So I better get back to blogging a bit more.
One of the things I thought I would do would be to share some goals I have for the future, and then as things progress we can revisit things and see how they go.
So before I start its worth remembering that I had some predictions, back in May, and we can already revisit them and see how they went.
Cubs did not win the world series. The Cubs did however win the NL central division and have the best record in the National League. They therefore made it to the playoffs (the last 8 teams) but got smacked around by the Dodgers.
The election is on Tuesday (today is the Saturday night before the big Tuesday). All indications are the Obama will win as I predicted but its by no means a slam dunk. In fact after all this I wouldnt be surprised if McCain pulls off an upset. The problem with an upset is that it will.... Upset a lot of people. That could get interesting.
Prices did fall (as predicted) but they fell a lot further than I predicted. I guess I wasnt counting on a recession to cease all global growth. So far the IEA report due in November is already leaking all over the place - some people are being bullish about it, other bearish so we will need to wait and see what it really says. My gut tells me that the economy will start bottoming soon, and once it starts climbing again we will see a return to the staircase we were on with oil prices. Its entirely possible that by 2010 we will see the dizzy numbers again, if the economy holds next time it could get really ugly so Im still counting on energy being expensive in a long term outlook.
SO anyway back to the goals.
1) Car
I do want to "finish" the mustang. Finished will look like this: Front disk brakes, front suspension upgraded with new perches, strut rods and bump steer correction. Rear end with a 3.55 or steeper gear, traction aid. Decent cylinder heads, engine making about 400hp. New mufflers - bit more tone. Bodywork, new paint, ducktail trunklid, maybe some side scoops, fiberglass hood.
Thats all going to take a lot of time and money. It might not ever come together so lets talk about more important stuff.
2) Bike
I do need to rejet, and Id also like to play with some headlight options and carbon fiber. but the jet kit is the top priority.
3) vacations
I REALLY like showing Tara around in Britain. We really want to do Scotland, but we also like to revisit some of the places we have been before. Id like to show her St Davids.
We also really badly want to go to Florence, Italy.
Ive always wanted to go out West, Nevada, California, National parks. Maybe travel in an RV. Ive also wanted to run down the 101 in a convertable or maybe on a bike.
Id like to do a real skiing trip, with real mountains.
Oh yes, Ive always wanted to see the Reno Air races too.
4) Sports/experiences.
Id really like to do some horseriding with Tara and Sophia. Actually if we get on with that OK, we could combine that with the trip out west and do some horse/camping. I like the idea of that - rather like the canoe trip I took years ago.
I still want to get my Bow straightened out. Its not right still, but I need to get it set up for less draw (and more weight). Maybe try a little hunting.
I think im ready for some firearms, mostly because im worried about what the future might bring. But its going to take time to get the right stuff together. So im thinking about a .45 ACP, but probably not a 1911, probably something cheaper in a polymer frame (glock or a springfield xD). I do want a shotgun though, and of course a rifle. Im trying to pick a rifle caliber that functions well as a medium game caliber, but is easy to shoot and has cheap and plentyful ammo. I think that means something that can run on 223/5.56 NATO rounds, some AR15s can hunt good.
5) Home.
The home, id like to make the home much more energy efficient. Id like to get a wood stove in the living room so we can use less (none?) gas. Id also like to improve the insulation. Id like to add a back porch that wraps around some. And of course the vegetable garden is a main goal. Perhaps a shed to store the garden tools in to free up space in the garage. Maybe add underfloor heating and tile in the bathroom and put more wood down in the living room.
Maybe be writing these goals out it will breath a little life into them?
Saturday, November 1, 2008
Thursday, October 9, 2008
Back at it again
Wow, its been forever since I posted.
Im trying to find the time, and I need to post more personal stuff with this too, so I may change up the format some to try and squeeze in more family and personal photos and fun.
But seriously the last few months have been a bit of a whirlwind.
I went back to Tasmania in September right after Hurricanes Gustav and Ike hit the Gulf coast and crippled refineries and a few oil platforms. The end result was a gasoline shortage all over the South East that we are only now pulling out of.
Then sometime near the end of September - roughly the same time, the government started making noises about the banks that were failing.
it what is now being coined the "credit crisis" we have discovered that banks are low on cash after making too many loans to all sorts of people that couldnt repay them. Tensions run high (as we head into the final phase of the elections) and finger pointing is everywhere. Some blame the mess on the government (some are blaming democrats for encouraging sub prime loans for decades) others put the blame on the banks, the interest rates (Greenspan and the federal reserve) or the home buyers who drank the banks Kool-aid.
The results are truly frightening, the Dow is falling every day, down from 14,000 a year ago to around 8700 today. Every day so far in October has been a down day. Trillions of dollars have been lost. I dare not look at my 401K portfolio.
