June 16, 2011

The 'Arab Spring' and high prices at the pumps

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WHAT is the connection between the women and children being bundled over the Syrian border and the price of petrol at your local garage? How could it be that Syria, a country with no oil, might affect the price of that most precious of commodities? There have been many internal conflicts in Syria, yet not one has ever affected the price of oil, so why now?

Yesterday, as I filled my car and listened to the radio about the acrimonious OPEC meeting in Vienna, it was clear that if these petrol prices don’t stop going upwards we — not just in Ireland, but also all over the world — are going to grind to a halt!

But why should petrol prices be going up?

Traditionally, petrol prices have been demand-driven. This means that the greatest single impact on the price of petrol is world demand. If the economy of the globe is expanding, the demand for petrol rises and the price goes up. The world and his wife are now worried about the fact that the global economy is slowing down following two years of printing money in the US and on the cusp of what many now believe to be a major wobble in China. So should the price of oil, be going down?

What else is going on?

Maybe the first thing to look at is the trend over the past 30-odd years.

It is easy now, after having a decade of high oil prices, to consider that oil has always been expensive. But that is not the case. In fact, if you look at the oil price since 1985, you see two distinct periods. The first period, from 1985 to 2003, was characterised by oil prices being quite low and not particularly volatile. More interestingly, the price of oil hovered around a median price of $19 a barrel.

Since 2003 this stability has left the oil market and prices have shot up and down all over the place. The main thing to note is that the median price of oil in the past eight years has been $60 a barrel. So we have had a threefold increase as the likes of China and India have come into the world economic picture. Think about this. The US with 5pc of the world’s population consumes 25pc of the world’s oil. China with 25pc of the world’s population only consumes 9pc of the world’s petrol. This will change over the coming years and will rebalance to reflect population with dramatic ramifications. But for the moment, the one aspect to consider is China is here and is consuming.

The other factor is OPEC’s reaction to political and economic shocks. Consider, the rebellions in the Arab countries — particularly, in significant oil producers like Libya. Libyan production has been decimated. Traditionally Saudi Arabia, as the world’s largest producer and the world’s biggest reserve of oil, has on three major occasions increased production to offset any politics-related drop in production to maintain global prices. First in 1956 when President Moussadeq of Iran nationalised Iran’s oil supplies, then again in 1979 when the Ayatollah came to power and finally, in August 1991 after Saddam invaded Kuwait. Each time, Saudi replaced the lost oil and prices stabilised.

But this time Saudi Arabia has not replaced Libya’s lost oil production. Why the change in Saudi policy?

Two things are affecting the Saudi behaviour this time. The first is a collective memory of the Asian crisis in 1997. Following the Asian crisis and in respond to pressure to ease oil prices to facilitate a global recovery, the Saudis increased production. But, because global demand was so weak, the oil price fell and it didn’t recover. It fell to below $10. This low price of oil caused Russia, which depended on oil revenues to pay its debts, to default in August 1998. This further weakened the price of oil and scared the Saudis because the lower the price of oil, the lower their revenues and the bigger their budget deficit.

So the Saudis lost their appetite to bail everyone out and this memory lingers.

Add to this searing experience, the events of the last few months and you will see why the price of oil will remain above $100 a barrel for a while.

When the first revolutions of the Arab Spring emerged, Saudi Arabia, a family dynasty, realised that it had to react. It saw that, for the first time in Arab countries, repression didn’t work. The more the old regimes repressed the common people, the more the people came on the street. Plus the preponderance of Facebook, Twitter and YouTube meant they couldn’t suppress the message.

A young leader of the Egyptian revolution who I met recently at a Google conference explained the role of social media to me succinctly,

“We advertised on Facebook, organised on Twitter and told the world about it on YouTube.”

Seeing the fate of Mubarak, the Saudi royal family decided to kill any incipient revolution with kindness. It spent money on all sorts of welfare payments. This meant spending and continuing to spend.

Brilliant research conducted by the Centre for Energy Studies has put one figure on what the price of oil has to be for the Saudis to be able to afford this new policy of killing the revolution with kindness. In early 2011, it was $74 a barrel minimum at a production level of $8.5m at day.

Now consider the cycle; the Saudis need this as a minimum price to keep the welfare rolling, this puts upward pressure on your petrol pump price.

The resulting revenues generate a budget surplus in Saudi Arabia.

But that’s not all. The ongoing trouble in Syria makes the Saudis nervous. Syria’s government is reacting like Egypt’s did, but social media and 24-hour news is telling the world that the Syrian army is terrorising defenceless women and children. TV stations like Al Jazeera are beaming this into Saudi living rooms and, for the first time, Saudi women are seeing other Arab women leading the demonstrations.

This scares the royal family so much so that they have increased welfare spending again to buy off their population. This escalating cycle of spending, Arab street violence, media coverage and more spending, is causing the Saudis to require a bigger budget surplus each coming year.

The experts at the Centre for Energy Studies have indicated that next year the Saudis will need a minimum price of $91 a barrel at higher levels of output to have enough money to buy peace at home.

WHEN you link up all the bits of the global oil and politics jigsaw it is not difficult to see that the Arab Spring, which is to be welcomed by all of us who value personal liberty, is coming at a huge price to Irish car drivers.

Obviously this is not going to change anytime soon. More liberty over there, means less growth over here — hardly ideal, but that’s the way the story goes when you are completely dependent on oil.

David McWilliams hosts the Dalkey Book Festival this weekend. On Friday night, there will be an in-depth discussion of the Middle East.

Irish Independent


  1. Malcolm McClure

    The research by the centre of Energy studies wasn’t so brilliant, as they say: “In early 2011, it was $74 a barrel minimum at a production level of $8.5m at day.”
    That implies a production level of 115,000 barrels per day whereas what they meant was 8.5 million barrels per day.

  2. stiofanc02

    Thinking of taking matress money and putting it into U$dollars. Any thoughts on this? Anyone?

    • Colin

      You could give some to the very needy at St Vincent de Paul, and you’ll feel great about it everyday for the rest of your life.

      I’d buy art if I had the money lying around. You can enjoy it by looking at it, it can furnish your house well, and you can sell it on later on and make a profit if its value goes up. Irish art would be better still, all the money stays in the local economy.

      • Deco

        Euros-despite all the faults of the Euro Zone are a more secure investment than USD. The CAN dollar is probably a more stable bet than the USD.

        Or try Asian currencies where the society are stable, and the central bank is robust. Like India, or Singapore.

  3. Colin

    We can’t control the price at the pumps, but we can control how many km/l we get from petrol/diesel. I get just over 650km from a full tank (60 liters I guess) of diesel. I keep my revs below 2000 rpm all the time. I avoid using the brake unless its really necessary, thus saving a lot of fuel. Servicing the car regularly also helps greatly with fuel economy.

    Don’t drive hard, drive clever. I think there’s courses available somewhere to help train motorists to drive with better economy. Clearing out the boot with unnecessary heavy junk also helps.

    Car Pooling will also help, as well as avoiding unnecessary road trips, many of which can be done on foot or on bike. Maybe our obesity epidemic can be targeted, I mean why not see a problem as an opportunity?

    • Julia

      Colin, back in the sixties and seventies when I was a kid my dad used to turn off the engine of the car when going down hill. Saving on fuel. It was brilliant. I might try it out myself tomorrow now I’ve remembered that. Thanks for the suggestions.

      • Tull McAdoo

        I would urge you to reconsider switching your engine off while moving, as new cars need the engine running for the power steering etc to work.
        The cars in your Dads time were configured differently.

      • Let us know how you get on.

      • no engine = no steering and no brakes.

      • doflynn

        Not a good idea anymore Julia; best thing to do, a) reduce your top speed, b) ease off on the brake by anticipating any slowdown or stopping and letting the engine slow you down, foot off the accelerator.

        Just those two actions alone will make a difference.

  4. Malcolm McClure

    Given that the total population of Saudi nationals in 18,707,000 and total annual oil revenue is 8.5m X $74 X 365 = $229.6 billions; then even if they shared it equally amongst the population, the moiety of each national: $12,272 would still leave them in poverty street if they had no other source of income. The effect of raising the price to $91 per barrel would give each national $15,100, still less than Ireland pays street sweepers, so we are in no position to complain about the oil price.

    • Colin

      I’m sure the Saudi street sweeper doesn’t have to pay as much Income Tax, VAT on goods, VRT, Annual Motor Tax, Schoolbook Tax, DIRT on his savings, Tolls on roads he drives on etc…. I’m sure his central heating bills are very low, as is the cost of filling up the tank in his car. He may have to pay his Indonesian maid/skivy/dogsbody/slave/sex-slave a little more, but she wouldn’t be earning much to start with.

    • Deco

      Well, actually 12 grand per citizen is reasonable when compared with the income level that many people in the third world have to deal with it. In fact it is not much less than what people are required to suffice upon in this country, after PAYE, mortgage repayments, rip-off charging, indirect taxes, levies, and oligopolistic markets.

      Though – you are completely correct in one critically important regard – income distribution is skewed in Saudi. Statistics on the distribution of income may not even exist.

  5. jboyd

    The problem that is going to occur is that a new wave of property transactions are going to have a significant effect on our ability to wean ourselves away from fossil fuels. Renewable Energy proposals and schemes are watching the funding which should be heading their way, go back into property (UK and NI not ROI you still have some way to drop). The mass buying of flats by speculators calling the bottom of the market and using very expensive finance is already going at full speed and diverting monies into short term strategies by lenders who seem to have learnt nothing from 2007.
    Renewable Energy technology and proposed plants cannot compete even though the average pay back time frame has dropped to 4/5 years for £2.5m borrowings.
    This property surge will be shorter and by its nature unsustainable- but who wants to hear that!

