Crumbling Infrastructure Porn: Drivers Pay "Secret" Road Tax In $15 Billion For Car Repair

The days of Happy Motoring, as Jim Kunstler is fond of calling it, may be drawing to a close. Here is Bloomberg with the details:

Gil Giro doesn’t need a license plate to tell where a car is from -- he just looks underneath the chassis.

“Every time we see a car that comes in from the district, you can see that its suspension is torn up,” said Giro, the owner of Gili’s Automotive in Rockville, Maryland, outside Washington. “It’s almost like the vehicle has been driven off- road.”

The nation’s capital isn’t alone in offering motorists teeth-rattling rides as U.S. lawmakers tussle over how to pay the bill for mending battered roads. Mechanics such as Giro say they see the hidden tax car owners pay every day in torn tires, misaligned front ends and bent axles.

Drivers won’t get relief anytime soon.

The U.S. Highway Trust Fund, which helps pay for road and transit projects in Washington and all 50 states, has been bailed out by Congress three times since 2008 for a total of $34.5 billion. The gasoline tax that supports the fund hasn’t been raised in 19 years, and with the cost of materials such as steel and asphalt on the rise, the fund is expected to have a deficit of about $10 billion this year.

Car owners already are shelling out far more than that to repair damage done to their vehicles by America’s ruined streets and highways, industry and academic researchers say.

Motorists pay $67 billion annually for increased fuel consumption, body dents, worn tires and premature wear wrought by pitted roads, according to The Road Information Program, a Washington-based research group. The group’s board includes representatives from construction-equipment makers Caterpillar Inc. (CAT) and Deere & Co. (DE), as well as Vulcan Materials Co. (VMC), a Birmingham, Alabama-based asphalt and concrete producer.

That works out to $324 per licensed driver, says Frank Moretti, TRIP’s director of policy and research. The figure is an average of all vehicles and can vary widely between cars and large commercial trucks, which are prone to costlier damage, he says.

Karim Chatti, a professor of civil and environmental engineering at Michigan State University in East Lansing, estimates that damage linked to poor roads probably runs between $15 to $25 billion annually for car owners, not including tire damage and fuel-efficiency costs.

As a denizen of the DC-area, I can attest to how crappy the roads are around here. And this is happening in a part of the country where local tax revenues are still fairly robust because of federal government spending. I can't imagine what it must be like in some of the less well off locales. It's now a race to see what will destroy our automobile-centric economy first, high oil and gasoline prices, or our crumbling highways.


Bonus: Some Drivin'n'Cryin' seemed appropriate here

The REAL Lesson From Obama's "Keystone Cave-In"

Last Friday, in the wake of President Hopey-Changey abruptly changing course on the Keystone Pipeline project, Rolling Stone political writer Jeff Goodell wrote a piece called, "Lessons from Obama's Keystone Cave-In," which was particularly notable because it demonstrated yet again that if you don't understand the dire implications of peak oil you are hardly going to learn the right lessons from any energy-related decision made by our so-called "leaders." Just for the heck of it, I thought I'd go through the four lessons listed by Goodell and offer a rebuttal for each of them:

1. "All of the above" = "Drill, Baby, Drill"
Obama talks a good game about developing "green" energy sources, but here he is, doubling down on oil. Although this speech was clearly political theater, I expected him to appease anti-pipeline activists by using his visit to Cushing – the belly of the fossil-fuel beast – to remind Big Oil that not only has he promised to yank away $4 billion in subsidies, but that oil is, as he said the other day, "the fuel of the past." Ha! Instead, Obama offered up a speech that would make Sarah Palin proud, reminding us how, over the last three years, "I’ve directed my administration to open up millions of acres for gas and oil exploration across 23 different states. We’re opening up more than 75 percent of our potential oil resources offshore." And he crowed: "We are drilling all over the place now." And as for pipelines, he bragged that "we’ve added enough new oil and gas pipelines to encircle the earth." Climate blogger Joe Romm rightly called the address "Obama's worst speech ever."

Okay, so Obama seemingly contradicted himself in two different speeches before two different audiences. That happens all the time with politicians. So which time do you suppose he was lying? The time he mouthed an empty platitude about oil being "the fuel of the past," or when he started bragging about his administration's pro-drilling record?

As the old saying goes, Money Talks and Bullshit Walks. In this case, the latter example was money while the former was the bullshit.

2. If Obama gets re-elected, the northern half of the Keystone pipeline is going to get built.
He did not say this explicitly in his speech yesterday, but the political code is perfectly clear. Obama is essentially endorsing tar sands oil production, with all the environmental wreckage it causes, as well as dooming the Midwest to more pipeline spills. It also means that investment dollars will now flow to boosting the production capacity of the tar sands operations, which in turn will pump up the industry's political clout even more. In effect, there’s no stopping the tar sands now. The dirty bitumen is gonna get dug up and refined and piped down to the Gulf and slimed across the world.

It should have been perfectly obvious even before Obama gave his speech that the whole damn pipeline was eventually going to be approved. All along, he was just trying to run the clock out until after the 2012 election and hoping there wasn't another spike in gasoline prices to force his hand before he was safe from ever facing the voters again. Well, the spike happened as you might have noticed, and Obama quickly realized there were more votes to be lost from being seen by Spoiled Rotten Nation to be standing in the way of America accessing another major source of oil (even if it will do nothing to bring down prices in the short term) than he will likely lose in support from environmentalists. Speaking of which:

3. Enviros have no muscle.
When the State Department last year decided to block the pipeline at least temporarily, enviros cheered. Frances Beinecke, president of the Natural Resources Defense Council, called it "a victory of truth over misinformation," and writer/activist Bill McKibben said "it isn’t just the right call, it’s the brave call." But that bravery wilted quickly in the face of high gas prices and Republican attacks, lame as they have been (the pipeline will have no measureable impact on gas prices in America today, tomorrow, or ever). The unmistakable subtext of this speech was: Tough shit, Frances and Bill and all your earnest followers. Are you really gonna vote for Romney in November?

Of course environmentalists won't be voting for Romney, and that is exactly why Obama was able to make the political calculation I outlined in my response to lesson 2. Yeah, a lot of environmentalists might stay home in November, or they might choose to throw away their votes by casting them for the Green Party, but they WON'T be voting for Romney and that will blunt any political effect their protest might have. Some of them will no doubt even cave in and vote for Hopey-Changey anyway, using the totally self-defeating lesser of two evils "logic."

The real lesson on this point ought to be obvious. The environmentalists, as well as those who believe in economic justice and those who are opposed to America's big business, war and empire foreign policy, DO NOT LIVE IN A DEMOCRACY. In a democracy you have real choices at the ballot box. As non-elite Americans living in a full blown corporatocracy, we most assuredly do not have any choice on issues of real importance that affect the economy or our future other than to throw our votes away on third party candidates who stand zero chance of ever being elected.

4. Obama is still wimping out on climate change.
Duh. But people had hopes. During the 2008 campaign, Obama talked about slowing the rising seas and putting a price on carbon pollution. After the election, he hired John Holdren as science advisor and Steven Chu to run to the Department of Energy, both of whom understand the dangers of climate change as well as anyone. Didn’t help. Today, despite the fact that global carbon pollution is accelerating and extreme weather is becoming the norm (it’s a sad but revealing irony that, as Brad Johnson points out, Cushing has been ground zero for climate disasters in the U.S.), Obama won’t even mention the words "climate" or "global warming," much less demonstrate any leadership on the single most dangerous threat that civilization has ever faced. Instead, he has shifted the conversation to energy independence. That may be a worthy goal, but if it’s pursued without regard to the risks of climate change, it will only increase the danger of future catastrophes.

