Meltdown

[BachQ]

bwv, oil isn't going to run out anytime soon but demand for it will outstrip supply anytime soon. And what that means is a little unclear to most thinkers: when people become aware that a problem is serious rather than a blip, stock markets tend to react sharply not in terms of a gentle curve, and trillions will disappear from stocks because all the big companies depend on petroleum.

D-Day will come when consumers' expectations (consumer confidence) catch up with the reality of dwindling, finite oil supply ....... and the inevitable rampant inflation for all goods and services which are directly or indirectly reliant upon petroleum (i.e., just about everything).  What's really sad is that, as the Chinese are attempting to emulate the Western standard of living by manufacturing zillions of cars and building zillions of roads and highways, they are building a doomed petroleum-based infrastructure that will be rendered obsolete in a matter of a few years.  In this sense, China is really clueless, and China will be hit the hardest.  But such is the potency of this narcotic which we call petroleum: it creates illusions of longterm structural soundness, but, in reality, it is a short-term opiate which turns everyone and everything it touches into an oil addict  -- we are all a bunch of shortsighted oil junkies .......

[Sean]

In this sense, China is really clueless

I hesitate to make judgements like this, but I've been there and it's true. To quote Gandhi, 'of China, nothing can be said'.

[bwv 1080]

http://www.ens-newswire.com/ens/jan2008/2008-01-08-091.asp

Switchgrass Ethanol Yields Large Net Energy Gain
LINCOLN, Nebraska, January 8, 2008 - (ENS) - Switchgrass grown for biofuel production produced five times more energy than needed to grow, harvest and process it into cellulosic ethanol, finds a large farm study by researchers at the University of Nebraska-Lincoln published Monday.

The five year study also found greenhouse gas emissions from cellulosic ethanol made from switchgrass were 94 percent lower than estimated greenhouse gas emissions from gasoline production.

"This clearly demonstrates that switchgrass is not only energy efficient, but can be used in a renewable biofuel economy to reduce reliance of fossil fuels, reduce greenhouse gas emissions and enhance rural economies," said principal researcher Ken Vogel, a U.S. Department of Agriculture-Agricultural Research Service geneticist in the university's agronomy and horticulture department.

In a biorefinery, switchgrass biomass can be broken down into sugars including glucose and xylose that can be fermented into ethanol similar to corn. Grain from corn and other annual cereal grains, such as sorghum, are now primary sources for ethanol production in the U.S.

In the future, perennial crops, such as switchgrass, as well as crop residues and forestry biomass could be developed as major cellulosic ethanol sources that could potentially displace 30 percent of current U.S. petroleum consumption, Vogel said.


Plant geneticist Ken Vogel examines a field of young switchgrass. (Photo courtesy UNL)
Technology to convert biomass into cellulosic ethanol is now at the development stage. Six small commercial scale biorefineries are being built with scale-up support from the U.S. Department of Energy.

Vogel's study involved switchgrass fields on farms in Nebraska, North Dakota and South Dakota. It is the largest study to date examining the net energy output, greenhouse gas emissions, biomass yields, agricultural inputs and estimated cellulosic ethanol production from switchgrass grown and managed for biomass fuel.

The study took place on 10 fields of 15 to 20 acres each with four in Nebraska near Atkinson, Crofton, Lawrence and Douglas; four in South Dakota near Highmore, Bristol, Huron and Ethan; and two in North Dakota near Streeter and Munich.

Trials began in 2000 and 2001 and continued for five years. Farmers were paid for their work under contract with the university and documented all production operations, agricultural inputs and biomass yields. The researchers used this information to determine the net energy estimates.

Switchgrass grown in this study yielded 93 percent more biomass per acre and an estimated 93 percent more net energy yield than previously estimated in a study done elsewhere of planted prairies in Minnesota that received low agricultural inputs, Vogel said.

Less land will be needed for energy crops if higher yields can be obtained.

Researchers point out in the study that plant biomass remaining after ethanol production could be used to provide the energy needed for the distilling process and other power requirements of the biorefinery. This results in a high net energy value for ethanol produced from switchgrass.

By contrast, corn grain ethanol biorefineries must use natural gas or other sources of energy for the conversion process.

In this study, switchgrass managed as a bioenergy crop produced estimated ethanol yields per acre similar to those from corn grown in the same states and years based on statewide average grain yields.

But higher yields compared to corn can be expected in the future, said Vogel, who points out that corn grain conversion technology is mature, while cellulosic conversion efficiency technology is still developing.

Vogel said he does not expect switchgrass to replace corn or other crops on Class 1 farm land. He and his colleagues are developing the grass for use on marginal, highly erodible lands similar to that currently in the federal Conservation Reserve Program. All the fields in this study met the qualifying criteria for that program.