  6. Irish Enigma

    Who broke up the Ottoman Empire that once ruled the complete Arab World ? Who initiated the State of Israel?

    Two great Irish men were the chief players .They were T.E. Laurence from Devlin , Co. Westmeath and Capt Joyce from Galway both served in the British Legion .Laurence took his mothers name after she eloped with his father a Lord Carbury and he never knew the true identity of his father until later in life .He was educated in Oxford and studied Archaeology and Arabic Studies .

    He singlehandedly organised the various disjointed Arabic Tribes to revolt against the Turks and displayed it with passion.He also organised the first meeting of the Jewish leaders with the Arabs to initiate the State of Israel.These countries ( including Kuwait , Iran Iraq etc ) were created under the aegis of the British Empire and would not have happened without these Irish men .They played a pivotal role.

    Nowadays the center of world strife is in what was the Ottoman Empire and is part of the consequences of the decisions made by these Irish men.Had they not done so maybe there would still be peace.And oil would be properly managed and shared and religion would not have cast a shadow over what could have been a successful Empire.

    The new countries were planted originally with puppet royal families allied to the British Monach.As more oil became discovered some countries had more and some had far less or none.Thus the imbalance of power in that region including Egypt .

    Anyone who has visted Cairo will see the Ornated Structures still standing around Cairo and Alexandra and the great warrior Mohammad ( Turk ) all built by the Turks.

    So what is the significance of the country border crossing from Syria to Turkey ?

    Maybe we should ask ourselves will the whole arab World revert to the control of the Turks and pacify their quest to join the EU ?

    • Praetorian

      Reading the comments beneath the Irish Times article that originally brought the ‘Joyce’ in the duo to public knwoledge, which you mention above, puts the tale in some perspective, the link to the Arab Revolt and the Arab Spring to my mind seems tenuous.
      http://www.irishtimes.com/newspaper/opinion/2011/0614/1224298864293.html

      The Ottoman Empire had been in severe decline for at least 80 years before Lawrence showed up on his camel, in the 19th century it was known as the ‘sick man of Euorpe’, by the time of its eventual and inevitable implosion it had been in existence for the bones of 600 years and ruled an enormous but impractical area and suffered from classic imperial overstretch. The Ottoman decision to go with the Germans in WWWI sealed their fate.

      The Arab Revolt (1916-1918) with Lawrence at its head, although not irrelevant, should be put in perspective against the forces eventually brought to bear by Western European powers (Britain and France)in the Middle East, powers who were happy to see Lawrence exit the scene so they could carve-up the entire territory for themselves, which is exactly what happened.

      Whilst there are serious questions about Turkey’s role around the Kurds and lingering historical questions around the Armenian genocide, today, the country is providiing something of a balanced presence in its immediate surroundings and the wider Mediterranean. Turkey is also a potential future member of the EU, if the latter still exists a few years from now :-)

    • coldblow

      Kevin Myers in a recent article:

      Now I think it’s generally better for Muslims to be governed by Muslims, and I regard the destruction of the Ottoman Empire 90 years ago by the British and French as one of the great follies of the 20th century.
      Indeed, history might show it to be the greatest of them all, as the Arab world becomes increasingly unstable and violent, and the very existence of the state of Israel unleashes what are virtually psychotic disorders. And a prime instrument in the destruction of the power of the Ottomans was that demented Anglo-Irishman, TE Lawrence.

      http://www.independent.ie/opinion/columnists/kevin-myers/kevin-myers-never-make-a-hero-of-a-blundering-fool-2613965.html

      • Deco

        I actually reckon that the assault, and dismemberment of the Ottoman Empire was a disaster for the Middle East. Justification was manufactured for Western interference in the Middle East, which has caused nothing but problems to this day.

        In comparison the previous century, with the Ottoman Turks in charge was much calmer.

      • Colin

        It was all honky dory in the time of the Byzantine Empire too.

  7. Juanjo R

    Great article!

    Roughly in line with jboyds comments above ( I’d argue about his detail a wee bit ) I would say this is where some of the debate should be steered towards now – that is the oppertunity cost of the bailouts and economic crisis.

    The future looks poor for Ireland in regard to energy consumption – we are among the worst offenders in Europe if not the worst – and we have lots of recently built housing without infrastructure in the wrong places. We are completely car orientated in our lifestyles and therefore hugely exposed to carbon-fuel price hikes.

    • Colin

      Now that the bunch of looneys aka the Greens got their comeuppence from the Irish people, we should begin a rational discussion about Nuclear Power Generation in Ireland. We already import it, so why not generate it ourselves? The technology today is far superior. Its safer and emits less CO2 into the atmosphere, so its superior to fossil fuels. It creates lots of construction jobs in the process and we may well export some of it if we become really good at making it.

      • Deco

        I would be in favour of it.

        But the Irish concept of management makes it completely impossible to implement successfully.

        Imagine putting the clowns who caused the banking crisis in charge ? Or having involvement from a state sector that gave us the M50, the Port Tunnel that was too low, the Luas with 10000 faults, etc…

        Once again we find the root cause of the problem in Ireland – the Irish concept of management.

      • vincent

        Not in my back yard-I do not want a nuclear power plant in my back yard, for those who are happy enough with one in their’s-well that’s obviously their choice…

        • Colin

          Vincent, maybe it could be arranged that the nimbys pay much much more for their electricity than those who do not have a problem with the location, call it a nimby tax, a premium on a greener lifestyle.

          In my mind, Carnsore Point and Malin Head would be good locations, jobs for locals should be encouraged and local businesses should receive large discounts on electricity due to perceived nuclear toxicity associated with the nearby plant, by folks like you.

  8. David,

    I think you forgot to mention in context that the house of Saud is not only killing revolutionary uprisings with kindness but brute military force as well as is the case in Bahrain.

    The Jasmine revolutions and QE policies in the US are correlated:

    http://static.seekingalpha.com/uploads/2011/4/7/164524-130217654123059-Michael-McDonough_origin.png

    Note the green bubble in this chart.

    http://www.sipri.org/research/armaments/milex/resultoutput/trendgraphs/Top10bubble/top10bubble2010/image_view_fullscreen

    Worth mentioning that the 70bln dollar weapns deal between Saud and the US was the biggest ever in history.

    To suggest that democracy will be implemented in the middle east as a result of the uprising is wrong. Democracy can not be accepted in these states by US foreign policies, they will just substitute one dictator with another, or military regimes instead. A free middle east means US no longer has it’s grip on ROW, and this is not going to happen.

  9. Praetorian

    The Saudi’s may not be in a position to increase output. It is generally accepted that we past the point of no return (i.e. peak oil), Western economies have not sufficiently adapted to this new reality, so you are about to see another issue enter a very cluttered socio-economic equation.

    Advice: Buy a bike and grow your own vegetables.

    I would be interested in McWilliams elaborating on exactly what he means when he writes: “More liberty over there, means less growth over here – hardly ideal”.

  10. SeanL

    Davids straight line link between their liberty and our growth is based on the old energy supply paradigm. Energy must come from mineral oil and flows from the oil wells of Saudi Arabia to the petrol pumps in Sallins.
    Ireland need not be as oil dependent as he implies as in fact we are energy rich. Much like those Saudi bedouin of 100 years ago we are blind to the immense energy resources we do have.
    Maybe in fact the exact opposite to what David McWilliams postulates will actually be the case. The very fact the growth of democracy in the Arab world pushes up the price of oil may be the trigger for us to exploit the ocean and biomass resources we have in abundance. This move to an indigenous energy industry will grow our economy.
    So once more Davids reading of history is colourful but his picture of the future is black.

    • jboyd

      Well we would need to move a little more quickly than we currently are. The very fact that the devolved administration in Scotland is already halfway around the track whilst Stormont and Dublin stand poking each other in the eyes like two goons isn’t heartening. Alex Salmond has set his eye on 100% energy from renewables by 2025 but looking now at 2020. He has 3 of the 6 largest wind turbine companies in the world now basing themselves in Scotland. Iberdrola the spanish giant announced a £4 billion investment in UK with 3.2 of it going to Scotland. With energy security comes swathes of inward investment due to the guaranteeing of production of any firm based there. With 120k new Chinese millionaires (proper ones with over $2m liquid assets) created last year, I don’t much fancy my chances of having the buying power I thought I might have for the last of the fossil fuels. There requires to be huge infrastructure investment to bring connectivity up to speed, whether this is facilitated through a bond issue underwritten by the ECB or through another method is neither here nor there. Doing nothing much is unfortunately not an option

      • SeanL

        Agreed. Speed is one thing Irish Governments lack, irrespective of political hue.
        But here is a suggestion to solve both Davids liberty qualms and our debt crisis.
        Germany has money, we owe German banks money, Germany needs alternative to it’s nuclear energy, we have the alternatives.
        Trade our ‘bank bonds’ for ‘energy bonds’. We haven’t the financial resources to fully exploit our ocean energy but why not lease ocean sites to Germany?
        As part of the deal German banks must fund an interconnector from the west to mainland Europe (€1 billion). Germany gets it’s renewable energy from off our West coast and we get an levy on every GW produced. Their money, our resources!

