeld should be tried for war crimes?

GEN. WESLEY CLARK: Well, I’d like to see what the evidence is against Rumsfeld. I do know this, that there was a lot of pressure put on the men and women in uniform to come up with intelligence. I remember -- I think it was either General Sanchez or General Abizaid, who stated that we don't need more troops -- this is the fall of 2003 -- we just need better information. Well, to me, that was immediate code words that we were really trying to soak these people for information.

And it's only a short step from there to all the kinds of mistreatment that occur at places like Abu Ghraib. So we know that Al Gonzales wrote a couple of really -- or authored, or his people authored and he approved, a couple of outrageous memos that attempted to define torture as deliberately inflicted pain, the equivalent of the loss of a major bodily organ or limb, which is -- it's not an adequate definition of torture. And we know that he authorized, to some degree, some coercive methods, which we have -- and we know President Bush himself accepted implicitly in a signing statement to a 2005 act on military detainees that he would use whatever methods were appropriate or necessary. So there's been some official condoning of these actions.

I think it's a violation of international law and a violation of American law and a violation of the principles of good government in America. ...

AMY GOODMAN: 1953 was also a seminal date for today, and that was when Kermit Roosevelt, the grandson of Teddy Roosevelt, went to Iran and led a coup against Mohammed Mossadegh under Eisenhower.

GEN. WESLEY CLARK: People make mistakes. And one of the mistakes that the United States consistently made was that it could intervene and somehow adjust people's governments, especially in the Middle East. I don't know why we felt that -- you can understand Latin America, because Latin America was always an area in which people would come to the United States, say, “You've got to help us down there. These are banditos, and they don't know anything. And, you know, they don’t have a government. Just intervene and save our property.” And the United States did it a lot in the ’20s. Of course, Eisenhower was part of that culture. He had seen it.

But in the Middle East, we had never been there. We established a relationship during World War II, of course, to keep the Germans out of Iran. And so, the Soviets and the Brits put an Allied mission together. At the end of World War II, the Soviets didn't want to withdraw, and Truman called their bluff in the United Nations. And Eisenhower knew all of this. And Iran somehow became incorporated into the American defense perimeter. And so, his view would have been, we couldn't allow a communist to take over.

AMY GOODMAN: But wasn't it more about British Petroleum?

GEN. WESLEY CLARK: Oh, it's always -- there are always interests. The truth is, about the Middle East is, had there been no oil there, it would be like Africa. Nobody is threatening to intervene in Africa. The problem is the opposite. We keep asking for people to intervene and stop it. There's no question that the presence of petroleum throughout the region has sparked great power involvement. Whether that was the specific motivation for the coup or not, I can't tell you. But there was definitely -- there's always been this attitude that somehow we could intervene and use force in the region. I mean, that was true with -- I mean, imagine us arming and creating the Mujahideen to keep the Soviets out of Afghanistan. Why would we think we could do that? But we did. And, you know, my lesson on it is, whenever you use force, there are unintended consequences, so you should use force as a last resort. Whether it's overt or covert, you pay enormous consequences for using force. ...

One country on Clark's list of invadees was Libya, which did an about face a few years ago and reconciled with the West (maybe this was one rare case where the US stick worked). Libya was at one point the world's largest oil producer, in the years before Gaddafi's coup, when the independent oil companies like Occidental were living it up - which was one of the more intriguing chapters of "The Control of Oil". The Libyan oil rush is on again in earnest now, with reports of fierce competition in scramble for Libya's black gold.
After 20 years of isolation, Libya has become the destination of choice for hungry oil companies ready to cut any kind of deal to get a piece of the north African state's oil riches. "It's a race for our black gold," president of the National Oil Company Shukri Ghanem told AFP. "We are organising it like the Olympic Games and may the best one win."

With each subsequent round of concessions, companies from all over the world have been undercutting each other's bids to the barest limits of profitability.

With the end of UN sanctions after Libyan leader Moamer Kadhafi dramatic decision in December 2003 to abandon weapons of mass destruction programmes, oil exploration has picked up from its long hiatus at a frenetic pace. OPEC member Libya is Africa's second largest oil producer with 1.6 million barrels of oil per day (bpd). Its reserves are estimated at 42 billion barrels of high quality crude which could rise to Kuwait-like levels of 100 billion with new explorations.

"Libya is one of those rare countries that has huge exploration zones of practically virgin territory, but some companies are rushing into them on terms that are only barely economically feasible," noted Philippe Malzac, head of French oil company Total in Libya. ...

While the agreements began with an average share of 25 percent for the companies, in the third round Chinese Petroleum offered to take only 7.8 percent, while Russia's Gazprom and Tatneft dropped to 10 percent. "Taking into account the risks and the rise in cost of investments, the companies submitting such offers are not functioning solely on economic criteria -- it's disturbing," said a Western oil man who preferred to remain anonymous. For him and many other representatives of the Western companies, these kinds of deals smack of "dumping" on the part of the energy-hungry Chinese, Indians and Russians.

American giant Exxon is sitting pretty with a massive offshore concession of 10,000 square kilometres (3,800 square miles) in the Sirte basin, along 160 kilometres (100 miles) of coastline, which it obtained without competition. "We are very happy with this concession," said Philippe Gosse, head of Libyan operations. "Exxon-Mobil has a long history of successes in Libya."

Oil makes up 95 percent of Libya's exports -- with 40 percent of it going straight to Italy -- and 70 percent of its GDP. The country is hoping to return to its pre-embargo production rate of three million barrels per day.

Mobjectivist points to some sludge from the NYT about the Kern River field in California.
Thanks to the Matt Sludge Report, I see a writer (Jad Mouawad) from the NY Times thinks that we will beat Peak Oil by relying on sludge. Note the bolded portion of the article: Oil Innovations Pump New Life Into Old Wells.
The Kern River oil field, discovered in 1899, was revived when Chevron engineers here started injecting high-pressured steam to pump out more oil. The field, whose production had slumped to 10,000 barrels a day in the 1960s, now has a daily output of 85,000 barrels.

In Indonesia, Chevron has applied the same technology to the giant Duri oil field, discovered in 1941, boosting production there to more than 200,000 barrels a day, up from 65,000 barrels in the mid-1980s.

And in Texas, Exxon Mobil expects to double the amount of oil it extracts from its Means field, which dates back to the 1930s. Exxon, like Chevron, will use three-dimensional imaging of the underground field and the injection of a gas — in this case, carbon dioxide — to flush out the oil.

Within the last decade, technology advances have made it possible to unlock more oil from old fields, and, at the same time, higher oil prices have made it economical for companies to go after reserves that are harder to reach. With plenty of oil still left in familiar locations, forecasts that the world’s reserves are drying out have given way to predictions that more oil can be found than ever before.

In a wide-ranging study published in 2000, the U.S. Geological Survey estimated that ultimately recoverable resources of conventional oil totaled about 3.3 trillion barrels, of which a third has already been produced. More recently, Cambridge Energy Research Associates, an energy consultant, estimated that the total base of recoverable oil was 4.8 trillion barrels. That higher estimate — which Cambridge Energy says is likely to grow — reflects how new technology can tap into more resources.

“It’s the fifth time to my count that we’ve gone through a period when it seemed the end of oil was near and people were talking about the exhaustion of resources,” said Daniel Yergin, the chairman of Cambridge Energy and author of a Pulitzer Prize-winning history of oil, who cited similar concerns in the 1880s, after both world wars and in the 1970s. “Back then we were going to fly off the oil mountain. Instead we had a boom and oil went to $10 instead of $100.”

There is still a minority view, held largely by a small band of retired petroleum geologists and some members of Congress, that oil production has peaked, but the theory has been fading. Equally contentious for the oil companies is the growing voice of environmentalists, who do not think that pumping and consuming an ever-increasing amount of fossil fuel is in any way desirable.

Increased projections for how much oil is extractable may become a political topic on many different fronts and in unpredictable ways. By reassuring the public that supplies will meet future demands, oil companies may also find legislators more reluctant to consider opening Alaska and other areas to new exploration.

On a global level, the Organization of the Petroleum Exporting Countries, which has coalesced around a price of $50 a barrel for oil, will likely see its clout reinforced in coming years. The 12-country cartel, which added Angola as its newest member this year, is poised to control more than 50 percent of the oil market in coming years, up from 35 percent today, as Western oil production declines.

Oil companies say they can provide enough supplies — which might eventually lead to lower oil and gasoline prices — but that they see few alternatives to fossil fuels. Inevitably, this means that global carbon emissions used in the transportation sector will continue to increase, and so will their contribution to global warming.

The oil industry is well known for seeking out new sources of fossil fuel in far-flung places, from the icy plains of Siberia to the deep waters off West Africa. But now the quest for new discoveries is taking place alongside a much less exotic search that is crucial to the world’s energy supplies. Oil companies are returning to old or mature fields partly because there are few virgin places left to explore, and, of those, few are open to investors.

At Bakersfield, for example, Chevron is using steam-flooding technology and computerized three-dimensional models to boost the output of the field’s heavy oil reserves. Even after a century of production, engineers say there is plenty of oil left to be pumped from Kern River.

“We’re still finding new opportunities here,” said Steve Garrett, a geophysicist with Chevron. “It’s not over until you abandon the last well, and even then it’s not over.”

Some forecasters, studying data on how much oil is used each year and how much is still believed to be in the ground, have argued that at some point by 2010, global oil production will peak — if it has not already — and begin to fall. That drop would usher in an uncertain era of shortages, price spikes and economic decline.

“I am very, very seriously worried about the future we are facing,” said Kjell Aleklett, the president of the Association for the Study of Peak Oil and Gas. “It is clear that oil is in limited supplies.”

