Two points. First “in-ground hydrocarbons” presumably refers to shale oil and tar sands, as well as coal-to-liquid, which are three very different technologies with very different cost-benefit revenue streams. Second, the increase in capital investment over conventional oil – that has to be amortized over the “effective life” of the deposits. I cannot believe that the numbers for developing alternative hydrocarbon resources aren’t favorable. I am thinking disinformation. Remember the baseline is $600B to $700B *annually* for imported oil.

This country used to have guts.

I tried to make a guess on how General Groves would approach the project.

If you followed the arguments about the Hirsch Report from SAIC looking at alternate of in-ground hydrocarbons, one could extrapolate that we could keep up with petroleum depletion but we’d have to double or triple our capital investment over conventional oil to do so. At least, that’s my ballpark estimate.

As to worries about uranium shortages, that’s just more anti-nuclear disinformation. Uranium is bought on long term contracts, sometimes 13 to 15 years out. True, the spot market jumped but that’s very thin as the production capacity has been optimized to meet stable demand for years. There is no READY capacity to speak of. Production is ramping up worldwide, including within the US and will easily meet demand for a century or more.

http://djysrv.blogspot.com/2008/09/western-lands-uranium-gopher-for.html

http://www.uic.com.au/

1. The loss of capital liquidity that should have been invested in energy instead of 400,000 dollar homes for burger-flippers on expired tourist visas – is tragic. We likely can scrape up the capital, but only with consumer belt-tightening, abandonment of Neocon ruinously expensive wars of choice, and abandoning elements of free trade so our wealth is not also pissed away overseas in conflict or trillion-dollar trade deficits. Or, by using wealth from our competitive superiors in Asia, or the Petro Kings for investments, but then given them the return on investment that should have stayed and multiplied in America..

2. There is no shortage of uranium, even though the Chinese are buying up major sources in Australia and Africa. Shortage assumes environmental insanity prevails and we do not recycle the 98% uranium not used in a fuel cycle, that we refuse to build breeder reactors or (long term) use fusion plants to enrich uranium and far more abundant thorium.

3. We omit discussion of natural gas substituting for much of the oil used in power equipment, chemical production, even transportation. Natural gas is abundant. Every cubic foot used for baseload electric generation instead of coal or nuclear (and sensible hydro, wind, and biomass sources that can feed into baseload), and instead of substituting for oil – is a crime. The Japanese have seriously gone this way. We can learn from them on what oil can be swapped for CNG.

4. Sasol may not be the best artificial oil process from an environmental or economic standpoint. Oil shale, coal-nat gas combined processes, breaking down the Venezuelan bitumin deposits appear to be superior. The Albertan oil sands are being exploited, but with more adverse environmental effects than just drilling.

5. No one mentions that Open Borders negates all conservation and the minescule contribution that solar, wind, and “tainted” ethanol provide. America is to go from 300 million to 370 million from it’s new 3rd and 4th world “citizens”…437 million by 2050.

Has my full support but the ethanol and biowaste people are fighting it tooth and tail.

The “technology transfer,” if that is the right phrase, has been poor. The technical information is still buried in academia and not disseminated in the broader public arena of politics.

Connections not yet made.

My working theory is that once the life span becomes sufficiently extended, as it is now in the western world, we will have the requisite *historical memory* to better inform long-term decision-making. Personal history trumps the learned kind every time.

People in their 80′s have now experienced two major market crises, assuming that one may politely disagree with Franklin Delano Dave that the current crisis is still unfolding in depth and magnitude.

Nobody cares, but for the record, I did not ‘gamble’ my investment portfolio, I went for the low cost, “buy and hold” funds (with one exception – and Ken Heebner is keeping my head above water). So this argument that you lie with gamblers and wake up with [some disease] doesn’t hold much water with me. There used to be this concept of conservative investment – gone right out the window with this “over-leveraged risk-mismanaged market”.