        • Deco

          Speed is one thing Irish authorities lack.

          Other concepts include transparency, cost efficiency, meritocracy, common sense, applied intelligence, honest, etc. etc…

          Actually, I can see the Germans using wind power resources off our coasts to sell power to the British, and the ESB doing a deal to keep that said power off the Irish market in case it interferes with them running matters.

          An Irish management method of diverting an Irish resource away from becoming a problem for them personally.

      • ict

        If I am not mistaken, our fellow Celts to the north have as advantage over us. Correct me if I am wrong, but it would seem they have won the (albeit limited)ability to enter the bond market.

        http://www.heraldscotland.com/news/politics/bonds-u-turn-by-treasury-1.1106669

        A sobering, if somewhat depressing thought

    • Juanjo R

      We have another problem – we simply don’t get it. Being truely environmentally friendly means reducing output and consumption. For most people being ‘green’ is the latest (hip) consumption fad…

      Aside from this talk of building powerplants etc there is an easier way to deal with increased energy costs – try to save more of it.

      Its a pity if various goverments ( including when the greens were in ) weren’t such a slave to the construction industry we might at least have had high-spec insulation incorporated in the huge numbers of dwelling built in recent years. But no the level isn’t as good as it should have been.

      Also some proper planning/spatial strategies across the celtic tiger years could have concentrated development where it could be most efficently accessed i.e. with the consequence of the likes of Cavan/Carlow to Dublin daily commuting not being an acceptable norm for average workers in our society.
      Speculation plays a big part there but that comes down to the goivernments lack of interference in all things to do with mortgages or development.

      The stable doors are open and the horse has bolted for this one!

    • abundance,energy rich,immense, waffle. Until i see a coherent plan that adds up, I’m inclined to ignore all this guff about irelands energy resources.

  11. Praetorian

    Libya used to export 1.5 million barrels per day, ranking it 14th in the line of producers; 1.5 million is regarded as a ‘drop in the bucket’ in terms of global oil production.

    Some rightly suggest that current unrest is being used as another excuse by speculators to push oil prices higher. The issue of speculation is the elephant in the room not mentioned in the article (why not?) and is something which has been going on for years (remember the highs around the worst moments of the war in Iraq) and yet people who are fighting and dying in their tens of thousands (10-15000 are reported to have been killed in Libya alone since fighting broke out) for their most basic of human rights and freedoms do get a mention as a contributory factor.

    These same people have long been denied these rights by foreign powers vis—à—vis their ‘favourite Middle Eastern dictators’ and these countries used their preferential access to oil markets to help fuel their own economic ‘growth.

    Whatever the West is supposedly missing out on now because of the inconvenient desire for human liberty, it has surely reaped many times over the last 90 years but then these human factors are rarely tapped into the commodity speculation screens or appear on the end of year reports in investment houses (only in terms possibly of how these ‘incidents’ negatively impacted the bottom line).

    • Deco

      I believe that Libya has high reserve exploration potential.

      Gordon Brown must have thought so, considering how he let the Lockerbie suspect go free.

      • Praetorian

        And the issue of speculation driving oil prices as opposed to people fighting for their human rights denied to them by the oil consuming West which likes to talk a great game about freedom?

        The programme below is quite excellent (we don’t come close to anything like this in Ireland unless you think exposing the working poor making a few bob on the side is earth shattering).

        60 Minutes – The Price of Oil – 1/11/09
        http://www.youtube.com/watch?v=NC-JC_u0ENQ

  12. jboyd

    nuclear is not an option for Ireland for a number of reasons, firstly it is eye wateringly expensive and the country is flat broke. Secondly it would have be on a smaller scale due to the size of the Island population and this makes it even more expensive (see Prof Fitzgerald report of energy publiched april for govt). Thirdly no one has yet worked out what to do with the waste- the uk is sitting on 100k tonnes of it and nowhere to put it short of blasting it into space- making your electricity actually cost more than you will ever earn. Fourthly we are watching countries such as Germany bin their nuclear programme for very good reasons and not just pandering to the greens.

    • Colin

      jboyd,
      Relative to current nuclear power plant technology, the claimed benefits for 4th generation reactors include:
      Nuclear waste that lasts a few centuries instead of millennia.
      100-300 times more energy yield from the same amount of nuclear fuel.
      The ability to consume existing nuclear waste in the production of electricity.
      Improved operating safety.

      http://en.wikipedia.org/wiki/Generation_IV_reactor

      • Deco

        The problem with Nuclear is often one of bad human mismanagement, and deliberately pursuing technologies that incidentally were beneficial in the daftest sense – they could produce Plutonium.

        The next economic/technological quantum leak will be concerning the storage of energy. The sooner it happens the better.

  13. doflynn

    Wind and waves, that’s the way we should be going; what we’re getting from this government is more wind and piss.

    • Deco

      I am begining to wonder if the ESB, Eigrid ( a quango who cannot manage the national grid properly) and ESB unions have a powerful influence on policy in this regard.

      To connect a renewable energy project to the grid costs a fortune in this country. It would be interesting to comapre the costs in Ireland and costs in countries like Germany and Spain, which are actively encouraging more usage of renewables, and less dependence on carbon based imports.

  14. Black GOLD

    We have loads of it off the West Coast and had we invested €100bn as we seem to be throwing away to the Bondi Bankers we would be the richest nation on the planet .Think about it ….we would have Sheik Deco and King Abdula McClure……and no sand anywhere .

    • Do you have numbers John?

      How much oil and gas?
      Cost of extraction?
      Tax take?

      Thanks

      • Colin

        You might as well be asking for the tomorrow’s Lotto numbers, then again, they say he’s good at predicting things.

      • Juanjo R

        1) Regarding how much oil and gas. According to the government in 2007 approximately 130 billion barrels of oil and 50 trillion cubic feet of gas.

        ( from Indiemedia 2007 )

        “The majority of these ( Irish ) reserves are understood to be located in the Atlantic Ridge, a geological structure running parallel with the west coast of Ireland and part of the same geological formation as the North Sea reserves.

        The fact that the Irish reserves are on this geological formation bodes well for their future development. The success of the Norwegian, Danish, Dutch and British fields at the other end of the structure is well documented. Closer to home, fields on the same structure such as Dunquin, which is estimated to contain 25 trillion cubic meters of gas and over 4,100 million barrels of oil, all increase the likelihood that the undeveloped reserves will be both technically and economically recoverable.

        A recently published government report shows potential reserves of 130 billion barrels of oil and 50 trillion cubic feet of gas. Given Ireland’s geographic location, there is significant scope for these reserves to be exported. Subject to the construction of suitable loading facilities, the oil can be relatively easily exported by tanker to anywhere in the world. The existing gas interconnection capacity with the UK could easily be reversed through the construction of new compression facilities, creating scope to export gas to the UK or even Continental Europe. Construction of LNG export facilities is also a possibility.”

        and in summary

        “If the new Atlantic Ridge reserves can be developed in a timely, cost-effective and streamlined manner, significant scope exists to transform the Irish energy sector and create a massive injection to the Irish economy.”

        2) Cost of extraction. As long as the extraction and delievery cost – which depends on the location/difficultly of exploitation level of each field is significantly less than the selling price of oil/gas( which is high for both and will probably go up ) then we are on a winner.

        3)Tax take – well this depends on a government taxation policies and I’d be hoping that an irish government would be capable of behaving in a protective way and exploiting such reserves for the Irish people – say along the lines of Petrobras in Brazil – as opposed to giving into international corporate interests as we are currently. Irish tax rate is 25% on profits AFTER the compaies have ecovered their costs. The UK taxes at 50% and Norway at 78%.

        • Malcolm McClure

          Juanjo R: of course these are all pie in the sky estimates, but you might as well try to be accurate. Pat Rabbitte, on 5th April 2011 gave latest estimates to be 6.5 billion barrels of oil and 20 trillion cubic feet of gas.
          http://debates.oireachtas.ie/dail/2011/04/05/00169.asp
          There are several other inaccuracies in your quote from Indiemedia 2007 which I’ll ignore.
          Oil reserves cannot be logged as such until several wells have been drilled and an exhaustive study of the evidence has taken place. Thus ‘potential reserves’ is an oxymoron. The Department of Petroleum Affairs do not actually use a crystal ball to arrive at these figures but their methods are not much better, although they offer to sell a report substantiating their estimates for €25,000. Needless to say, there are few buyers.

          • Thanks for posting helpful answers to my question Juanjo and Malcolm

            In web speak I derived much value from your answers

            I agree with Malcolm and reckon it is more likely that they don’t have a clue how much oil and gas is down there. Malcolm you are claiming there are inaccuracies in Juanjo’s answer but don’t mention what they are

            They might be important so please elaborate if you have the time thanks

            I am currently under the impression that the Irish govt has signed away most of the rights to these fields and that any private companies involved in the venture will take a profit while paying next to zero tax. This doesn’t sound right however and I would like someone to clarify

          • Malcolm McClure

            Pauldiv: A wise government won’t even look cross-eyed at a golden goose until it starts laying golden eggs. However, the Atlantic shelf is an ugly duckling. Wow, is it ugly. It’s ugly as if it has fallen off an ugly tree and hit all the branches on the way down, then landed in a warm and soft pile of shit called Bellinaboy.

          • Juanjo R

            Malcolm – go take a running jump. You are clearly being a contrarian and a crank for the sake of it. You cherry-picked your comments from your quoted Dail Q&A session and quoted them way out of context!