Many oil executives say that these so-called peak-oil theorists fail to take into account the way that sophisticated technology, combined with higher prices that make searches for new oil more affordable, are opening up opportunities to develop supplies. As the industry improves its ability to draw new life from old wells and expands its forays into ever-deeper corners of the globe, it is providing a strong rebuttal in the long-running debate over when the world might run out of oil.

Typically, oil companies can only produce one barrel for every three they find. Two usually are left behind, either because they are too hard to pump out or because it would be too expensive to do so. Going after these neglected resources, energy experts say, represents a tremendous opportunity.

“Ironically, most of the oil we will discover is from oil we’ve already found,” said Lawrence Goldstein, an energy analyst at the Energy Policy Research Foundation, an industry-funded group. “What has been missing is the technology and the threshold price that will lead to a revolution in lifting that oil.”

Nansen G. Saleri, the head of reservoir management at the state-owned Saudi Aramco, said that new seismic tools giving geologists a better view of oil fields, real-time imaging software and the ability to drill horizontal wells could boost global reserves.

Mr. Saleri said that Saudi Arabia’s total reserves were almost three times higher that the kingdom’s officially published figure of 260 million barrels, or about a quarter of the world’s proven total.

He estimated the kingdom’s resources at 716 billion barrels, including oil that has already been produced as well as more uncertain reserves. And thanks to more sophisticated technology, Mr. Saleri said he “wouldn’t be surprised” if ultimate reserves in Saudi Arabia eventually reached 1 trillion barrels.

Even if the Saudi estimates are impossible to verify, they underline the fact that oil companies are constantly looking for new ways to unlock more oil from the ground.

At the Kern River field just outside of Bakersfield, millions of gallons of steam are injected into the field to melt the oil, which has the unusually dense consistency of very thick molasses. The steamed liquid is then drained through underground reservoirs and pumped out by about 8,500 production wells scattered around the field, which covers 20 square miles.

Initially, engineers expected to recover only 10 percent of the field’s oil. Now, thanks to decades of trial and error, Chevron believes it will be able to recover up to 80 percent of the oil from the field, more than twice the industry’s average recovery rate, which is typically around 35 percent. Each well produces about 10 barrels a day at a cost of $16 each. That compares with production costs of only $1 or $2 a barrel in the Persian Gulf, home to the world’s lowest-cost producers.

Chevron hopes to use the knowledge it has obtained from this vast open-air, and underground, laboratory and apply it to similar heavy oil fields around the world. It is also planning a large pilot program to test the technology in an area between Saudi Arabia and Kuwait, for example.

Oil companies have been perfecting so-called secondary and tertiary recovery methods — injecting all sorts of exotic gases and liquids into oil fields, including water and soap, natural gas, carbon dioxide and even hydrogen sulfide, a foul-smelling and poisonous gas.

Since the dawn of the Petroleum Age more than a century ago, the world has consumed more than 1 trillion barrels of oil. Most of that was of the light, liquid kind that was easy to find, easy to pump and easy to refine. But as these light sources are depleted, a growing share of the world’s oil reserves are made out of heavier oil.

Too bad we have completely debunked the reserve growth cornucopians, and that recent CERA publicity has lead to this ignorant journalist to rely on cherry-picked examples. The Kern River field remains a huge anomaly that even Attanasi & Root kept off their reserve growth prognostications.

Kern River is an interesting field - much talked about by the anti-peak oil conspiracy theory set - as an example, try this aging piece of tinfoil from Dave McGowan - its worth keeping an open mind about this field I suspect - while infinite growth of reserves is impossible, determining the exact amount of oil produced by a particular field over its lifetime does seem to be quite a tricky thing to do...


Jim at The Energy Blog has a detailed post on the need for biofuels and battery based vehicles. Jim is the best pure energy blogger in the business, so go read the whole thing - I quote a large section below but there's more.
Based on the response to this mornings post on the governments cellulosic ethanol program, I think some of you may have misunderstood the reasoning behind The Energy Blog supporting this cellulosic ethanol program and some of the basic causes and remedies of The Energy Revolution. Our most pressing energy problem is our decreasing supplies of increasingly expensive oil for the transportation industries. The high use of petroleum products for transportation is one of the primary causes of global warming (the other being coal fired power plants, which will not be discussed in this post), fortunately the solution to the problem of increased use of petroleum products also decreases the emissions of global warming gases.

This is not a short term problem, but one that has taken years to develop and will take years to solve. The timing is hard to pin down. I believe we have passed the peak production of inexpensive sweet crude oil. Each year we are now using larger quantities of expensive (either to harvest and/or refine) oil, whether it be sour oil, very deep offshore oil, heavy oil or perhaps eventually shale oil. At some time, as prices of oil go up, market forces will cause the use of oil to decrease. This would require changes in lifestyle, some of which would be beneficial, as there is much waste and some of which could reduce the the standard of living that we have become used to. More use of mass transportation and driving more efficient vehicles are certainly required.

We currently import nearly two-thirds of our oil. This is increasingly being viewed as a strategic problem, in that we are becoming more and more dependent on obtaining oil from countries that are unstable and not necessarily friendly to the U.S. Most of this oil or its products are used in the transportation industry and thus this becomes the focus of reduced usage.

At the same time increasing use of oil in China, India and other Southeastern Asian countries is putting greater demands on world wide oil production, compounding the problem.

Two general initiatives are underway to mediate this problem 1) Decreasing the use of petroleum products by a)increasing vehicle efficiency and b)by powering vehicles by means that do not use liquid fuels, such as batteries, fuel cells or CNG 2) Developing alternate liquid fuels that are not petroleum based, such as ethanol, biodiesel, biobutane and liquified coal.

Both of these initiatives are required to alleviate severe problems in the future. The current pricing structure is not of too much concern, by the time the problem will become crucial, say greater than $5.00 gasoline, oil will be much more expensive and the alternate fuels will be relatively more economical. We will always have a need for liquid fuels, it would be extremely, if not prohibitively expensive to convert all vehicles to either fuel cells using very expensive hydrogen or battery based power which includes hybrids (HEVs), plug-ins (PHEVs) and battery electric vehicles (BEVs).

Corn ethanol has a small net positive energy efficiency and is land intensive. Its place is/was primarily to establish a market for ethanol which would have cost several years if we were to have started with cellulosic ethanol. We have reached the point, that with the corn ethanol plants now planned for construction, we will have reached the limit at which corn ethanol is a viable fuel. This is evidenced by large increases in the cost of corn, caused by increasing limitations on the amount of corn that can be grown for its various uses, ie, food, cattle food and ethanol; the plowing in of land used by other crops so that it can be used for corn and increasing prices for farmland.

Cellulosic ethanol on the other hand has a larger net positive energy efficiency and uses crops that are much less land and water usage intensive. It is a technology that for the most part is just coming out of the laboratory or pilot plant stage. It has been postulated that corn ethanol at best can provide 12-15% of our liquid fuels, while cellulosic ethanol could provide 30-35% of our current requirement for liquid fuels. It is also believed that our current ethanol biorefineries can be converted to produce cellulosic ethanol with relative ease.

Ethanol has two downsides 1) it is currently must be transported only by truck and rail cars because it absorbs water which is corrosive to existing pipelines. Cellulosic ethanol minimizes this problem because it can be produced in a more distributed manner, closer to population centers. This could be also be alleviated by constructing new pipelines made of corrosion resistant fiberglass as is used to transport natural gas. Biobutanol eliiminates this problem because it is not hydroscopic. 2) The heating value of ethanol is less than that of gasoline, so that mileage per gallon is reduced. Biobutanol reduces this problem because its heating value is 30% higher than ethanol, close to that of gasoline. (paragraph added 8:30 am 3/2/07)

Whether it be increasing costs of oil, ever increased demands for oil, or strategic needs, all of these reasons point to a need to urgently develop our capability to produce biofuels. Many of the same reasons could be postulated for the use of biobutanol or biodiesel from algae. For whatever reasons the government has not become very involved in these technologies.

Private industry in the name of a combine of Dupont and BP are spearheading the drive to use biobutanol and they probably have the money and science to make a go of it. It was announced today that the U.S. EPA will give a $70,000 contract to Integrated Genomics Inc. to develop a method to produce butanol from biomass that is economically competitive with the chemical synthesis of
butanol from petroleum. In 2004, EPA awarded a contract, running through September 2007, to The Consortium for Plant Biotechnology Research (CPBR) at Ohio State University to develop a process for butanol from biomass.

There is still much research to be done on producing biodiesel from algae. This is being pursued by several private firms, especially those that are growing algae with the aid of CO2 from the exhaust from powerplants. If this technology is to be developed at a reasonable pace it may take a grass roots effort from private citizens to uplift it into a mainstream technology, receiving the government support needed to implement it.

Through the use of battery based vehicles and other conservation efforts, it is estimated that we can eventually reduce our liquid fuel consumption by two-thirds, which would be consistant with the combination of biofuel and domestic oil supplies, with the usage of biofuels increasing as domestic oil supplies decline.

My stance on the hydrogen economy is that, for the most part, it is a waste. The power plants that are being proposed to produce hydrogen would be better served by using their electricity to more efficiently charge batteries. The infrastructure required to distribute hydrogen would be all new and very expensive, while alternative liquid fuels can use an existing infrastructure. The storage of hydrogen in vehicles is very obtrusive and expensive. The use of fuel cells, which are part of the hydrogen economy, in stationary uses, especially power plants, looks very promising. The technology for these fuel cells, most likely SOFC fuel cells, is less stringent and is moving along fairly rapidly. No infrastructure for distribution of fuel is required as the fuel would be generated at the power plant site. ...

