Daily Digest

Daily Digest - July 4

Sunday, July 4, 2010, 9:15 AM
  • Saudi King: Halt To Oil Exploration To Save Wealth
  • Hungary To Ask For 'Precautionary' €10bn–€20bn Bailout From EU And IMF
  • Illinois Stops Paying Its Bills, but Can’t Stop Digging Hole
  • Stimulus Or Austerity: Is That The Right Question?
  • Ministers Ordered To Find 40% Cuts As Treasury Axe Swings
  • A Market Forecast That Says ‘Take Cover’
  • As Oil Industry Fights a Tax, It Reaps Billions From Subsidies
  • Hundreds Killed and Injured as Fuel Tanker Explodes in Congo
  • Intel’s Cure for Home Energy Management: Answering Machines
  • Preserving Its Piece of the Pie
  • what is peak oil everything you should know
  • Oceans facing 'irreversible' deterioration, report says
  • Tuna’s End

Economy

Saudi King: Halt To Oil Exploration To Save Wealth (ChrisM **gulp!**)

RIYADH (Zawya Dow Jones)--Saudi Arabia's King Abdullah has ordered a halt to oil exploration operations to save the hydrocarbon wealth in the world's top crude exporting nation for future generations, the official Saudi Press Agency, or SPA, reported late Saturday.

"I was heading a cabinet meeting and told them to pray to God the Almighty to give it a long life," King Abdullah told Saudi scholars studying in Washington, according to SPA.

"I told them that I have ordered a halt to all oil explorations so part of this wealth is left for our sons and successors God willing," he said.

Hungary To Ask For 'Precautionary' €10bn–€20bn Bailout From EU And IMF (SolidSwede)

Economy minister György Matolcsy said this morning that Hungary believes it needs to arrange a new credit line from the IMF and the EU in case the European economic situation deteriorates. Speaking to Reuters in Budapest, Matolcsy also said that Hungary will seek agreement to run a larger deficit than planned next year.

Illinois Stops Paying Its Bills, but Can’t Stop Digging Hole (SolidSwede)

Mr. Hynes shakes his head. “This is not some esoteric budget issue; we are not paying bills for absolutely essential services,” he says. “That is obscene.”

Stimulus Or Austerity: Is That The Right Question? (Truthsavvy)

Investment markets have been unsettled of late, resulting in the worst quarter for major American stock indices since 2008. Are European G20 leaders correct in declaring there is too much debt in the world? Or is President Obama's team right in pushing for more stimulus? Who holds the real economic insights? Those who say we must borrow our way forward to recovery? Or those who believe a new day of financial austerity looms?

Ministers Ordered To Find 40% Cuts As Treasury Axe Swings (SolidSwede)

The latest plans, if implemented in full, would see spending slashed to an extent rarely if ever attempted before in a Western democracy and would strike a massive blow at key areas such as the police, transport, energy, universities and business support.

A Market Forecast That Says ‘Take Cover’ (jdargis)

“I’m saying: ‘Winter is coming. Buy a coat,’ ” he said. “Other people are advising people to stay naked. If I’m wrong, you’re not hurt. If they’re wrong, you’re dead. It’s pretty benign advice to opt for safety for a while.”

Energy

As Oil Industry Fights a Tax, It Reaps Billions From Subsidies (jdargis)

At the same time, BP was reaping sizable tax benefits from leasing the rig. According to a letter sent in June to the Senate Finance Committee, the company used a tax break for the oil industry to write off 70 percent of the rent for Deepwater Horizon — a deduction of more than $225,000 a day since the lease began.

Hundreds Killed and Injured as Fuel Tanker Explodes in Congo (jdargis)

Preliminary United Nations estimates put the death toll at 220, with 111 people injured. A local official said 232 had died, while the Red Cross put the toll at 219. According to witnesses, the tanker was carrying gasoline, Reuters reported.

Intel’s Cure for Home Energy Management: Answering Machines (Davos)

As part of its push into energy, Intel will make 1,000 of the units by the end of the year and conduct trials with various utilities. The company will then license the reference design — probably for free — to retail manufacturers. A contact manufacturer has already been enlisted to take orders.