Researchers found that switchgrass grown on the marginal fields produced an average of 300 gallons of ethanol per acre compared to average ethanol yields of 350 gallons per acre for corn for the same three states.

The researchers point out that this was a baseline study. The switchgrass cultivars used in this study were developed for use in pastures. New higher yielding cultivars are under development for specific use in bioenergy production systems.

Switchgrass yields continue to improve, Vogel said. Recent yield trials of new experimental strains in the three states produced 50 percent higher yields than achieved in this study.

Switchgrass in this study employed UNL's best management practices for switchgrass, including no-till seeding, herbicides, weed control and adaptive cultivars.

Six cellulosic biorefineries that are being co-funded by the U.S. Department of Energy also are in the works across the United States. These plants are expected to produce more than 130 million gallons of cellulosic ethanol per year.

Researchers reported their findings in the current issue of "Proceedings of the National Academy of Sciences," online at: http://www.pnas.org/cgi/content/abstract/0704767105v1.

[bwv 1080]

Silicon Valley gets interested in solar power
By G. Pascal Zachary Published: February 17, 2008

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Can Silicon Valley become a world leader in cheap and ubiquitous solar panels for the masses?

Given the valley's tremendous success in recent years with down-to-earth products like search engines and music players, tackling solar power might seem improbable. Yet some of the valley's best brains are captivated by the challenge, and they hope to put the development of solar technologies onto a faster track.

There is, after all, a precedent for the way the valley tries to approach such tasks, and it is embodied in Moore's Law, the maxim made famous by an Intel co-founder, Gordon Moore. Moore's Law refers to rapid improvements in computer chips - which would be accompanied by declining prices.

A link between Moore's Law and solar technology reflects the engineering reality that computer chips and solar cells have a lot in common.

"A solar cell is just a big specialized chip, so everything we've learned about making chips applies," said Paul Saffo, an associate engineering professor at Stanford University and a longtime observer of Silicon Valley.

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Financial opportunity also drives innovators to exploit the solar field. "This is the biggest market Silicon Valley has ever looked at," said T.J. Rogers, chief executive of Cypress Semiconductor, which is part owner of SunPower, a maker of solar cells in San Jose, California.

Rogers, who is also chairman of SunPower, said the global market for new energy sources would be larger than the computer chip market.

"For entrepreneurs, energy is going to be cool for the next 30 years," he said.

Optimism about creating a "Solar Valley" in the geographic shadow of computing all-stars like Intel, Apple and Google is widespread among some solar evangelists.

"The solar industry today is like the late 1970s when mainframe computers dominated, and then Steve Jobs and IBM came out with personal computers," said R. Martin Roscheisen, chief executive of Nanosolar, a solar company in San Jose.

Nanosolar shipped its first "thin film" solar panels in December, and the company says it ultimately wants to produce panels that are both more efficient in converting sunlight into electricity and less expensive than today's versions.

Dramatic improvements in computer chips over many years turned the PC and the cellphone into powerful, inexpensive appliances - and the foundation of giant industries. Solar enterprises are hoping for the same outcome.

But Silicon Valley's love affair with solar could be short-lived.

"We've seen a lot of pipe dreams in the industry over the years; a lot of wild claims never came through," said Lisa Frantzis, a specialist in renewable energy at Navigant Consulting in Burlington, Massachusetts.

Another brake on the pace of solar innovation might be consumer behavior. It often can be hard to get consumers to change their habits, and homeowners may be slow to swap out expensive water heaters for new solar solutions. Reliability is also an issue: while current solar technologies have proved relatively durable, it is unknown how resilient the next generation of solar will be.

"We need technologies that can survive on a rooftop for 20 years," said Barry Cinnamon, chief executive of Akeena Solar of Los Gatos, California, a designer and installer of solar systems.

Affordable solar development also still depends on government subsidies.

So what does Silicon Valley bring to the mix? Expertise in miniaturization and a passion for novelty among its entrepreneurs.

"There are suddenly a lot of new ideas coming into this field," said Paul Alivisatos, a professor of chemistry at the University of California, Berkeley, who also has his own solar start-up.

One novel approach is called "solar thermal," which uses large mirrors to generate steam to run conventional turbines that generate electricity.

In 2006, Vinod Khosla, a veteran venture capitalist best known as a co-founder of Sun Microsystems, discovered an obscure Australian company, Ausra, pursuing solar thermal. He persuaded the management of Ausra to move to Silicon Valley and helped it raise money.