Wired has an article on a backyard fuel cell setup that sounds like an interesting implementation of Richard Smalley's idea of a home based power storage unit - the basis of the smart grid.
Stephen Friend has the first hand-built fuel cell-powered house in the US. No, not another hopeful boil-your-own-yogurt demo for an impractical technology, but a real, sustainable achievement that makes its own hydrogen in a cedar shed out back. And it has a huge advantage over electric systems favored by his neighbors on Stuart Island, an off-the-grid Pacific Northwest paradise in Washington’s Puget Sound. Most residents there use solar power but must rely on noisy backup generators as well, since their batteries don’t hold enough energy to get them through the winter. So with the help of two buddies, Friend, a Merck vice president and pioneer in digital gene arrays, drew a back-of-the-envelope plan for an energy storage system that extends the life of battery banks. In 2004, they started rigging up a Rube Goldberg contraption that uses solar panels and electrolyzers to generate hydrogen and allows Web-based monitoring of its proton-exchange-membrane fuel cell. In late 2006, a bemused but impressed inspector granted state approval. Now the system, which they built for around $50,000, taps any surplus solar electricity to fill a 500-gallon hydrogen fuel tank, enough reserve for about 14 days’ worth of power (a second tank can be added to double that capacity). Friend thinks of the setup as sort of a TiVo for energy — bank hydrogen during the summer, then consume as it’s needed. ...

NASA's James Hansen notes that the time for building coal fired power stations has passed and plans should be drawn up for bulldozing existing plants.
One of the world's top climate scientists called for an end to building new coal-fired power plants in the United States because of their huge role in spewing out greenhouse gases that contribute to global warming. In the next decade of so, 159 coal-fired power plants are scheduled to be built, generating enough power for about 96 million homes, according to a study last month by the U.S. Department of Energy.

"There should be a moratorium on building any more coal-fired power plants," NASA scientist James Hansen told the National Press Club Monday. Hansen was one of the earliest top researchers to warn the world of global warming.

Hansen's call dovetails with an edict by the private equity group buying TXU, a massive Texas-based utility. The equity group, led by Kohlberg Kravis Roberts & Co. and Texas Pacific Group, agreed to stop plans to build eight new coal-fired power plants, not to propose new coal-fired plants outside Texas and to support mandatory national caps on emissions linked to global warming.

This is the first time Hansen, director of NASA's Goddard Institute for Space Studies in New York, has called for an end to coal burning. He said it's the No. 1 solution to global warming, and that so far, no coal-fired plants can capture carbon dioxide emissions so they are not released into the atmosphere.

While burning oil and natural gas also release carbon dioxide, they will run out and there's more coal to burn and pollute the Earth, so it's more of a threat, Hansen said. "Coal is the big amount," Hansen said. "Until we have that clean coal power plant, we should not be building them. It is as clear as a bell."

Hansen, who said he was speaking as a private citizen, also told the press club that by mid-century all coal-fired power plants that do not capture and bury carbon dioxide "must eventually be bulldozed." It's foolish to build new ones if the emissions can't be dealt with, he said.

He said the increased efficiency could make up for the cutbacks in coal.

Like the Bush administration, Hansen said he had high hopes for using cellulosic ethanol, or switchgrass, as an alternative fuel. But unlike the president's plan which is big on this source for cars, Hansen proposes burning switchgrass for electrical power and sequestering the carbon dioxide emissions underwater so it would reduce the atmosphere's carbon dioxide.

Although switchgrass could reduce our dependence on oil, burning switchgrass in cars would not reduce emissions much, he said.

Technology Review notes that a Canadian government has declared zero tolerance for Carbon-Dioxide Emissions - coal plants must clean up their act. According to tech review this means IGCC plants - so we may get to see if these are really an economic alternative to renewable. Or not.
Some energy experts say that meeting the policy, which states that coal plants must capture and sequester their carbon dioxide, effectively mandates the use of cleaner but more costly coal gasification technology called Integrated Gasification Combined Cycle (IGCC). In these power plants, coal is converted into a hydrogen-rich gas that burns clean like natural gas. Capturing carbon from these plants could be easier than capturing it from conventional coal plants. ...

Major utilities and technology providers in the United States say that IGCC technology is ready for commercial use. According to the National Energy Technology Laboratory, in Pittsburgh, IGCC is the technology selected for one-fifth of 159 new coal plants proposed since 2000. But so far, systems for capturing carbon dioxide from such power plants have not been engineered. And of the 32 proposed IGCC plants, only a handful are moving forward.

What is slowing the transition away from conventional pulverized-coal technology is IGCC's higher up-front cost. General Electric, which is providing the designs for the IGCC project that is now the farthest along, estimates that the first 10 will cost at least 10 to 15 percent more to build than a pulverized-coal plant. Other experts estimate that the cost premium could be much higher. That has made IGCC a tough sell, even though it is cleaner, emitting levels of smog-producing NOx and sulfur dioxide closer to those of a natural gas-fired power plant.

British Columbia's new carbon-dioxide policy, if adopted widely, could change the rules of the game. Adding the cost of capturing carbon would raise the price of power. But prices could go up less with IGCC technology, if it does indeed prove easier to capture carbon dioxide in such plants than in conventional plants. That could make IGCC plants the less costly alternative overall.

The proposed British Columbia policy, however, could have unintended consequences. John Thompson, director of the Coal Transition Program for the Clean Air Task Force, a nonprofit environmental consulting firm based in Boston, says that British Columbia's seemingly IGCC-friendly policy may be too ambitious because it would force IGCC operators to find a place to store their captured carbon dioxide. In Thompson's view, carbon-dioxide sequestration technology is not as mature as IGCC. "There's a tendency to think that geological sequestration from coal plants can emerge in one fell swoop. But [carbon capture and sequestration] are really two distinct technologies," argues Thompson. Sequestration is under way at several sites in Europe and the United States. Still, Thompson says that more testing is needed to see whether deep geologic formations are capable of absorbing the carbon dioxide from multiple power plants and safely holding it long term. "Who's liable if, God forbid, some of this carbon dioxide comes up?" he asks.

British Columbia's policy poses an immediate dilemma for the two coal-power projects currently pending in the Canadian province. Proponents of one project, a pulverized-coal plant proposed for Tumbler Ridge, are exploring the feasibility of adding carbon capture and storage, Neufeld says. The other project, in Princeton, has found an entirely different way around the new policy: dumping coal from its plan. The plant was originally designed to burn a fifty-fifty mix of wood waste and coal. Neufeld says the developers are now talking about burning 100 percent biomass.

The new plans for Princeton are a reminder of the coal-power industry's stake in IGCC technology. If it doesn't find a means of reducing coal's greenhouse-gas emissions, coal power may eventually be legislated out of existence.

The San Jose Mercury has an article pondering the question "Will green tech become the valley's new bubble ?".
Silicon Valley's shift toward green technology is in high gear. Will it create the same kind of bubble, bust and lasting change as the Internet itself? Are we going to party like it's 1999? Will we hear venture capitalists like John Doerr describe ``green tech'' the way they did the Internet boom in the 1990s as the ``largest legal creation of wealth in human history''?

I don't think we're in danger of going over the edge into a bust just yet. It's so early, and the bubble warning signs just aren't there. For instance, we don't have any 50-person green tech start-ups valued at $10 billion yet.

But the velocity of news about clean tech is certainly accelerating. Clean coal is going to get a boost with the proposed $45 billion buyout of Texas utility TXU, funded in part by San Francisco's Texas Pacific Group. BP is investing $500 million in a consortium led by the Lawrence Berkeley National Laboratory that is exploring alternative energy sources. There's a conference every week. Today, for instance, Energy Crossroads 2007 starts at Stanford University.

Investments in clean start-ups climbed to $1.3 billion worldwide in 2006, more than double the $664 million in 2005 and far above the $416 million in 2001, according to a report this week by Dow Jones VentureOne and Ernst & Young. That's 4 percent of all venture funding, up from earlier years.

(The surveyors define clean tech as companies that enable the efficient use of natural resources and reduce the ecological impact of production.)

Does this green-tech boom mean the valley's freeways will clog with smoke-laden traffic jams, just as we saw in the heyday of the Internet boom? (Although this time we may be driving hybrids or Teslas with electric motors.) Perhaps, especially if you think of all the jobs $3 billion in venture funding for clean tech in the United States -- so far -- can create, with much of that coming here.

Other fields could certainly overtake green tech, such as nanotechnology or biotech, as the hot industry. But John Denniston, a partner with Doerr at Kleiner Perkins Caufield & Byers, says green tech has enormous scope because it is driven by stopping climate change, achieving energy independence and restoring American competitiveness. The valley is attacking the problem on multiple fronts, from better batteries to cheaper ethanol. These are real problems that need real solutions, in contrast to such over-hyped problems during the tech bubble as the need to buy pet food online.

Green tech's potential market is huge. Even if solar companies continue to grow like crazy, solar still won't meet more than 10 percent of our energy needs by 2030, according to a November report by the President's Council of Advisors on Science and Technology, a group co-chaired by venture capitalist Floyd Kvamme. In the next 25 years, electricity demand in the United States is expected to increase 50 percent. We used 139 billion gallons of gasoline last year, and that is expected to increase to 153 billion gallons by 2012. ...

Mike Carlton has a column in The Herald on blowhard bloviators in which he discusses ex-ABC TV presenter Maxine McKew taking on the Rodent in this year's federal election. It will be amusing if she beats him though it would have been more amusing if Andrew Wilkie had beaten him last time round (Wilkie was an ONA - the PM department's intelligence agency - guy who resigned over the shameful pre-war Iraq intelligence cook up and ran against his old boss for the Greens).
Bloviate is a splendid word from America. According to the Merriam-Webster online dictionary, to bloviate is "to speak or write verbosely and windily". The Oxford English Dictionary, which has only recently picked up the word from across the Atlantic, says it's "to talk at length in an empty and inflated way". So far as I can check, the Macquarie Dictionary hasn't got hold of it yet but it should, and quickly.