The reverberations are being felt in the commodity markets. Oil is falling fast on the speculation that if the economy implodes and a depression sets in there wont be much demand for oil. So here we are feeling what some Peak oilers predicted:
Rapid increase in prices
followed by economic response
Followed down by oil price - which doesnt seem like a good deal since no-one will be able to afford even cheap oil.
meanwhile in a cheaper oil environment the oil companies wont be spending lots of money to go exploring and will rely on the rapidly depleting exsisting fields. Our Post peak production curve may therefore dip faster than expected. Its possible that with some economic recovery, and a return of high prices the exploration will pick up and even production numbers might temporarily rebound (like the production of Russia after the fall of the Soviet Union did). But ultimatley there is a sense that if producers start shutting oil in we may have seen the official global peak already.
Its a sobering thought that we may now be stuck between the rock and the hard place:
The Rock - weak economy - falling GDP - a correction with unknown proportions.
The Hard place - if the economy ever recovers we will be faced with $150+ oil - which may mean the economy NEVER recovers.
I guess in the meantime - since I still have a job to do and a Salary coming in, life is good, fuel is getting cheaper and It might buy me some time to prepare for any future problems.
One idea I should mention in a future post is an emergency kit, to help transition if things get really nasty.
I am working on getting the back garden set up for planting lots of vegetables in the spring....
Ill let you know how that goes.
Im trying to find the time, and I need to post more personal stuff with this too, so I may change up the format some to try and squeeze in more family and personal photos and fun.
But seriously the last few months have been a bit of a whirlwind.
I went back to Tasmania in September right after Hurricanes Gustav and Ike hit the Gulf coast and crippled refineries and a few oil platforms. The end result was a gasoline shortage all over the South East that we are only now pulling out of.
Then sometime near the end of September - roughly the same time, the government started making noises about the banks that were failing.
it what is now being coined the "credit crisis" we have discovered that banks are low on cash after making too many loans to all sorts of people that couldnt repay them. Tensions run high (as we head into the final phase of the elections) and finger pointing is everywhere. Some blame the mess on the government (some are blaming democrats for encouraging sub prime loans for decades) others put the blame on the banks, the interest rates (Greenspan and the federal reserve) or the home buyers who drank the banks Kool-aid.
The results are truly frightening, the Dow is falling every day, down from 14,000 a year ago to around 8700 today. Every day so far in October has been a down day. Trillions of dollars have been lost. I dare not look at my 401K portfolio.
The reverberations are being felt in the commodity markets. Oil is falling fast on the speculation that if the economy implodes and a depression sets in there wont be much demand for oil. So here we are feeling what some Peak oilers predicted:
Rapid increase in prices
followed by economic response
Followed down by oil price - which doesnt seem like a good deal since no-one will be able to afford even cheap oil.
meanwhile in a cheaper oil environment the oil companies wont be spending lots of money to go exploring and will rely on the rapidly depleting exsisting fields. Our Post peak production curve may therefore dip faster than expected. Its possible that with some economic recovery, and a return of high prices the exploration will pick up and even production numbers might temporarily rebound (like the production of Russia after the fall of the Soviet Union did). But ultimatley there is a sense that if producers start shutting oil in we may have seen the official global peak already.
Its a sobering thought that we may now be stuck between the rock and the hard place:
The Rock - weak economy - falling GDP - a correction with unknown proportions.
The Hard place - if the economy ever recovers we will be faced with $150+ oil - which may mean the economy NEVER recovers.
I guess in the meantime - since I still have a job to do and a Salary coming in, life is good, fuel is getting cheaper and It might buy me some time to prepare for any future problems.
One idea I should mention in a future post is an emergency kit, to help transition if things get really nasty.
I am working on getting the back garden set up for planting lots of vegetables in the spring....
Ill let you know how that goes.
Wednesday, July 30, 2008
Apologies for my absence
Paradoxically I choose today to write again - a day that I really dont feel well.
I saw a video on youtube of a professor who had terminal liver cancer. he gave his last lecture back in December last year, and finally passed away on July 25th of 2008. No - im not terminally ill, but part of my inspiration for this blog was to leave something behind - something long lasting, I hope Im going to be long lasting too but you never know.
But I dont feel well so Im not doing much but read and feel miserable. I thought I would revisit my blog because oil prices have tumbled in what experts are calling a market correction.
This is where I should point readers to my predictions back some time ago about a correction. At the time I made that prediction oil did start to fall but it only lasted a few days then some supply worries and talk of Iran made prices rise. This is apparently the real correction, although prices bounced today some. We havnt made it below 120 yet, which I kind of thought would be our floor. So time will tell if we are done correcting or if there is a little more to come. I feel that some overshoot and correction was due, but so far although the price has fallen sharply im not seeing a lot of folks celebrating - perhaps because the majority are now aware of the longer term picture and only a fool would call the spike "over" and predict the return of permanently cheap oil.