Preserving Its Piece of the Pie (ChrisM)

Dow Chemical, which uses a lot of energy plus copious amounts of natural gas as an ingredient of the chemicals it manufactures, is sitting pretty for the moment because the price of that fuel is way down. Still, it is worried about the future.

What is Peak Oil – Everything you should know – A series by Richard Komorowski for The Cornwall Free News (ChrisM)

Estimates vary, but the general consensus is that the world’s peak is now, plus or minus about five years, i.e. something between 2005 and 2015. The most optimistic forecast is around 2020, but these are estimates from the oil producing nations and the oil companies, who don’t want to see any panic which would bother their bottom lines.

Since around 1965, we have been using more oil each year than we have discovered. If one compares it to a bank account, we have been taking more out than we have been putting in. If we look at oil as a bank account, we’re heading for inevitable bankruptcy.

Environment

Oceans facing 'irreversible' deterioration, report says (ChrisM)

WASHINGTON — A sobering new report warns that oceans face a "fundamental and irreversible ecological transformation" not seen in millions of years as greenhouse gases and climate change affect temperature, acidity, sea and oxygen levels, the food chain and possibly major currents that could alter global weather.

The report in Science magazine doesn't break a lot of new ground, but it brings together dozens of studies that paint a dismal picture of deteriorating ocean health. "This is further evidence we are well on our way to the next great extinction event," said Ove Hoegh-Guldberg, director of the Global Change Institute at the University of Queensland in Australia and an author of the report.

Tuna's End (ChrisM)

The essentially ownerless nature of tuna has led to the last great wild-fish gold rush the world may ever see. The most noticeable result of this has been the decline of the giant Atlantic bluefin tuna. But the Atlantic bluefin is just a symptom of a metastasizing tuna disease. The United Nations’ Food and Agriculture Organization reports that 7 of the 23 commercially fished tuna stocks are overfished or depleted.

Tuna then are both a real thing and a metaphor. Literally they are one of the last big public supplies of wild fish left in the world. Metaphorically they are the terminus of an idea: that the ocean is an endless resource where new fish can always be found. In the years to come we can treat tuna as a mile marker to zoom past on our way toward annihilating the wild ocean or as a stop sign that compels us to turn back and radically reconsider.

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13 Comments

idoctor's picture
idoctor
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Re: Daily Digest - July 4

Happy 4th everybody......if our founding fathers could only see us now LOL. Thanks to all the members who contribute the data & thoughts that we share.

Did anyone watch Paul Krugman this morning on ABC? A round table discussion & he said the problem was the stimulus was way too small. Said we need more stimulus. This is what many have talked about & why I sold my last shorts Friday & started going back long. Forces of deflation are stronger at this moment but for how long before the thick ketchup hits the plate as they keep pounding on the bottle?

cmartenson's picture
cmartenson
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Re: Daily Digest - July 4

How is it that human's inability to appreciate the complexity of life, of ecosystems - of any non-linear, complex system - can come back to haunt them?

Too many ways to count, but some of the stories should be quite instructive:

The Great Sparrow Campaign (wiki)

The campaign was initiated by Mao Zedong, the first President of the People's Republic of China. Sparrows were included on the list because they ate grain seeds, causing disruption to agriculture. It was decided that all the peasants in China should bang pots and pans and run around to make the sparrows fly away in fear. Sparrow nests were torn down, eggs were broken, and nestlings were killed.[2]

Initially, the campaign did improve the harvest. By April 1960 the National Academy of Science found that sparrows ate insects more than seeds. Mao declared "forget it", and ordered the end of the campaign against sparrows.[2] By this time, however, it was too late. With no sparrows to eat them, locust populations ballooned, swarming the country and compounding the problems already caused by the Great Leap Forward and adverse weather conditions, leading to the Great Chinese Famine in which around 30 million people died of starvation.

Even something as simple as killing sparrows turns out to be an enormous error.  One wonders what treats the great extinction event we are in the midst of has in store for us?

Certainly many that we'll never anticipate.