Here's why. A columnist for The New York Times, the admirable Frank Rich, deliciously employs bloviate to scorn the right-wing punditocracy in the US, not least the bloodthirsty crazies who infest Rupert Murdoch's odious Fox News TV network. We have more than a glut of that ilk in this country, too, so I've happily borrowed from him.

Our bloviators have been in hysterics all week at the news that Maxine McKew, the former ABC journalist turned ALP adviser, plans to run for Labor against the Prime Minister in Bennelong. This, they warn darkly, is yet more proof that the ABC is a nest of Howard-hating pinko subversives.

"There has always been a left-wing Labor annexe inside the ABC and this only vindicates public concerns about its reputation," squeaked the NSW Liberal senator Connie Fierravanti-Wells, the self-important, self-appointed ABC watchdog. "How many more Labor candidates are there lurking in the wings?"

Chris Berg, a research fellow at the Institute of Public Affairs (whatever that might mean) fulminated in The Australian that "this cannot help but reflect poorly on the ABC. One moment McKew is an impartial, objective journalist with no political interest except the truth, and the next moment she is a hungry political campaigner, determined to unseat the head of the Government."

In Melbourne's Herald Sun, the village idiot, Andrew Bolt, proclaimed: "McKew's signing confirms not just a close relationship between Labor and the media, but a claustrophobic one between Labor and the ABC."

And Tony Abbott, lunging yet again to the defence of his leader, bloviated that McKew was "Madam Blow-In. I'm not sure that the journalistic mind-set is necessarily conducive to becoming a good politician."

Deary me. There is the acrid whiff of conservative panic in the air, but McKew should not be complacent. The famous election expert Malcom Mackerras predicted on Thursday that "Bennelong electors will kick Howard out at the October-November general election". Mackerras, you might remember, also forecast that John Kerry would win the White House from George Bush. That should have them breathing more easily at Kirribilli.

THE Mad Monk's plodding abstraction about journalists failing in politics comes oddly from a politician who once grubbed a living as a minor editorial hack at The Australian and The Bulletin. The ghosts of prime ministers Alfred Deakin and John Curtin, and the former Liberal minister and later governor-general, Sir Paul Hasluck, journalists all, would not be amused.

It will also have been a bitter blow to poor Prue Goward, another former ABC journalist, friend of the Prime Minister and Liberal hopeful for the state seat of Goulburn. Goward's candidacy, of course, also reflects badly on the ABC, clear evidence - on the tortured logic above, anyway - that your national broadcaster nurtures a conservative conspiracy in its bosom.

Never let it be said, though, that the Howard Government loathes all journalists. Its preferred scribblers - almost all of them from the News Ltd and Quadrant magazine axis - have done very nicely with seat-warming jobs for the boys and girls over the years.

A short list includes Goward's husband and Howard's biographer, David Barnett, appointed to the board of the National Museum of Australia in Canberra, along with Christopher Pearson, a columnist for The Australian. Pearson is also a board member at SBS and has a nice little earner as a taxpayer-funded speechwriter for Lord Downer, a colourful sideline he has not bothered to disclose to his small clump of readers.

Janet Albrechtsen, another right-wing bloviator at The Australian, was injected like botox into the ABC boardroom along with the punchy historian Keith Windschuttle, who claims to have been a journalist. Albrechtsen's like-leaning Murdoch colleague, Imre Salusinszky, chairs the Literature Board of The Australia Council. Miranda Devine, a Fairfax columnist, somehow landed on a committee inquiring into literacy teaching and, last but not least, the editor of Quadrant, the less than omniscient P.P. McGuinness, was bizarrely appointed to vet and veto funding grants doled out by the Australian Research Council. Curiously, there has been nothing yet for Piers Akerman, Bloviator-In-Chief at The Daily Telegraph, although he is always a welcome guest at the Prime Minister's drinkies.

All very chummy. But - call me old fashioned - I don't think working journalists should take even one lousy cent from government paymasters.

The Age has a report that David Hicks' Marine Corps lawyer may be in trouble for allegedly criticising his Dear Leader and a senior administration official.
MAJOR Michael Mori, the defence lawyer for terror suspect David Hicks, could be removed from the case after threats from the chief US prosecutor to charge him under the Uniform Code of Military Justice. The intervention may derail Hicks' trial and possibly prompt his return to Australia. It would take months for a new lawyer to get to grips with the case and the new military commission process.

Prime Minister John Howard has told Washington that any action leading to further delays would be unacceptable and would prompt him to demand the return of Hicks, 31, after being held for five years at the US base at Guantanamo Bay.

Colonel Morris Davis has accused Major Mori of breaching article 88 of the US military code, which relates to using contemptuous language towards the President, Vice-President or Secretary of Defence. Penalties for breaching the code include jail and the loss of employment and entitlements.

Major Mori denied he had done anything improper, but said the accusations left him with an inherent conflict of interest. "It can't help but raise an issue of whether any further representation of David and his wellbeing could be tainted by a concern for my own legal wellbeing," Major Mori told The Age. "David Hicks needs counsel who is not tainted by these allegations."

Major Mori, who has been to Australia seven times, will seek legal advice. The issue will also have to be raised with Hicks when his legal team next sees him. The Federal Government has highlighted Major Mori's work as proof of the fairness of the much-criticised US military commission system. ...

Hicks' lead defence counsel, Joshua Dratel, a New York attorney, said Colonel Davis' threats were the latest example of the "corrupt" system that will try Hicks. Mr Dratel pointed to the former senior Pentagon official in charge of detainee affairs, Cully Stimson, who resigned last month after urging businesses not to hire law firms that had worked for Guantanamo prisoners.

US prosecutors are under intense pressure to offer Hicks, a former kangaroo skinner and father of two, a plea bargain deal by the end of the month. Senior Australian Government members want Hicks to come home a free man, provided he agrees to a pre-trial plea of guilty.

Amid rising public anger in Australia about Hicks' long wait for justice and alleged mistreatment, any Hicks trial risks becoming a public relations disaster. He is to be the first person to appear before a military commission.

The world's media will be focused on the case, including al-Jazeera and other Middle Eastern outlets. They will hear graphic testimony of abuses and torture by US guards and interrogators. It will involve a man, Hicks, whose alleged offence pales alongside the serious accusations made against alleged senior al-Qaeda leaders at Guantanamo Bay.

Prosecutors have dropped three charges against Hicks — attempted murder, aiding the enemy and conspiracy to commit war crimes. There is now only the lesser charge of providing material support to a terrorist group. That charge did not exist for non-US citizens when Hicks was arrested.

The SMH has a report about Australian police and intelligence agencies constructing online honey pots for wannabee jihadis. This game seems to be an old one - it reminded me of the episodes in "Reilly: Ace of Spies" where Felix Dzerzhinsky created a group to oppose the new communist government in Russia as a lure for all enemies of the state - which turned out to be a very successful tactic, and one that I suspect has been rerun by quite a few governments over the years. Another similar tactic (more relevant for online stings) is the old "honeypot" technique used to study hackers. Of course, you could ask if setting up propaganda sites for extremists may actually create extremists where none would have otherwise existed...
THE Australian Federal Police, assisted by the military's signals intelligence arm, is setting up bogus jihadist websites to track extremists who use cyberspace to recruit followers and plan attacks. The undercover operation, disclosed yesterday by the federal police commissioner, Mick Keelty, is an assault by security agencies on arguably the most powerful weapon of the global jihadist movement, the internet.

Mr Keelty said police were working closely with foreign governments, as well as the Defence Signals Directorate. "We have actually worked with some foreign countries through our undercover program, establishing our own websites, if you like, to capture some of the activities that are going on on the internet," he told a security conference in Sydney.

The program employs methods similar to those used to track child pornography and financial fraud. The reason for setting up hoax jihadist websites is to trace people who contact them, and then work back to see who those people are in contact with. The hope is that software will identify patterns of communication between extremists, and uncover networks of terrorists.

The international dimension to the program was vital because most jihadist websites were located overseas, Mr Keelty said. "The internet does pose a problem," he said. "It has for some time. It's been actually quite an education these past five or six years to see how quickly terrorists have adopted new technologies."

Mr Keelty said a team of security agents was "walking the beat" on the internet around the clock, in conjunction with US and British authorities.

Cyberspace is awash with extremist websites, blogs and chat rooms. Some raise funds, others post recipes for explosives, the latest extremist theological tract or sophisticated propaganda aimed at attracting recruits and demoralising the West. One terrorist expert observed yesterday: "There is now a terrorist training camp in everyone's living room."

Violent extremists use the internet to plan, command and control terrorist acts. "Not only can you communicate very quickly, you can communicate very effectively and you can communicate without anybody knowing," Mr Keelty said.

I'll close with a quote from Bucky Fuller (no tinfoil required after the previous item):
"We have also noted how the power structures successively dominant over human affairs had for aeons successfully imposed a "specialization" upon the intellectually bright and physically talented members of society as a means of keeping them academically and professionally devided- ergo, "conquered," powerless. The seperate individuals' special, expert glimpses of the seperate, invisible reality increments became so infinitesimally fractioned and narrow that they gave no hint of the significant part their work played in the omni-integrating evolutionary front of total knowledge and its power-structure exploitablity in contradistinction to its omni-humanity-advantaging potentials. Thus the few became uselessly overadvantaged instead of the many becoming regeneratively ever more universally advantaged.

Hyper specialization also prevented popular comprehension of what the ongoing world power structure was doing- ergo, hyperspecialization kept society preoccupied in ways nondetrimental to the power structure's interests and practically dependant upon the power structure's media for information."

The Silence Of The Bees  

Posted by Big Gav

I've been following the travails of the world's bee population for quite a while now, and am somewhat surprised at how little attention it gets from the doomer community. While global warming and peak oil are the more obvious examples of the limits to growth being reached, bees are actually kind of important (likely much more so than the lack of petrochemical fertilisers that doomer mythology believes will cause starvation when we are past the peak).