There is still plenty of bullish news on oil all over the web, but now its becoming balanced by the amount of news concerning demand destruction and changes to lifestyle.
Im not the only one who bought a two wheeled gas miser. But bicycles, walking and mass transit are all seeing major upticks in popularity. And of course SUVs and trucks are increasingly becoming relics of an older age. All this means that at least the US demand for oil is falling and can be shown to be at least somewhat "elastic".
I saw a video on youtube of a professor who had terminal liver cancer. he gave his last lecture back in December last year, and finally passed away on July 25th of 2008. No - im not terminally ill, but part of my inspiration for this blog was to leave something behind - something long lasting, I hope Im going to be long lasting too but you never know.
But I dont feel well so Im not doing much but read and feel miserable. I thought I would revisit my blog because oil prices have tumbled in what experts are calling a market correction.
This is where I should point readers to my predictions back some time ago about a correction. At the time I made that prediction oil did start to fall but it only lasted a few days then some supply worries and talk of Iran made prices rise. This is apparently the real correction, although prices bounced today some. We havnt made it below 120 yet, which I kind of thought would be our floor. So time will tell if we are done correcting or if there is a little more to come. I feel that some overshoot and correction was due, but so far although the price has fallen sharply im not seeing a lot of folks celebrating - perhaps because the majority are now aware of the longer term picture and only a fool would call the spike "over" and predict the return of permanently cheap oil.
There is still plenty of bullish news on oil all over the web, but now its becoming balanced by the amount of news concerning demand destruction and changes to lifestyle.
Im not the only one who bought a two wheeled gas miser. But bicycles, walking and mass transit are all seeing major upticks in popularity. And of course SUVs and trucks are increasingly becoming relics of an older age. All this means that at least the US demand for oil is falling and can be shown to be at least somewhat "elastic".
Tuesday, July 8, 2008
defining 2008
As time goes on with this blog it is becoming apparent that Oil prices are going to define 2008.
Its possible that there was this much buzz in the early 1970s, but I wonder if back then there was such a sense of doom, of storm clouds gathering?
My thoughts for this week are on natural gas. I realized that I have spent way too much time focusing on oil prices and have thought little about heating homes this winter. Its easy to do that when its 90 degreesF outside.
So I checked my NG bills for the winter of 07/08. My coldest most expensive month had me consuming about 130 Centa Cubic feet which is roughly 130 therms of gas. There is a "therm factor" which converts CCF into therms based on the specific calorific value of the gas at the time but its usually close to 1. My price at the time was about $1.10 per therm and we also pay a standing monthly charge of about $25. By the time all the taxes and fees were added we aid $180.
Today's price for natural gas is around $1.52 per therm. roughly a 40% jump. I should expect my worst month this winter (if prices stop rising today) to be around $240. That's if prices magically stop rising.
My provider wont lock my price for me, they are a relatively small co-op and cannot afford to guess incorrectly and lose their shirt. Large providers will allow a 12 month lock but they offer $1.69 if we lock now. Clearly they expect rates to go that high by wintertime (or even slightly higher). Assuming they are accurate in their predictions I should expect to pay about $260 or more for my worst month. That's a significant difference from my $180/month bill.
The lesson here is that while gasoline prices have risen and may continue to rise, we need to be considering home energy - particularly home heating - this winter. many people will be paying over $100/month more to heat their home this winter than they did last year, and for some this will come as a shock.
I'm going to call my wood supplier and hopefully catch a favorable rate for firewood before the mad scramble starts in the fall.
Here is how my domestic energy profile looks for 07/08 and a three year average. The charts suggest I am using more energy which is entirely true. The reason is simple, my 3 year average includes more than one year where we didnt have a child and wasnt heating or cooling the upstairs of the house, nor doing as much laundry, dishes or baths. So you can see in some rough way what having a child means in terms of energy comsumption.
Monday, June 30, 2008
What am I doing about it?
Yes long time no post. Im getting lazy. Actually im getting busy.
This is what I was busy with:
This is what I was busy with:
This is my hedge against crazy oil prices. It gets between 50 and 60 mpg (US gallon). So I have effectivley doubled my reach as far as mileage goes. Leaving the 4 cylinder car for my wife to use instead of the larger 5 cylinder truck, also saves us money. Of course I must pay for the bike, but these things can last a LONG time because they are so easy to work on. Engines can be replaced etc...
I will be able to afford to commute all the way up to about $10/gal. I wonder if I will still have a job at that point? Also I have started car pooling with a co-worker. This is a somewhat short term strategy since he retires in about a year. But in the meantime we can ride together and split the costs - effectivley the same cost per mile as the motorcycle (or less since the tires and maintanence will be less).
Im preparing a thread to talk about other strategies. Some obvious, others not so obvious. The goal is to be able to transition to a post peak world, without causing total economic collapse (grapes of wrath style).
On the motorcycle theme see this local news story.
