We can do this the nice way ... or the nasty way

This article sums up the actualization of almost everything we have been writing and warning about for more than a year. I am not happy to have been right. No one at FTW is happy to have been right. There is more really bad oil news coming but even I can only take so much in one day. It can wait.

This is it. It is now a certainty for me that this winter is going to be devastating on any number of fronts. Whatever the United States and the rest of the world look like next spring, it will be almost unrecognizable except maybe for McDonald’s and Starbucks.

I have many important tasks to complete quickly. I have a major article in the works. There is a hugely important Petrocollapse conference in New York on October 5th. We are just finishing our first major DVD since Truth and Lies of 9/11 (out next month). I have previously scheduled lectures in another country and I need to get FTW moved out of Los Angeles as soon as I can.

Pay close attention now, those of you who understand all this. Things will soon start to happen very quickly, perhaps too fast even to report on. So it’s best we all get the lay of this deadly new land as quickly as possible. – MCR]

In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.

Two hurricanes in a month, petrol prices at $3 a gallon, a current account deficit of enormous proportions, a housing market that defies gravity: little wonder that the mood in the United States is a little edgy.

The International Monetary Fund made it clear last week that it saw the world's largest economy as an accident waiting to happen. The US could not continue to live beyond its means indefinitely, and there were only two ways to deal with the unsustainable imbalances in the global economy: the nice way or the nasty way.

The nice way, according to simulations by IMF staff, would involve a gradual slowdown in the pace of consumption in the US, accompanied by slightly higher real interest rates and a modest 15% devaluation in the dollar over a few years.

The US current account would decline from 6% of GDP to 3.5% of GDP by 2010 and to 3% over the long run. The other main component of the soft-landing scenario would see a 15% appreciation of currencies in the developing countries of Asia - China, for the most part - which would result in their current account surpluses shrinking to 2% of GDP.

The nasty way involves a much sharper contraction in US activity. Under this scenario, the overseas investors who have been funding the American trade deficit by buying US assets decide they have had enough. The result is a large and sudden devaluation of the dollar, which adds to inflationary pressure and forces the Federal Reserve to raise short-term interest rates aggressively. Protectionist pressures mount and this, together with the big appreciation of China's currency, leads to much slower growth. With both the world's two big growth engines - the US and China - faltering, Europe and Japan also suffer. Financial markets suffer hefty losses, adding to the gloom.

The IMF does not know how this will pan out - nor, to be honest, does anybody else. On the plus side, it points to the fact that the past year has seen some progress on the agenda it has proposed for each key part of the global economy: the US budget deficit has been reduced, the Chinese have taken the first steps towards a more flexible exchange rate regime, the Japanese and the Europeans have committed themselves to structural reforms of their economies. On the negative side, however, there has been no evidence thus far that the moves have been accompanied by an improvement in the global imbalances. On the contrary, they appear to have got worse.

The communique issued by the G7 at the weekend aptly summed up the mood of uncertainty. Although the global economy has continued to expand and the outlook was "positive for further growth", it stressed that higher energy prices, growing global imbalances and rising protectionist pressures "have increased the risks to the outlook".

Oil prices are a real concern, despite relief that Hurricane Rita caused less damage than feared. Prices have now remained higher for longer than policymakers expected, and the futures markets suggest they are going to stay high. Demand is expected to remain strong and it will take years for investment in new fields and refineries to increase supply.

The inflationary impact of dearer energy is already becoming evident, with consumer confidence dented by falling disposable incomes and policymakers fretting about the effects on inflation. Central banks will only take a relaxed view of higher oil prices when they can be really confident that activity will not be impaired. Some analysts believe that it will not be long before the economy is affected. Janet Henry of HSBC said that if petrol prices stayed at pre-hurricane levels, American consumers would spend an extra 1% of disposable income just on fuel in the final quarter of 2005, compared with the fourth quarter of 2004. She said: "The current bout of high oil could finally spell the end of the US consumer-leveraged expansion and a near-term end to the Fed tightening."

It has certainly been the consumer that has kept the US afloat over the past few years. As the IMF put it: "Fiscal and monetary policies in the United States became sharply expansionary - both absolutely and relative to other countries - thus sustaining domestic demand."

America 's spending habit has been fed by exports from the rest of the world, with China playing an increasingly important role. The forces of globalisation have given both sides of the transaction what they want: the US has been able to suck in low-cost goods while the developing countries of Asia have been able to enjoy export-led growth. In the process, they have built up a huge stock of US assets, while the US has increased its stock of liabilities.