Albert Einstein once said "If bees were to disappear, man would only have a few years to live.". The causes of bee dieoff (known as colony collapse disorder) seem to be hard to pin down (and not entirely without precedent), with mites, pesticides (fipronil), gm crops, viruses, fungus, lack of wild flowers to forage on and the hives used by commercial bee-keepers amongst a number of factors blamed for what is going on. Rudolf Steiner (an odd person to pair with Einstein, but there you go) apparently predicted back in 1923 that commercial beekeeping would wipe out bees within 100 years - hopefully he wasn't right...

Anyway - this is all a long-winded intro to the latest article on bees - this one from the New York Times (and for the obligatory tinfoil decoration, you could check these out - search for "bees").

In 24 states throughout the country, beekeepers have gone through similar shocks as their bees have been disappearing inexplicably at an alarming rate, threatening not only their livelihoods but also the production of numerous crops, including California almonds, one of the nation’s most profitable.

“I have never seen anything like it,” Mr. Bradshaw, 50, said from an almond orchard here beginning to bloom. “Box after box after box are just empty. There’s nobody home.”

The sudden mysterious losses are highlighting the critical link that honeybees play in the long chain that gets fruit and vegetables to supermarkets and dinner tables across the country.

Beekeepers have fought regional bee crises before, but this is the first national affliction.

Now, in a mystery worthy of Agatha Christie, bees are flying off in search of pollen and nectar and simply never returning to their colonies. And nobody knows why. Researchers say the bees are presumably dying in the fields, perhaps becoming exhausted or simply disoriented and eventually falling victim to the cold.

As researchers scramble to find answers to the syndrome they have decided to call “colony collapse disorder,” growers are becoming openly nervous about the capability of the commercial bee industry to meet the growing demand for bees to pollinate dozens of crops, from almonds to avocados to kiwis.

Along with recent stresses on the bees themselves, as well as on an industry increasingly under consolidation, some fear this disorder may force a breaking point for even large beekeepers.

A Cornell University study has estimated that honeybees annually pollinate more than $14 billion worth of seeds and crops in the United States, mostly fruits, vegetables and nuts. “Every third bite we consume in our diet is dependent on a honeybee to pollinate that food,” said Zac Browning, vice president of the American Beekeeping Federation.

The bee losses are ranging from 30 to 60 percent on the West Coast, with some beekeepers on the East Coast and in Texas reporting losses of more than 70 percent; beekeepers consider a loss of up to 20 percent in the offseason to be normal.

Beekeepers are the nomads of the agriculture world, working in obscurity in their white protective suits and frequently trekking around the country with their insects packed into 18-wheelers, looking for pollination work.

Once the domain of hobbyists with a handful of backyard hives, beekeeping has become increasingly commercial and consolidated. Over the last two decades, the number of beehives, now estimated by the Agriculture Department to be 2.4 million, has dropped by a quarter and the number of beekeepers by half.

Pressure has been building on the bee industry. The costs to maintain hives, also known as colonies, are rising along with the strain on bees of being bred to pollinate rather than just make honey. And beekeepers are losing out to suburban sprawl in their quest for spots where bees can forage for nectar to stay healthy and strong during the pollination season.

“There are less beekeepers, less bees, yet more crops to pollinate,” Mr. Browning said. “While this sounds sweet for the bee business, with so much added loss and expense due to disease, pests and higher equipment costs, profitability is actually falling.”

Some 15 worried beekeepers convened in Florida this month to brainstorm with researchers how to cope with the extensive bee losses. Investigators are exploring a range of theories, including viruses, a fungus and poor bee nutrition.

They are also studying a group of pesticides that were banned in some European countries to see if they are somehow affecting bees’ innate ability to find their way back home.

It could just be that the bees are stressed out. Bees are being raised to survive a shorter offseason, to be ready to pollinate once the almond bloom begins in February. That has most likely lowered their immunity to viruses. ...

Stewart Brand and his "4 environmental heresies" also featured in the NYT this week.

Stewart Brand has become a heretic to environmentalism, a movement he helped found, but he doesn’t plan to be isolated for long. He expects that environmentalists will soon share his affection for nuclear power. They’ll lose their fear of population growth and start appreciating sprawling megacities. They’ll stop worrying about “frankenfoods” and embrace genetic engineering.

He predicts that all this will happen in the next decade, which sounds rather improbable — or at least it would if anyone else had made the prediction. But when it comes to anticipating the zeitgeist, never underestimate Stewart Brand.

He divides environmentalists into romantics and scientists, the two cultures he’s been straddling and blending since the 1960s. He was with the Merry Pranksters and the Grateful Dead at their famous Trips Festival in San Francisco, directing a multimedia show called “America Needs Indians.” That’s somewhere in the neighborhood of romantic.

But he created the shows drawing on the cybernetic theories of Norbert Wiener, the M.I.T. mathematician who applied principles of machines and electrical networks to social institutions. Mr. Brand imagined replacing the old technocratic hierarchies with horizontal information networks — a scientific vision that seemed quaintly abstract until the Internet came along.

Mr. Brand, who is now 68 and lives on a tugboat in Sausalito, Calif., has stayed ahead of the curve for so long — as a publisher, writer, techno-guru, enviro-philosopher, supreme networker — that he’s become a cottage industry in academia.

Last year, Fred Turner of Stanford published “From Counterculture to Cyberculture: Stewart Brand, the Whole Earth Network, and the Rise of Digital Utopianism.” This fall Andy Kirk of the University of Nevada, Las Vegas, is putting out “Counterculture Green: The Environmentalism of Stewart Brand and the Whole Earth Catalog.” By next year we should be due for a revisionist historian’s discovery of a modern social movement that Mr. Brand did not orchestrate.

In addition to publishing the Whole Earth Catalog, he organized the first Hackers Conference, in 1984, and helped found The WELL, the early electronic community that was a sort of prototype of the Web. In Professor Turner’s history, he was the impresario who knew everyone and brought the counterculture and the cyberculture together, from the Homebrew Computer Club in the 1970s to Wired magazine in the 1990s.

He is now promoting environmental heresies, as he called them in Technology Review. He sees genetic engineering as a tool for environmental protection: crops designed to grow on less land with less pesticide; new microbes that protect ecosystems against invasive species, produce new fuels and maybe sequester carbon.

He thinks the fears of genetically engineered bugs causing disaster are as overstated as the counterculture’s fears of computers turning into Big Brother. “Starting in the 1960s, hackers turned computers from organizational control machines into individual freedom machines,” he told Conservation magazine last year. “Where are the green biotech hackers?” ...

Mr. Brand predicts that his heresies will become accepted in the next decade as the scientific minority in the environmental movement persuades the romantic majority. He still considers himself a member of both factions, just as in the days of the Merry Pranksters, but he’s been shifting toward the minority.

“My trend has been toward more rational and less romantic as the decades go by,” he says. “I keep seeing the harm done by religious romanticism, the terrible conservatism of romanticism, the ingrained pessimism of romanticism. It builds in a certain immunity to the scientific frame of mind.”

Mr. Brand got his first look at the big picture one afternoon in 1966 while sitting on a roof in San Francisco at what he calls an “altitude of three stories and 100 mikes,” meaning micrograms of LSD. He contemplated the skyline and decided the buildings weren’t parallel because he was seeing the curvature of the Earth.

This reminded him of Buckminster Fuller’s theory that people abused the environment because they thought of the Earth as flat and infinite, not as a finite globe. The next day the Earth looked flat again, but the 28-year-old Mr. Brand had a new cause. He printed up buttons asking, “Why haven’t we seen a photograph of the whole Earth yet?” ...

Professor Ehrlich dismissed Professor Simon’s victory as a fluke, but Mr. Brand saw something his mentor didn’t. He considered the bet a useful lesson about the adaptability of humans — and the dangers of apocalyptic thinking.

“It is one of the great revelatory bets,” he now says. “Any time that people are forced to acknowledge publicly that they’re wrong, it’s really good for the commonweal. I love to be busted for apocalyptic proclamations that turned out to be 180 degrees wrong. In 1973 I thought the energy crisis was so intolerable that we’d have police on the streets by Christmas. The times I’ve been wrong is when I assume there’s a brittleness in a complex system that turns out to be way more resilient than I thought.”

He now looks at the rapidly growing megacities of the third world not as a crisis but as good news: as villagers move to town, they find new opportunities and leave behind farms that can revert to forests and nature preserves. Instead of worrying about population growth, he’s afraid birth rates are declining too quickly, leaving future societies with a shortage of young people.

Old-fashioned rural simplicity still has great appeal for romantic environmentalists. But when the romantics who disdain frankenfoods choose locally grown heirloom plants and livestock, they’re benefiting from technological advances made by past plant and animal breeders. Are the risks of genetically engineered breeds of wheat or cloned animals so great, or do they just ruin the romance?

Mr. Brand would rather take a few risks.

“I get bored easily — on purpose,” he said, recalling advice from the co-discoverer of DNA’s double helix. “Jim Watson said he looks for young scientists with low thresholds of boredom, because otherwise you get researchers who just keep on gilding their own lilies. You have to keep on trying new things.”

That’s a good strategy, whether you’re trying to build a sustainable career or a sustainable civilization. Ultimately, there’s no safety in clinging to a romanticized past or trying to plan a risk-free future. You have to keep looking for better tools and learning from mistakes. You have to keep on hacking.



While I'm always hesitant to disagree with Stewart (as I don't much like being wrong about things), I disagree with the heresy about nuclear power and still firmly believe doing the switch to 100% renewable energy is a more practical and cost effective long term approach to meeting our energy needs without unpleasant side effects.