Obama most certainly is "wimping out" on climate change. Why? Because he is a product of a system that is completely dependent upon never ending economic growth for its very survival, and curtailing the burning of fossil fuels would destroy that system pretty quickly. Obama would have to be politically suicidal NOT to wimp out on climate change, and the world only very rarely ever sees the likes of Mikhail Gorbachev achieving high political office.

Goodell then concludes his piece with this:

In any crass political calculation, drilling for oil will always win more votes than putting a price on carbon. But if I recall what I was taught in fifth-grade American government class, we elect presidents to do more than crass political calculations. Obama wants to be thought of as the president who freed us from foreign oil. But if he doesn’t show some political courage, he may well be remembered as the president who cooked the planet.

Excuse me for being so blunt, but what a childish statement. I don't know how old Mr. Goodell is, but the last president I can recall who didn't make every single decision based upon "crass political calculation" was Jimmy Carter, and we all know how well that worked out for him.

So many environmentalists just refuse to get it into their heads that humanity has painted itself into the tightest of corners. Beginning in earnest about a century ago, we tapped into the greatest energy resource nature could have possibly bestowed upon us. Instead of wisely managing that very nonrenewable resource, we exploited it as quickly as we could and allowed our population to expand in a very short time to well beyond what the planet can possibly sustain when that resource runs out, even if the resulting environmental damage from burning that resource wasn't also a hugely negative factor.

Not only America, but all of humanity is barreling towards the cliff at breakneck speed, and it is likely already too late to put on the breaks. "Leaders" like Obama have been put into place by his billionaire backers in order to pull the wool over the eyes of the masses and keep the game going for as long as possible. That is the real lesson to be learned from Obama's Keystone cave-in, and accepting it is the key to becoming part of the reality-based community.


Bonus: "I believe before the world ever got that bad, I'd be on my knees a-crying"

Spoiled Rotten Nation Not Sure Who To Blame For High Gas Prices

This is a good companion piece to my post the other day about a recent public opinion survey on energy issues that demonstrated how clueless the public really is. Spoiled Rotten Nation doesn't understand why gas prices are skyrocketing, and Spoiled Rotten Nation is plenty pissed off about it. Spoiled Rotten Nation just does not know who should get the blame, as this story from Yahoo Finance points out:

Families canceling vacations. Fishermen watching their profits burn up along with their boats' gasoline. Drivers buying only a few gallons of gas at a time because they can't afford to fill the tank.

From all corners of the country, Americans are irritated these days by record-high fuel prices that have soared above $4 a gallon in some states and could top $5 by summer. And the cost is becoming a political issue just as the presidential campaign kicks into high gear.

Some blame President Barack Obama. Some just cite "the government," while others believe it's the work of big, greedy oil companies. No matter who is responsible, almost everyone seems to want the government to do something, even if people aren't sure what, exactly, it should or can do.

A Gallup poll this month found 85 percent of U.S. adults believe the president and Congress "should take immediate actions to try to control the rising price of gas." An Associated Press-GfK poll last month showed 71 percent believe gas prices are a "very" or "extremely" important matter.

Once again, we see how meaningless public opinion polls are in regards to energy issues. It may come as a shock to 85% of the American public, but there isn't fuck all the president and Congress can realistically DO to reduce gasoline prices. The COULD repeal the federal excise tax on gasoline, which would lower the price by a whopping 18.4 cents per gallon. State legislatures, which the president and Congress do not control, could also help out by repealing all state gasoline taxes, which vary by state but average around another 18 cents per gallon. And that is the grand total of what the government could do, lower the price of a gallon of gas by less than 10% in the short term.

But then, guess what? There goes all of that tax revenue governments at all levels are expecting will help pay to build and maintain roads and highways along with running public transportation. Let America go a year or so without any road or highway repairs, and let's see how quickly the entire transportation grid collapses.

But Spoiled Rotten Nation doesn't want to hear it:

"When I go out to change the prices, they honk their horns and yell at me," said Siroub whose station's cheapest grade of gas, regular unleaded, was selling for $4.44 a gallon earlier this week. "The other day one person even gave me the finger."

Boy, you gotta love the visual image of an enraged driver flipping the bird to a gas station manager because he is forced to raise his prices just to stay in business. What is that fucker going to be like when gas finally does rise to $5.00 or $6.00 a gallon or ever more? Worse yet, what will he be like when gasoline starts to become unavailable at any price? Something tells me he isn't going to handle it too well.

The last guy they interviewed for the article does make an accurate statement in the middle of his cluelessness:

Shrimpers in Louisiana and lobstermen in Maine complain that high fuel prices are cutting into their profits. Craig Rogers, who burns through 50 gallons of gas a day tending his lobster traps along Maine's rocky coast, blames commodities traders, though he questions whether politicians are doing enough. He said politicians are too well off to really grasp what ordinary people are going through.

"They can say they feel for us, they can say they understand us, but when you have that kind of money, there's no way you can truly understand what we're feeling," he said.

No, Mr. Roberts, they don't understand what you are feeling. More importantly, they don't give a shit even if they may act like they do. But even if they did give a shit, there really is very little they can do. Yes, they've been lying to you about our energy predicament for 30 years, ever since Ronald Reagan defeated Jimmy Carter after the latter tried to tell the country the truth about peak oil. You and everyone else who is now whining about high gasoline prices didn't want to hear it then, and now you're all butt hurt about it.

As the saying from the old Fram oil filter commercial used to go: "You cay pay me now, or you can pay me later." Well, later has arrived and now reality has showed up at the door of Spoiled Rotten Nation waiving a huge bill in its hand, and it isn't going to go away until it gets satisfaction.


Bonus: How fitting is it that this commercial came out in 1981?

Startup Company Converts Plastic To Oil

I'm always wary of any energy related story put forth by National Propaganda Radio, but this NPR article on a company that has apparently figured out a feasible way to make oil from plastic waste is interesting:

Only 7 percent of plastic waste in the United States is recycled each year, according to the Environmental Protection Agency. A startup company in Niagara Falls says it can increase that amount and reduce the country's dependence on foreign oil at the same time.

It all starts with a machine known as the Plastic-Eating Monster. Thousands of pounds of shredded milk jugs, water bottles and grocery bags tumble into a large tank, where they're melted together and vaporized. This waste comes from landfills and dumps from all over the United States.

"Basically, they've been mining their piles for us and sending them here," says John Bordynuik, who heads his namesake company, JBI Inc. He invented a process that converts plastic into oil by rearranging its hydrocarbon chains.

So how much does the process cost?

Each barrel of oil costs about $10 to produce. JBI can sell it for around $100 through a national distributor. The young company is already producing a few thousand gallons of oil a day. It has signed lucrative deals to set up operations next to companies with large volumes of plastic waste.

So what's the bottom line here?

"We don't make a synthetic 'other' product that has problems," he says. "We make an in-spec fuel like everyone else. If anything, the word 'alternative' has a stigma attached to it, more so because of prior attempts."

If JBI has its way, plastics will become a significant source of domestic fuel that reduces the U.S. dependence on foreign oil. But just how "green" is JBI's recycling, when it produces a fossil fuel that pollutes just like any other?