And oh yeah Oil is now firmly above $140. Now around $141 to $142. So we will see Gasoline rise to approx $4.20 over the next few weeks if oil stays up there.
Monday, June 16, 2008
market reaction?
I think this sums it up:
From an AP article by John Wilen.
"We have a weaker U.S. dollar, and the buyers are out in force right now," said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com.
Saudi Arabia, the world's largest oil producer, told U.N. chief Ban Ki-moon over the weekend that it would boost output by 200,000 barrels a day, or by 2 percent, from June to July. In May, the kingdom raised production by 300,000 barrels a day.
The latest promise of a production increase by the kingdom was largely ignored by traders Monday amid strong global demand and falling production elsewhere.
Cordier said Saudi Arabia has "to increase by north of 1 million barrels per day" to have an impact on prices, "and the market doesn't think they have it."
My emphasis added.
So we have a fire in the North Sea, and instead of calming the market the Saudis are farting around with small numbers and losing credibility by the day. Now we have a new trading record near $140.
From an AP article by John Wilen.
"We have a weaker U.S. dollar, and the buyers are out in force right now," said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com.
Saudi Arabia, the world's largest oil producer, told U.N. chief Ban Ki-moon over the weekend that it would boost output by 200,000 barrels a day, or by 2 percent, from June to July. In May, the kingdom raised production by 300,000 barrels a day.
The latest promise of a production increase by the kingdom was largely ignored by traders Monday amid strong global demand and falling production elsewhere.
Cordier said Saudi Arabia has "to increase by north of 1 million barrels per day" to have an impact on prices, "and the market doesn't think they have it."
My emphasis added.
So we have a fire in the North Sea, and instead of calming the market the Saudis are farting around with small numbers and losing credibility by the day. Now we have a new trading record near $140.
Sunday, June 15, 2008
Lazy day
OK well there isn't a huge amount of news for the last week.
So I'm going to be lazy and give you my Short summary and some additional reading.
The EIA report (US government) that came out Wednesday was very similar to the previous week. Almost 5 million barrels of crude were consumed from Inventory by the refineries but not replaced by production or imports.
Oddly enough the market reaction was the exact opposite of the prior week.
In the week ending June 6th the market initially saw the increase in gasoline reserves as proof of demand destruction - the price of crude consequently fell.
This week, ending on June 13th, folks instead realized that with Morgan Stanleys news of falling tanker traffic and the dropping crude inventory that perhaps it was more prudent to consider CRUDE numbers instead of gasoline numbers.
Refineries are apparently over-producing relative to demand, their margins are now almost all gone and we should expect to see utilization drop a little. It has fallen slightly the last few weeks but if the trend continues we will see that drop further. They cant keep turning lemons into lemonade if no-one's buying their lemonade...
The media is of course still full of finger pointing, rage and denial. I don't bother with the articles asserting that oil should be $50/bbl or that its all the fault of Democrats who don't want to allow drilling in US territory. By the way search for McCains voting record on ANWR. Is he really a republican at all?
It looks like my prediction is dead as a do-do. Price seem to be relaxed in the 130-140 range, some analysts have called recent movements "range finding" since no significant news has occurred since the 6th. That was until today, Sunday the 14th - more on that further down.
So today I will post articles that offer some insight, or just seem to me to have found the needle of truth in the haystack of Bull Excrement that the mainstream media has to offer.
http://www.newsweek.com/id/141524/page/1
This might be my favorite article for a long time. Robert recognizes peak oil, he recognizes that we cant drill our way out - but that we might at least want to get started on the new wells anyway (since it takes so long to get to production). He also recognizes that while corn ethanol doesn't represent a final solution, that there is work to be done on cellulosic ethanol and Biodiesel from algae. This guy seems to have his thoughts together. I will look for further stories from him in the future.
Going back to cellulosic ethanol I eagerly await the ribbon cutting on the plant at Soperton in GA. That plant plans to use pine mulch to make ethanol using new process. The process is not a distillery type process, but requires heat and pressure to "gassify" the mulch. The gas is then treated to create ethanol. The process should be much more efficient than the distillation and dehydration process at a corn ethanol plant. I assume that the amount of energy produced is MORE than the amount needed to make it. The net return on Energy invested (EROI) is critical to a post peak world. If we need more natural gas, or electrical energy to make the ethanol then we will only end up in trouble with natural gas or coal - hardly a solution.
I wonder when the plant will start production? Hopefully soon. Here is their website:
http://www.rangefuels.com/our-first-plant
Back to more recent developments:
Saudi Aramco Chief, Al Naimi (remember that name - someday hes going to go down in History as one of the worlds greatest liars) has announced intentions to add about 200,000 barrels a day to Saudi output. I expect this will have some small limited effect on the oil market. We will need to wait until the market opens to find out what effect, but I'm guessing it will be near zero, maybe a few dollars. The reason for skepticism is because the world is slowly starting to realize that the Saudi propaganda machine is, well... A propaganda machine. Any real reduction in price would have to come after we see tanker traffic numbers. The 200,000bpd increase will probably simply offset decline in other fields or other OPEC countries, leaving output flat. That's not really going to help in a world that gets thirstier by the day. Each year the population grows by over 70 million people. And they all want to drive a car!
