Thursday, August 26, 2010

Rest In Peace Cody

I just got this sad news in my email today. Cody is a cougar at InSync Exotics.

I haven't worked with the cougars yet, so I don't really know them well. Cody was getting prepped to go to Texas A&M before I left on Monday. At that time, the staff was looking for an air conditioned ride that would hold his cage.


I'm afraid I have some very bad news. We lost Cody today.

If you aren't up to date on his story, he stopped eating so he was taken to our local veterinarian, Dr. Kerin. Chest x-rays showed a mass on his lungs, which wasn't there on his x-rays taken just 4 months ago. The mass could have been either cancer, or an abscess.

Cody was taken to Texas A&M today, to hopefully perform surgery to determine what was in his lungs. When he got there, he had a collapsed lung, and they pulled 2 liters of fluid out of his lung, and then reinflated it. However, before they could start the surgery, his bloodwork showed Cody was in acute renal failure. They were going to put him on IV fluids for a few days, then try again to perform the surgery.

However, a short time ago, the abscess in Cody's lung burst. Between that and the renal failure, we just couldn't ask Cody to fight any longer. He would have been in a great deal of pain, with a very poor prognosis for recovery.

A necropsy is being performed now, to let us know what happened to our sweet Cody, and then Vicky will be bringing him home.

I'll update everyone on memorial plans once I know what they are. Thanks so much.


The service for Cody will be held at Pet Memories Cremation tomorrow morning (Friday) at 8:30am. Their address is 2500 State Highway 66, Rockwall TX 75087. You can find directions at their website,

Tuesday, August 17, 2010

Driver's Side Gas Detectors

Do You Know What This Symbol Means?

Well, it's a busy picture, and I thought the article was a joke. So if there had been a multiple choice selection, I was going to pick, "Excess Passenger Gas Detected". I thought maybe it was a courtesy warning to give the other people in the car, time to hold their breath and roll down the windows.

Here's the answer...

Thursday, August 12, 2010

Doom In October?

Not too long ago, I was predicting another downturn in October. So far I'm not seeing anything to contradict that view. As I argued, the heavenly economic numbers that had the media elated, turned out to be dramatically wrong. The unemployment numbers enjoyed a boost from two stats that made them misleading. The unemployment benefits were temporarily cut, this dropped a large number of unemployed people off the stats, and then 'Jobs Saved' saw a big boost.

And jobs saved is probably the most bogus stat in current use. It's the measure of how many people got raises. And evidently a lot of government employees got raises, which made unemployment look better. Too bad they don't subtract the number of people who get pay cuts as jobs lost. It makes as much sense as the nonsense they push now.

We've also learned that across the board the rosy numbers touted as proof of a recovering economy, turned out to be false. Well false for everyone but the folks on Wall Street, who are enjoying our Federal Government's largess.

And the next item up that I count as an indicator of bad times on the horizon is stability in high gasoline prices. So long as gasoline prices stay high, it will eat into a disproportionate percentage of people's incomes and reduce spending on other goods and services.

I got the following chart from Gas Buddy.

Now this chart doesn't look too bad. You can see how prices dropped in May as I predicted. But they've held steady at a higher level with trend upwards. What I'll be watching for in September is another run up like we say in March and April. I don't know that we need as a dramatic of a run up as we did before, as the health of small businesses is precarious. Smaller and smaller increases in commodity prices can likely do comparable damage as the economy continues without the major correction I'm expecting the first quarter of next year.

For any of you following me from Peak Oil Debunked, this is economic behavior that I believe is driven by the fact that energy production is not growing, and thus industry is not growing, while the Gov continues to try to stimulate the economy through pure financial magic. It's like pumping the gas pedal when the fuel line is getting clogged. The engine will not run smoothly or go faster, no matter how hard you pump it. Not until the problem with supply is repaired.

There's a lot of folks over on Peak Oil Debunked that think that a new era of mega oil or mega energy production is coming in a few short years. One poster suggested that Brazil will add 5mbd to our production by 2015. He added that there were many similar fields that will be exploited. When I did a little searching on this I found that Petrobas is expecting to increase production by about 240,000bpd in 2014. This is a dramatic let down from the cornucopian viewpoint.

Since I started following the Peak Oil in 1998, I've heard many hundreds of people continually repeat the story that there will be no peak in our lifetimes. When I was engaged in conversation on USENet (remember that service?) back in 1999-2000, my research led me to believe that we'd see a short term peak in 2001 and this peak would crash the markets. I had many people cussing me out and telling me I was full of crap. I went with my research and sold most of the stock I had accumulated in the DOT Com bubble and sold in in Jan 2001. I made the same recommendation to friends and family. No one took my advice, though a High School buddy later told me that not a day goes by that he doesn't kick himself for not listening.