"To enter themselves into this industry, I think that they've all bought into the idea of producing a fuel," says Carson Maxted of Resource Recycling, the plastic recycling industry's trade journal.

Maxted says he's not sure whether converting plastic to oil can be considered recycling, or even environmentally friendly. But he says JBI's methods can co-exist, and even complement, current recycling practices.

"They're getting value from something that would otherwise go to the landfill," he says, "because the plastics most of them are looking for, the plastics that are not easily recycled, they're of low quality or mixed-plastic types, or they're dirty — things that wouldn't be accepted into a recycler."

And because there's no lack of waste-plastic supply, and no lack of demand for oil, Maxted says the technology has the potential to transform both industries.

Some issues that were not addressed by the article that I wish they would have covered are: exactly how much plastic does it take to make a barrel of oil? Are there significant environmental impacts to be considered should this technology become widely used? How does the energy density of a barrel of this oil compare with a barrel of crude oil? How scale-able is this technology, really?

On the one hand, it is gratifying to see that someone may have successfully figured out a way to put those mountains of plastic garbage to good use. On the other hand, the fact that we are considering mining our own landfills to get more oil just shows how desperate we really are. It will be interesting to see if this company continues to be successful whether this process becomes touted by the media as the latest great technology that is going to "save" our happy suburban, consumerist lifestyles. If so, it will become yet another pipe dream pumped out by the Hologram to keep the masses thinking that everything is going to be just fine.


Bonus: "Everything is going to be all right...rock-a-bye"

Public Opinion Poll on Energy Issues Shows How Clueless The Public Really Is

It really is true, as comedian Doug Stanhope has asserted, that a majority of Americans will express their opinion about an issue even when they have no basis of knowledge for which to even form an opinion. That point was driven home in a recent article from UPI entitled, “Poll: Alternative Energy Loses Support.” Why the pollsters even bother polling on an issue so technically complex that no more than a small percentage of the population is well informed enough to provide meaningful answers is a whole separate topic. Instead, I thought I would go through and pick the results of this particular poll apart point by point.

Let’s get started, shall we?

Support for development of fuel sources such as wind and solar power has diminished in the United States during the past year, a survey found.

The March 7-11 poll, conducted by the Pew Research Center for People & the Press, found 52 percent of those responding indicated support for alternative fuel was more important than increasing oil, coal and natural gas production, while 39 percent indicated expanding exploration of coal, oil and gas was the more important of the two choices.

Although a majority went for alternative fuels, support for solar, wind and hydrogen power was not as popular as it had been in March 2011, when 63 percent indicated that was their favorite choice, while 29 percent chose coal, oil and gas exploration.

Respondents who identified themselves as Republicans were more apt to have changed their preferences -- with 33 percent indicated support for alternative energy sources, down from 47 percent in 2011.

Do I really need to waste the pixels pointing out that asking people whether they “support” development of alternative energy versus whether they “support” increased oil, coal and natural gas production is laughably meaningless? The question makes it sound as if all forms of energy are interchangeable and unlimited, and how we power our lives is merely a matter of the choices we collectively make.

On the one hand, you can “support” solar and wind power all you want, but that doesn’t mean either form of energy will ever be a viable replacement for fossil fuels and enable you and your descendents to live your suburbanized, consumerist lifestyle in perpetuity. The fact is that while both do have their uses and COULD be a part of voluntarily powered down future if America was willing to be sensible about its energy predicament, neither is going to allow us to continue on with business as usual once fossil fuels deplete to the point where they are too expensive to keep supporting our modern industrialized civilization.

On the flip side, you can “support” increasing the production of oil, coal and natural gas; and while you are at it you might as well try holding your breath until Santa Claus brings you a new Lexus for Christmas. The world supply of all three is FINITE. That means there is only so much of it that can EVER be produced. What’s more, most of the easy and cheap to extract stuff is already gone and what’s left is going to be ever more costly and difficult to produce. Child-like wishing for more isn’t going to change geology.

Let's move on:

The survey found "as in the past ... there continues to be broad public support for an array of policies aimed at addressing the nation's energy supply."

Nearly 80 percent overall indicated support for improving fuel efficiency in cars, while nearly 70 percent indicated support for federal research for alternative energy sources. Sixty-five percent indicated support for improved rail, bus and subway systems.

Sure, no doubt there is “broad public support” for all of that stuff. You know why? Because it doesn’t cost the respondents anything to answer the questions in a public opinion survey.

Once you start moving beyond feel good concepts and into how all of those policies are going to be PAID FOR it becomes a different equation altogether. Try asking, “Would you be willing to pay an annual $1,000 carbon tax to support the federal research for alternative energy sources and for improved rail, bus and subway systems?” or “Should federal government funds be used for public transportation INSTEAD OF building more roads and highways?” and I’ll guarantee you the poll results would be drastically different.

Once again, the choices are presented in a vacuum, as if each one does not carry considerable costs and consequences. This is exactly the kind of thinking that created Spoiled Rotten Nation, and a citizenry that just cannot understand how the government can’t seem to do everything they want it to do without raising their taxes and/or running massive budget deficits. We want alternative energy research, AND public transportation, AND more roads and highways to reduce traffic congestion, BUT we don’t want to pay for any of it.

But they saved the very best part for last:

Concerning the controversial method of mining called fracking, 37 percent indicated they have only heard a little about it and 37 percent, indicated they have never heard of it. Only 25 percent indicated they had heard a lot about it.

A majority -- 52 percent -- indicated support for fracking, a figure held up mostly by Republicans, 73 percent of whom indicated they supported fracking, compared to 33 percent of Democrats.

You gotta love the willingness of so many to support something they know very little or nothing about. Despite the fact that only a quarter of the population has by its own admission any real idea what fracking is, more than half claim to support it. And that 25% constituting the at least reasonably well informed doesn’t include people like me who know a lot about fracking but are opposed to it because we know what the dangers are. The more appropriate question to ask here would be, “Would you support fracking even if it meant there was a good chance that your drinking water might be poisoned or that a resulting earthquake might damage your home?” That at least might get a few of the respondents thinking, yet another resource which is in very short supply these days.


Bonus: I've posted this video before, but it is too funny not to repeat

Direct Air Abruptly Cancels All Flights

Hat tip to reader Redd Dogg for alerting me to this story.

Let's consider a hypothetical scenario for a moment. You run an airline. It's a costly business and profit margins are low. Say it is getting to be your busiest season when passengers are really depending on you. What's the first thing you should make sure you do?

If you said, "pay the fucking fuel bill," you win a cookie.

Here is The Columbus Dispatch with the story:

Discount airline Direct Air is suspending all flights for two months after it abruptly cancelled its schedule at the height of spring break.

The airline’s shutdown following its apparent failure to pay a fuel bill left stranded passengers wondering how and when they’ll get home.

You would think that not being able to afford to buy fuel for your airplanes and leaving all of your passengers stranded would be pretty much the end of your airline as a going concern. But no...this is merely a temporary setback. Direct Air will be back. They promise:

Direct Air, based in Myrtle Beach, S.C., says it will not fly until May 15. Ticket holders were told to contact their credit card companies for refunds.

Direct Air’s Ed Warneck told The Sun News newspaper that the airline missed a fuel payment and the fuel supplier cut it off. So it had to ground its fleet.