Ausra recently signed a deal with PG&E, the big California utility company, to supply a large solar plant. "The best work in solar is happening in Silicon Valley," Khosla said.

The promise of Solar Valley has investors opening their wallets as never before.

But some worry that promising technologies of today must be renewed, and quickly, if the logic of Moore's Law is to define solar.

"There's a lot of money being thrown at the problem and that's healthy; it gives it a real chance of succeeding," Alivisatos said. "But so much of our effort is going into short-term victories that I worry our pipeline will go dry in 10 years."

G. Pascal Zachary teaches journalism at Stanford and writes about technology and economic development.

[BachQ]

Switchgrass grown for biofuel production produced five times more energy than needed to grow, harvest and process it into cellulosic ethanol, finds a large farm study by researchers at the University of Nebraska-Lincoln published Monday.  The five year study also found greenhouse gas emissions from cellulosic ethanol made from switchgrass were 94 percent lower than estimated greenhouse gas emissions from gasoline production.

"This clearly demonstrates that switchgrass is not only energy efficient, but can be used in a renewable biofuel economy to reduce reliance of fossil fuels, reduce greenhouse gas emissions and enhance rural economies," said principal researcher Ken Vogel, a U.S. Department of Agriculture-Agricultural Research Service geneticist in the university's agronomy and horticulture department.

That's very promising.  An EROEI of 5:1 is acceptable (although it doesn't measure up to oil's EROI of 30:1), and it's likely that, over the long-term, with hybrid switchgrasses developed, that ratio could increase.

It would be interesting to know: (1) how many years it would take to make biofuels commercially viable on a widespread (universal) basis? (2) how many acres of switchgrass would be needed to meet the shortfalls in oil production, it being understood that there is a tradeoff in diverting land from agricultural uses to biofuel uses? 

I think your larger point is that VIABLE alternatives to oil ARE available.  While this is true, they are a far cry from oil, and they are decades away from commercial viability.  This preliminary study took FIVE YEARS ......... so how many decades until anything remotely commercially viable will emerge?

Meanwhile, GWB would rather spend $800 billion on IRAQ than $80 million on biofuel or solar research.  How far will society need to descend into financial turmoil before this becomes a priority?

[BachQ]

Dollar Falls to Record Against Euro as Manufacturing Contracts

By Bo Nielsen and Gavin Finch BLOOMBERG.COM

March 3 (Bloomberg) -- The dollar declined to a three-year low against the yen and a record versus the euro on speculation the U.S. economic slump will cause banks to report more losses from the collapse of the subprime-mortgage market. ...  "The dollar is in a clear free-fall, down versus every major and emerging-market currency,'' Jan Loeys, head of global- market strategy at JPMorgan Chase & Co. in London, wrote in a note to clients.

[BachQ]

NEW YORK TIMES

March 3, 2008
Oil Prices Pass Inflation-Adjusted Record
By JAD MOUAWAD
Setting an all-time record, oil prices rose to nearly $104 a barrel on Monday morning, exceeding their inflation-adjusted high reached in the early 1980s during the second oil shock.

Oil futures rose as much as $2.11 to $103.95 on the New York Mercantile Exchange. That level tops the record set in April 1980 of $39.50 a barrel, which would translate to $103.76 a barrel in today's money.

The latest surge in oil prices is taking place as investors seek refuge in commodities to offset a slowing economy and declines in the dollar, as well as to hedge against inflation.

The dollar fell to its lowest level in three years against the yen on Monday. It also dropped to a record $1.5274 in early New York trading against the euro following steep declines last week.

Today's record oil prices are markedly different from the energy crises of the 1970s and 1980s, which were brought about by sudden interruptions in oil supplies.

Since the year 2000, oil prices have more than quadrupled as strong growth in demand from the United States and Asia outstripped the ability of oil producers to increase their output.

Other energy futures also rallied on Monday. Heating oil futures jumped 6.06 cents to $2.8675 a gallon, while gasoline futures rose 5.65 cents to $2.7264 a gallon. Natural gas gained 20 cents to $9.566 per thousand cubic feet.

In London, Brent crude futures rose $2.07 to $102.17 a barrel on the ICE Futures exchange.

The OPEC oil cartel meets on Wednesday and is expected to leave its production levels unchanged. The oil producing group had suggested last month that it might curb production soon to make up for a seasonal decline in oil demand.

But with oil prices at their current levels, analysts said members of the Organization of the Petroleum Exporting Countries will find it politically difficult to curb their output at this time.

[BachQ]

Meanwhile, GWB would rather spend $800 billion on IRAQ than $80 million on biofuel or solar research.  How far will society need to descend into financial turmoil before this becomes a priority?