            There are no unreasonable comments in the indiemedia piece – nor did I alter it as you seem to be hinting.

            What you really wish to play with to create ambiguity is ‘proven’ vs ‘unproven’ reserves. The simple truth is 1) we have sizeable ‘proven’ reserves, which to date have not been expoited for a number of reasons ( e.g. because it was uneconomic to do so with low prices ) and 2) we have potentially much larger ‘unproven’ reserves because the sea area is relatively UNEXPLORED.

            The Q&A link by Boyd Barrett / Rabitte backs up MY EARLIER POINTS not yours. Rabitte clearly says the ‘proven’ conservative figure starts at the above and the ‘unproven’ figure will likely add to that. He says the report is for sale TO INDUSTRY i.e. those who can afford to buy it at 25K a pop – not you or me – and it doesn’t confirm your comment that nobody has bought it.

            There is nothing oxmoron-ish about the phrase ‘potential reserves’.

            ‘Potential Reserves’ Definition – From Iowa State University ( http://www2.econ.iastate.edu/classes/econ380/zhao/ch5.pdf )

            “2. DEFINITION: Potential Reserves refers the relationship between a resource’s market price and the amount of a resource that can be profitably extracted at that price. It is a function. The higher the price, the greater the potential reserves.”

            Australia for example has huge proven reserves of gas but no huge market to sell it to so unless liquification technology and facilities are invested in both there and in target markets ( China for example ) and they can actually get to such a market there well until then – its all just ‘potential’ reserves. Its normal language Malcolm.

          • Malcolm McClure

            Juanjo R: You fondly seem to think that you can teach your granny how to suck eggs. I’d suggest that you go away and learn some relevant science and economics; then perhaps then we can have a constructive discussion about how exploration and development decisions are made in the real world.

          • Juanjo R

            Ha ha Malcolm! get a life would you? honestly hanging around internet forums to insult those you would contest a point with you? Are you so rude to people in day to day life? Perhaps thats why you are here at 1AM with nothing better to do than to insult me?

            I hold an honours degree that says ‘Bachelor of Science’ on it. Would you like to send you a copy of it? And I have 10 years of working experience in that area which is heavily interalted to environmental concerns being spoke of here so the machinations of the ‘real’ world are no huge mystery to me.

            As for economics well I guess we have all being getting a lesson in that the last few years. But Klein & Stiglitz are probably my favourite authors on the topic…although Mastering Econmics ( McMillian ) by Jac Harvey is currently on my coffee table.

            That enough for you?

          • Malcolm McClure

            Juanjo R: I happened to be up celebrating Rory’s win at the Open when your email arrived advising me to ‘take a running jump’. I regret that you seem determined to reduce a serious matter to the level of a willy-waggling contest. Suffice it to say that I have been an in-house advisor on exactly these matters to the National Oil Companies of three separate OPEC member states. I think an apology is due.

            ‘Quien quiera saber, que compre viejo’.

        • Juanjo R

          Viejo, no voy a responder a alguien que en su vida viver solo para joder a la otra gente. En mi opinion eres un hombre sin verguenza y dignidad y entonces eres mucho mas pobre por eso.

    • BrianC

      I reckon give our stupidity in past behaviour we would start buying sand to make nice sand castles to look the part and then we would start selling these sand castles to each other to create another bubble.

      • paulpr

        Juanjo R -Australia has huge reserves of gas of the northwest coast & has LNG plants in place at Karratha. Two more are due to be built & they mostly supply Japan which is trying to make up for the lost supply from their nuclear power plants.
        Interestingly, Shell are proposing to build a floating LNG platform which will supposedly be able to withstand a category 5 cyclone. Funny how they couldn’t do that off the west coast of Ireland because our weather was too bad.

        I suppose the question most people will ask about our supposed reserves is, if they exist to the extent they’re supposed to exist, why aren’t companies falling over themselves for drilling rights? Before anybody pipes in with the weather, how can it be any worse than drilling in cyclone/hurricane belts or off the west coast of Greenland?
        Any answers?

        • Juanjo R

          No, I don’t have all the answers. I’ll give you my best shot.

          Also thanks for the Australian info I had read about it many years ago and LNG was being mooted for there in the piece. So they are exploiting it now which is good for them I guess.

          Regarding Irish drilling rights…

          From what I know easy resources are exploited first by oil and gas companies ( read the middle east ) as prices dictate what is to be exploited by that to an extent in so much as difficult to exploit resources are priced out of the market. Do you get me? As easy sources run dry and as prices rise due to consumption/demand difficult to exploit reserves become economical. I would guess this is it?

          Also these companies have never been more profitable so maybe its not a priority just now for them.

          • Malcolm McClure

            Juanjo R: Real oil economists compare opportunities on the basis of a calculation that goes something like this:

            (Discounted NPV investment cost of installations required to deliver oil to market allowing for cost recovery against tax) per (sustainable production rate in barrels per day averaged over say 10 years.)

            Oil in place times recovery factor (ie what you think of as reserves) only comes into the matter insofar as the material balance calculation needs to vindicate the sustained production rate envisaged.

          • Juanjo R

            Sorry – this is different in what I said in what way?

            It will cost more money to exploit irish reserves ( or canadian tar sands or alaskan oil fields or australian gas fields ) due to location and general difficultly and this means these ‘difficult to exploit’ resources will be left to last after all the easy ( therefore cheap ) to exploit resources – i.e. when oil/gas prices look to be permanently high and the capital cost can be extracted back.

            I think profit and loss accounting is not restricted to REAL oil economists – its pretty f***ing basic you pompous t**t.

  15. doflynn

    Made a lot of enquiries some time ago about installing a domestic wind-turbine – it’s about the only form or renewable energy for which there is no grant. Light and solar panels, from which we could get least value at the time of greatest need, the winter, grants galore; wind-turbine, from which we would get greatest value at the time of greatest need, winter, no grant.
    Plugging into national grid, large obstacles; remuneration for excess produced by domestic turbines, minimal, lowest in Europe by a street. And all this when it was a ‘Green’ Minister at the wheel.
    The ESB, Airticity/Eirtricity, they’re the big boys, it’s their field and they’re not for sharing.

    • Deco

      Well. let’s see. In Ireland the authorities will give you a grant to install a solar panel, but not a wind power generator – even though it is fairly obvious which oen is ore suited to take advantage of the energy resources that exist in the Irish climate.

      This is typical of the way “assistance” is organized in this cou ntry to minimize competition for the vested interests. It is sickening.

      In particular I cannot understand why coastal towns of scale, with suitable geographical features like Dundalk, Wexford or Sligo do not have localized wave electric power generation facilities.

      • Once again where are you going to put these things.
        The people of Sligo can’t even agree on where to build a simple bridge and they have been fighting over the matter for years.

  16. Three things overlooked;

    1. Carbon is not bad, CO2 is a life giving gas, if there were more of it in the atmosphere we’d have more plant growth and less starvation, in theory presumming it was distributed fairly.

    2. Wind energy is highly inefficient, there is NO-WAY wind can replace coal/gas/oil, the amount of energy stored in these minerals is staggering, think of all the plants/trees etc. that went into the creation of oil.

    3. Germany has said it will stop nuclear energy, this inevitably means increased prices for us all!!!!

    • Wind can’t deliver our energy needs
      Carbon is dirty
      Nuclear is a nightmare

      Catch 22

    • Juanjo R

      Josey – CO2 is lovely in small doses – its the ramping up of the carbon cycle and to paraphase Paul the toxic side products in its production we have to watch out for.

      Paul – we only NEED enough energy to live. Everything is needless consumerism and keeping the whole capitalism game of ‘endless growth’ going which is an impossiblity in on a planet of finite resources.

      To you both I’ll say one thing (again here) – saving lots more energy is the easiest way to go on all of this.

      • Thanks for the feedback. Someone who can hold a conversation without sounding like some teenager with a donut stuck in his mouth makes a change. I feel that in my case you are preaching to the converted Juanjo as you ain’t telling me anything I don’t know already

        “We only need enough” – exactly Juanjo. That is a maxim I apply to all areas of my life including education, knowledge, pleasure, food, respect, love etc. I am sure I don’t need to explain this basic philosophy because it is so simple that it doesn’t need explaining

        We all need to reduce our energy consumption and stop buying useless stuff we don’t need:

        Ford Fiesta instead of a Muscle Car
        Used cars not a new ones
        Ingredients instead of fancy pre-packed food

        Stop buying fashionable products with short product life cycles – mobiles, computers, clothes etc

        Get a few extra years out of our computers by powering them with Free and Open Source Software such as Linux instead of being taken in with the glitzy multimedia marketing campaigns spewed out by the likes of Apple and Microsoft. Be sensible and realise you don’t need this shit which is designed to make you and your computer hardware obsolete

        Austerity is changing everyone’s thinking on the energy problem because utility bills are continuing to rise, and will keep rising, while incomes continue to fall. A lot of people are learning that that huge house which costs a fortune to heat is not such a great idea after all and that it would have been smarter to house the family in a smaller and more homely abode

        Anyone who is thinking of engineering some type of system for turning off lights when a room becomes vacant after 5 mins or will automatically turn off electrical appliances sitting on standby might be in a position to benefit himself and society. We need useful, practical, money saving products and not shit products we don’t need

        People are being forced to consume less and that is a good thing but vulnerable people are suffering because the cost of heating their homes is out of proportion to their incomes. If we learn to consume less energy then maybe heating fuel would settle at a level where everyone can afford this most basic of human needs

        A lecturer in Sligo IT laughed at me 7 years ago when I suggested automatically shutting off the computers in the teaching labs after 10pm. ‘Oh You Can’t do that!’ was the answer and it was then I realised how, for all the glitz and glamour of the boom, this country had fallen fast asleep and had become arrogant beyond belief. This is no point in even talking to someone who doesn’t want to hear

        • Juanjo R

          +1

          Can I recommend a book for you or anyone interested

          ‘easy eco auditing’ by Donnachadh Maccarty – its in libraries/book stores….its not perfect but it is a mine of information and very practical…thumbs up!