The airline serves 17 cities in the Midwest, East and South. It is unclear how many travelers were affected.

Given how oil prices have been exploding lately, the cost of jet fuel will certainly drop and be much more affordable by then. So make sure you book those Memorial Day tickets now. Because an airline would NEVER sell a ticket and then not deliver on its promise. Perish the thought.


Bonus: Bill tells a funny airplane story

Feds Reject Large Loan Application From "Green" Police Car Maker

Looks like the effects of the Solyndra scandal are rippling outward...which I consider to be a good thing as it will prevent more taxpayer money from being wasted on "green energy" boondoggles. Here is the USA Today with the story:

The dream of a purpose-built, fuel-efficient police car may be in jeopardy. The Energy Department has denied the application of an Indiana start-up for a $310 million loan that would have created its advanced police car.

Carbon Motors is pushing a police pursuit car it calls the E7. It says it has over 20,000 reservations from more than 500 law enforcement agencies in all 50 U.S. states, in addition to interest overseas. It says the car's creation would have resulted in 1,550 direct jobs.

Carbon has been waiting for years for the loan under the same program that provoked the outcry about the loan to solar-panel provider Solyndra. That company's financial problems provoked a Republican outcry about wasteful spending by the Obama administration.

Finally, someone is actually watching over the till and not just throwing hundreds of millions of dollars in federal loan guarantees around willy-nilly. But of course, that isn't how the company sees it:

An "outraged" Carbon, in a statement, blames DOE for bowing to election-year political pressure in not granting the loan.

"It is clear that this was a political decision in a highly charged, election-year environment," said William Santana Li, chairman and chief executive officer, Carbon Motors. "Carbon Motors simply appears to be the last victim of this political gamesmanship."

Other start-ups that were waiting for DOE loans have also failed. Bright Automotive, which was going to make a fuel-efficient van, just announced it can no longer stay in business without the loan. Aptera, a Southern California-based start-up, failed earlier this year and won't make its unusual pod-like electric car.

So when exactly did American businesspeople become such a group of whiny ass little titty babies? If your electric police car idea was so fucking great, Mr. Li, I would gather that banks would be lining up to loan you the money for it without the federal government having to backstop them. The fact that they aren't speaks volumes in my opinion. In case you haven't noticed, we've got a trillion dollar plus federal deficit to contain, and this is as good a place to start containing it as any.


Bonus: Dedicated to Carbon Motors Chairman and CEO William Santana Li, a song by The Babys. Maybe he can stop looking for a handout, pull himself up by his own bootstraps and get back on his feet again

So What Happens If Gasoline Hits $5.00 A Gallon This Summer?

You gotta love the mainstream media. For months now the drumbeat has been about how the economic recovery in the U.S. is picking up steam, even though the only two indicators which are in agreement with that assertion are stocks and jobs, both of with are being relentless manipulated by the Federal Reserve and the Bureau of Labor Lying Statistics respectively. Nevertheless, despite the persistant propaganda designed to get the consumers suckers back into the malls and spending freely again, the media just can't resist the temptation to goose its ratings/readership/page views by doing a little scaremongering over rising gasoline prices. Numerous stories have appeared in the last week breathlessly proclaiming that gasoline prices will hit $5.00 a gallon by this summer.

You would think that someone would quickly spot the inherent contradiction here. After all, every recession since the 1970s has been preceded by a spike in oil and gas prices. But, surprisingly, you would be wrong about that, as shown by an article which appeared over the weekend on MSNBC.com. The title, "8 Reasons Why Gas Will Hit $5 a Gallon This Year," seems straightforward enough, but let's take a closer look at their supposed "expert" analysis. Here are the reasons from the article listed in order, followed by my commentary:

1. Strait of Hormuz
About 20 percent of the crude oil produced in the world is shipped through the Strait of Hormuz, and Iran has threatened to shut down shipping traffic through the Strait. At its narrowest, the passage is 30 miles wide, so there is a realistic case that a conflict could close it. Iran has already been isolated as a trade partner by U.S. and EU sanctions. The regime in the country has made a number of threats about what it might do if its “national interests” were threatened. If Iran follows through with its threats, the period the passage is closed could be very brief if the U.S. Navy, which has a carrier group in the region, moves to reopen the lane. But it is not clear that the American government would make that decision without the open support of allies or the United Nations. A closure of the passage, or any escalation that would make a closure more likely, will drive oil prices higher -- and by extension, gasoline prices.

No argument there. Tensions involving this key oil transportation checkpoint are certainly putting speculative upward pressure on prices. Let's move on.

2. Iran
Iran contributes to a second problem in terms of global oil supply well beyond that of its ability to interrupt supply. Because of the embargo against the nation due to nuclear weapons violations, the U.S. has pressured large oil importers such as Japan to act to isolate Iran by cutting their imports. This puts Japan in a position in which it has to tap even tighter global supply. Japan apparently has agreed to cut its Iranian crude imports by 20 percent. But as the world’s third largest oil importer, Japan indeed will have to get its oil somewhere other than Iran -- which will put more pressure on current production.

Not sure I agree with this one. The sanctions against Iran are laughably self-defeating given that China and India have shown no inclination to join the embargo against Iranian oil, and as long as Persian oil is being bought somewhere, there should not be any corresponding increase in world oil prices as that just means those two countries will buy less elsewhere.

3. Refiners raising prices
Most of the oil refined on the east coast of the U.S. is Brent crude, a type of oil produced from the North Sea. The price of Brent -- more than $124 a barrel -- is almost $16 higher than the price of West Texas Intermediate (WTI) crude, the amount most people read about in the media. But because Brent has replaced WTI as the global price benchmark, U.S. refiners set prices for gasoline and other products as if Brent were the only grade of crude used. That allows refiners with access to cheaper WTI to make larger profits.

However, when the prices converge, as happened in the final two months of 2011, WTI refiners lose their edge -- and their hefty profits. “Refiners were losing money in November and December. You can only lose money for so long,” John Felmy, chief economist for the American Petroleum Institute, recently said. Many large refineries are owned by public companies that do not have much appetite for posting ongoing losses. To avoid losses, refiners will have to increase gasoline prices.

Can't quibble with this one in light of the recent refinery shut downs in Pennsylvania and New Jersey, which certainly wouldn't have happened if they were turning big profits.

4. Other geopolitical risks
Iran does not present the only geopolitical challenge to oil production. In Nigeria, which is the 14th largest producer of oil in the world, Islamic terrorist group Boko Haram has continued to attack Christian areas of the country. The Nigerian Army has reacted by attacking Islamists. Militants have continued to attack pipelines, apparently in a move to disrupt the government.

This segment went on to mention Venezuela and other unstable Middle Eastern countries, but I've left that part out for brevity's sake. Again, no argument here.

5. The EU may save itself
For now, Greece has been bailed out again -- a move that should buoy confidence in the region and encourage demand for oil. Even with the Greek bailout, however, the eurozone is not out of the woods as nations continue to implement austerity measures to protect against the risk of default on sovereign debt.

Also edited down for brevity's sake. Can the EU muddle through for another year? Well, it pretty much muddled all the way through last year, so it certainly is possible.