"Looking forward, the global imbalances are clearly unsustainable in the long term. If the US external current account balance excluding investment income remained at its current level of more than 5% of GDP, there would be an unbounded accumulation of external liabilities," the IMF said. It noted that so far the US had experienced little difficulty in financing imbalances but that there was no guarantee that this benign state of affairs would persist. It is right to be wary. On any reasonable assessment, a central part of any unwinding of the global imbalances will be a considerable devaluation of the dollar, which would leave those holding US assets nursing substantial losses.

To trigger a crisis, holders of US assets don't necessarily need to sell them; all they need to do is to stop buying more. To be sure, the US can be allowed to continue along its current path, with the cooperation of the central banks of China, Japan and other Asian countries, but this would mean an even bigger adjustment in exchange rates when the day of reckoning finally arrived, and an even bigger haircut for those awash with US assets.

Apart from the dire consequences for the global economy that would result from a disorderly unwinding of the imbalances, there are two additional causes for concern. One is that while the IMF has analysed the dilemma with aplomb, neither it nor any other body involved in global economic governance seems to have the clout to do anything about preventing a meltdown. There is a vacuum that needs to be filled and urgently.

The second concern is this: underlying the policy recommendations of just about every global analyst is the belief that the rest of the world needs to emulate the economic model of the US. The calls for structural reform in Japan and Europe stem from the belief that the Americans and the other "Anglo-Saxon" economies have the sort of flexibility that breeds success. Yet that hardly squares with the IMF's notion that the US economy could be going down the pan at any moment. As Mark Weisbrot of the Centre for Economic and Policy Research, a Washington-based thinktank, points out, nor does it square with the long-term needs of sustainability. Europe's energy consumption per head is half that of the US: Weisbrot says the idea that the Europeans should work longer so that they can buy more things is dangerous and he's right.

Perhaps the Germans were a lot smarter than they've been given credit for in their scepticism about the need for neo-liberal structural reform.

All sorts of rumours were swirling around in Washington at the weekend when it was announced that Gordon Brown was to chair yet another meeting of the G7 in London in December. One theory was that it was to give political impetus to the world trade talks in Hong Kong, which start two days later. Another was that it was a special send-off to Alan Greenspan, who retires from the US Federal Reserve in January. The neatest explanation, however, was that the G7 wanted to shaft Russia.

At the moment, Russia's political clout means it is a member of the G8, which last met at Gleneagles in July, but it is not deemed an important enough economy to join the finance ministers and central bank governors of the US, Britain, Germany, France, Italy, Canada and Japan at G7 meetings.

For the first time next year Russia will hold the presidency of the G8. Since meetings of the G7 are by tradition held in the country that is hosting the G8, the Russians thought this was a chance to get into the rich man's club by the back door. But instead of holding the next meeting in February, the G7 has cunningly brought it forward to December in the UK, making it possible to leave the Russians out in the cold. In reality that's a sensible decision. There is a strong case for membership of the G7 to be expanded, but China and India have a stronger case than Russia.

[Well this about ties it up in a bow. “Oil production in 2007 will be 2m barrels a day less than expected…” This is crunch time. We will all know if Peak Oil is real or not within three to four months. And if, by some miracle, the United States recovers from hurricanes Katrina and Rita then I will be the first to admit that all of us have had our legs pulled by the most ornate and elaborate disinformation scheme in human history; a scheme so detailed and masterfully orchestrated that it controlled hundreds of databases, hundreds of press outlets, every stock market and even involved a willing loss of wealth by the world’s richest one per cent. The latter is something I have never heard of before.

It might be possible that The Powers That Be want to scare us now about a peak that may be three to five years off – but I doubt it. They just haven’t been executing things very well lately, have they? Even the market reports are schizophrenic, dishonest and misleading to say the least.

The Oil Depletion Analysis Centre (ODAC) in the UK precisely detailed for us some months ago, after an evaluation of projects slated to come online, that absolute numeric shortages of oil were a certainty by 2007. The story below is intended to suggest that all was well until the hurricanes screwed up the program; without them, we’re told, production would have been enough to meet demand for the time being. But it seems to me that what we are seeing here is another book-cooking episode where what was promised to keep share prices up was nothing more than an accountant’s flimflam. – MCR]

Delays of big oil projects are helping to drive oil prices higher as energy companies become increasingly unreliable at delivering production from new oilfields on time, a recent analysts' report has warned.