  17. malone

    David

    Are you getting so hard up for money that you have to appear in a advertisment for Bulmers Cider ?

    No hope for the rest of us then !

    • @malone

      Have you so much money that you would refuse that offer ?

      • malone

        Hello John

        I dont actually but if I was very hard up I still wouldnt be part of such a advertisement.

        Being part of an industry that makes huge money out of giving people addictions and being a major cause of road accidents , anti social behaviour and a lot more problems , no thanks

        do you not have any principles at all or does it not matter to you how you earn your money ?

  18. adamabyss

    Nem, nem soha!

  19. Praetorian

    People under the age of 50 will not get a state pension until they are at least 68, under government changes.
    http://www.independent.ie/national-news/anger-in-dail-as-pension-bill-raises-age-to-68-2677473.html

    Affordable housing scheme scrapped.
    http://www.independent.ie/national-news/affordable-housing-scheme-axed-2676463.html

    Yeah, Labour are making a real difference! WTF!

  20. adamabyss

    Hello,

    This forum is in danger of going the way of newscientist or youtube or countless other (mostly American I notice) forums/blogs/etc. where participants take potshots at each other and trade insults.

    That’s a shame as we have avoided this sort of thing (mostly) here up to now. I suspect some posters are understandably suffering from ‘battle fatigue’ and would be as well advised to take a break for a while rather than becoming embroiled in ridiculous spats.

    As for me, I have no interest in getting upset with fellow free-speakers and live by the old expression; ‘water off a duck’s back’.

    Have a good evening,

    Adam.

  21. EIA data show strongly growing global oil production reaching new peaks in excess of those reached in 2005 and 2008, whilst JODI data do not and are more consistent with a continuation of the bumpy plateau reached in 2006. Why is this important? There are a number of issues at stake. First, the EIA data give the impression that high price has fed into an increase in global production capacity whilst the JODI data do not. The EIA data give the impression of strong growth in the global economy feeding into higher demand for and production of oil whilst the JODI data do not. Finally the cause of the divergence raises questions about reporting standards and why these should vary. It is this last point that is the focus of this post.

    http://www.theoildrum.com/node/7965

  22. ict

    David, you ignore the third possibility as to why the Saudis might not be increasing the oil supply, namely that they simply can’t, because they don’t have it.

    Peak oil (rather than speculation) is the real elephant in the room. One may dispute when it will happen, or to what extent it is or is not a factor in the current high price of oil, but few argue that oil is anything other than a finite resource and therefore subject to Hubert’s curve.

    If you take the long view, if oil doesn’t peak in this decade, it will peak in the next, or even in the most optimistic scenario, will do so with certainty, in our childrens’ lifetime.

    Why does this matter? It matters because fossil fuel utilisation over the past two centuries is what industrial capitalism has been based on. This capitalism is, in effect, a meta Ponzi scheme, as evidenced by the reliance of capitalism on continuous growth. We like to think that all the wonders, comforts and advances of the modern world are a result of how clever we are. I fear that the staggering human progress of the past two centuries has been only 5% inspiration and 95% fossil fuel. (Leonardo da Vinci had the concept of an aeroplane but lacked the energy to put it into practice. Arguably all the Wright brothers did was add petrol to a centuries old idea).

    As with any Ponzi scheme, the meta Ponzi scheme which is capitalism will eventually collapse. As it is dependent on an ever increasing supply of cheapish fossil fuels, it will collapse shortly after oil peaks.

  23. paulpr

    Maybe the Saudis like the high price of oil for their domestic issues, but I think the more likely answer to them not increasing production is that they can’t. Remember 2008 when George Bush went on bended knee to the Saudis to get them to increase production because $147 barrels of oil were crippling his economy? The Sauidi’s answer was ‘the world is well supplied’. They blamed the high price on speculation & maybe this was partly true. But then again, flooding the world with an extra 2-5 mbd would have definitely brought the price down-but then the GFC brought the price down anyway.

    Matt Simmons did an excellent book (Twilight in the Desert) which did a field by field analysis of the Saudi oil fields to see where this swing production would come from. His answer —they can’t. He did this in some way by subterfuge, as the Saudis are notorious for not giving out any production rates on a field by field basis, as are most OPEC countries. Last I heard, the super giant Ghawar needed a 50 % water cut just to maintain production at current levels & is expected to decline steeply (as most fields do once the pressure drops)

    Kenneth Deffeyes puts it more succinctly. As the price of oil as a % of GDP rises, the economy will struggle & eventually grind to a halt. That’s when we realise that the amount of energy from renewable energy is miniscule in comparison to fossil fuels & unless the various world institutes get their act together & get nuclear fusion going (could be 30 years) then a low energy future & powerdown is what’s in store for us. My philosophy has always been a 3 pronged approach;
    1. Get a bicycle
    2. Learn how to grow your own vegetables
    3. Don’t stress (it doesn’t help). The world will continue to spin (even without you) & the sun WILL rise in the morning.

  24. Land n Gold

    Re oil price rise and other commodities, no mention of all the fiat $$ printed into circulation to keep the fat cat afloat
    BTW watch this…….
    http://www.tfmetalsreport.com/forum/nigel-farage-greece-could-default-weeks-time-faz-baby/467

  25. dlenny

    Reasons for high petrol prices;
    1. Demand and supply; Very little oil is being pumped out of Africa, the adverse weather in America, Chinese refineries go into maintenance season, Japanese demand is down.

    2. Technical issues; Crude is hovering between two technical thresholds, WTI won’t drop below 94.50 and the wti/Brent spread is widening ergo we are going to sit between 94.50 and 100.00 a barrel for the foreseeable future unless GS say otherwise.

    3. Goldman sachs forecast a rise to 115, guess what crude goes to 115, whatever GS says, the market follows.

  26. Deco

    An interesting overview of Peak Oil from the US perspective.

    http://www.marketoracle.co.uk/Article28696.html

    Key points
    i) politicians do a lot in the “talk space”. Be sceptical about it – the more inspiring it sounds, the more ridiculous it will end up.
    ii) the fundamentals concerning oil supply are awful for the future.
    iii) there is a personnel problem – too few engineers and geologists (to many people going to college to work in the entertainment sector, or the speculation/FIRE economy). [ If any of you are unemployed – you might consider starting a Mechanical engineering course in an regional college, and burshing up on your maths and material science abilities).
    iv) A culture based squarely on lifestyle as the defining attribute of human existence. What James Kunstler calls “happy motoring”. It is completely bankrupt, and long term it is not going to work. The 1000 km round trip pissup in Barcelona is going to become a non runner for Liamy and the lads who want to go on the lash !!! Complete non-runner. So too are apples from chile, cheap bananas, and chicken from Thailand.

    • coldblow

      Re (iv), Bill Bryson (Made in America) says that, even well into the 20th c., the American road system was so primitive that in 1919 the US Army sent a column of trucks from Fort Meade in Maryland to San Fransisco (under the command of a young officer named Dwight D. Eisenhower) just to see if it was possible. It took them 2 months.

  27. Deco

    …and now we have Michael Lowry and his plan to bring “Vegas” to Two Mile Borris. It is like something on a comedy show – except, he is serious.

    http://www.businessinsider.com/the-10-metro-ares-with-the-highest-foreclosure-rates-2011-6#10-merced-california-1

    Just have a look at city number 1, for being the city that has the worst rate of foreclosures.

    that is without asking the question “what has speculation ever done for the Irish economy, or Irish society ? ”

    Lowry, you muppet – we need less speculation, not more.

    • Deco

      The picture on the cover of Phoenix magazine captures the essence of it.

      should we give businessmen linked to Michael Lowry another licence ?

      Considering what came as a result of the last time a licence was granted at Michael Lowry’s behest – the answer is NOOOOOOOO !!!!

  28. Dorothy Jones

    Petrol…driving…hmm
    Does anyone remember the song ‘Driving Away from Home’ by ‘It’s Immaterial’? Well today is the day….just get in the car….put the pedal to the floor….and keep on driving.
    Events have overtaken all rhetoric now it seems. I remember being on a site 11 years ago and noting concrete being poured onto to a metal decking floor which had not been propped up….and screaming at two workers below to RUN… They just escaped as it came crashing down. Today I have the same feeling.
    Good luck with the book festival David, Sian and team. Was in that neck of the woods yesterday to see the Glasthule Opera performance of Mozart’s ‘The Magic Flute’. It was brilliant!

  29. coldblow

    Are these ‘renewables’ just a rip off here?

    I recently got a quote from a local plumber to install a solar panel: 1500 for the panel (30 tubes), less 800 grant, 800+ for a new cylinder and 1400 for installation. Total 4k less 800, ie 3,200.

    I don’t think it’s worth it. I don’t think anything over 2k, everything included, would be worth it. Maybe an extra 500 for novelty value.