So I'm posting this article about Saudi Arabian oil information.
http://www.theoildrum.com/node/4153
OK, and here too is a newer presentation by Matt Simmons. (PDF reader needed)
http://www.simmonsco-intl.com/files/Island%20Institute.pdf
I cant help question Matt's credibility a little since he owns a company dedicated to investing in the oil industry. But having said that, if he is fleecing us (them?) with doom and gloom data, hes doing a really remarkable job of making it look real. The more time goes on the more real it looks. His 2004 book "Twilight in the desert" has certainly turned out to be quite the sensation with many of its key points standing the test of time.
One more item I want to address today is the onslaught of
"run your car on water" websites. Several people have approached me asking if this is something they should consider.
http://runyourcarwithwater.youbetterreadthis.com/
this is just one example of the scam. Others do exist - they all bear similarities:
So I'm going to be lazy and give you my Short summary and some additional reading.
The EIA report (US government) that came out Wednesday was very similar to the previous week. Almost 5 million barrels of crude were consumed from Inventory by the refineries but not replaced by production or imports.
Oddly enough the market reaction was the exact opposite of the prior week.
In the week ending June 6th the market initially saw the increase in gasoline reserves as proof of demand destruction - the price of crude consequently fell.
This week, ending on June 13th, folks instead realized that with Morgan Stanleys news of falling tanker traffic and the dropping crude inventory that perhaps it was more prudent to consider CRUDE numbers instead of gasoline numbers.
Refineries are apparently over-producing relative to demand, their margins are now almost all gone and we should expect to see utilization drop a little. It has fallen slightly the last few weeks but if the trend continues we will see that drop further. They cant keep turning lemons into lemonade if no-one's buying their lemonade...
The media is of course still full of finger pointing, rage and denial. I don't bother with the articles asserting that oil should be $50/bbl or that its all the fault of Democrats who don't want to allow drilling in US territory. By the way search for McCains voting record on ANWR. Is he really a republican at all?
It looks like my prediction is dead as a do-do. Price seem to be relaxed in the 130-140 range, some analysts have called recent movements "range finding" since no significant news has occurred since the 6th. That was until today, Sunday the 14th - more on that further down.
So today I will post articles that offer some insight, or just seem to me to have found the needle of truth in the haystack of Bull Excrement that the mainstream media has to offer.
http://www.newsweek.com/id/141524/page/1
This might be my favorite article for a long time. Robert recognizes peak oil, he recognizes that we cant drill our way out - but that we might at least want to get started on the new wells anyway (since it takes so long to get to production). He also recognizes that while corn ethanol doesn't represent a final solution, that there is work to be done on cellulosic ethanol and Biodiesel from algae. This guy seems to have his thoughts together. I will look for further stories from him in the future.
Going back to cellulosic ethanol I eagerly await the ribbon cutting on the plant at Soperton in GA. That plant plans to use pine mulch to make ethanol using new process. The process is not a distillery type process, but requires heat and pressure to "gassify" the mulch. The gas is then treated to create ethanol. The process should be much more efficient than the distillation and dehydration process at a corn ethanol plant. I assume that the amount of energy produced is MORE than the amount needed to make it. The net return on Energy invested (EROI) is critical to a post peak world. If we need more natural gas, or electrical energy to make the ethanol then we will only end up in trouble with natural gas or coal - hardly a solution.
I wonder when the plant will start production? Hopefully soon. Here is their website:
http://www.rangefuels.com/our-first-plant
Back to more recent developments:
Saudi Aramco Chief, Al Naimi (remember that name - someday hes going to go down in History as one of the worlds greatest liars) has announced intentions to add about 200,000 barrels a day to Saudi output. I expect this will have some small limited effect on the oil market. We will need to wait until the market opens to find out what effect, but I'm guessing it will be near zero, maybe a few dollars. The reason for skepticism is because the world is slowly starting to realize that the Saudi propaganda machine is, well... A propaganda machine. Any real reduction in price would have to come after we see tanker traffic numbers. The 200,000bpd increase will probably simply offset decline in other fields or other OPEC countries, leaving output flat. That's not really going to help in a world that gets thirstier by the day. Each year the population grows by over 70 million people. And they all want to drive a car!
So I'm posting this article about Saudi Arabian oil information.
http://www.theoildrum.com/node/4153
OK, and here too is a newer presentation by Matt Simmons. (PDF reader needed)
http://www.simmonsco-intl.com/files/Island%20Institute.pdf
I cant help question Matt's credibility a little since he owns a company dedicated to investing in the oil industry. But having said that, if he is fleecing us (them?) with doom and gloom data, hes doing a really remarkable job of making it look real. The more time goes on the more real it looks. His 2004 book "Twilight in the desert" has certainly turned out to be quite the sensation with many of its key points standing the test of time.