Oil production in 2007 will be 2m barrels a day less than expected because companies are increasingly having to delay the date at which their projects deliver their first barrels of oil, according to Sanford Bernstein, an international research group.

"The industry is truly dreadful at project management, or at least at predicting the timing of project start-ups. The amount of production growth that has been lost to projects being delayed over the past few years is stunning, over 2m b/ d-2.3 per cent of expected global production in 2007," the report said.

As aresult Bernstein believes annual supply growth will slow to 1 per cent in the next decade, compared with the 2 per cent expected by many other analysts - including those at the International Energy Agency, the industrialised countries' watchdog agency.

Royal Dutch Shell, Europe's second largest energy group by market capitalisation, this year made headlines with delays at its Sakhalin oil and natural gas project off Russia's east coast and its Bonga oilfield in Nigeria.

But apart from ExxonMobil - the world's biggest, and possibly most tightly run energy group, the problem of 'project slippage' is industry- wide, the Bernstein report said.

The problem is caused by companies having to venture into increasingly difficult terrain and use untested technology as the world runs out of big, easy-to-find oilfields.

Meanwhile, new competitors attracted by high oil prices have made hiring exploration rigs increasingly difficult. The project delays are particularly serious in today's tight market conditions where the world's oil producing states are barely managing to keep up with strong demand, especially from the US and China.

Had the 40 large oil projects that Sanford Bernstein studied been delivered on time, the world's spare oil capacity would be double today's volume of 1.3m b/d. "Thus, it could be argued that this effect has been a direct, contributory driver of current oil prices," Bernstein said.

The longer-term prognosis also looks bad. John S. Herold, the industry consulting and research firm, said in a report released yesterday that worldwide oil reserves had "barely changed in 2004, the poorest performance by the sector in many years".

Total year-end reserves were up only 2.8 per cent, with companies spending more on share buy-backs than on exploration, said Tom Biracree, vice-president at John S. Herold.

He agreed with Bernstein's broad analysis of project delays. "When did you last hear that a project was going to come in on time. It does appear that delays and cost overruns are routine."

[According to the governing myth of Capitalism, the “invisible hand” of the market quietly adjusts the cosmos to suit mankind’s needs – it’s an appendage of the invisible God of the British 18th Century, still hanging around in Economics 101, presiding over the clock whose eternal springs He wound up all those years ago.

Unfortunately, there is a magic word this deity does not know, a word scarier than “Big Bang,” “Evolution,” “Plutonium,” even “Socialism.” That word is “scarcity.” This time around, when we get thrown out of the abundant zone of Eden to till the Earth in the sweat of our brows, our false God will be thrown out, too – and the world outside will not be so arable.

High gas prices can burn up more than your transportation budget, and it doesn’t take an economics degree to understand why. Not all crude oil is converted into gasoline.

Much of the oil that doesn’t wind up in engines goes to everything from the tires on your gas-eating car to the plastic bags that line trash cans — and the plastic trash cans themselves.

Some nonfuel uses of petroleum, according to the National Energy Information Center, include:

Of course, there are myriad services for sale that rely heavily on gasoline; when transportation costs rise, so too can the price of the goods being moved.

Here are some items you already are paying more for, or could in the future, because of high gas prices.

For now, Lincoln food wholesalers and retailers report holding their prices fairly steady. That could be at least partially due to some companies eating the extra cost at points along the food-supply chain.

But if high transportation and other costs remain, expect companies to stop eating those costs and start passing them on — to consumers.

“We’re trying to deliver the goods and services our customers demand as efficiently as we can right now so those increased costs aren’t being passed down,” said Kim Brown, president of Lincoln Poultry, which has an inventory of 10,000 items in all food categories, sold mainly to restaurants. “But at some point,” he said, “we may have to look at the bottom line and say, ‘This doesn’t make sense.’ ”

On the retail side, freight costs also have gone up, but not yet enough to increase the prices of what is sold in grocery stores, said Pat Raybould, president of B&R Stores, which operates Russ’s Markets and Super Savers.

At least one company that sells canned fruits and vegetables, he said, has begun offering fewer cost-cutting deals.

A double-whammy of higher prices for petroleum and steel — both used in the manufacture of tires — has spiked the cost of putting new rubber on your car.

Consider this, said Brian Dillon of Cross-Dillon Tire in Lincoln: Major tire makers normally boost the price of their products just once a year.