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saxplayer00o1
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Re: Daily Digest - July 4

"Coast Guardsman on the scene called it ‘emulsified oil’ but declines to speculate on its origin

James Shannon

Mid & South County Editor

Southeast Texans living in Crystal Beach on the Bolivar Peninsula got news late Saturday afternoon that they had rather not have received. Following Hurricane Alex sending excessively high tides, having the only road into Bolivar closed due to flooding and debris filling SH 87, and many businesses closed last week, vacationeers and residents alike reported oil residues on Crystal Beach. "

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rjs
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idoctor's picture
idoctor
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Re: Daily Digest - July 4

Roubini Sees Euro Zone '10 Growth "Closer to Zero"http://www.cnbc.com/id/38033254

Euro zone growth in 2010 could be "closer to zero" after a volatile second quarter threatens to dash previous estimates of 1 percent, U.S. economist Nouriel Roubini said on Sunday.

Nouriel Roubini
Getty Images
Nouriel Roubini

The currency bloc does not face a double-dip recession, however, despite deteriorating financial-market confidence over economic growth in an age of fiscal austerity, Roubini told a
conference in Aix-en-Provence.

"Given the shocks of the last few month s... by year-end, euro zone growth could be closer to zero percent," said Roubini, who has been nicknamed "Doctor Doom" for his pessimistic forecasts.

He said his previous estimate of 1 percent was similar to forecasts by the European Central Bank and the International Monetary Fund.

The past three months' stock-market correction, rising credit spreads and a jittery inter-bank lending market suggested there were serious concerns over economic growth at a global level, said Roubini.

Growth in the U.S. economy could slow in the second half of this year to 1.5 percent from 3 percent in the first, he said.

"For the global economy, by year-end, the picture is not a very nice one," said Roubini.

plato1965's picture
plato1965
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Re: Daily Digest - July 4

Saudi King: Halt To Oil Exploration To Save Wealth (ChrisM **gulp!**)

 strikes me as the possibly the most significant article in years....

 A phase change..

 

 

 

Subprime JD's picture
Subprime JD
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Re: Daily Digest - July 4

If the Saudis do choose to hoard their oil wealth that would be great news for their country, especially in the long term. However, they do run the risk that certain heavily armed western nations may not tolerate this "austerity" on oil production and may take matters into their own hands.

Chris M has been spot on regarding this oil hoarding forecast. He has stated on many occasions that as word gets around about peak oil, many oil producers would begin to hoard their reserves.  The land-export model is key on this topic. As a country's oil production falls while domestic consumption rises, there is less oil to export. As the delta between production and exports gets narrower, a negative feedback loop begins and these nations export less.

In addition, China and India are growing rapidly meaning their thirst for crude will continue to grow. The strait of Malacca in Malaysia is a huge chokepoint of oil transportation as 40% of asian crude imports cross through here. I see this place being a huge area of contention in the future.

The Saudis would be very wise to halt oil production and exploration as it means more wealth for them in the future and at the same time forces us oil dependent importers to adjust our economy and way of life. I would prefer change due to political factors as opposed to solely geological factors.

printfaster's picture
printfaster
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Re: Daily Digest - July 4

This is the biggest news of the post WWII era:

Saudi King: Halt To Oil Exploration To Save Wealth

My view stands differently.  It is about stopping exploration and development of abiotic oils.  My view is that Gawhar sits over a huge abiotic pool feeding it from below.  Every evidence in oilfields like Bakersfield shows more and more oil at lower formations when the same sites are redrilled deeper and deeper.

The notion that all oil is of biological origin is fanciful.  One question that the promoters of biological oils only must answer is:  Where did the carbon mass come from to produce biomass for life itself?  Clearly life is based on abiotic sources of carbon.

The Russians have been able to drill to nearly 50,000 feet and have found immense quantities of gas, and that gas did not come from dead dinosaurs.  Not even dead fish.  Even in the US the most productive gas wells are over 25,000 feet.

One more question for the biomass only touts is:  Where did the extraordinary amounts of Helium 3 come from in the ultra deep gas wells?  I guaranty that dinosaurs or their excretions did not produce He3.  Methane at those depths accumulated from nuclear processes that released neutrons, alpha particles, tritium (source of He3) and various other isotopes over billions of years.  Even today, tritium levels are monitored at volcanic sites to measure activity.  That tritium did not come from a billion years ago.  Tritium is evidence of current and ongoing nuclear processes.  It can be nothing else.