I stand corrected.  Iraq costs the US $2 TRILLION, not $800 billion ........  I apologize for the error .........


March 4, 2008
Op-Ed Columnist
New York Times
The $2 Trillion Nightmare
By BOB HERBERT
***

The war in Iraq will ultimately cost U.S. taxpayers not hundreds of billions of dollars, but an astonishing $2 trillion, and perhaps more. There has been very little in the way of public conversation, even in the presidential campaigns, about the consequences of these costs, which are like a cancer inside the American economy.

On Thursday, the Joint Economic Committee, chaired by Senator Chuck Schumer, conducted a public examination of the costs of the war. The witnesses included the Nobel Prize-winning economist, Joseph Stiglitz (who believes the overall costs of the war — not just the cost to taxpayers — will reach $3 trillion), and Robert Hormats, vice chairman of Goldman Sachs International.

***

[Lethevich]

The witnesses included the Nobel Prize-winning economist, Joseph Stiglitz (who believes the overall costs of the war — not just the cost to taxpayers — will reach $3 trillion), and Robert Hormats, vice chairman of Goldman Sachs International.

Damn. I am annoyed enough at the UK government for wasting money that is needed in this country on their Iraqi adventure, I feel sorry for US citizens who are in it far more deeply.

Edit: bad I am at grammar.

[Harry]

A liter of petrol cost 1,55 euro's, in Holland, and considering that 80 liters go in my car, that's a awful lot of money.....

[paulb]

I stand corrected.  Iraq costs the US $2 TRILLION, not $800 billion ........  I apologize for the error .........


March 4, 2008
Op-Ed Columnist
New York Times
The $2 Trillion Nightmare
By BOB HERBERT
***

The war in Iraq will ultimately cost U.S. taxpayers not hundreds of billions of dollars, but an astonishing $2 trillion, and perhaps more. There has been very little in the way of public conversation, even in the presidential campaigns, about the consequences of these costs, which are like a cancer inside the American economy.

On Thursday, the Joint Economic Committee, chaired by Senator Chuck Schumer, conducted a public examination of the costs of the war. The witnesses included the Nobel Prize-winning economist, Joseph Stiglitz (who believes the overall costs of the war — not just the cost to taxpayers — will reach $3 trillion), and Robert Hormats, vice chairman of Goldman Sachs International.

***

Ck out my post on March 1, page 13 of the Hillary/Obama/OR would you rather take a  hot poker?" topic.

Qote : "3 Trillion ++ all said N done with the Iraq war"

I do not need any economist to confirm what I figured out myself.
Thou it is good to geta   second opinion

I think in like 30 or 40 yrs, the 20 something generation is going to storm the pentagon.
I hope i am still around, I'll be passing out cool drinks for the kids.
I wish we could have Joshua resurrect with his bugel horn and everyone shout at once and watch the walls come crumbling down.

[paulb]

D-Day will come when consumers' expectations (consumer confidence) catch up with the reality of dwindling, finite oil supply ....... and the inevitable rampant inflation for all goods and services which are directly or indirectly reliant upon petroleum (i.e., just about everything).  What's really sad is that, as the Chinese are attempting to emulate the Western standard of living by manufacturing zillions of cars and building zillions of roads and highways, they are building a doomed petroleum-based infrastructure that will be rendered obsolete in a matter of a few years.  In this sense, China is really clueless, and China will be hit the hardest.  But such is the potency of this narcotic which we call petroleum: it creates illusions of longterm structural soundness, but, in reality, it is a short-term opiate which turns everyone and everything it touches into an oil addict  -- we are all a bunch of shortsighted oil junkies .......

this is a  very good post.
I think you have hit on a  few notes, a  few chords that will shape the political landscape in the comming decade.
China and her oil needs.
there my friend we have a   senario.
btw Saudi Arabia is not saying how much oil they have.
No one knows for sure if there mega fields are close to peak or not.
Mexico has begun the slow down hill slide on her fields.
The oil sands production  really pollute the ozone, but no one is crying foul play. Oil money talks big.

[head-case]

trillions will disappear from stocks because all the big companies depend on petroleum.

This quote alone shows that you are a half-wit.  When stocks lose their value nothing "disappears." It just means that person A sold it to person B for a certain amount of money but person B can't convince person C to buy it for the same amount of money.  The money that person B invested in the stock didn't disappear, person A has it and person C is happy to get the stock for a bargain price.

Unfortunately your poorly concealed glee at the supposed collapse of civilization is unjustified.
 

[m_gigena]

This quote alone shows that you are a half-wit.  When stocks lose their value nothing "disappears." It just means that person A sold it to person B for a certain amount of money but person B can't convince person C to buy it for the same amount of money.  The money that person B invested in the stock didn't disappear, person A has it and person C is happy to get the stock for a bargain price.