“Now there’s several,” a year, he said, adding that about five gallons of oil are used in the production of one semi-trailer tire. Just this year, Goodyear Tire and Rubber Co. has announced three price hikes, with the most recent — a 5 percent to 8 percent increase, depending on models — taking effect earlier this month.

“They’re to come,” Dillon said of higher prices post-Hurricane Katrina. “Right now, the manufacturers are eating their costs, but they won’t for long.”

Don’t expect the cost of feeding your lawn to jump substantially— it’s farmers who are getting drilled by higher fertilizer costs.

A few years ago, a ton of nitrogen-based anhydrous ammonia, a popular farm fertilizer, cost about $150.

Now it’s more than $400 a ton, according to Harold Hummel, general manager of Farmers Co-op. The high-rising cost of natural gas — a primary ingredient of nitrogen fertilizers — is the primary culprit. Katrina won’t help matters. A lot of natural gas is produced in the Gulf Coast.

High fuel prices are exacerbating the problem because of the long distances that must be traveled to deliver fertilizer to far-flung farms.

Fuel prices have caused a $40 to $60 increase in the per-ton cost of anhydrous ammonia, Hummel said. The co-op’s trucking costs are up $150,000 this year over last.

Greg Little read the letter with a somber, incriminating tone, like a judge sentencing a criminal.

“There was a 6-cent-a-pound increase September first, there will be a 7-cent increase the middle of the month, another in October . . . the price will have gone up 24 cents since August,” said Little, with Rochester Midland Corp. in Omaha. The company distributes janitorial products, among other things.

Plastics are made from petroleum and, like fertilizers, also require increasingly expensive natural gas to make. Instead of an ingredient in plastic products, natural gas is often used to heat pellets of plastic so they can be molded into thousands of consumer products.

It’s difficult to quantify the overall impact on consumers by increasing plastics prices, but the cost of individual products such as plastic bags is already on the rise. For the year, said Little, the cost of plastic bags is up 20 percent.

The bluntly worded letter from the plastics manufacturer indicates a market nearing crisis.

“As the panic sets in over the next several weeks,” the letter, dated Sept. 9, says, “. . . we are anticipating inventory levels for some types of PE (polyethylene) to tighten significantly . . . These past several weeks have proven that we are truly experiencing unprecedented times within our industry.”

Like other companies, ABC Supply in Lincoln is facing a choice: Weather the storm and not pass higher costs on to consumers, or forecast a future where decreasing costs are not likely.

Oil is used to make many brands of shingles. So far this month, their costs have risen 5 percent to 7 percent, said Corey Sorensen with ABC Supply.

“As far as ABC, we haven’t decided if we’ll pass those costs along to customers,” Sorensen said.

Assume it eventually has to and homeowners have to pay 5 percent to 7 percent more to have their homes roofed. The cost of shingles for a typical residential job is between $900 and $1,350.

Not long ago, it cost Wade Leming of C&L Lawn Care $10 to fill up each of his 48-inch walk-behind mowers. Now it’s closer to $22.

“We had to add a $1 surcharge on every $10 of service,” Leming said. “So a $50 job now costs $55.”

Customers of Ray’s Lawn and Home Care got a $2 surcharge added to their Sept. 1 bills for work done in August. City Councilman Ken Svoboda, whose family owns the business, said there was concern the surcharge would cause an uproar, but it didn’t.

In the interview of Daniel Yergin by Tom Ashbrook, on Point Radio, one of the giants of the opposition to the Peak Oil theory stood forward.

Only after listening to the interview, I got the feeling that not only did he not understand the theory, it's premises, or even its full assertions and facts, but that he hadn't really given it enough gravity to even study it. Perhaps he “wiki'd” it. Further, I got the feeling that he was run on high octane optimism mixed with a small amount of BS.

Yergin, Chairman of Cambridge Energy Research Associates, an energy consulting and research firm, is also a Pulitzer Prize-winning author of "The Prize: The Epic Quest for Oil, Money and Power." (who, by the way, spent seven years researching that book—that's impressive)

In the interview I found him to be mostly confident, pleasant, and knowledgeable, but at other times fumbling, ignorant of some vital basic information, presenting of overly simplistic justifications of evidence for things such as optimism over technology, and disingenuous. There were at least 4 main red flags in this interview which revealed a less than balanced approach. I believe Yergin's position rests on this scenario. In the early 90s, the price of oil was low leading to slowing exploration. Now demand has increased way beyond forecasts leaving the oil industry with its pants down, so to speak, hence the tightness in the market. He then puts tremendous faith in technology, efficiency, conservation, and the market forces of supply and demand to correct this problem. In particular, he is putting faith in the unconventional sources, especially the tar sands of Canada. He believes he has seen these forces working in history throughout time and sees no reason to doubt them today. I believe his overall argument has merit, if he is an honest unbiased researcher. Unfortunately, I found too many cues that this was not always the case. There are a few red flags which are enumerated below.