 

 

cmartenson's picture
cmartenson
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Re: Daily Digest - July 4
printfaster wrote:

This is the biggest news of the post WWII era:

Saudi King: Halt To Oil Exploration To Save Wealth

My view stands differently.  It is about stopping exploration and development of abiotic oils.  My view is that Gawhar sits over a huge abiotic pool feeding it from below.  Every evidence in oilfields like Bakersfield shows more and more oil at lower formations when the same sites are redrilled deeper and deeper.

???

What?

Um, if you think Ghawar is sitting above an abiotic pool of oil that's constantly refilling from the creamy nougat center of an endlessly bountiful earth, why on earth would the Saudi king want to conserve anything?  Even at that level I don't understand your logic.

However, if you want to open a thread about abiotic oil and then trade actual hard facts, one for one, you will certainly find yourself swamped with counter evidence.  There is, to be sure, scant evidence on the abiotic side compared to the biotic side.

This site is dedicated to facts and not speculation and abiotic oil has not yet passed even the minimal standards required to be taken seriously here.  Perhaps you can be the one to marshal the facts?  That would be very helpful.

However, the random collection of tritium and H3 and unconfirmable claims of ultra-deep Russian wells that you've tossed in here are not sufficient.  Not even close.  Links please, from multiple confirmable sources for all fanciful claims of unlimited physical abundance.  That is the basic requirement here.

Thank you in advance.

plato1965's picture
plato1965
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Re: Daily Digest - July 4

"biomass only touts"

 is the current paradigm..... might be wrong but it's there up on the most-favoured-theory perch.. to be knocked off sure... but it IS the default. so less of the "touts".. you are the outside challenger. m''kay.!   *grin*

 The west needs oil short and medium term..

 The middle east has oil.. needs......... food.. protection (arms) short term.. food is more significant than arms I feel.... despite the glamour factor.

http://en.wikipedia.org/wiki/Oil-for-Food_Programme

 

 Take it away Mr Cohen....

 Now..

 We know who the oil exporters are..... OPEC..

 But..... who are the net food exporters. ?????  Who are "OFEC" ?

 The US.. Canada .. the EU ? Africa ???

There are two kinds of people in this world my friend; those with food and guns who need oil, and those with oil who have quite a lot of guns already but need food.

 

 

 

 ps.. Abiotic food theorists.. fuggetaboutit..!!

 

plato1965's picture
plato1965
Status: Platinum Member (Offline)
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Posts: 615
Re: Daily Digest - July 4

 Same guy that did the Goldman / food  story.. on the oil issue..

 We all live in an oil slick now.

 http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-we-all-live-in-an-oil-slick-now-2009644.html

 I'm seriously amazed at the UK press sometimes.... mucho kudos to "the independent".

 

Gord.Barker's picture
Gord.Barker
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Re: Daily Digest - July 4

Oil does not come from dinosaurs but rather from biological material in the oceans that rain down from the surface into an environment that is anaerobic.  There it gathers without decaying and is eventually covered by sediment.  Over time this is buried as well and the oil is cooked out by pressure and heat.  As to where and when it was created...every change in the ages of the earth (jurassic, triassic, etc) is only recognizable by a marked shift in the creatures alive at the time.  That is, each is an extinction to one degree or another.  There have been lots and some of them were catastrophic to the earth. 

Not everthing buried in a hypoxic environment would be come oil, some were just well preserved fossils.  The Burgess shale for example is an example of fossils created in a hypoxic ocean enviroment where at least the bottom of the ocean had no oxygen.

We are probably (with the number of dead zones in the oceans right now) starting the oil creation cycle again, although it will be some far future species that gets to dig it up.

As for H3 is generally considered to be a primordial inclusion in the mantle and occationally gets included (I'm not sure if absorbed is the correct term) in natural gas deposits.  I think up to 7% in some sources.

If you are looking to an abiotic source for oil to releave you of the fear of peak oil you must answer the question, is Gaia creating oil in excess of 85 million barrels per day?   Unless it is, you still have a peak oil problem.

Deal with it.

plato1965's picture
plato1965
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Posts: 615
Re: Daily Digest - July 4

 

 Very good point.. abiotic capital.. sure possible......  hell Titan is covered with the stuff..

but abiotic income ?  Ah.. now that is tricky...

 The genesis of the stock is irrelevant.. it's the source (if any) of flow that matters in the long run.

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