One more item I want to address today is the onslaught of
"run your car on water" websites. Several people have approached me asking if this is something they should consider.
http://runyourcarwithwater.youbetterreadthis.com/
this is just one example of the scam. Others do exist - they all bear similarities:
- Pretty lady talking to you about the product
- Fake testimonials that you cant verify independently
- Half truths - misrepresented - with credible sources talking about the technology
- Money back guarantee - to try to win your confidence.
The problem is that these kits amount to a perpetual motion machine. The amount of energy needed to split water into its component gasses is greater than the energy that can be converted into useful motive power by burning those gasses. And since the energy that splits the water using the old process of electrolysis comes from the battery (and thus the alternator and the engine itself) you are looking a perpetual motion type device.
Just remember that electrolysis is an old well known process - not new technology. The amount of gas recovered from the process is small - nowhere near enough to assist in the operation of an automobile engine. Heck even the mythbusters tried it and showed it to be a fraud.
If it sounds too good to be true it is. Ford, GM, Caterpillar, Cummins, Chrysler, BMW, PSA, Nissan, Honda, Toyota and more. All huge companies that stand to make massive amounts of money from such technology should it show real benefits. With all the engineers in all these companies - myself one of them, how could we have missed something so simple? We didn't. Its a very simple and successful scam, sell a junk product, and hide when the customers come for their money back guarantee. By the time folks figure it out the company owner will be tanning in Brazil or somewhere else that has no extradition treaty. Unfortunately for every garage inventor who makes a brilliant discovery, there are 100 scammers who weave half truths into fraudulent products. They all come out of the woodwork when gas prices rise and the public - laden with SUVs and trucks come looking for a free lunch.
So things to look for this week:
- Market response to Saudi oil production increase.
- EIA inventory report Wednesday - look for further drop in crude inventory and refinery utilization dropping further.
- Any news of supply disruption, depletion etc... bringing prices up
- Any news of demand destruction or faltering global economic news - bring prices down.
One more thing. Cubs still the best team in baseball this week. The Cubs Soriano is out with a Broken hand, but likewise the St Luois Cardinals Slugger Albert Pujols is also out with a bad calf strain.
Saturday, June 7, 2008
Lets Talk Alternatives
When we think about what we use oil for we need a little context. You can see from this image that we dont use oil for electricity generation in the US - at least not in any meaningful amount.
Since its not being used to generate electricity most of the 20 million barrels per day habit in the US goes towards transportation. Gasoline, Diesel and Jet fuel specifically. Heating oil is another important use for oil. Heating oil, similar to Kerosene (a middle distillate) is most commonly used in the North East of the United States, but is falling out of favor as a heating energy source.
To break the oil habit we need to use "alternatives".
When we select alternatives we need to understand that there are 3 principle sources of energy in the world.
1) Fossil fuels. Conventional wisdom holds that oil, coal, gas peat etc... are comprised of decomposed organic matter. The decomposition process takes an extremly long time (thousands or millions of years), and also requires precisley the right conditions, the right rocks, the right porosity, permeability, temperature, surrounding rocks etc... For the purposes of this discussion, its non-renewable. Once you use it - its gone.
2) Sunlight. Not just solar power. Sunlight powers the atmosphere, so Hydroelectric, wind and solar. Sunlight powers photosynthesis so even biofuels fall into this category. It could be argued that the energy in fossil fuels came from the sun originally but that since the process is so slow it gets its own category.
3) Geothermal and Nuclear. energy from "within" the earth. Both of these forms are limited to various degrees. Some parts of the world are able to exploit Georthermal energy easily. Iceland is a country that enjoys such a relationship. Nuclear energy is derived from large volumes of Uranium that must be enriched and concentrated. Once the fuel is spent it must be disposed of.
If we choose to switch from oil to some other energy source for transportation we need to consider what that alternatives long term availability looks like.
At the moment half of our electricity comes from coal, so if we switch to transportation powered by the electricity grid instead of oil, we're going to be putting that load on Coal, and Nuclear - at least at first.
How much load? Well we use 20 million barrels a day mostly for trasnportation. Assume we switch away 10 million of those to the grid. 1 ton of coal = approx 12 barrels of oil. A switch like that means burning 800,000 extra tons of coal. Thats about 1/3rd of our current coal consumption level (which supplies half our needs for electrcity) So if we switch to "green" electric vehicles on a massive scale the grid will need some massive upgrades.
Cars that use hydrogen, batteries or compressed air, they all get their energy from the grid. Even if they are more efficient than oil burning engines you can see we will need to add a great deal of generating and transmission capacity.
Its possible also to imagine that what is happening now with oil could happen next with coal.