“keep in mind that Congress has deliberately put oil & gas exploration off limits in large areas, including the near-U.S. ocean floor. There is likely agood deal of economically extractable oil and gas in some of these regions. Also, technological solutions are becoming available to make shale and tar sands extraction more economically viable.”

I don’t doubt that technology will make more energy available. I also don’t doubt that there is some oil off the coast of California that could become available if environmental protection laws were relaxed. Of course the big question is whether this additional petroleum would be significant (I doubt it).

Joseph Somsel brought up the point of EROEI “energy returned on energy invested”. I previously described how gold and silver mining in California and Nevada have been abandoned because the mines there were no longer economical. With petroleum, EROEI is a stronger constraint than mere economics. Even if petroleum is priced at $10,000/barrel, the petroleum would stay in the ground if it required 10 joules of energy to extract 9 joules worth of petroleum. Under that scenario, we’ll stop petroleum extraction from wells and go to petroleum synthesis, e.g. Sasol conversion (Fischer-Tropsch process) from coal. Twenty years ago, we should have gone over to nuclear power and Sasol conversion. Unfortunately we allowed ourselves to be snookered by underpriced OPEC petroleum and environmentalist craziness. Now we’re in trouble.

Joseph Somsel also mentioned the website:

http://www.theoildrum.com

I strongly recommend The Oil Drum as an information source with the caveat that it has signal-to-noise issues. People who believe in Peak Oil are sometimes called “peakniks” (I’m a peaknik). Unfortunately many of the commentators at the Oil Drum are garden variety moonbats and “doomers”. A doomer is a peaknik who believes “all is lost” due to Peak Oil, i.e. we’re doomed because there is no possible solution to Peak Oil. On a bad day, I have doomer tendencies but generally I’m optimistic that technology can eventually save us from Peak Oil.

“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.” – Charles Mackay, Memoirs of Extraordinary Popular Delusions and the Madness of Crowds

It’s from a book my Dad had me read while I was at prep school (next stop military school if I didn’t straighten up). Been thinking lately that I need to reread it. Pop’s point was that, hopefully, I would be living through numerous market cycles and that the book would provide insight. It may also have contributed to my skepticism about global warming…er…climate change…or whatever loada crap Al Gore is peddling these days….

Taken together, these constitute a “perfect storm” for the destruction of financial institutions. George Soros or Vlad Putin can pick a bank, short forty billion shares of it, create a panic and rest assured that the government will wipe out the existing shareholders to make sure he never has to cover.

*The argument against reinstating the uptick rule is “It probably won’t have any effect.

The argument for reinstating the uptick rule is “it costs nothing and may have a huge effect”

Given these two views why wouldn’t you reinstate the rule, except for the colossal ego and possible coruption of a few government flunkies?
Christopher Cox needs to be waterboarded!

This is a good example of “unknown unknowns”. If they reinstate the uptick rule and it stabilizes the market this will be proof positive that they were incompetent to get rid of it. For this reason alone they refuse to reinstate it.

Scary thought: Russia owns a ton of US debt and desperately needs to raise money to bail out their own banks.

That is a huge reduction of lending capacity in a short period of time. The real economy will notice.

Furthermore, you have to look at the distribution of the equity losses – heavily concentrated in money center banks lending to other financial institutions (hedge funds, investment banks, etc.) The vast majority of 8500 banks across the US make loans against local real estate and the cash flow and/or assets or real businesses. Consequently, the impact on main street should remain negligible.

Thank you for a very good point about the economics of extraction, but also keep in mind that Congress has deliberately put oil & gas exploration off limits in large areas, including the near-U.S. ocean floor. There is likely agood deal of economically extractable oil and gas in some of these regions. Also, technological solutions are becoming available to make shale and tar sands extraction more economically viable.

The point isn’t to reinforce a dependence on petroleum, but to give us as much margin as we can for as long as we can while alternatives have time to mature and take over increasingly larger portions of the energy load.

Also, I have no illusions about “energy independence,” for America, because that is not possible. Both parties are touting that fantasy, with the Democrats being the more egregious. However, LESS dependence on foreing oil is an achievable goal.