But here is where things suddenly begin to go completely off track and way out into la-la land:

6. U.S. economic recovery
An improved U.S. economy means higher oil prices. U.S. GDP, employment and even housing have all staged unexpected improvements in recent months. Many economists now peg a 2012 GDP increase at more than 2 percent. The new White House budget assumes growth of 3 percent by 2013. An average of more than 100,000 jobs has been created in each of the past six months. And an extension of payroll tax cuts through the end of this year may further aid the employment recovery. An extension of unemployment benefits means that hundreds of thousands of American who would have no income, will have at least enough to consume basic goods and services. The argument that Americans now drive less is not a powerful one for gas and oil demand when a healthy economy also means more consumption of oil for business, petrochemicals and jet fuel. Demand for oil-based products across the entire economy will pick up with any recovery.

Even if you buy the recovery propaganda, how can any rational observer of the economy not realize what will happen to the American consumer well before gas prices hit $5.00 a gallon? Is 2008 really that far in the past that it has been completely forgotten? That year, gas prices topped out in July at a national average of $4.11, and the shock to the system was so traumatic that it helped trigger a deflationary crash across the financial sector. By January of 2009, gas prices bottomed out at $1.61 (figures courtesy of the chart above from Gas Buddy.com). Yet we're supposed to believe that prices shooting towards $5.00 wouldn't cause an even worse economic shock this time around?

But wait, it gets even more absurd:

7. Summer
In the U.S., summer vacation driving has historically boosted demand for gasoline. Over the past three or so years, however, that boost has been small, if present at all. In 2011, U.S. traffic volume decreased year-over-year in every month except January and February. But that was last year. So long as the U.S. economy continues to improve, more drivers will be on the road this summer.

Right here we see the blind spot of every economic commentator who uses the raw jobs figures to back up the claim of economic recovery. Are there more jobs now than there were a year ago? Undoubtedly. Are most of those newly created jobs the kind of stable, good paying positions which would allow their holders to take a couple of weeks off this summer and take the family out for a long driving vacation? Unlikely. It seems like many of those who get paid to write articles like this one in the mainstream media think that everyone who has a job is as comfortable and well off as they are.

8. Supply risk
In December 2011, OPEC members produced nearly 31 million barrels a day, cutting the cartel’s spare capacity capability from 3.18 million barrels per day to 2.85 million. Saudi Arabia accounts for 2.15 million of those daily barrels of spare capacity.

Again, edited down for brevity. Maybe Saudi Arabia has that spare capacity. Maybe it doesn't. No one outside the desert kingdom really knows for sure. But at least the article ends on a more sensible note.

To sum up, there are a lot of very good reasons to believe that oil and gas prices are going to rise higher in the coming months, but reasons six and seven listed above are absolutely laughable in their absurdity. The fact that they were included in an otherwise relatively astute analysis shows just how powerful the propaganda spewed forth by the Hologram really is.

What will happen if gas prices hit a nationwide average of $5.00 a gallon this summer? Personally, I think that absent a war with Iran we're not going to find out. Because while the economic free fall we experienced in late 2008 and early 2009 was halted by the enormous increase in federal deficit spending and the loose monetary policies of the Federal Reserve, the economy is far too fragile withstand prices surging to that level. Almost certainly, another financial market crash will short circuit the rise in gas prices well before they reach those lofty heights, at least for this year.


Bonus: "Putting out the fire with gasoline"

Yet Another Oil Refinery is Shutting Down

On January 27th of this year, I posted a story about a ConocoPhillips oil refinery in New Jersey shutting down. Well, now comes word that a Sunoco refinery near Philadelphia is also closing up shop. Here is NBC 10 Philadelphia with the details:

Officials at a Sunoco refinery near Philadelphia say about 100 employees are being laid off at the end of the week.

The workers at the company's Marcus Hook plant in Delaware County were given layoff notices saying Friday would be their last day, reports the Delaware County Daily Times.

Sunoco spokesman Thomas Golembeski said Tuesday that the hourly employees were told not to return because the first phase of the plant decommissioning process has been completed. But he says the workers will be paid their wages through the end of the month.

Sunoco said last year that it would idle the refinery and lay off about 490 employees because of deteriorating market conditions. Another Sunoco refinery in Philadelphia is expected to close by July if a buyer isn't found.

And all the politicos can do is whine about it:

Pennsylvania politicians urged Sunoco CEO Brian MacDonald to find a buyer for the facilities.

"With so many jobs on the line and the risk of higher fuel prices for consumers across the northeast, Sunoco and ConocoPhillips must be held accountable for the impact refinery closures would have on the region," said Sen. Bob Casey (D-Pa.) in a letter sent Wednesday. "We need these companies to be more transparent with workers and the public as they contemplate decisions that could have very damaging impacts not only on the local communities but on the entire northeast."

What a pathetic, pandering little worm. Do you really think these refineries are closing because the companies are deliberately being mean, Senator Casey? Or that they wouldn't sell the refineries if they could actually find buyers for them? They're shutting these refineries down because they can no longer turn a profit with them, for whatever reason. The implications of that fact ought to be as clear as they are dire. And you'd be much better off telling your constituents the truth instead of continuing to blow smoke up their asses.


Bonus: Bad boy that he was, Pennsylvania would still likely be better off with the fictional Senator Bob Roberts

"There's No Tomorrow" - Outstanding Animated Peak Oil Movie

I assume that most of my regular readership has at least a basic understanding of peak oil, and the dire long term implications it has for our modern industrialized situation. The problem with explaining peak oil to the layperson has always been the difficulty in reducing the concept to easy sound bites, something it is far easier for the deniers to do.

Peak oil does NOT mean that the world is, "running out of oil," for example, but that it is in fact running out of CHEAP oil. And while the latter does not mean an imminent overnight economic collapse, it DOES mean the end of real economic growth as we know it. Without all of the debt games being played by Western governments and central banks, the permanent end of economic growth and the beginning of a long era of permanent economic contraction would already be evident to all but the most hopelessly thickheaded.

In the spirit of attempting to disseminate the word about peak oil as widely as possible in an easily understandable manner, here is a link to a brand new animated peak oil film, entitled There's No Tomorrow, by professional animator Dermot O'Connor. I strongly urge everyone who reads this to watch this video and spread the word about it. An astonishing seven years in the making, it is a true labor of love that shows through in every frame.

The Yahoo version of the movie is posted below, but first I wanted to be sure to provide a direct link to the film's website: Incubate Pictures. Also, if you would like to express your appreciation directly to the filmmaker himself, you can sign on to the Hubbert's Arm peak oil discussion forum at this link: Llamedos, where both he and I are longstanding members.

Is Globalization Now Blunting the Effects of Peak Oil?

Mish Shedlock of the Global Economic Trend Analysis blog posted a reader letter on Monday that included the chart above as well as some rather startling facts about the current trends in gasoline consumption in the United States:

As I have been telling you recently, there is some unprecedented data coming out in petroleum distillates, and they slap me in the face and tell me we have some very bad economic trends going on, totally out of line with such things as the hopium market - I mean stock market.

This past week I actually had to reformat my graphs as the drop off peak exceeded my bottom number for reporting off peak - a drop of ALMOST 4,000,000 BARRELS PER DAY off the peak usage in our past for this week of the year.

The letter goes on:

An amazing thing to note is that in two out of the last three weeks gasoline usage has dropped below 8,000,000 barrels per day.

The last time usage fell that low was the week of September 21, 2001! And you know what that week was! Prior to that you have to go back to 1996 to have a time period truly consistently below 8,000. We have done it two out of the last three weeks.