He was COMPLETELY ignorant of the Dept of Energies' commissioned mitigation study in March of this year. The author of the study, Dr. Robert L Hirsch, the coordinator of this study, well, let's just say his energy and technology credentials are stronger than the historian Yergin, ESPECIALLY when it comes to the promise of technology, the fine work in his Pulitzer not withstanding.

Dr. Robert L. Hirsch is a Senior Energy Program Advisor at SAIC. His past positions include Senior Energy Analyst at RAND; Executive Advisor to the President of Advanced Power Technologies, Inc.; Vice President, Washington Office, Electric Power Research Institute; Vice President and Manager of Research, ARCO Oil and Gas Company; Chief Executive Officer of ARCO Power Technologies, a company that he founded; Manager, Baytown Research and Development Division and General Manager, Exploratory Research, Exxon Research and Engineering Company; Assistant Administrator for Solar, Geothermal, and Advanced Energy Systems (Presidential Appointment), and Director, Division of Magnetic Fusion Energy Research, U.S. Energy Research and Development Administration. During the 1970s, he ran the US fusion energy program, including initiation of the Tokamak fusion test reactor.

This oversight is, in my book, in the kindest terms, a major one. Tom Ashbrook brings forth a question positioning the DOE's study as “in direct opposition to CERA's study” and then quotes a portion of the study from Hirsch: “If recent trends hold, there is little reason to expect that the discovery trend will improve”. Someone so “in touch” with the energy industry should not have missed this, especially since the study itself is a direct challenge. Yergin's response, “I wonder what...I'm not sure what report that is, but I expect there to be a few reports coming out from the U.S. Government, from the geological side, that I think are more confident about the resources.” Does that mean that perhaps he only looks at best case scenarios? Yergin twice said during the interview that he was unfamiliar with it, until Tom Ashbrook brought him up to speed. At that point, I got nervous. He clearly had no idea. This study is one of the most disturbing and authoritative accounts, commissioned by our own DOE no less, to come about.

It must be noted that there has been no attention to the report in the mainstream media. But, then I hope that Yergin doesn't just get his energy news from CNN or the NY Times or ABC. After all, he is widely touted as an expert. I'd wager that 90% of those studying the Peak Oil situation are familiar with it. Why wasn't he? The ready answer: he hasn't taken it seriously enough to research it.

He puts a grand faith in technology. He begins by reminding us to consider, “would anyone have believed that we'd be walking around with cell phones 10 years ago?” He mentions the advances in the PC and a computer on so many desks. I'm no expert in technology, but aren't grand, “wowie,” tech advances rather random events rather than necessarily pointed? So that's a meaningless tack. I'm more interested in the technological advances in energy.

He does mention one advance, and that is the depths we are drilling today compared to 20 years ago which are impressive. I think also that, we are all familiar with at least some of the technological improvements in energy, and there have been some great ones. At that point, he mentions the tar sands of Canada, as being one of the main areas of growth. Which is true. But, from what I've seen, the expectation from there is 3 mbpd by 2020 that will hardly make up the difference. This is not pie in the sky gushing over technology, but what appears to be the consensus on what to expect at this point. THAT is what we should be basing our assessments on, not the random selection of advancements that we are amazed with.

Most people following the problems of peak oil have educated themselves quite well. They know that even with technological and infrastructural changes there is a lag time toward implementation, if those changes in fact do come at all (re: above mitigation study for that issue). They know, for example, that the much touted synfuels (coming from extra heavy oil, tar sands, or oil shale) are expected to be quite slow in their growth. And these are not just technological issues as mentioned above. Infrastructure, capital, the environment, and political will can be a great impediment. The tar sands of Alberta, Canada are expected to produce only 3 mbpd by 2020. Hardly enough to make up the shortfall from decline and increase in projected demand even if you assumed 10 mbpd by 2020 with all synfuels combined.

Perhaps Mr Yergin was just using an off the cuff remark, and does have better evidence. Mr Yergin, if you're listening, please use it, though you appear to be confident, there are many of us out here who do not share your optimism. Perhaps we are ignorant.. I believe it is your duty, with this serious manner, to bring forth your best. Cell phones and PCs were NOT it.