Monkeygrinder isn't a big fan of nukes either:
US Nuclear Plants' Power Output 2nd Highest Ever
The industry group said 103 nuclear plants nationwide generated 787.6 billion kilowatt hours of electricity last year, just off the 788.5 billion kwh record set in 2004.
At the same time, production costs sank to a record 1.66 cents per kilowatt hour in 2006, despite three years of price increases for uranium, the fuel used in nuclear generation. These are preliminary figures, the institute said, and final numbers are expected in two months.

Unprecedented efficiencies in power generation. Well, of course, plant operations can be expected to streamline over time. Even as their internals relentlessly corrode. Still, one can only marvel at how these outputs are achieved.

Maybe we should check some recent headlines.

* Safety Lapse Feeds Debate on New Jersey A-Plant
* Water Level Drops at Indian Point Nuclear Plant in Upstate New York
* Safety Alarms Raised at Nuclear Weapons Plant
* Unit 2 to be back in operation by Friday after outage

So, by and by, in addition to replacing oil and gas, we will need to replace every reactor running today. It doesn't matter if their operating leases get extended. These things wear out.

The Oil Drum, on the other hand, has a bullish piece on nuclear power (which gave me a powerful feeling of deja vu - haven't you run this before PG ?) which got a big run on reddit and digg today. The commenters aren't quite as enthusiastic - here's one from Laurence Aurbach.
I appreciate Mr. Sevior's technical review and especially the update on uranium exploration and discoveries. On a technical level, the arguments for nuclear energy are indeed persuasive.

But let's remember that the industry's arguments have always been persuasive, from day one. From the beginning, nuclear power was going to be too cheap to meter; it was perfectly safe; the risk of catastrophic accidents was nil for all practical purposes; waste disposal and decommissioning posed no major hurdles. Those early assertions have, by and large, not proven to be true. Remember that just a few years before Three Mile Island, the US Atomic Energy Commission claimed a core meltdown could be expected only once in every million years of reactor operation. Now when we hear similar assertions we must decide: Should we trust the spokespeople and advocates again?

The industry argues that new plant designs are safe, and in theory I agree. The problem now is, as it has always been, those perfect engineering proposals are carried out by imperfect humans like you and me. There can be corruption and corner-cutting during the construction phase, incompetence during the operation phase, bribery and mishandling of waste during the disposal phase, and sabotage and terrorist strikes during all phases. What's more, "perfect" engineering can and does turn out to be flawed, and politics can meddle with the entire process. This historical account is very instructive: Searching for Safety, an excerpt from Beyond Engineering: How Society Shapes Technology.

Sevior notes that the Chernobyl power station suffered from a "complete lack of safety culture." If nuclear power becomes a global substitute for oil, what assurances do we have that nations around the world will establish and enforce an adequate safety culture?

What's more, no commercial nuclear plant has been fully and properly decommissioned. The projected costs of doing so (in money and energy) are so high that they represent a significant hit in net profit. It could well be that is why the Yucca Mountain disposal facility has not opened yet. Otherwise, the safety concerns for civilizations 10,000 years in the future would have been swatted aside like an insect.

Now some politicians are arguing for increased subsidies and tax cuts for nuclear. Why should nuclear get public subsidies when we are seeing promising breakthroughs every month in wind, solar, biofuels and other technologies that are far cheaper and safer? Wind farms can be up and running, from design to generation, in 6 months. It's tough for any conventional power source to compete with that, especially nuclear. Why choose one horse when there's a whole field of promising contenders? Better they should all compete without subsidies, and that includes the billions in subsidies going to the fossil fuel industry.

Government R&D, however, is a different matter and that should continue for all energy sources. The R&D budget for renewables should be greatly increased.


The Economist seems to have adapted quite well to its new habit of backing the Democrats (one more "first" for George Bush, as this had never happened before the 2004 election), with them now pushing for an Al Gore presidency.
...there is a huge opportunity for somebody to arrive late [in the race for U.S. President] and steal the show. ...

Step forward Al Gore. Gore has enough of a national profile to command instant credibility. He has rich friends to finance him. He will also command plenty of attention in his own right over the next few months: His film "An Inconvenient Truth" won an Oscar for best documentary on Sunday, and he may be up for the Nobel Peace Prize in the autumn.

Gore is the ideal candidate for the Democratic stalwarts who turn out to vote in the primaries. He came out strongly against invading Iraq. He has spent the past six years warning the world about global warming. And he was robbed of victory in 2000 by the man whom the Democrats loathe above all others.

What better way of wiping out the Bush era than replacing him with the man who should have been president?


I'm surprised George himself hasn't broken out the jump suit again for another round of "Mission Accomplished" - after all, US oil companies finally got what they wanted in Iraq (for the time being anyway) - a big slice of the greatest prize of all.
"By 2010 we will need [a further] 50 million barrels a day. The Middle East, with two-thirds of the oil and the lowest cost, is still where the prize lies." - US Vice President Dick Cheney, then Halliburton chief executive officer, London, autumn 1999

US President George W Bush and Vice President Dick Cheney might as well declare the Iraq war over and out. As far as they - and the humongous energy interests they defend - are concerned, only now is the mission really accomplished. More than half a trillion dollars spent and perhaps half a million Iraqis killed have come down to this.

On Monday, Prime Minister Nuri al-Maliki's cabinet in Baghdad approved the draft of the new Iraqi oil law. The government regards it as "a major national project". The key point of the law is that Iraq's immense oil wealth (115 billion barrels of proven reserves, third in the world after Saudi Arabia and Iran) will be under the iron rule of a fuzzy "Federal Oil and Gas Council" boasting "a panel of oil experts from inside and outside Iraq". That is, nothing less than predominantly US Big Oil executives.

The law represents no less than institutionalized raping and pillaging of Iraq's oil wealth. It represents the death knell of nationalized (from 1972 to 1975) Iraqi resources, now replaced by production sharing agreements (PSAs) ...


Of course, if those nuke boosters out there get their way (and nuclear power viability is as insensitive to the price of uranium that they claim) then Olympic Dam might be the world's greatest resource prize instead of Iraqi oil - hopefully people won't start talking about "the curse of uranium" in the future...

I noticed Condi announced the US wants to open talks with Iran and Syria this week (a complete about face on their earlier position and an adoption of the Iraq Study Group's recommendations) - that may well be related to the item above - time to consolidate control...

Moving on, I occasionally wonder about my local paper, the Herald - I usually assume (with some justification) that they run op-ed columns from far right fringe dwellers like Gerard Henderson and Miranda Device as a way of providing "balance" to their relatively liberal party line, and also to spark some controversy and provoke lots of angry letters to the editor. This hit piece on Clint Eastwood from some griefer at Newsday didn't seem to serve any purpose other than simply echoing the conservative party line and demonstrating, once again, that conservatives simply don't get it (or are being deliberately obtuse). According to this fool, Clint has become a liberal as he's aged. Personally I'd say Clint's politics haven't changed much at all - I liked Clint in the 1970's and I like him just as much now - to me most of his tales are libertarian fables - the Dirty Harry movies being stories about political correctness, justice and bureaucracy, "Unforgiven" (one of my favourite movies) about injustice and the abuse of power, and his two new movies about not trusting governments and the propaganda they produce.

I suspect Mr Cranky Conservative's ire is mainly due to Clint's pointing out that the famous flag raising exercise on Iwo Jima was a propaganda stunt (and the obvious modern day echo through to the same ceremony at the world trade centre site and the toppling of Saddam's statue) - which to me is just another example of Clint telling it like it is - just like he always has...
Clint Eastwood is "growing" as a movie director. We know what that means - he is going to the politically correct left. And that has led him to some strange conclusions, which are worth addressing.

The onetime archetypal tough guy - his Dirty Harry cop character took wrathful justice into his own hands decades before Jack 24 Bauer - has been sliding over to liberalism for the past 15 years. Equally predictably, he has been showered with Academy Awards ever since.

His "growth" was notable in 1992 when Unforgiven, his nihilistic deconstruction of the western, won a bunch of Oscars, including best picture and best director. In 2003 his Mystic River gave audiences a curiously sympathetic portrait of a child-murderer, gaining Oscars for the liberal lions Sean Penn and Tim Robbins. And in 2004 Eastwood's tribute to euthanasia, Million Dollar Baby, swept the top awards offered by the Motion Picture Academy.

So it's not surprising that Eastwood now has his revisionist take on a famous World War II battle in Letters From Iwo Jima, told from the Japanese point of view. Last year he released an English-language movie about Iwo Jima, Flags of Our Fathers, but it's the Japanese-language effort that has grabbed Hollywood's attention.

Letters was nominated for four Academy Awards - for best picture, director, screenplay and sound editing. It won the best sound editing award. By contrast, Flags was shunted aside, nominated for only two awards - sound editing and sound mixing - and won neither.

For his part, Eastwood has been eager to document the "evolution" of his thinking. As he told Agence-France Presse, "I grew up in the war pictures in the 1940s where everything was propagandised. In all the movies, we were the good guys and everybody else were bad guys." So Eastwood is determined to counteract such "propaganda" by creating propaganda of a different kind. ... As he told the French press agency: "Every war has a certain parallel in the futility of it, and that's one of the reasons for telling these stories - they are not pro-war stories." ...

But today many people, thinking about Afghanistan and Iraq, are prone to see war as futile. But the better conclusion is this: wars fought incompetently are futile. Indeed, for a war not to be futile, it must be fought competently - which, in this case, means being supported by top-to-bottom economic and industrial mobilisation. That's how wars are won.

We might pause to reflect on the iconic flag-raising at Mount Suribachi. Nearly 7000 US Marines died on Iwo Jima, and they gave, through their sacrifice, an object lesson in accomplishing a mission. No amount of retroactive Hollywood political correctness can detract from what was achieved there.

