This article is possibly the best yet from Mr. Simmons. Check it out at http://www.financialsense.com/transcriptions/Simmons.html . Instead of $60/barrel (which is 42 gallons of oil) he suggests the real value & price of oil could and should realistically reach $210-$420/barrel. I agree and have thought this way for several years after looking at the value we get form all that stored potential energy and work. Here are some excerpts I selected from the interview on how unrealistically cheap oil is today:

"JIM: You gave an analogy in terms of how cheap oil is at $60/barrel, I wonder if you might share that with our listeners?
MATT: Sure. Because every time I get into a discussion now about the future of oil I always get asked, “well, where will oil prices be?” And my response is, “I don’t have any idea where they’re going to be, other than the fact I think on a secular move, we are still at a very, very cheap level of oil prices.” And that immediately gets a response, “Cheap?! Oil’s at $60 a barrel!” And one of the things I’ve observed is that people don’t really understand what a barrel is. They can kind of conceive what a barrel might look like. But when you put it in terms people can understand, I say “what $60 per barrel is, is 18 cents a pint.”
And then I get a response, “How did you do that?!”
“Well, you divide 60 by 42, to get a gallon of oil, and you divide a gallon by 8 to get a pint of oil, and that just happens to be 18 cents a pint.”
And then they say, “ Oh, that’s really cheap, isn’t it?”
And obviously it’s cheap. I don’t know what’s the next cheapest liquid we actually sell in any bulk is, that has any value. I suspect there are places around the United States where municipal water costs more than 18 cents a pint. And yet for some reason, we created a society that was built on a belief that oil prices in a normal range were some place in the $15-20 level. It turns out $15/barrel, which is the average price of oil – in 2004 dollars – it sold for, for the last 140 years, is less than 4 cents a pint. So we’ve basically used up the vast majority of the world’s high flow rate, high quality sweet oil at prices that were effectively so cheap, you basically couldn’t sustain an industry. And now we’re left with lots of oil. But it’s heavy, gunky, dirty, sour, contaminated with various things oil, it doesn’t come out of the ground very fast, is very energy intensive to get out of the ground and we’re going to pay a fortune for it. [13:42]"

"JIM: Based on reading your book, and the extensive studies – as you said many of these major oil wells are now at tipping points – we’re likely to wake up one day and find out that oil is over $100/barrel, we can’t meet...
Matt: It’s still cheap at $100!
JIM: Yeah, at $120 it’s 36 cents a pint, which is still cheap.
MATT: What the economists ought to be trying to figure out is: what constitutes a fair price for oil versus their belief that oil prices are really expensive today. I would argue that probably a number in the $5-10/gallon is a real bargain. [51:24]"

Last Thought-Oil at these prices would make many alternative energy sources look quite good financially.

I continue to be impressed by Mathew Simmons. His latest on-line Q&A hosted by the Washington Post is notable for the variety of questions that main-stream news media is not asking. Check it out here: Simmons Interview. It's interviews like this that give me some hope in Democracy and the number of other Americans who are following this topic and not accepting that things are all OK and we should not worry about oil ever declining. Mr. Simmons is eloquent, tactful, and convincing. I believe he is the best current spokesperson for Peak Oil who can be understood by most "USA Today" readers.

Here's a kindred soul: Gone to Croatoan. Fun/informative links to paleo-survival topics.

I also like his link to The Oil We Eat article.

Association for the Study of Peak Oil & GAS – USA (ASPO-USA) has just started a new web site.

They are also hosting the conference Beyond Oil: Inteligent Response to Peak Oil Impacts -A Dialogue with the Experts This will be a high-level conference to discuss the impacts of a peak in world oil production. It will be held in Denver, Colorado on November 10-11, 2005. The two-day forum is sponsored by the City and County of Denver and ASPO-USA. Keynote speakers include Matt Simmons, author of "Twilight in the Desert", and Congressman Roscoe Bartlett, (R-Md).

http://www.wired.com/wired/archive/13.07/solar.html


Great article from Wired Magazine. Very neat solar idea that works. A rooftop concentrator (looks like a daisy - that focuses on an efficient solar cell). Check it out.

Liquid fuels for transportation are the top use of oil in America and also the hardest to replace with a renewable source. My good friend Jim is a strong proponent of using Algae to produce Biodiesel. Honestly, I think it is the only potential replacement on the horizon that is renewable and solar based. Here is his one page summary on the topic.

Bio-diesel from Algae: A renewable liquid fuel for transportation
U.S. transportation: cars, ships, trains, trucks, and aircraft, are 98% reliant on oil supplies for power. No energy source now, or in the foreseeable future, can match oil's energy density, ease of distribution, safety, or simplicity of use. The world's drilled oil is being depleted, yet a renewable oil substitute is now being harvested from crops like soybeans and rapeseed, both in Europe as well as here in Colorado http://www.gobluesun.com/index.html. The oil in the crops is merely pressed out and processed with 10% alcohol to become suitable for most of today's diesel engines. In use, biodiesel produces much lower smoke emissions than drilled oil, has a higher lubricity that reduces wear, can utilize a catalytic converter as it contains no sulfur, and recycles CO2 from use-cycle back to growth-cycle contributing little to global warming.