We in the Peak Oil mindset, see oil slight differently. We see “cell phones” and “PCs” as in a somewhat different category than “natural” resources. Sure technology can extract more, the price will encourage development, etc. But at some point the “energy in energy out” ratio will make the era of cheap oil, well, history. Most of us in the Peak Oil crowd are nervous that technology gets to a sort of diminishing return situation, when technology itself peaks and produces ever diminishing returns. In that, we are expert. Mr Yergin should address just what he sees on the horizon of tech improvements, rather than illustrating advances in other fields. I think that was a blatant attempt to bolster his position that technology was a major mitigating factor. That made me nervous as well.

He uses what appear to be ready made and fashioned arguments to calm the public down. The greatest example is his noting that “This is about the 5th time the world was about to run out of oil, and each time that time, technology, the markets changed things.” My first reaction is that he's misrepresenting the argument of Peak Oil theorists. The world is not going to run out. The first false prediction was in 1890. Yes, as I recall, I believe we traveled by foot back then. Certainly an apple to an orange. Yergin mentions the second case in 1920. Why? Most were still traveling by foot (by the way, I'm just suggesting technologically, that we were nowhere near where we are now in 2005). I think we still have an apple to an orange.

Today, we pretty much have our cards on the table, we've mapped quite well, and today's exploration technology is not comparable. This is a group of possible, but not necessarily probable related events separated by great expanses of time. Further, past behavior is not always a great predictor of present or future performance. And lastly, who was crying wolf in the past compared to who is crying wolf today. The number and qualifications of the authorities today are far greater. Yes, we have an apple and and orange and another instance of a possible imbalance in his approach.

If the variables are similar and certain things remain constant, then yes, you have a better argument. But the variables have changed dramatically as have the constants. Red flag number three, shows an unfortunate streak of disingenuousness. Or, it could be that he is locked into a grand faith of some sort of flow from historical events, being a historian himself. Because this happened, history will repeat itself. Well, very often, history changes and does not obey patterned formulas. In any event, he seems to show a bias toward not taking another interpretation into account.

He notes reserves grew from 600 billion in reserves in the 1970s to today where we have 1.2 trillion, all from technology. We in the peak oil world are trained to be skeptical of the proven reserves since we know that these are very often a fiction. Is that being reported correctly? I doubt it, given Yergin's propensity to overstate and show the rosy side. From 1980 to 1990 proven reserves jumped from 650 to 1000 billion barrels. Probably greatest jump in the history of oil. To represent that as due to technology is really the height of disingenuousness.

In the late 1980s, the Middle eastern countries bumped up their reserves to bump up their quotas to the tune of 250 billion barrels. And there is your technological advancement. Is he, like so many others who like to tout proven reserve stats and growth, suggesting that the Middle Eastern tripling of proven reserves in the early 80s overnight was real? No serious examination that I have seen has been done in that way so far. Measuring non existent oil, that is. This undermines his credibility overall, and his credibility as concerns is faith in technology. Two strikes in one flag.

As the DoE's commissioned report warns, a timely and all out effort is imperative to mitigate severe consequences. This is what market disciples don't get. The market is a reactive mechanism based on the populations' behavior to things in the present which forces the hands of corporations. When we start sliding, and the market begins reacting, it will be too late to avoid disaster. Can we please get someone to take this seriously, stop relying on stats they know are fictitious to prop up their positions, stop ignoring flaws in using the market as the only way to make change, look at every accusation from the Peak Oil crowd and answer our concerns honestly and completely?

Yergin's unsubstantiated optimism in this interview simply underscores the glue that appears to be holding his report together. When in doubt, chin up, smile, and report the rosy. After all, many of us just want to hear positive soothing news from our experts. In the interview, Ashbrook notes how calm Yergin seems with stakes so high, and wonders if it wouldn't be more prudent to hedge our bets in the event the 'pessimists' are not pessimists, and are just solid reasoners. Yergin replies that he is simply driven by the numbers and nothing else. Unfortunately, it looks like that is not the case. It seems clear that his optimism is based, at least to a small degree, on another facet as well: optimism, bias, or even something less innocent, such as corporate subsidies, which steers him toward positive evidence and interpretations and away from the negative.

Arctic Could Be Ice-Free By Century's End... 500,000 Extra Square Miles Melted This Year

The floating cap of sea ice on the Arctic Ocean shrank this summer to what is probably its smallest size in at least a century of record keeping, continuing a trend toward less summer ice, a team of climate experts reported yesterday.