Dan at The Daily Reckoning has a post on the TXU takeover by KKR and Texas Pacific/
We predicted 2007 would be the year private equity goes after energy assets. So what does KKR and Texas Pacific’s $US32 billion buyout of Texas electricity utility TXU Corp. forebode? Will there be new deals ahead?

Yes, but beyond those three letters it gets murky. TXU’s private equity buyers aim to shift the company’s strategy of adding coal-fired generation capacity to… something more friendly to Oscar Winner and Climate Morality Czar Al Gore. More friendly to the atmosphere than coal? What ever could that be? Fuel cells? Nuclear? The sun?

First things first. The pirates don’t do anything that isn’t good for them first. They would sell Mother Earth to the Man in the Moon if there was a profit to be made. It could be KKR is putting the kibosh on new plants because of the capital cost. When you’re loading up a balance sheet with debt just to go private, why ad more debt on top of that? .

A vaguer, greener explanation is that the pirates see the worm turning in the economics of energy production from fossil fuels and are going green because there’re more green it. That, however, is a theory with quite a few holes in it.

The truth is, we have no idea of how the new TXU will solve Texas energy problems. But we suspect it will be a portfolio of alternative energy solutions alongside more conventional Texas tea and gas. And in the meantime, we are diligently drilling down into the alternative energy sector for smaller, development firms, where a lot of the R&D in the energy business is being done.

Private equity may be looking for more big fish to land. But the little fish are doing all the development in the alternative energy space. And that’s where individual investors could see big gains this year, provided they buy the right clean-energy shares before the dread pirates equiteers.

Bruce's latest Viridian Note also looks at the TXU takeover (or "Massive Green Buyout" as Bruce labels it), seeing it as a sign that Viridian strategy is working, and thus a good thing. As usual the formatting is atrocious - Bruce's interjections are largely marked with ((( ))). Energy Bulletin also has a roundup of articles on the TXU deal.
**Breaking News**
Victory in Texas ... Environmental Agreement Tied to Sale of Electricity Giant Will Block Construction of Eight Dirty Coal-Fired Power Plants

Dear Bruce,

Thanks to the generous support of our online activists and donors, today is a truly historic day in the fight against global warming. News just broke that Texas Pacific Group and Kohlberg Kravis Roberts & Co. are seeking to acquire Texas-based energy giant TXU Corp. As part of the sale agreement, Environmental Defense helped negotiate an aggressive environmental platform that will, among other things:

* Terminate plans for the construction of 8 of 11 coal-fired power plants TXU had hoped to build; (((They were planning to nail these coal-plants up in a panic rush and grandfather 'em in before Bush leaves power.)))
* Stop TXU's plans to expand coal operations in other states;
* Endorse the U.S. Climate Action Partnership (USCAP) platform, including the call for a mandatory federal cap on carbon emissions; and
Reduce the company's carbon dioxide emissions to 1990 levels by 2020.

Here's a story in The New York Times describing how Environmental Defense helped negotiate this deal:

http://action.environmentaldefense.org/ct/Vp16sGE1JX7B/

This is a huge victory for the environmental community. It sends a clear message about the undeniable momentum in our campaign calling for federal global warming legislation. (((I'm unclear on why these guys still want to waste time in federal legislation when they got their "historic victory" by hanging out with Corporate Green merger and acquisition financiers. You'd think they'd blow off the Bush government and spend all their time with bankers, but, I dunno, old habits die hard.)))

The story behind today's announcement began last April when TXU announced alarming plans to build 11 dirty coal-fired power plants in Texas. (((Where else? The whole state stinks!)))

(((Except for the much-beleaguered CAPITAL of Texas, Austin, "the leading city in the nation in the fight against global warming"!))) http://austin.bizjournals.com/austin/stories/2007/02/05/daily26.html?surround=lfn

From the start, most business and political experts considered it a done deal. Texas Governor Rick Perry got personally involved, fast-tracking the permits and declaring "we're not going to let these bureaucrats jerk us around." (((Like most Governors of Texas including the current President, this guy is a consummate ignoramus. Let's hope and pray he never does anything requiring any more effort and skill than being Governor of Texas.)))

Even our own experts in our Texas office considered the odds of stopping the plants as remote, at best.

But the size of the proposal left us no choice but to aggressively oppose the plants. The 11 coal-fired plants would spew 78 million tons of global warming pollution per year, more than twice the expected carbon reductions from the historic California Clean Cars legislation.

So, Environmental Defense mobilized an all-out grassroots campaign targeting TXU and Texas Governor Rick Perry. Nearly 50,000 Environmental Defense members and activists took action, sending emails, attending public hearings across Texas and submitting public comments against the plants. More than 50 community and environmental groups signed on to our letter urging TXU to change its course.

We took out television, billboard and online ads. We reached out to allies in the Texas state legislature and we worked the legal and financial angles to keep the pressure on TXU.

Our efforts were designed to achieve three goals:

1. Stop as many of the plants as possible;
2. Prevent TXU from exporting its coal plant build-out to other states; and
3. Send a national message to other utility companies that the TXU plan is one they should reject. (((Those companies are listening -- not to the activists, of course, but to guys with enough muscle to buy fossil-fuel companies after the activists wear down the stock price a little.)))

It may have been a long shot when we started this campaign, but this weekend's news meets each of these goals. (((I like it when a guy is smart enough to declare victory and actually stop the war.)))

I want to thank everyone who took action on this campaign and supported our work with generous donations or other actions. We couldn't have claimed this seemingly unattainable victory without your support.

Thanks for everything you help make possible,

Fred Krupp
President



(((Now the New York Times weighs in. Note that Krupp cites their article, so he must more or less agree with their assessment. At least, Krupp was clearly a source.)))

A Buyout Deal That Has Many Shades of Green

By ANDREW ROSS SORKIN
Published: February 26, 2007

About two weeks ago, Fred Krupp, the president of a nonprofit advocacy group called Environmental Defense, received an unusual phone call.

William K. Reilly, the former administrator for the Environmental Protection Agency under President George H. W. Bush, was on the other end. But before Mr. Reilly would explain the reason for his call, he said he needed an assurance from Mr. Krupp that he would keep the conversation confidential.

After receiving such a pledge, Mr. Reilly dropped a bombshell: the TXU Corporation, the Texas energy giant that had become the whipping boy of the nation's largest environmental groups, was in talks to be sold to a group led by Kohlberg Kravis Roberts & Company a nd Texas Pacific Group, two large private equity firms.

Mr. Reilly, who works for Texas Pacific, said he wanted to negotiate a cease-fire. If the investors succeeded in taking over TXU, Mr. Reilly said, they would commit themselves to scale back significantly on TXU's plan to build 11 new coal plants and adhere to a strict set of environmental rules. (((The guy is, after all, the former head of the EPA.)))

In return, he wanted the support of Mr. Krupp and his peers, who had spent the past several months waging a bitter and public war against TXU.

Early Monday, after several weeks of marathon negotiations that brought together both environmentalists and Wall Street bankers, TXU announced that its board of directors had approved the bid from Kohlberg Kravis and Texas Pacific for about $45 billion, which would be the largest buyout in history.

(((And the evil genius who proposed building all the coal plants REMAINS IN POWER. That's the genius of it. In fact, since TXU capo C. John Wilder owns a ton of TXU stock, he's gonna clear millions of dollars. The brilliance of this scheme? You don't actually have to buy companies. You just have to bribe the CEO elite and they'll sell out the enterprise, hook, line and sinker!)))

The deal was noteworthy not just for its size, but for the confluence of business decisions and environmental concerns that drove the ultimate transaction. (((Call it "Corporate Green.")))

Because private equity firms are unregulated and historically have valued their privacy, neither Kohlberg Kravis nor Texas Pacific were eager to become an "enemy combatant" of the environmental groups, people involved in the talks said. Reducing the coal plant initiative will also free up billions of dollars in planned spending that the firms will be able to use for other projects or to help finance the transaction. (((Corporate Green "values its privacy" because it is basically covertly doing what governments used to do back when governments actually governed. Why run the EPA when you can just buy coal plants?)))

Within TXU, the controversial plan to build a raft of coal plants had become so damaging to its stock price that its board had been privately weighing a plan to scrap part of the project, said people involved in the talks, (((note that Krupp is willing to talk publicly to the NY Times, while Corporate Green raiders stay off the record))) bringing the number of new plants to 5 or 6 from 11. Shareholders had sent the stock on a roller coaster ride from more than $67 a share to as low as about $53 (((that's not much of a roller-coaster; consider Enron))) over concerns about the risk and vast expenditure; the stock closed at $60.02 on Friday.

Indeed, it was the quick drop in TXU's stock price that got the attention of Kohlberg Kravis and Texas Pacific, which look for undervalued companies and try to turn them around.

(((Carbon companies will be henceforth subjected to organized under-valuement. Their captains of industry will be bought off and then they'll be annihilated. Watch it happen.)))

Together, both firms approached C. John Wilder, TXU's chief executive, in January with an offer for the company, these people said.

At the time, neither Kohlberg Kravis nor Texas Pacific told TXU about their ambition to scale back its controversial coal plants. But behind the scenes, both firms had been developing a new strategy for the company with the help of Goldman Sachs, their lead adviser.

Goldman Sachs has been a longtime proponent of reducing carbon emissions. Its former chief executive, Henry M. Paulson, now the secretary of the treasury, was also the chairman of the Nature Conservancy, an environmental activist group.

Texas Pacific's co-founder, David Bonderman, is member of the board of the World Wildlife Fund, and Mr. Reilly is chairman emeritus. Mr. Bonderman called Mr. Reilly to help work on the deal and create what they ultimately called The Green Group, a committee of advisers that included Mr. Reilly, Roger Ballentine of Green Strategies and Stuart E. Eizenstat, the former chief domestic policy adviser for President Jimmy Carter. ((("The Green Group." Yikes.)))