While using soybean and rapeseed to produce Biodiesel is promising, large scale displacement of existing crops on land needed for food or forage production is not. Requiring oil based fertilizers and high quality irrigation water also reduce economic and environmental attractiveness.

Fortunately, a study on harvesting oil from algae grown in very shallow ponds was performed by Colorado's National Renewable Energy Laboratories (NREL) between 1978 and 1996. The NREL Aquatic Species Program http://www.nrel.gov/docs/legosti/fy98/24190.pdf collected and experimented with various species of algae and found that under certain conditions some algae could generate up to half their body weight in oil. From 1988 to 1990 NREL performed experiments in Roswell NM where shallow open ponds of algae were able to produce 10 to 50 grams of oil per day per square meter of pond surface area. Translated, this is 5,500 to 27,000 gallons of biodiesel per surface acre per year. Funding for this NREL program was discontinued by the federal government in 1997; however, researchers increasingly believe development of large scale algae farming is technologically and economically practical in today's energy climate.

Land productivity comparison in growing Biodiesel: http://en.wikipedia.org/wiki/Biodiesel
• Soybean: 40 to 50 US gal/acre/year• Rapeseed: 110 to 145 US gal/acre/year (Canola oil) • Mustard: 140 US gal/acre/year • Palm oil: 650 US gal/acre/year (tropical climate) • Algae: 10,000 to 20,000 US gal/acre/year

Components of a modern algae biodiesel operation:
Ample sunlight to provide energy to the oil through photosynthesis
+ Saline or brackish low quality water found on waste lands that won't support crops
+ Algae seed stock enhanced through bioengineering yet non-dominant in the wild
+ Agricultural run off, livestock waste, or municipal sewage nutrients (get rid of waste)
+ 10% transesterification alcohol from fermenting algae waste or sugar/cellulose crops
+ CO2 from the air, fermentation, or from power plants (especially coal w/CO2 credits)
+ Modern technology for containing algae, harvesting and refining the oil
= Biodiesel oil compatible with conventional vehicles and distribution systems.

The University of New Hampshire projected http://www.unh.edu/p2/biodiesel/article_alge.html that the entire U.S. requirement for transportation fuel, 140 billion gallons/year, could be met by harvesting biodiesel from algae. This would require $300 billion to build the infrastructure, 15,000 square miles of scrub or desert land, and $50 billion in yearly operating costs. In perspective, amortized over 10 years, this would amount to 7% of our military budget, the land area is 0.4% of the U.S. total, and the operating cost is a fraction of our yearly bill for foreign oil.

The most amazing thing about Peak Oil to me is how much oil is used to make and transport our food. We literally are eating oil even when we get organic produce from Whole Foods. Check out this short lesson in how deep the rabbit hole is: Oil and food: A new security challenge

Censored reports on Peak Oil

Here's an article about the suppression of a DOE sponsored report on Peak Oil . (It is a good report by the way.)

The report is here: The Hirsch Report. The bottom line: start preparing NOW because the transition will take decades.

Hats off to two sites that archive information that big brother thinks you do not need. http://www.projectcensored.org/ and http://www.thememoryhole.org/.

Two great video interviews with two of the biggest giants in Peak Oil:

Matthew R. Simmons the author of “Twilight in the Desert”.

Ken Deffeyes One of the nation’s top geologists and world expert in oil exploration and production.

The value of these videos is to see the authors real people. Both are very convincing and do not come across as alarmist or radicals. You see a business man and a scientist both talking with integrity about unpopular ideas. I think it adds more credence to their writing.

Here are some of my favorite web sites on Peak Oil. A great list to start with if you are just waking up to Peak Oil.

http://www.321energy.com/ - great hourly oil price quote graphic
http://www.energybulletin.net/index.php - rich summary of world wide news articles about energy issues
http://theoildrum.blogspot.com/ -one of my favorite peak oil Blogs
http://peake.blogspot.com/ -another good blog- this one from Seattle
http://www.peakoil.org/ -the grandaddy site of much to do with Peak Oil
http://www.wtrg.com/index.html -a useful oil industry site
http://www.rigzone.com/news/ -web site with news on oil exploration and extraction

http://www.lobg2.blogspot.com/ Land of Black Gold – great blog about financial and investing implications of Peak Oil
http://jameshowardkunstler.typepad.com/clusterfuck_nation/ - Jim Kunstler’s (“The Long Emergency” author) weekly column –entertaining and accurate rants about our energy predicament
http://www.dieoff.com/ -Like bacteria that overshoot their environment's carrying capacity...

There are many excellent Peak Oil blogs out there, and I will not try to replicate them. THIS blog will focus on how things will look & feel in the post peak world. Despite how bleak the scenarios look for the future (James Kunstler and DieOff.com) I believe there will be points of stability and growth like there are in any chaotic system. Frankly I agree with most of the future vision described by Kunstler and DieOff because I am an engineer and these scenarios seem the most logical and probable. But I also draw upon a strong spiritual perspective and believe there is some larger lesson being learned by humanity right now that only peak oil can give us. Hold on tight to the lifeboat... it seems the next few decades will be a very wild ride.