Unfortunately your poorly concealed glee at the supposed collapse of civilization is unjustified.
 

You are wrong here. A has the money, C has nothing more than the chance to get a bargain. The stocks B purchased are now a part of his portfolio, so they are a fraction of B's assets. If the prices plummet B is losing wealth. Now, suppose B asks and gets a loan or a mortgage with the stocks as warrant...

[head-case]

You are wrong here. A has the money, C has nothing more than the chance to get a bargain. The stocks B purchased are now a part of his portfolio, so they are a fraction of B's assets. If the prices plummet B is losing wealth. Now, suppose B asks and gets a loan or a mortgage with the stocks as warrant...

All of the wealth that B lost was gained by A, who has more cash than he started with after buying and selling the appreciating asset.  The result is to transfer wealth from the dumb/unlucky to the smart/lucky.   

[m_gigena]

All of the wealth that B lost was gained by A, who has more cash than he started with after buying and selling the asset.  The result is to transfer wealth from the dumb/unlucky to the smart/lucky.   

No, you don't get it. After selling stocks to B, A doesn't have any link at all with B's financial results.

This is how it goes (a silly example):

I) A purchases stocks from Z for a total of $60, and
II) sells them to B for $100.
III) The market cracks, and the stocks are worth $40.

A has $100 bucks, cash. (He won $40)
B has a stock portfolio worth $40 (His loss is $60)

Practice this at home with any numbers you want. There's no real link between the profit/loss they make. The picture doesn't go as simple as "All of the wealth that B lost was gained by A".
Add the possibility of leverage to the scenario and it might get awful.

[head-case]

No, you don't get it. After selling stocks to B, A doesn't have any link at all with B's financial results.

This is how it goes (a silly example):

I) A purchases stocks from Z for a total of $60, and
II) sells them to B for $100.
III) The market cracks, and the stocks are worth $40.

A has $100 bucks, cash. (He won $40)
B has a stock portfolio worth $40 (His loss is $60)

Z has $60, which he obtained by selling a portfolio which he can now buy back for $40 (his gain, $20).

The prosperity of an economy isn't related to how much there is sitting around in assets, it depends on economic activity, which is essentially how fast everyone is spending their money.  Of course, bad market conditions can interfere hurt liquidity and hurt the economy.

[m_gigena]

Z has $60, which he obtained by selling a portfolio which he can now buy back for $40 (his gain, $20).

LOL. Z has no gain. You see... 40+20 = 60

The prosperity of an economy isn't related to how much there is sitting around in assets,

Yes, it is very related to that.

economic activity, which is essentially how fast everyone is spending their money.

No, that's just circulation speed.

Of course, bad market conditions can interfere hurt liquidity and hurt the economy.

It's not "can interfere", it's "WILL INTERFERE". Bad market conditions, sometimes, tend to turn off investors.

[head-case]

LOL. Z has no gain. You see... 40+20 = 60

Z sells IBM share to A for $60.
IBM stock appreciates, A sells to B for $100
IBM depreciates (crashes, if you prefer), share is worth $40.
Z buys IBM share from B for $40.

At the beginning of the scenario Z has one share of IBM.  At the end of the scenario (assuming Z has decided to reinvest) Z has one share of IBM plus $20 cash, A has $40 profit due to the transaction, B has $60 loss due to the transaction.  As long as IBM is still selling computers and paying dividends gains and losses cancel. 

[m_gigena]

Z sells IBM share to A for $60.
IBM stock appreciates, A sells to B for $100
IBM depreciates (crashes, if you prefer), share is worth $40.
Z buys IBM share from B for $40.

At the beginning of the scenario Z has one share of IBM.  At the end of the scenario (assuming Z has decided to reinvest) Z has one share of IBM plus $20 cash, A has $40 profit due to the transaction, B has $60 loss due to the transaction.  As long as IBM is still selling computers and paying dividends gains and losses cancel. 

First of all, you are changing your parameters, you said C would purchase from B.

Second, you are still not getting it right. It doesn't matter if Z has: "ONE SHARE + $20 Cash", for what is important is the value of that share. At one instant, it makes no difference if you have either:
$60 in cash or
a $40 share, plus $20 cash.

Results:
Z has the same wealth
A won $40
B lost $60 =======> There's a loss of $20 somewhere in this Economy.

As long as IBM is still selling computers and paying dividends gains and losses cancel. 

The dividend flux is always priced in the stock. And if there's a general loss of $20 in this economy, are you so sure IBM will be able to keep selling computers at the same pace?