Mish himself then rather blandly concludes:

A mild winter can explain part of the drop in petroleum usage (heating oil), but it does not explain the declines in gasoline usage or the overall trends.

Back on September 23rd of last year, in my post "Fear and Loathing in the Auto Industry: The Flacks Can’t See What’s Right in Front of Their Eyes," I highlighted a story about how annual American automobile sales remain mired more than four million below their peak in 2000, even after recovering over two million from the depths of the Great Recession. Moreover, with gas prices having remained above $3.00 a gallon for more than a year now, sales of smaller and higher mileage vehicles have increased as a percentage of the number of vehicles purchased. Additionally, back on November 21st of last year, in my post, "Peak Vehicle Miles Travelled Shows the True State of America's Economy," I highlighted a story about how for the first time since at least the 1960s, U.S. total vehicle miles traveled have dropped during the past four years.

Clearly, the explanation for less gasoline being used is that there are fewer cars now on the road driving fewer miles at a higher average of fuel efficiency. Greater efficiency, of course, is a good thing for the economy. The fewer miles travelled, however, not so much. Because so few Americans have access to adequate public transportation options, and those options are also being cut back and becoming more expensive as I have demonstrated in several previous posts, fewer vehicles miles travelled can only mean less real economic activity in a car centric society such as ours.

But wait, I hear you protesting. What about last Friday’s fantastic jobs report from the Bureau of Labor Lying Statistics? Wasn’t that an indicator of how we have finally turned the corner and are on the road to a full economic recovery? You gloom and doom peak oil pundits were saying all during last year that the return of world oil prices to triple digit territory was going to trigger another recession, yet it obviously hasn’t happened. So what gives?

Well, the flippant answer to that question is that it isn’t 2008 anymore. By that I mean it is now apparent that the global economy underwent a major adjustment the past four years and that $100-a-barrel oil is the new $30. That’s not to say the global financial market crash of 2008, the loss of seven million American jobs, the bailouts of the big banks and Wall Street and the various stimulus programs were not PAINFUL. They certainly were. But as things stand nearly four years later the adjustment is largely complete. The weaker banks, retail chains and other businesses have largely died off, and those that remain are so far better able to weather the storm of higher energy costs, even if many of them have seen the size of their operations reduced.

That’s all well and good, Bill. But what about the fact that the more dire predictions you peak oil types made back in 2008 that oil prices would top $200 or $300 a barrel by now haven’t come true? Clearly, you and numerous others in the movement owe us all an explanation for how you blew that call so badly.

The answer to that question, of course, is right there in those gasoline usage figures. Demand destruction globally, but in the United States in particular as the world’s largest oil consumer, has thus far prevented peak oil’s upward pressure on prices from getting completely out of control. Note, however, that the figure of four million barrels per day less usage almost perfectly mirrors the amount of reserve oil production capacity supposedly possessed by the world’s swing producer, Saudi Arabia. It’s pretty clear that had American demand not been reduced so dramatically, we would again be bumping up against the limits of world production capacity like we were in 2008 and $200 oil and $7.00 a gallon gasoline (at least) would already be a reality.

So what you’re saying is that if America continues along our current path towards economic recovery, and jobs continue to be created at the rate they apparently were in January, that we will soon see demand increase to the point where we’ll again be facing the prospect of $200 oil?

Not necessarily. Even if you take the BLS jobs numbers at face value and ignore the rise in structural unemployment resulting from people “exiting the job market,” there is still the thorny little problem of how the actual net number of jobs can increase so robustly even as the gasoline usage figures above have been dropping so dramatically. Those two data points seem on the surface to stand in direct contradiction to one another.

My theory is that what we are seeing here is globalization, which used to be a driver for increased oil usage and thus higher prices, now serving to actually blunt the price of oil and gasoline. Demand continues to rise in the world’s new factory economies like China and India, of course, but at a rate largely offset by the demand decline in consumer economies like the U.S.

I’ve posted countless stories on this blog in recent months containing news articles showing that, despite higher energy costs, the relentless offshoring of good paying American jobs to the lower wage factory economies is continuing at a rapid pace. Moreover, the wages and benefits for those jobs that do remain are being decimated more rapidly than they already were before the financial crash due to the amount of surplus labor we now have. The new normal in America is that the average person is poorer than they used to be, which means they have less money to be able to afford to buy cars and to drive them as often, especially at the current elevated gasoline price levels.

These effects of globalization on the prosperity of America’s working and middle classes will likely continue to place downward pressure on oil and gasoline prices even as the average barrel of oil itself gradually becomes more and more expensive to produce as the traditional supergiant oil fields deplete and “tight” oil sources (oil sands, oil shale, deepwater) struggle to replace the lost production. As long as we remain mired on the so-called “bumpy plateau” at or near the all time peak of world oil production first achieved in 2005, the globalized economic system will likely continue to limp along unless abruptly disrupted by a geopolitical crisis such as a Middle East war.

Eventually, of course, even without the advent of a major resource war, oil supplies will begin to decline and oil prices will rise to a level above that which can continue to sustain an economic model which dictates that products be made wherever in the world it is cheapest to make them and then shipped everywhere else. Globalization is doomed in the long run, and eventually we will all be returning to localized economies whether we wish to or not. This we know for certain. It just won’t happen as quickly as many in the peak oil community were expecting it to happen.

ConocoPhillips Refinery Shutting Down; 600 Employees Losing Their Jobs

There have been so many mass layoff stories appearing in the past few days that I am going to have a rare four-post day today. Much as it might clutter up the blog, I think it's important to document these articles.

Remember just a few days ago in his SOTU speech how President Hopey-Changey claimed that the U.S. is producing more oil than it has in eight years? Well, if that is an accurate portrayal of our current energy situation, why is a New Jersey refinery shutting down and laying off so many workers? Here is CBS News with the details:

At New English Style Pizza in Marcus Hook, Joe Salters enjoys a soda and slice of pizza as employees conduct business as usual, for now.

Layoff notices went out for Thursday and Friday at the ConocoPhillips Refinery in nearby Trainer.

“Officially we are finished work by the 31st of January,” said Dennis Stephano, President of the Steelworkers Local Union. He says not only are 190 union members at the refinery losing their jobs, but management and contractors too. He says the total comes to about 600 layoffs.

And let's not lose sight of the bigger picture:

“The consumers in the U.S. are going to be impacted by this, this summer. In the winter, heating oil is going to go up, gasoline, jet fuel,” said Stephano.

Conoco Phillips announced on January 25th earnings of $3.4 billion in the fourth quarter of 2011 compared to $2 billion in the same quarter in 2010. Stephano questions the closing despite the company’s announcement in September that it would close this March if a buyer for the site wasn’t found. Workers knew then layoffs would come now says Stephano. He says they will be paid through March according to the union contract and given one weeks pay per year of service capped at 16 weeks.

With Sunoco closing refineries in Marcus Hook and potentially Philadelphia, US Senator Bob Casey is pressing both companies for more information.

“We’re asking them to do what they should do, be concerned about the region, energy markets, and consumers, not only about some bottom line,” said Casey.

Well, Senator Casey, thanks to 30 years of craven politicos like you bowing and scraping before them, they don't have to be concerned about anything BUT the bottom line. They know that it is going to cost a lot of money to upgrade and maintain aging refineries, even though there is going to be far less oil available for them to refine in the future. They may be heartless, but they aren't stupid.