    By the way there’s a co. operating out of Meath who are doing mailshots around the country. ‘Er Indoors invited them round for a ‘free estimate’ for solar panels and then wanted to head off for herself to a removal! I insisted she stayed to be educated in the ways of the world.

    This salesman stayed all night. They have a ‘hook’ whereby if you qualify to be chosen as a ‘solar house’ and tell your friends and allow an temporary advertising sign (“I am a sucker”) to be put up in front of your house you get a significant discount. Because our house is on a main road he reckoned he could stick his neck out and award us an extremely rare ‘A’ category (“I hardly give these to anybody”).

    I stuck the course to see what the quote would be (just 20 tubes instead of the 30 I’d been quoted earlier, which we said nothing about). I calculated back from his (highly inflated) forecasted savings that it would be 7k, but he tapped out the sums on his calculator and showed us the result: 7,900. However, this could be reduced by 395 because of our highly-favourable A rating as a ‘solar house’.

    I politely advised him that we wouldn’t wish to advertize ourselves to the world as fools. I asked him what percentage of their customers were ‘solar houses’. (Could it be, say, 100%?) He thought long and hard before replying.

    Would you believe it, he then tapped a few more random digits into his calculator and told us that the best price he could do was 5,900. How’s that! A 2k reduction on the spot and another 2k or more of clear profit still in the bag no doubt.

    This outfit are at it all over Ireland (I since heard about a similar things in Dublin). The idea is clearly to take up so much of your time that you feel it would be rude to disappoint.

    Their ‘material’ contains a picture of a young one with her arms stretched up to heaven, apparently delighted with the fact that the sun’s shining, glad to be alive. In front of her there’s an old geezer also with his hands up in the air and a stupid grin on him. Bainfidh mise an straois díot, a amadán, arsa mise liom féin. But this was unexpected to say the least. (Compare with Vodaphone who only display smiley bonded youngsters who would clearly have been at home in the Moonies or the Children of God.) Turns out the old geezer’s Duncan Stewart.

    By the way, in view of the emergency the Govt. should scrap the NCT. That would be a cost and energy saving for everyone.

    • adamabyss

      Hilarious story!

    • Deco

      This the beahviour that is going on in the sector that the Green Party told us would be the future – “green collar jobs”. Very insightful indeed !!!

      Sounds more like a ponzi-scheme.

      I see Duncan Stewart has not been on Pravda since Eamon Ryan stopped being Minister over Pravda – purely coincidental.

      He can come back if he likes, running a documentary about the benefits of having IBEC and ICTU running the country. In terms of TV documentaries, and being chummy with whoever is in power, that would an idea with “much longer sustainability” (sic)….unless we kick the social partnership process out of existence. (long overdue).

      • Praetorian

        Aren’t the ‘Green party’ still walking around the Dublin mountains admiring the views and encouraging us all to go for a good brisk walk, which ensures we can live long enough to pay off our little corner of the national debt.

        If I get to the pearly gates (which seems highly unlikely) and Dan the Man, Eamon Ryan and the former leader of the Green party, whose name I have thankfully forgotten, are there telling St. Peter that Heaven could be better insulated and would benefit enormously from solar panels, well, I’ll be asking for my money back from this whole ludicrous experience called ‘life’.

        Think I’d prefer a Bulmers and enjoy a good book, Sitglitz or Krugman? Hmmmmmmm, any recommendations David?

    • Colin

      Thanks for that Coldblow, the gombeens have morphed into gomgreens. Could you credit that now for ingenuity? Love your Children of God comment about the boys and girls in vodafone ads, reminds my of an advert inside a bus about 10 years ago, for Ericsson mobiles, and the guy in the poster looked completely stoned, gazing into space with a stupid grin on his face with his phone in his hand.

      What about these fireplace stoves then, the ones advertised on the back of the Saturday Irish Independent TV Guide, claiming to heat 7 radiators, all for just €1,100 or the deluxe one for €1,200? I remember Duncan Stewart cajoling an elderly resident in Ennis about installing one on Pravda, anyone remember this? I’m imagining Duncan in a white robe, with his hair flowing in the wind, surrounded by fluffy clouds and dry ice, the Chieftan of the Gomgreens.

      • coldblow

        To be fair to DS I’m not sure if he went as far as endorsing the use of his mug shot on their material, he might have been too polite to take them up over it. Just guessing. The poor man was in St Stephen’s Green making a programme one day five or six years. He was standing by the edge of the pond and some gurriers pushed him in.

        Yeah, that mobile phone advertising has long intrigued (as well as irritated) me. It doesn’t really tell you much, if anything, but relies on this idea that if you don’t have one you’re out on your own. It’s obviously aimed at the extravert half of the population. There’s absolutely nothing there, just a series of photos about people smiling for no particular reason. It’s a ‘belonging’ thing. An “If you like a lot of chocolate on your biscuit join our Club”/ Maxwell House kind of thing.

        If you look at the Irish Catholic or the Universe, or such, you’ll occasionally see a group photo of ‘young people’ at a youth day, say in Rome or wherever. There’s always a mix of men and women, perhaps in their 20s (but it’s not always easy to place the age), every one has that grin. They’re all together and they are having fun, in a very chaste way. You can bet that at least two of them have a guitar just out of camera shot. They’ve been practising in their local folk group and they’re gonna start singing any moment now, once the gentle laughter has died down. You’ll get the same thing in local papers when a minor celebrity visits the local school, especially girls’ schools. A kind of “we’re all the bestest friends” kind of thing. It’ll never last…

      • Juanjo R

        Sorry – ignore the prior comment – i made a mistake or two!

    • Juanjo R

      Tar everyone with the same brush there Coldblow / Deco / Pretorian reinforce your prejudices and ignorance that will help your collective understanding of the whole area! Clap on the back all round there lads! You are all lads aren’t you?

      Mostly I think very little people really ‘get it’ hence why these greenwash frauds can be presented to people.

      One of the big problem with renewable technologies is the only people who can afford the capital investment are people with money to spare and are there

      Coldblow can I ask you a question? why did you think a solar panel was going to benefit you? – to be more clear what question did you FIRST ask that resulted in the hypothetical answer; why I think a solar panel might work in this case!.

      You see i’m wondering if there is a flaw in your logic.

    • Juanjo R

      Tar everyone with the same brush there Coldblow / Deco / Pretorian reinforce your prejudices and ignorance that will help your collective understanding of the whole area! Clap on the back all round there lads! You are all lads aren’t you?

      Mostly I think very little people really ‘get it’ hence why ‘greenwash’ frauds like that second salesman or the greens themselves can be presented to people with apparent credulity and then gotten away with so frequently. Your collective attitude here though doesn’t help. You all just remind me of Statler and Waldorf to be honest ( remember the old guys in the Puppet show? ) – only they were funny.

      One of the big problems with ‘renewable’ technologies is the only people who can afford the capital investment are older, middle class people with money to spare which means the people who have more to gain from all of this finanically if nothing else – the younger and poorer – won’t. Also the older generation in particular don’t ‘get it’. I have seen so many examples of such monied people building needless extensions to their near empty houses ( the family have flown the coup ) at a huge carbon cost to the earth and then ‘greening’ it up with a solar panel or two – and all just because they have money to spare. Environmental morons!

      Coldblow can I ask you a question? why did you think a solar panel was going to benefit you? — to be more clear what question did you FIRST ask that resulted in the following hypothetical answer from yourself; “why I think a solar panel or two might just be the thing for me!”.

      You see – I’m wondering if there is an apparent flaw in your logic.

      • coldblow

        JuangoR

        Let’s see: we are reinforcing our prejudices and ignorance while you ‘get it’? Lucky you. I’m not sure what point you are making but you seem to think I am being anti-environmentalist. Or just cynical? (In which case see my points below about spot lights and advertizing.) At any rate you appear to be comfortable in seizing the high moral ground. If I’ve misunderstood your position (and your post does not make your position clear, whether deliberately or not) you might care to explain.

        I was given the idea of solar panels from the man who serviced our boiler (we’ve just moved into a new house) who said that there was still a grant available for them. It turns out that his son is the plumber who installs them and wants to charge 1,400 odd for 4 days work – our builder thought these were bubble-era rates. (The service engineer himself is employed by the dealers who sell the panel.) I would have stretched to say 2k to 2.5k for this, but I think 4k won’t pay itself back for many years.

        From asking around it seems that the panel, in an Irish climate, would more or less give you tepid to warmish water at best. Perhaps in the case of a new house, fully insulated, you might get better results as you don’t first have to bring the base temp. up from low to room temp.

        The plumber who gave the first quote then pointed out that the water would need to be kept at 60 deg. as otherwise it could encourage legionnaire’s disease. So when the temp. drops the oil system kicks in to maintain the temp. How much would it need to do this? I asked. The answer: minimal. I find this hard to believe.

        We’ve asked for quotes from another plumber, who I don’t think is registered, so there’d be no grant available. I’d be interested to know if his price is lower than the first man even taking into account the 800 euro grant. (I’ve heard that when the grant for cattle pens was withdrawn the cost of these fell by the same amount.)

        Also, I have not got clear answers from anyone as to how long these tubes last and how expensive they are to replace.

        So in the case of solar energy in a non-AA rated house the benefits would seem to be very low.