June 6th
Wow,
what a ride.
I wanted to start writing about alternative energy but instead I need to at least mention the amazing day on the NYMEX. Maybe someday people will look back at the 6th of June and view it as some kind of red letter day. Perhaps we will call June 6th "Yergin day" and celebrate the totally reidiculous prophecies from the now infamous Daniel Yergin of CERA.
So what happened. Well only about the biggest one day surge in oil prices in the history of the NYMEX. Not much then. We started Thursday the 5th with oil around 122. We gained about 5 dollars that day ending around 127-128.
This run started because for a couple of reasons.
Some European finance minister anounced that some interest rates would be raised in the Euro, which strengthened the Euro against the dollar (weakening the dollar). The rush to move money caused the price of oil and most other commodities to rise.
Also Israel announced that it would act against Iran if it did not suspend its nuclear program - I think act means "attack", maybe even they just came out and said attack. Either way it frightens the oil industry to think that Irans production might not be secure.
So we gained a few dollars. I'm thinking well thats mostly speculative, itll come down.
Then Friday came along and so did Ole Slorer Executive director at Morgan Stanley. Ole decided to tell everyone that he had been looking at the tanker traffic crossing the ocean, and that he didnt think that what is on its way will be enough to maintain inventory levels through the summer. $128 turned into $138 even 139 for a moment.
Well we do know that the last 2 weekly reports have shown significant declines in inventory.
So anyway my prediction of a few months rest in oil prices is now in tatters. At least for a while.
If Ole's precitions turn out to be true theres every reason to expect higher oil prices this summer. Maybe the market rest I predicted is done, not quite the 2 months or so that I expected, more like 2 weeks.
I always thought I was quite pessimistic, I assumed that oil should be priced around $120 and just as it was getting there we got more bad news... Maybe $130 is a better price. With all the news of demand destruction, Im still seeing plenty of Ford Excursions and H2s driving around like they have their own personal oil well.
While my oil predictions are going sour, the Cubs have lost 2 straight games in LA. When it rains it pours...
this was my favorite article.
The Goldman Sachs analyst that predicts the super spike, also thinks that after the spike hits we might return to lower levels of pricing - like $75. Im not sure. I can believe $100 or $120, but not $75. And after the "crash" from 200 to 120, the long term trend would be upward again...
Why would we return to $75 when at that price demand was still growing rapidly.
what a ride.
I wanted to start writing about alternative energy but instead I need to at least mention the amazing day on the NYMEX. Maybe someday people will look back at the 6th of June and view it as some kind of red letter day. Perhaps we will call June 6th "Yergin day" and celebrate the totally reidiculous prophecies from the now infamous Daniel Yergin of CERA.
So what happened. Well only about the biggest one day surge in oil prices in the history of the NYMEX. Not much then. We started Thursday the 5th with oil around 122. We gained about 5 dollars that day ending around 127-128.
This run started because for a couple of reasons.
Some European finance minister anounced that some interest rates would be raised in the Euro, which strengthened the Euro against the dollar (weakening the dollar). The rush to move money caused the price of oil and most other commodities to rise.
Also Israel announced that it would act against Iran if it did not suspend its nuclear program - I think act means "attack", maybe even they just came out and said attack. Either way it frightens the oil industry to think that Irans production might not be secure.
So we gained a few dollars. I'm thinking well thats mostly speculative, itll come down.
Then Friday came along and so did Ole Slorer Executive director at Morgan Stanley. Ole decided to tell everyone that he had been looking at the tanker traffic crossing the ocean, and that he didnt think that what is on its way will be enough to maintain inventory levels through the summer. $128 turned into $138 even 139 for a moment.
Well we do know that the last 2 weekly reports have shown significant declines in inventory.
So anyway my prediction of a few months rest in oil prices is now in tatters. At least for a while.
If Ole's precitions turn out to be true theres every reason to expect higher oil prices this summer. Maybe the market rest I predicted is done, not quite the 2 months or so that I expected, more like 2 weeks.
I always thought I was quite pessimistic, I assumed that oil should be priced around $120 and just as it was getting there we got more bad news... Maybe $130 is a better price. With all the news of demand destruction, Im still seeing plenty of Ford Excursions and H2s driving around like they have their own personal oil well.
While my oil predictions are going sour, the Cubs have lost 2 straight games in LA. When it rains it pours...
this was my favorite article.
The Goldman Sachs analyst that predicts the super spike, also thinks that after the spike hits we might return to lower levels of pricing - like $75. Im not sure. I can believe $100 or $120, but not $75. And after the "crash" from 200 to 120, the long term trend would be upward again...
Why would we return to $75 when at that price demand was still growing rapidly.
Tuesday, June 3, 2008
Well as you can imagine while things are going my way im going to toot the horn.