Finally, Some Good News: Congress Ends Ethanol Subsidies

One of the dumbest public policy decisions made in recent years was the subsidy paid by the federal government to ethanol producers. Not only did the subsidy directly contribute to the national debt, it helped drive up the price of corn, which is one of our most basic food staples. It also artificially suppressed the price of gasoline, and if there is one thing government policies should NEVER do in this peak oil era, it's encourage people to use more oil and gas than they would otherwise. Here is USA Today with the details:

Gasoline could cost 4.5 cents a gallon more starting as early as this week, and it's not because of rising oil prices.

It's because Congress declined to renew the 30-year-old federal subsidy for ethanol, letting it expire Sunday.

Ethanol, denatured grain alcohol used as a proven smog-cutting ingredient, currently makes up 10% of most gasoline-based motor fuel for general use, so-called E-10. In a few areas, E-85 fuel, 85% ethanol, also is available. E-85 can be burned only by vehicles equipped for "flex fuel."

How much the end of the subsidy could add to gas prices, and how soon, is yet to be seen. Ethanol blenders got a 45-cents-a-gallon tax credit, which amounts to 4.5 cents for the amount blended into each gallon of E-10 fuel.

It's hard to calculate the immediate impact. Oil prices and ethanol stocks are in flux. And unknown is the impact of another move by Congress: dropping the 54-cents-per-gallon tariff on ethanol imports. Brazil is a leading global producer of ethanol made mostly from sugar cane.

In the U.S., ethanol primarily is made from corn. That has made the ethanol subsidy controversial because of allegations that it raised food prices. The estimated $6 billion annual cost of the subsidy also has added to the federal deficit.

Of course, they had to go and diminish the positive effect on the nation's balance sheet by also eliminating the tariff on Brazilian ethanol, but at least this is a step in the right direction.


Update: I stand corrected on this actually being good news. See reader bmerson's comment below and my response.

What's the Matter With the Electric Car?

Very few people want to buy them, actually. Here is MSNBC with the details:

If the White House hopes to meet its ambitious goal of putting 1.5 million battery cars on the road by mid-decade it better hope that 2011 wasn’t a good indication of what Americans think of electric vehicles.

Add them all up, hybrids, plug-ins and pure battery-electric vehicles, or BEVs, and they accounted for little more than 2% of the U.S. automotive market last year. Remove conventional gas-electric models, such as the Toyota Prius and Ford Fusion Hybrid, from the equation and more advanced battery vehicles generated barely 20,000 sales.

“I’d say they failed,” proclaims Joe Phillippi, chief analyst with AutoTrends Consulting.

Ouch...harsh. So if they failed, as Mr. Phillippi says, WHY exactly did they fail?

...they aren’t cheap, battery vehicles saddled by price tags that are thousands – in some cases, tens of thousands – of dollars more than comparable gasoline vehicles.

That might make sense had fuel prices held at the near-record levels seen in early 2011, but gas has dropped sharply since then. Meanwhile, manufacturers have been making major strides when it comes to the fuel efficiency of conventional, gas-powered vehicles. In the compact segment where Ford will compete with the Focus Electric, for example, 40 mpg on the highway is the new norm.

Both government bureaucrats and electric vehicle manufacturers, says analyst Sullivan, “aren’t giving consumers credit for being able to do the math. It just doesn’t make economic sense” to buy an electric vehicle – at least if your primary goal is to save money by reducing your energy bills.

There are, of course, other reasons. There’s the desire to clean up the air and to curb oil imports, especially from the Mideast. But whether that can be used to draw more buyers into the market remains to be seen. Especially in this economy, value is the big motivator, rather than politics and social concerns.

Oh, no shit? You mean that very few people other than a handful of greenie-minded, upper middle class yuppie types actually takes such things as the environment or Middle East oil imports into consideration when making a major purchase like a car? For that brilliant observation, let me present you with the coveted Dr. Obvious award. I'm not saying it's right, but it is a fact of life that most people make purchasing decisions based upon the bottom line to their pocketbooks.

I wrote back in June on this blog about how when I was ready to purchase a new vehicle after nine years and ultimately decided on a Ford Escape, that I chose to go with the conventional gasoline powered model rather than the hybrid because the latter cost nearly $6,000 more (and there was a three month waiting list for the hybrid). Six months later, I've put just over 5,000 miles on the car, meaning I would have to drive it for many more years to make up the cost difference between the purchase price and what I would have saved on gasoline.

The sad fact is that the time for America to start transitioning to electric vehicles was 20 years ago or more before we began staring the peak oil crisis right in the face. Even if President Hopey-Changey's unrealistic goal of 1.5 million EVs on the road by the middle of the decade is met, that is less than one percent of the total and still leaves something on the order of 250 million gasoline powered vehicles still out there.

There is also the problem that even if every car were suddenly magically converted to being an EV, the power grid couldn't handle charging them all. Additionally, much of our electricity comes from coal fired power plants, and coal is also not only also a fossil fuel but a bigger contributor to global warming than oil. You wouldn't think it would be necessary to have to keeping repeating all of that, but sadly it is because so few people seem to realize it.

I suspect that going forward EVs will remain a niche product purchased mostly by select members of the upper middle class in a desperate attempt to keep their car-centric lifestyles going as long as possible. But I doubt that ultimately they will have a future that lasts much longer than their gasoline powered counterparts.


Bonus: The Boss's Chevy wasn't a Volt, that's for sure

Ohio Quakes Linked to Oil-Drilling Waste Pumped Into Wells

Okay, so technically the recent earthquakes in Ohio were not the result of fracking, but check out the key passage in this USA Today article about the quakes:

Oil-drilling wastewater pumped into a northeast Ohio well "almost certainly" triggered 11 minor earthquakes around Youngstown since last spring, including one Saturday, a seismologist tells the Associated Press.

Ohio officials closed four inactive "fluid injection" wells within a five-mile radius of the Youngstown well, which is near a fault that geologists apparently weren't aware of. Pressure from the wastewater caused the fault to shift.

Northstar Disposal Services has used the wells to dispose of brine wastewater from shale oil and gas drilling, which officials said is different from so-called fracking, the Youngstown Business Journal and AP report.

Despite the disclaimer, The Christian Science Monitor writes that the disposal wells -- and the earthquakes -- are related to fracking, or hydraulic fracturing ("How fracking caused an Ohio earthquake").

The seismologist interviewed by the AP, John Armbruster of Columbia University's Lamont-Doherty Earth Observatory, said more minor shakes can be expected throughout 2012.

"The earthquakes will trickle on as a kind of a cascading process once you've caused them to occur," he said. "This one year of pumping is a pulse that has been pushed into the ground, and it's going to be spreading out for at least a year."

"...which is near a fault that geologists apparently weren't aware of..." in other words they were tampering with the geology of a potentially unstable area and had no idea about the risks they were taking. If they had no idea this fault line was there, how many other fault lines in potential fracking zones around the country do they have no idea about?

What is it going to take to stop this insanity, the accidental triggering of a major earthquake in a large metropolitan area? And before you scoff and say that can't happen, I would simply ask this question: how do you know? The science of earthquakes is still not well understood and they have yet to be predicted with any degree of accuracy. For all we know, every day that fracking and other injection techniques being used to extract oil and natural gas is placing us at risk of a major catastrophe. Do you want to be living in the area where the fracking equivalent of the Deepwater Horizon disaster takes place? Because I sure don't.