        There is another aspect, which appeals to my wife, which is that you will have constant hot water fromt eh tank. That would be convenient but I think it’s probably a luxury these days. (I think I said ‘novelty’ in my original post when I should have said ‘convenience’.) I had it in my parents’ hous in England where I grew up but I don’t know if this is the norm now or not. When we need hot water we boil it in a kettle or switch on the immersion. So just to spell it out, in case you want to put another interpretation on it, solar panels might only be cost-efficient where you want 24 hour hot running water.

        The insulated cylinders work really well, as I found out from the house we’d been renting for the last couple of years or so, but again I’d have to think hard about forking out 800-900 euros to get it installed, plus whatever the rate is for putting it in. Again, it might be worth the expense if we wanted to keep the cylinder hot around the clock.

        I mentioned the salesman and his company to warn people of the hard-sell techniques. Obviously this plays on people’s naivety and ignorance, but I assumed that readers of this blog would not need to be told that explicitly. (You didn’t need to be told this, of course, as you already ‘get it’.) Actually, it doesn’t play on their ignorance so much as on their sense of decency and a reluctance to disappoint a nice man who has driven across the country to their home and spent 2 hours educating them on the environment and the benefits of his company’s system.

        A final point I’d like to make (my remarks about advertising technique are relevant) is that, in my opinion, perhaps the main selling weapon is novelty. My 10 year old car has got wing mirrors which you can adjust from the inside – this was one of its main selling points when I bought it, although I can assure you that as a ‘feature’ it is quite useless. I wonder if solar panels are being sold largely on the strength of their novelty value.

        I dislike novelty value as it implies that value for money is not there if you aren’t interested in following trends. (My wife put in some spotlights into our old house in Dublin. My initial reaction was similar to that of those Muppets you refer to (I think – I never found the show funny) but was based on reasonable expectations grounded in experience and which were subsequently borne out). From what little understanding I have of psychology, advertising (and opinion-forming in general, eg ‘you can’t go wrong buying property’) is aimed mainly at the extraverted half of the population, who are outward-focussed and always looking for external stimulation, yes right from when they are babies. But I won’t go into all that again here. Where they lead the more cautious part of the population follows. The advertizers seem to have an intuitive feel for the dynamic at work.

        Our heating engineer told me that of all the energy-saving technology the solar panels were the only ones that really were worthwhile. Maybe he’s right. So, my first question in my original post is from that perspective. It’s partly rhetorical but also looking for feedback.

        I’d be more interested in hearing practical feedback (for example, I remember some posters here a good while back referring to the fact that Vat on certain renewable energy schemes cancelled out the effect of any grant-aid) than being accused of some failing or other in my point of view.

        I’ve told you where I’m coming from. Perhaps you might explain your own comments.

        • coldblow

          2 other things:

          “renewables” – I used the inverted commas as it’s an expression you hear (like “the Royals”) and not one I like to use myself, although it is quicker to type out.

          “You are all lads aren’t you?” What can I say? I’d really love to know, comprehensively, your reasons (and the underlying assumptions) for writing that. It would help me understand more about the world, and about modern culture in general. Both of these baffle me sometimes.

          • Juanjo R

            Coldblow,

            Thanks for the detailed response and you will be glad to know I’m retreating off he higher moral ground here!.

            Seriously i’ll make a reply to you later, I do promise, I have to go through what you said up above but from first glance a lot of seems to be bang on the nail.

            True I did percieve you to be more ant-environmentalist than just a wary perceptive consumer so my apologies for that mistake.

            Until later.

          • coldblow

            JuangoR

            That’s me, always misunderstood! Take your time going through it – I don’t think you’ll find anything to cause alarm.

            I placed a 5p bet with a school friend in the 70s that one of us would be dead by 1998 (or was it 1989) as a result of pollution but I lost that bet. I’ll get over it. The friend went to become an election agent for what was then called the Ecology Party.

            Seriously though I do think the GP/Amish were worse than useless in their last outing. There, that’s just to throw you some ammunition in case you’re running low…

            I’m heading back up to the moral high ground myself in a minute with some solar panels…

        • Garry

          hi, just for information…. I brought a system in from the UK 3 years ago… only got around to installing it this winter though.

          The insulated tank and a 30 tube panel works well… Ive been suprised with how well its working, there is no good data around on what you can expect but i haven’t switched on the immersion in months.
          That said the roof is facing almost due south, there are no obstacles to block sunlight etc. the only piece of advice I would give for a new house is to wait till the winter, watch the sun hitting the roof in the morning and evening, and make sure it is not being blocked by shadows … check it out when the sun is lower at that time of year.
          Just now, i checked the temp, the water in the tank is at 60 degrees (and 57 degrees at the solar panel). its misty outside all afternoon so thats just stored energy from yesterday and this morning. but assuming there a few hours sun some time tomorrow or even the next day, there’ll be enough hot water till then..

          Plumbing stuff is very expensive particularly in Ireland so even if you get the panel and tank, theres stainless pipe, pumps, the anti freeze etc to buy it… And if youre hiring a plumber to do it, make sure they have done one before…

          ebay… google … have a search… you’ll quickly see what the typical costs are. (Im well out of date on that) the uk has plenty of suppliers of kits and individual bits.

          Of all the energy saving technology … the one you really need is insulation. Ive no idea on the external insulation.
          But drylining with insulated plasterboard is a major project but its transformed the house (which was an icebox with solid concrete walls)… but it is a major major project…. but if youve an old house spend the money there….

          I bypassed the official way of doing things in favour of bring the stuff in from the UK, happy enough with the result. But, be aware the NSAI have set standards for Irish plumbing fittings that are slightly different to the British and EU standards.

          The system uses the glass vacuum tubes with copper ends. It was really great to see it glistening with frost on a sunny day last winter but still pushing some heat into the tank. There are other systems which i think are plastic which i have been told are rubbish…. But there is so little real data available, youre taking a gamble

          It shouldnt be beyond the wit of the SEI to stick a panel on a roof somewhere…. installed under real conditions and publish water temperature, usage etc in real time on the internet… so people can get an idea of how these things perform under Irish conditions. I know when I started looking I couldn’t find any real data from Irish sources, just lots of pictures of smug grinning people… delighted with “free hot water for life”.

          Maybe its an irish thing or maybe its the way of the world but the marketing industry has a lot to answer for.

          I havent done any real cost benefit analysis… to be completely honest, it as much of a hobby project and a hedge against the govt robbing savings and future energy costs as anything else…. But I had to admit to being pleasently suprised with the results.

          anyways, hope that helps, garry

          • coldblow

            Thanks, Garry, that’s really useful. I’ll read over your post again and look into it again. I didn’t realize there were plastic and glass tubes out there.

            We are very lucky to have a south facing garden. I think there’s room on the roof on that side.

            We had to have the fibreglass insulation removed from the inside the roof because the rafters are not deep enough and it was stopping the wood from breathing. I was thinking how to lay it on the floor of the attic instead but still have the place for storage and came up with the idea of covering it with a second floor.

            We also have a built on glass conservatory. It’s like a radiator for the rest of the house on a bright day (although cam get hot on a warm one) and I’ll be interested to see what it’s like if we get a rerun of the last 2 winters, in which I will need solar panels on the ar*e of my trousers.

            I understand your point about it being a hedge against loss of savings. That’s probably the main reason we bought when we did, and I’m using up some of the balance of the proceeds on the sale of our house in Dublin in 2008 on things like this that will ensure a future benefit.

          • Juanjo R

            great to get feedback straight from the horses mouth good piece garry!

    • doflynn

      No matter how noble or well-intentioned the proposal, somewhere out there lives a paddy willing to take it, twist it, and screw you on it, guys who would rather make a dishonest shilling than an honest pound – sad fact of our lives here. Solar panels? Now there was one ripe for plucking!

    • Juanjo R

      Coldblow

      Reply part 1;

      Can I recommend two sites for you which would be good sources of clear info for you. There is a minimal green wash/ and sales pitch involved.

      http://www.constructireland.ie/

      This is a eco-construction journal which doesn’t come directly from a major industry source such as the CIF so minimal propaganda. What is great about it is every project that is written about has lots of detailed information is freely shared in each and every article ( nearly all editions/articles are on line ) therefore I can’t recommend it enough as a source of in-depth information on eco-bulding here. There is a forum too. Its associated with Cultivate and the bad news is that it is/was a bit of a green party vehicle at times, so that small element of politiking has to be taken with a pinch of salt.

      http://www.easca.ie/

      An organisation for people ( contractors consultants etc ) who are serious eco-building nerds. They are almost evangelical in their zest for better eco-building. Its associated with cultivate too.

      Reply part 2 to follow when I can

  30. Malcolm McClure

    Looks like Merkel and Sarkozy blinked first in their standoff against the ECB.

    Joe Stalin, when told that the Roman Catholic Church had worldwide influence reportedly asked “How many army divisions do they have?”

    Likewise with the ECB. When governments are asked “Where would we be without them?” –they cave in meekly.

    • Juanjo R

      Who lasted the longer there the Catholic church or ‘Joe’ and the Soviet Empire?

      • doflynn

        During Joe’s time (and he died in his bed) there can be no argument about who was on top inside that sordid soviet empire, giving validity to the question and the point.
        Which isn’t to say – before someone else points it out – that there wasn’t a lot that wasn’t sordid in that other empire either.

  31. Four Graphs 1/2

    I was playing with the research tools at the Federal Reserve bank St. Louis. Here some interesting results:

    1. Corporate Profits (after Tax) from Reagan to date

    http://dl.dropbox.com/u/4914840/reagantodate.pd

    2. Corporate Proftis 2007 to date

    http://dl.dropbox.com/u/4914840/2007todate.pdf

  32. Praetorian

    The ‘Titanic’ Republic

    Not a single banker has appeared in court. Not a single politician has been before a parliamentary enquiry into Ireland’s economic and fiscal crisis.