That shift is hard to explain without attributing it in part to human-caused global warming, the team's members and other experts on the region said.

The change also appears to be headed toward becoming self-sustaining: the increased open water absorbs solar energy that would otherwise be reflected back into space by bright white ice, said Ted A. Scambos, a scientist at the National Snow and Ice Data Center in Boulder, Colo., which compiled the data along with the National Aeronautics and Space Administration.

The findings are consistent with recent computer simulations showing that a buildup of smokestack and tailpipe emissions of greenhouse gases could lead to a profoundly transformed Arctic later this century, when much of the once ice-locked ocean would routinely become open water in summers.

Expanding areas of open water in the summer could be a boon to whales and cod stocks, and the ice retreat could create summertime shipping shortcuts between the Atlantic and the Pacific.

But a host of troubles lie ahead as well. One of the most important consequences of Arctic warming will be increased flows of meltwater and icebergs from glaciers and ice sheets, and thus an accelerated rise in sea levels, threatening coastal areas. The loss of sea ice could also hurt both polar bears and Eskimo seal hunters.

The Arctic ice cap always grows in the winter and shrinks in the summer. The average minimum area from 1979, when precise satellite mapping began, until 2000 was 2.69 million square miles, similar in size to the contiguous area of the United States. The new summer low, measured on Sept. 19, was 20 percent below that.

Before 1979, scientists estimated the size of the ice cap based on reports from ships and airplanes.

The difference between the average ice area and the area that persisted this summer was about 500,000 square miles, an area about twice the size of Texas, the scientists said.

This summer was the fourth in a row with the ice cap areas sharply below the long-term average, said Mark C. Serreze, a senior scientist at the snow and ice center and a professor at the University of Colorado, Boulder.

Dr. Scambos said the consecutive reductions in the ice cap "make it pretty certain a long-term decline is under way."

A natural cycle in the polar atmosphere called the Arctic oscillation, which contributed to the reduction in Arctic ice in the past, did not appear to be a factor in the past several years, Dr. Serreze said.

He said the role of accumulating greenhouse gas emissions had become increasingly apparent with rising air and sea temperatures. Still, many scientists say it is not yet possible to determine what portion of Arctic change is being caused by rising levels of carbon dioxide and other emissions from human sources and how much is just climate's usual wiggles.

Dr. Serreze and other scientists said that more variability could lie ahead and that the area of sea ice could actually increase some years. But the scientists have found few hints that other factors, like more Arctic cloudiness in a warming world, will reverse the trend.

"With all that dark open water, you start to see an increase in Arctic Ocean heat storage," Dr. Serreze said. "Come autumn and winter that makes it a lot harder to grow ice, and the next spring you're left with less and thinner ice. And it's easier to lose even more the next year."

The result, he said, is that the Arctic is "becoming a profoundly different place than we grew up thinking about."

Other experts on Arctic ice and climate disagreed on details. For example, Ignatius G. Rigor at the University of Washington said the change was probably linked to a mix of factors, including influences of the atmospheric cycle.

But he agreed with Dr. Serreze that the influence from greenhouse gases had to be involved.

"The global warming idea has to be a good part of the story," Dr. Rigor said. "I think we have a different climate state in the Arctic now. All of these feedbacks are starting to kick in and really snuffing the ice out by the end of summer."

Other experts expressed some caution. Claire L. Parkinson, a sea ice expert at NASA's Goddard Space Flight Center in Greenbelt, Md., said a host of changes in the Arctic - including rising temperatures, melting permafrost and shrinking sea ice - were consistent with human-caused warming. But she emphasized that the complicated system was still far from completely understood.

William L. Chapman, a sea ice researcher at the University of Illinois Urbana-Champaign, said it was important to keep in mind that the size of the ice cap could vary tremendously, in part because of changes in wind patterns, which can cause the ice to heap up against one Arctic shore or drift away from another.

[The DOE releases a plan to address climate change using nuclear energy and other non-renewable technologies to sustain over-consumption. Avoiding all talk of POWERDOWN , the plan is doomed from the beginning. – MK]

Washington , DC . Even though the Bush Administration is known for being skeptical of climate change and its causes, the Department of Energy has released for public review a plan for accelerating the development and reducing the cost of new and advanced technologies that avoid, reduce, or capture and store greenhouse gas emissions. The DOE called the effort the technology component of a comprehensive U.S. approach to climate change.