We should stop this madness once and for all and accept the fact that extending our fossil fuel supplies by a few years is not worth the risk of touching off a major earthquake, especially since we are eventually going to be forced to power down one way or another. But of course we won't. We're on a highway to hell, barreling at top speed with the brake line severed.


Bonus: "No stop signs...speed limits...nobody's gonna slow us down"

Public Transportation Service Cuts/Layoffs Coming to Buffalo

As the peak oil era stretches on, and high oil and gasoline prices become the norm, one would think it should be obvious that the last place state and local governments should be making budget cuts is in public transportation. Sadly, that is not the case, as this story out of Buffalo shows:

The Niagara Frontier Transportation Authority has approved a budget for the 2012-2013 fiscal year. Cuts in state aid and dwindling revenue from NFTA owned properties have left the transportation authority with a 15 million dollar budget gap. To fill that hole the Board of Commissioners has approved several deep cuts in personnel and service routes.

- 50 positions are being eliminated. 20 of those positions come from the NFTA's police force.
- 81 bus service routes will be eliminated.
- 14 other routes will see reductions in service.
- Metro Rail service will be eliminated on Sundays after 8:00 pm.

Buffalo Mayor Byron Brown was at the budget meeting and addressed the Board shortly after the vote. Brown says up to 80 percent of the NFTA's bus customers are city residents and many rely on the bus system as their only source of transportation. Brown added that he has reached out to the state legislature, the Governor's office and the New York Power Authority for assistance. The NFTA will be holding several public hearings on the budget cuts in the coming weeks.

At least Buffalo's mayor is cognizant of the negative effects these cuts are going to have on the citizens who have to ride the buses to get around. The scary thought is contemplating what is going to become of these people when the day finally comes that the buses stop running altogether.


Bonus: looks like the boys from ZZ Top may be waiting for the bus a bit longer

Speculators, Cartels and Myths of Scarcity: How War Pushes up the Price of Oil

Oil Wars/Wikimedia image

Dean Henderson
Global Research

Last week, as if to justify his Libyan crusade, President Obama echoed the prevailing “peak oil” myth, stating that “we must accept the new reality that from here on out, demand for oil will always exceed supply”.  It was music to the ears of the Rockefeller/Rothschild energy cartel and tax-dodger oil traders in Zug, Switzerland alike.  Both know full well that oil companies pay around $18/barrel to get crude out of the ground.

Big Oil rings up its usual quarterly record profit, speculators led by Goldman Sachs and Morgan Stanley tack on another $50/barrel and people get gouged at the gas pump.  Governments “tighten their belts”, economies contract and the myth of scarcity (root word: scare) encourages a race to the bottom for the global masses, alongside an historical concentration of power and wealth by the well-fed and fueled global elite.

A day after Obama’s endorsement of concentrated corporate power and casino capitalism, the US Department of Energy reported that the main US oil stage depot at Cushing, Oklahoma was holding 41.9 million barrels of crude oil, very near its capacity of 44 million barrels.  In other words, the US is awash in crude oil.
Here in South Dakota, the USDA announced that farmers plan to plant an additional 850,000 acres of corn- the most since 1931.  According to a March 10 bulletin from USDA, Brazil’s corn crop is 2 million tons higher than last year.  Yet corn futures on the Chicago Mercantile Exchange trade at record prices.


According to the same USDA report, “U.S. wheat ending stocks for 2010/11 are projected higher this month on reduced export prospects. Projected exports are lowered 25 million bushels with increased world supplies of high quality wheat, particularly in Australia, and a slower-than-expected pace of U.S. shipments heading into the final quarter of the wheat marketing year.”  Yet wheat futures hover near record highs.

There is nothing alarming in the report about supplies of beef, poultry, eggs, milk, sugar or rice either.  Yet food prices continue to skyrocket.

The global elite know that both food and energy are paramount to life. Control over these two most basic needs means control over people.

After the 2008 acquisitions of Swift, Smithfield and National Beef Packers by Brazilian meat-packer JBS, there are three conglomerates that control over 80% of beef-packing in the US – Tyson, Cargill and JBS.  These same companies control most of the burgeoning cattle feedlot industry centered in SW Kansas and SE Colorado.  They also dominate the pork, chicken and turkey industries.  Cargill is the largest grain processor on the planet, handling a full one-half of global grain supplies.
  
Four giant companies are making a play to own not just all the oil, but virtually all energy sources on the planet.  In my book, Big Oil & Their Bankers…I dub them the Four Horsemen – Royal Dutch/Shell, Exxon Mobil, Chevron Texaco and BP Amoco.
  
These companies control crude oil from the Saudi well-head to the American gas pump and profit from every step of processing, shipping and marketing in between.  While reactionary Republicans blame environmentalists for the lack of US oil production, it was these oil giants who capped permitted wells in Texas and Louisiana and moved production to the Middle East – where Bangladeshi, Filipino and Yemeni workers are paid $1/day to work the oil rigs.
  
Royal Dutch/Shell and Exxon Mobil are the heaviest and most vertically integrated of the Four Horsemen. These behemoths have led the charge towards horizontal integration within the energy industry, investing heavily in natural gas, coal and uranium resources.

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Resilient Cities

I just attended a hopeful presentation by Australian urbanist Peter Newman on his concept of Resilient Cities. We're at the toxic intersection of several trends: peak oil, global warming, and scattered, car-dependent residential growth fueled lately by subprime mortgages. According to data he presented from the UK Industry Taskforce on Peak Oil and Energy (Nov. 2008), "the underlying trend in the price of oil is 6 percent growth per year." Combine this with the IEA's recent World Energy Outlook that says the "natural annual rate of [oil output] decline is 9.1 percent from 2009" and it becomes pretty obvious that massive changes in our energy and transportation infrastructure and technology are around the bend.

Newman lists four courses the modern city may take:

Collapse: It's happened before and could happen again. Newman cited the ancient examples of Ephesus and Babylon, and while total abandonment seems less likely in today's world, a tour through Rust Belt American cities such as Gary, Indiana, should suffice as a warning of potential decay.

Ruralization: Food production moves to the cities somewhat, as happened in Havana when the Soviet Union cut off energy supplies. Total ruralization with every apartment complex growing its own food seems unlikely because it would disrupt the whole logic of the city as an opportunity factory.

Division: Wealthy eco-enclaves will coexist with and be surrounded by Mad Max suburbs. This is a highly probable outcome if market forces play out sans smart urban and regional planning. This pattern is already prominent in the developing world where gated communities abut slums.

Resilience: Combining all the dream elements of renewable energy, distributed systems, smart grids, carbon neutrality, and sustainable transport, resilient cities are basically environmental utopias--only impossible if viewed as overnight projects. Alone among these four types, resilient cities are founded on hope not fear, though division, ruralization, and collapsing neighborhoods may all accompany the transition to resilience.

Newman focused today on the fact that land use follows transport, thus illustrating the importance of public transit-oriented development. His sense is that the stimulus and transportation initiatives of the Obama era must move dollars from freeway construction to sustainable options. Spending $100 million per mile on a freeway, as Houston did, seems like Stone Age economics at this point.

I suggested to him that transition to high gas mileage electric vehicles (100+ mpg) might forestall investment in public transit, but he seemed optimistic that, given the bigger picture of climate change pressuring the economy, plug-in cars and vehicle-to-grid technologies will prove a win-win situation. Let's hope he's right.