    110,000 families are in danger of having their utilities cut off while ‘Catch me if you can’ Kenny, clearly demonstrating solidarity with continental elites, is pulling a ludicrous €200,000 per annum (plus expenses no doubt).

    Access to the State pension for those under 50 years of age has been increased to 68 (if you can survive the stress of being a member of the working poor, or as some politicians like to euphemistically call it: ‘struggling to get ahead’).

    The Affordable housing scheme has been ended with barely a mention in public, a member of Fianna Fail has been appointed the head of the parliament’s most important Committee i.e. the Public Accounts Committee, a property tax and water charges will be introduced.

    Mortgage interest rates have been increased, the bailout of the banks is heading for €150 billion, national debt is pushing €250 billion, while the overall political system is characterised by cronyism, nepotism and corruption (family members of sitting politicians are once again being appointed to inside jobs).

    A recent poll has revealed that 73% of people in the North of Ireland would prefer to remain in the British Union, can you blame them? And to cap it all off, the weather is beyond crap!

    A failed 100 days for the government complete with Failing Republic, we are in the midst of phase II, phase III of the crisis is going to get very ugly especially if the government continues along their current course.

    .

  33. It is a coincidence that Max Keiser and David are talking about oil in the same week during the huge full moon. Hopefully John Allen will explain this better and help us put things in universal context

    Should the price of oil be going down?

    Of course not – oil is a form of currency and is worth far more than silly paper money. Why do you think there are so many wars going on – there will be even more wars in the future when everyone is fighting over oil or for the fear of a lack of it

    If I do work for someone I will happily accept a months worth of coal or heating oil over paper money any day. Three years ago I would not have considered it but hey it just shows you that Austerity can change your thinking and behaviour. Which naturally leads to the question ‘is there merit in austerity’

    Forget the trends of the last 30 years. Theories mean nothing now because people are desperate and it is their future behaviour that will determine future trends. Future behaviour will change or else it will need to be changed for us if we fail to waken up

    5% of the world’s population use 25% of the oil?
    The Americans have learned nothing because the major energy companies still only spend a tiny fraction of their profits in the research and development of alternative forms of energy

    They are arrogant and truly believe that the world owes them a living by handing over all it’s oil and other resources. They are arrogant because their actions and behaviour says so. Don’t just take my word for it

    Anyway why would an oil company want an alternative to oil? Shareholders demand profits and would be demanding the heads of anyone possessed of silly ideas like erm, being altruistic and wishing to save the planet and mankind by using less oil and stopping all these damn wars

    For all you know your pension fund might have shares in an oil company and this leaves you with a moral dilemma

    “But this time Saudi Arabia has not replaced Libya’s lost oil production. Why the change in Saudi policy?”

    In his report yesterday (Sky Channel 512) Max Keiser was adamant that we are now at peak oil and that the Saudis are bullshitting everyone about the amount of oil they have under the ground. Lying through their teeth was the expression used. The truth is so awful that no-one wants to face it so let’s all just play pretend

    His co-presenter Stacey Herbert reported that we are now heading into a Depression and that the heads of the banking institutions in Europe and the US are at breaking point because they do not have a clue what is going on or what action is needed to save the economy

    “Saudi Arabia, a family dynasty”
    Correction. It is a despicable Tyranny that was tolerated by us all for years because it suited us to avoid having to do any hard thinking

    The Saudi princes are shitting themselves while leaders across Europe and America still maintain a smug sense of security. That is why Saudi people are being lavished with extra benefits while Irish people are swallowing the cold salty porridge of Austerity

    The bottom line here is that if you don’t demand you don’t get. Forget trying to be a nice guy when dealing with bankers and corporate parasites who are acting like perpetual welfare junkies. Their behaviour is telling us that we have no choice but to remove them from our lives through peaceful protest. A one month national rent and mortgage strike would quickly sober them up and bring them to their senses

    We have our own hard choices to face internally while the madness rages on just outside the range of our peripheral vision

    Otherwise we just kneel down and humbly accept our masters will just like we have always done. The fighting Irish

    Good on the Arab people. They deserve to be free and if we have to use less oil then so be it

  34. Praetorian

    One way to clear the crowded Irish Presidential race: simply tell the candidates that the new post pays the average industrial wage, that will trim it down overnight.

    The candidates were asked what one thing they would do for the country, and quite frankly, their answers were uninspiring, ranging for yet another conversation with the people to re-creating the Republic (the Presidency has almost no political powers apart from conveying the Dail in certain circumstances or having legislation reviewed), neither of which was exercised for NAMA or the bailout, the single worst decision in the history of the State.

    Wage levels in Ireland, at the higher levels, are obscene and buffer decision-makers and the power elite, while those on the average industrial wage or less are being hammered to pay for the madness.

    • Praetorian

      “You can always judge the character of a person by the way they treat someone who can do nothing for them”.

  35. vincent

    The most important video you’ll ever see http://www.youtube.com/watch?v=F-QA2rkpBSY

    • BrianC

      Dr.Bartlett (professor of physics) is a very brilliant man. I posted details about him before. He too will tell you that frational reserve banking does not work because the arithmetic that it is based on is flawed.

      If of interest you should review Damon Vrabel Debunking Money http://www.csper.org and Chris Martenson how the inability to address debt is going to crush our socioenvironmentaleconomic system http://www.chrismartenson.com. Both brilliant men gifted in being able to distil the comlex to simple laymans language.

      Just look at the way the upper part of the pyramid is trying to hold onto the collapsing structure of the prevailing pyramid of debt. They expect the masses to put up and shut up.They have had enough the common man in the street wants default. Default is imminent and they are struggling to rationalise a wording to permit default.

      The Saudis are on a looser you can only pay off the public for so long and then they must be given what they want. And for them in the Middle East they want true democracy where they believe they will be rewarded with equal access to opportunity. Democracy is only an illusion. In the mean time we must pay the price and the world economies are crumbling under the pressure of debt which is in the control of some few thousand people who when you really get down to it don’t know their ass from their elbow. The economic crisis of population growth at the size of Germany every year is causing lethal pressure. Bartlett discusses this in detail. Eric Lerner is right the answer is to resolve the cost of engergy and only fusion technology can deliver the solution. The spend billion upon billions on looking for the smallest element know to man yet can’t even spend a few million on cracking the fusion problem left to the few lunatics trying to do it in their garages.

      • paulpr

        I think there are a few fusion research institutes scattered around the world, & they get a fair bit of funding-not on the level of CERN, but still. Ask any of the people involved how long it will be before fusion energy is actually on the market & they’ll mostly say 20-30 years. A convenient time frame-they’ll probably be retired by then. Then again, how can you put a time frame on when something will be invented-maybe it never will.

        The absurdity of the situation is that if Bush Jnr, instead of spending close to 1 trillion & wasting the lives of thousands of soldiers to get a few more years of oil security from Iraq, had instead spent that money on a proper world class institute for fusion. At a stroke they could have got themselves out of their endless resource wars. A tragedy for a generation.

  36. mister_jinks

    On the question of peak oil, I’d like to share some facts.

    * The rate of discovery of new reserves has been in a steady decline since the mid 1960s (http://www.planetforlife.com/oilcrisis/oilsituation.html) and the rate of consumption overtook the rate of discovery in the 1980s.
    * Most oil producing countries have already peaked (http://www.theoildrum.com/node/5576).
    * The global economy is heavily dependent on this single exhaustible commodity. Transportation is almost exclusively dependent on oil and there are many many products that are derived from oil (http://www.ranken-energy.com/Products%20from%20Petroleum.htm)
    * Some are of the opinion that the current global economic difficulties were sparked by a historic spike in oil prices – $145 July 2008.
    * The massive population surge of the last century has been facilitated by this abundant, practical and energy dense commodity through mechanization and the introduction of artificial pesticides and fertilisers which are in fact produced from natural gas which is of course an exhaustible fossil fuel fuel also.

    * Some believe that we are already post peak and that the peak occured 2005/2006.
    * 90% of Ireland’s energy needs are served by fossil fuels with oil at over 50$%

    The performance of a nation’s economy is measured by its growth as is the performance of the world economy as a whole. Growth is of course an exponential function and anything that grows exponentially grows very quickly over time. A modest annual growth rate of 3% means a doubling every 23 years. So, if an economy grows at a rate of 3% for example it will require double the resources every 23 years to maintain growth. And there is the crunch. A finite supply of any resource cannot be made to grow at an exponential rate to keep up with exponentially growing demand. Sooner or later, the rate of extraction of that resource will begin to go into decline i.e. it passes its peak of production. This may already have happened as regards oil.

    Oil is a complicated subject. I could go on, but I’m no expert on the subject really. However, it is undeniable that a peak in global production will eventually or has already been reached. If it hasn’t already peaked I personally believe that it is imminent and will certainly occur in the next 10 years. The implications of this are profound. Shortages, resource wars, further economic collapse. etc.

    So, rather than focusing on growth, I believe that the focus should be on sustainability and the preparation for an energy impoverished future.

    Whenever I hear a politician talking of a return to economic growth I wonder.

    Sustainable growth – No such thing.

    Please take a look at the following. I reckon that this guy is on the money.

    http://www.chrismartenson.com/crashcourse

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