The technologies developed under the Climate Change Technology program will be used and deployed among the United States' partners in the Asia-Pacific Partnership for Clean Development announced earlier this year. Renewable energy is expected to play a smaller role than carbon-sequestration technologies, nuclear, and other non-renewable technology options.

"This Strategic Plan is the first of its kind and will provide a comprehensive, long-term look at the role for advanced technology in addressing this important global concern," David Conover, Director of the Climate Change Technology Program said. "This forward-looking document will allow us and our partners to drive and capitalize on technological innovation far into the future. The Asia-Pacific Partnership coupled with the technologies that we will develop will have a significant impact in addressing this long-term challenge."

The U.S. Climate Change Technology Program's draft Strategic Plan provides direction and organizes about $3 billion in federal spending for the climate change-related R&D needed to reduce greenhouse gas emissions and power economic growth.

Washington, DC [RenewableEnergyAccess.com] Even though the Bush Administration is known for being skeptical of climate change and its causes, the Department of Energy has released for public review a plan for accelerating the development and reducing the cost of new and advanced technologies that avoid, reduce, or capture and store greenhouse gas emissions. The DOE called the effort the technology component of a comprehensive U.S. approach to climate change.

Renewable energy is expected to play a smaller role than carbon-sequestration technologies, nuclear, and other non-renewable technology options. The technologies developed under the Climate Change Technology program will be used and deployed among the United States' partners in the Asia-Pacific Partnership for Clean Development announced earlier this year. Renewable energy is expected to play a smaller role than carbon-sequestration technologies, nuclear, and other non-renewable technology options.

The U.S. Climate Change Technology Program's (CCTP) draft Strategic Plan provides strategic direction and organizes about $3 billion in federal spending for climate change-related technology research, development, demonstration, and deployment -- needed to both reduce greenhouse gas emissions and power economic growth. This activity complements other efforts including short-term measures to reduce greenhouse gas emissions intensity, advance climate change science, and promote international cooperation.

The Plan sets six complementary goals: (1) reducing emissions from energy use and infrastructure; (2) reducing emissions from energy supply; (3) capturing and sequestering carbon dioxide; (4) reducing emissions of other greenhouse gases; (5) measuring and monitoring emissions; and (6) bolstering the contributions of basic science to climate change.

The Plan outlines approaches toward attaining these goals, articulates underlying technology development strategies, and identifies a series of next steps toward implementation.

To view and comment on the CCTP draft Strategic Plan, please visit the CCTP website at the link below. CCTP will discuss the plan with stakeholders at a series of workshops during the coming months. The public comment period will close on Wednesday, November 2, 2005. The completed plan is expected in 2006.

SAUDI Arabia 's Foreign Minister has warned the Bush Administration Iraq is hurtling towards disintegration — a development that he says could drag the region into war.

"There is no dynamic now pulling the nation together," Prince Saud al-Faisal, said at the Saudi embassy in Washington this week. "All the dynamics are pulling the country apart." He said he was so concerned that he was carrying this message "to everyone who will listen" in the Bush Administration.

Prince Saud's statements, some of the most pessimistic public comments on Iraq by a Middle East leader in recent months, were in stark contrast to the generally upbeat assessments that the White House and the Pentagon have been offering.

But in an appearance at the Pentagon yesterday, President George Bush, while once again expressing long-term optimism, warned that the bloodshed in Iraq was likely to increase in the coming weeks.

"Today, our commanders made it clear," he said after a meeting on Iraq with senior military officers. "As Iraqis prepare to vote on their constitution in October and elect a permanent government in December, we must be prepared for more violence."

Mr Bush said that if the US left Iraq now, the country could turn into a haven for terrorists, as Afghanistan was before the fall of the Taliban. "To leave Iraq now would be to repeat the costly mistakes of the past that led to the attacks of September 11, 2001," he said.

Prince Saud, in Washington for meetings with Administration officials, blamed US decisions for the slide towards disintegration. Primary among them was designating "every Sunni as a Baathist criminal", he said.

Saudi Arabia styles itself as the capital and protector of Sunni Islam. His remarks highlighted the conflicts in the Saudi-US relationship.

An Administration official, reacting to Prince Saud's remarks, said the US "values and respects his view, and we all share a common concern for the future and stability of Iraq". But he added: "The forward movement of the political process is the best answer."

The prince argued: "But what I am trying to do is say that unless something is done to bring Iraqis together, elections alone won't do it. A constitution alone won't do it.