"We didn't want to be on the wrong side of history," said a person involved in the bidding group who was not authorized to talk about the transaction before its formal announcement. ((("We also didn't want to be quoted in public.")))

(((Fascinated by weird Texas energy politics? Read your fill!))) http://www.texasobserver.org/blog/?cat=7

Under the terms of the deal, TXU shareholders will receive $69.25 in cash for each TXU share. Goldman Sachs, Morgan Stanley, Lehman Brothers and Citigroup will take small stakes in TXU as well as help finance the debt with J.P. Morgan Chase. In addition, the investor group will assume more than $12 billion of TXU's debt.

The deal represents a 20 percent premium over TXU's closing price on Thursday before word of the deal began to leak and was reported Friday on CNBC after the market closed, TXU said.

It is unclear whether shareholders will agitate for a higher price from the investor group or push for other suitors to emerge. Several recent "go private" deals have drawn opposition from shareholders who expressed concern that they were being shortchanged. (((Yeah? Then how come they pay CEOs so much? The shareholders are gluttons for punishment.)))

Monday's merger agreement allows TXU's board to solicit bids from other potential buyers through April 16, and TXU said it intends to do so. (((It'll be interesting to see if any black angel investors show up and INSIST on building coal plants.)))

The investor group has not laid out any specific plans to grow revenues through alternatives to the coal plants, but TXU is not likely to lose money, at least initially, as a result of scaling back. Three of the plants are already in the works and other eight that will be canceled would not have been built for years.

And the group will be getting more than just a utility. TXU is in the midst of an experiment to run broadband Internet over its power lines as part of a venture with Current Communications. (((Very Enron. They loved Internet pipes.)))

Both TXU, which was advised by Credit Suisse and Lazard, and the investor group spent weeks holed up in three conference rooms at the Gaylord Texan, a hotel just outside of Dallas. With armies of bankers and lawyers that frequently numbered more than 40, the group negotiated the buyout deal, including an unusual provision that will allow TXU to seek higher rival bids over the next 50 days. This clause could potentially create a bidding war, perhaps bringing other private equity firms and utilities into an auction.

Related

Deal's Broader Effect on Coal Plants Is Uncertain (February 26, 2007) (((uncertain, but they've gotta be wondering today)))

Mr. Bonderman and Henry R. Kravis, the founder of Kohlberg Kravis, pleaded their case to the Texas governor, Rick Perry, on Thursday in person at his mansion, mindful that Oregon had rejected Texas Pacific̢۪s deal to buy Portland General and that Arizona had rejected Kohlberg Kravis' deal to buy UniSource Energy. The pair has also reached out to James A. Baker, a Texan and former Reagan cabinet member. (((James A. Baker, "the Bush Consigliere.")))

But perhaps the most difficult talks were with the environmentalists, who often seemed more like Wall Street negotiators than green activists. (((Given that government is a non-player, these self-appointed activists barging into the boardroom are the only thing standing between the citizenry and outright corporate-green feudalism. It's no wonder they've finally learned to act like businessmen when business is the only game in town.)))

Mr. Krupp of Environmental Defense used his conversation with Mr. Reilly as an opportunity to negotiate even harder for further concessions. The men agreed that Mr. Krupp's lieutenant, James D. Marston, who was leading the charge against TXU in Texas, would meet with Mr. Reilly and other representatives of the buying group. And representatives from Natural Resource Defense Council, another climate-control advocacy group, was brought into the discussion to help formulate a plan that all sides could agree on.

So last Wednesday, Mr. Marston flew to San Francisco, (((obligatory "oh look, the enviros are flying in airplanes and spewing carbon" riff inserted here))) where he found himself face to face with Mr. Reilly over breakfast at the Mandarin Oriental hotel. There, over scrambled eggs and croissants, Mr. Reilly laid out a plan that included reducing the coal plants from 11 to 3.

Then the men went to Texas Pacific's conference room overlooking Alcatraz and the San Francisco Bay for a day-long negotiation that stretched until early the next morning. The group, which included Mr. Reilly, Mr. Bonderman and Frederick Goltz of Kohlberg Kravis, worked out a "10-point plan" that included a commitment by the investors to return the carbon- dioxide emissions by TXU to 1990 levels by 2020 and support a $400 million energy efficiency program. (((Okay, this is the actual work of the world being performed here. This is the sound of icebergs not melting, seas not rising, etc. Let 'em get after it, don't get in the way.)))

When an agreement was finally struck, at 1 a.m. the next morning, Mr. Reilly grabbed a bottle of pinot noir from his colleague's office to toast the group. But he couldn't find a corkscrew. (((Need more tech geeks in the boardroom. I'm only a damn author and I've got a Swiss Army corkscrew right here.))) So he ran back to the Mandarin Oriental to borrow one. (((Let's be charitable, maybe their corkscrews were confiscated by airline security.)))

Not all of TXU's historical opponents are popping corks. Some noted that a decision by one company did not sway the others that are building plants. In Dallas, Laura Miller, the mayor and leader of a coalition of municipal officials that has spent $600,000 fighting the TXU plants, said the agreement with the environmental groups might not get TXU as much help as it wanted.

Ms. Miller pointed out that one of the three surviving projects, a plant near Waco, is still opposed by local officials and had drawn a negative recommendation from a panel of Texas judges. She said she hoped that TXU's plans would leave an opening for cleaner projects, like a proposal to build a power line to West Texas, where power producers propose to build large wind farms.

Matthew L. Wald contributed reporting.
O=c=O O=c=O O=c=O O=c=O O=c=O O=c=O
IT ACTUALLY IS A HISTORIC MOMENT,
SO IT'S WORTH PUTTING UP WITH IT.
LET THEM GET AWAY WITH IT. IN FACT,
IF YOU CAN HELP THEM, GO DO IT
O=c=O O=c=O O=c=O O=c=O O=c=O O=c=O

On the local (state) election front, I noticed Newcastle member Bryce Gaudry on TV tonight, in a segment on the battle for his normally safe seat. Apparently Labor disendorsed him last year (showing just how much attention I pay to state politics here) and the competition at the next election is now a 4 horse race between Bryce, the Labor candidate (a TV newsreader), the (Labor) mayor of Newcastle (also running as an independent) and the Greens candidate (there is also a Liberal polling less than 10% who has no chance). Anyway - I met Bryce at a peak oil function at parliament house a year or two ago and he seemed like a good guy, as he did on the TV spot. So if you live in Newcastle, vote for him (for that matter, Peak Energy generally recommends voting for local, independent members by default - party politics sucks, though exceptions can be made in some circumstances).
SURELY only a surrealist with a fascination for self-destruction could have written the script for the Seinfeld-like scuffle that has erupted over the seat of Newcastle.

Thanks to a mixture of idiocy, arrogance, greed and self-centredness, Labor has plunged a dagger into its own heart and has been forced to spend a fortune to staunch the outflow of votes in an electorate it has effortlessly owned for 91 of the past 97 years.

Labor has foolishly risked Newcastle by disendorsing its long-serving left-wing MP, Bryce Gaudry. He was sacrificed by his own side in a factional deal that should have seen the seat pass into the deathless embrace of the Right.

Instead, the man chosen by the Right, the Lord Mayor of Newcastle, John Tate, chickened out in the face of an uprising among the 13 pro-Gaudry branches in the electorate.

Displaying slightly more steel, a former television newsreader, Jodi McKay, 37, stepped up last September and was named as Labor's candidate.

Then it all sort of unravelled.

Tate, 62, announced he would stand as an independent. Not to be denied, Gaudry, also 62, resigned from Labor after 16 years in Parliament and unexpectedly threw his hat back into the ring. Now no one knows what will happen.

But two things are obvious: the omnipotence of Labor's factional politics and the labyrinthine ways powerbrokers ride roughshod over the wishes of branch members. And now the party is being forced to fork out as much as $1 million to defend Newcastle and other Hunter heartland seats. It has taken the electorates for granted for so long that many routinely refer to "the Sydney Labor government".

With the exception of McKay, other candidates agree that Labor has been so cruel to Newcastle for so long that only defeat can send a message to Sydney that the faithful dog has been hit once too much.



I'll close with a post from TreeHugger about one of my favourite animals - the Aye Aye. These little critters are a type of lemur and they have a finger that ET would be jealous of - part digit, part radar. I went to Gerald Durrell's zoo at Jersey many years ago to see some of them in action and they're great (albeit hard to get a good view of as they are nocturnal). The one in the picture below must be a baby - the real thing is about the size of a cat. Who wants to save the aye aye ? - well - I do.
One of my zoology professors used to refer to it as "The Bambi Syndrome"—us hairless bipeds tend to gravitate towards cuddly megafauna like the panda; we're ready to empty our pockets to pull them from the precipice of certain doom. But can you get people rallying for an obscure species of clam? Does anyone really get pumped about saving the tuna? What about the almost grotesque-looking aye-aye, which, according to Slate got hit so bad with the ugly stick that conservationists are going to pieces trying to figure out how to persuade people that its unique genetic heritage is worth giving a damn?

Everyone loves a cute face. For humans, something about large heads, languid eyes, and flat faces appeal to something visceral inside us, not coincidentally, much like a baby's face does.

David Stokes, a conservation biologist at the University of Washington wanted to study why we preferred one type of animal over another. In a recent paper in Human Ecology Stokes analyzed hundreds of pictures of penguins found in mainstream photography books. He discovered that out of the 17 species of penguins that exist in the world, publishers favored three species in particular, with "a warm dash of color, either yellow or orange or red, around the eyes of bill." Humans, it seems, are meticulous even in our pickiness:
Conservationists, he argued, must understand the ways that aesthetic appeal can be used to motivate the public—and then try to promote the "less attractive" creatures by highlighting their most endearing features.

Beauty is only skin deep, right? Tell that to the aye-aye.

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