After 2001, things got muddy in the crystal ball department. I had posted many times on multiple forums and this blog, that the government response to Peak Oil will be to inflate a series of bubbles. The government will use fiscal policy to try to bring back back an era of endless growth. This is currently Obama's stated policy. But without growing energy supplies, industry can't grow. If industry can't grow, then pumping money into the economy will only grow those businesses that don't rely on real world goods and services. In other words, only the financial sector will grow. And while it grows, it's overarching shadow will do constant damage to other sectors of the economy.

By 2005, we began to see that the real estate market was going to be the next bubble. The question in my mind was, 'How long can it be propped up?' I honestly didn't know. As we watched the entire economy move from a dying industrial economy to a house flipper economy, We were inundated with stories about how this time it really is different. And I saw that this bubble which really started in the 1990s but gained speed at an accelerated rate after 2004 (As a White House driven stimulus plan), was becoming a world wide phenomenon. i understood that if everyone is doing it, then the likelihood that any nation would rock the boat and crash it all was lower, and it would make the bubble last longer. but how long?

This gets back to Peak Oil quickly enough. Our numbers on global oil production were really bad in those years. From 2001-2004, the EIA didn't publish the numbers on their website. They went from being very good about staying mostly up to date, to zero reporting. The rumor mill was suggesting that the numbers were bad, but you couldn't go to a public source and see it. The Peak Oil Deniers simply denied there was a drop in production.

When they finally did report the numbers, it was well after the recovery of oil production was underway. in the period between 2004 and 2009, production numbers were all over the place. The EIA has a history of trending their current numbers upwards, then correcting them a year or two later. During this period, the variance was even worse. Other sources were estimating production figures that looked like oil production had flattened out.

Because the numbers were so bad, it was impossible to use oil production as a prediction tool. We knew we were in a bubble. We knew it would crash. But we didn't have good data to determine when.

But when we look in hindsight, and see the peak in Conventional Oil in 2005 and then All Liquids in 2008, then compare those numbers to our economic time line, we get a similar correlation that we saw in the peak in early 2001, and the subsequent market crash in May. The housing market was showing strains after 2005, that the Bush financial team was able to overcome by opening the flood of money wider. In 2008 they couldn't hold it together any longer. Oil production had quit growing and demand kept rising. The subsequent fallout was a crash in our banking system, a ratcheting down of our economy as a whole and pressure for a real estate correction that is being prevented through the power of high speed money presses.

This system has not seen the correction it enjoyed in 2001. Cracks will keep opening up and weakening our economy until it does correct. But we can bet that the White House will fill in those cracks as quickly as they can and pretend they they are solving the problem with the rotting economic frame, through the judicious use of paint and plaster.

I've been waiting twelve years now for the cornucopians to produce the era of sustained and 'healthy' growth in energy production. It's always just around the corner. And yet we keep rounding corners and they say, "Well, the next corner will have a pot of gold for sure."

Maybe it will happen. I don't think it's a safe bet. I think it's highly improbable, but I can't say it's impossible.

But when will it happen? From industry reports such as this one from Petrobas, it looks like future production will not keep up with the decline.

Assuming things go as I have forecasted, after the economic dip in October and the banking crisis in the first quarter of next year, I expect things to go back to a quasi normal state, that will be a new low, but leveled again, proving that everything is fine and we would be better off, if we only picked better presidents... Well at least that's what the political talk will revolve around. I expect that the folks on Peak Oil Debunked and similar sites will continue to tell us that we're not taking into account, reserves that have not been discovered. And that will prove that we are wrong.

And yet, we do take them into account. We expect them to keep getting smaller and to be ever more difficult to produce oil from. That expectation was exactly while Colin Campbell and Jean Laherre were writing about in the May 1998 Scientific America article, "The End of Cheap Oil".

Before I end this article, it doesn't hurt to cover what the idea of 'Cheap' is. One poster on that debunking site, correctly points out that oil prices are driven upwards by monetary inflation. That is true. What he neglects to mention, and this is important, is that wages have not risen with oil prices. In fact oil prices keep going up and wages are in decline. When your income is dropping and prices are going up, then stuff is getting more expensive. This is all the theory that working man needs to understand. Knowing that the bankers are seeing prices relative to their income drop like they are in free fall, means nothing when you're counting out your change at the pump, trying to figure out how much gas you can afford to buy, or how little you can get away with until pay day.

The Era of Cheap Oil is over.


Update: The 5mbd suggested for Brazil turned out to be an estimate for the Atlantic as a whole. We had a misunderstanding. Still that figure taken out to 2015, is unlikely to cover depletion effects we'll be seeing world wide. We need dramatically faster increases in our energy supply to see a return to an era of infinite growth.

Wednesday, August 04, 2010

Riffing on Intolerance

I saw an annoying bumper sticker the other day. Got stuck seeing in traffic for a half an hour. Just thought I'd publish my version of it. I'm only a smidgeon Cherokee. Not enough to show. I only picked them because they are the dominate tribe in my area. I'd enjoy seeing bumper stickers like this everywhere with different tribal names. I would not feel offended.

Professor Albert Bartlett and the Limits of Growth

I'm reposting this, as it's worth watching again. Or if you missed it the first time, it's worth watching!