WTI fell more today to $124, Obama looks set now to recieve the nomination, Hillary even postured to be the Veep on his ticket. And the Cubs won their 8th straight game.
After reading the Westexas post on Export land model, and how tight the gulf supplies are getting, I am wondering what tomorrows inventory report will bring. Last week supplies fell but were blamed on fog, some folks have gone so far as to check on that story and its beginning to sound like theres more to that story than meets the eye. So I guess tomorrow will tell. A bounce in Inventory levels will show that the fog story had merit, we might even see some folks go short on that news and see the price lose another buck or two. Flat or declining oil inventorys would be bad news, and support a pretty big surge in prices ~ 3 to 5%.
I also got my little fuel leak sorted on the Mustang, and its now ready for a test drive.
WTI fell more today to $124, Obama looks set now to recieve the nomination, Hillary even postured to be the Veep on his ticket. And the Cubs won their 8th straight game.
After reading the Westexas post on Export land model, and how tight the gulf supplies are getting, I am wondering what tomorrows inventory report will bring. Last week supplies fell but were blamed on fog, some folks have gone so far as to check on that story and its beginning to sound like theres more to that story than meets the eye. So I guess tomorrow will tell. A bounce in Inventory levels will show that the fog story had merit, we might even see some folks go short on that news and see the price lose another buck or two. Flat or declining oil inventorys would be bad news, and support a pretty big surge in prices ~ 3 to 5%.
I also got my little fuel leak sorted on the Mustang, and its now ready for a test drive.
Monday, June 2, 2008
More car progress
Dale helped out on Saturday as I did an intake Manifold swap. I was able to procure an Edelbrock RPM airgap intake manifold for cheap - it was new, but had been bolted on an engine and never run.
I took the opportunity to remove the heater hoses for now since I dont ever run the car in the cold.
The engine fired up well, timing seems about right. This is what the timing curve looks like right now. I approximated this by setting RPM with the idle screw and using the timing light to measure timing.
I think it needs more timing but Im not going to adjust it until I can drive the car.
My new fuel lines have a slight leak which I need to fix, then its drive time!
Jun 2nd
Well not much to report in the news.
Thursday last week was exciting with news of massive inventory declines.
I dont pay for up to the minute market data, I just watch the delayed data. Which took hours to catch up with reality. The inventory news caused a massive buying spike, but news came out to explain away the shocking data. The oil was here it was just stuck in the gulf due to fog...
That calmed everything back down and by the end of the day we were back on the gradual downward tradjectory. Last week I predicted a path towards $120 in the coming months, we are somewhat closer, down from around $130, to about $126-127. I think this can continue barring any frightening news of production declines or supply disruptions.
I also predicted a Cubs world series win and Obama winning the presidential election. So far those predictions are also panning out. The Cubs Swept Colorado at Wrigley field making it 7 wins straight and earning the title of "best team in MLB" for now anyway. Obama is inching closer to the nomination.
By the way dont take my predictions to mean I am an Obama supporter. I think if I had the choice I would probably vote McCain - but I wouldnt exactly be smiling my way to the polls. Obama does appear to be the straightest talking politician since JFK though. He told crowds in Detroit that their industry needs to do better. Wow. Does he even know that hes a politician?
Interesting articles:
Net export model
That was an article from Jeffrey Brown who goes by username Westexas on the oildrum. Written last year it warns that production declines from our top producing nations are not the only concern.
When you realize that many of the worlds net exporters actually subsidize their fuel price (they can afford to they are still net exporters! they use oil revenue to do it!) then you understand how oil consumption in those countries continues to rise in some cases at 3 or 4% per year.
A plateaued production curve or a decline suddenly looks much sharper when you account for their own increasing thirst for their own oil.
This makes you stop and think about the Saudis claims about excess production capacity. They may have some extra capacity - but they will likley need it just to cover their own needs - or face the prospect of removing some of those glorious subsidies. Imagine how your population reacts when they suddenly are forced to pay the market price for fuel!! Shock horror.
Thursday last week was exciting with news of massive inventory declines.
I dont pay for up to the minute market data, I just watch the delayed data. Which took hours to catch up with reality. The inventory news caused a massive buying spike, but news came out to explain away the shocking data. The oil was here it was just stuck in the gulf due to fog...
That calmed everything back down and by the end of the day we were back on the gradual downward tradjectory. Last week I predicted a path towards $120 in the coming months, we are somewhat closer, down from around $130, to about $126-127. I think this can continue barring any frightening news of production declines or supply disruptions.
I also predicted a Cubs world series win and Obama winning the presidential election. So far those predictions are also panning out. The Cubs Swept Colorado at Wrigley field making it 7 wins straight and earning the title of "best team in MLB" for now anyway. Obama is inching closer to the nomination.
By the way dont take my predictions to mean I am an Obama supporter. I think if I had the choice I would probably vote McCain - but I wouldnt exactly be smiling my way to the polls. Obama does appear to be the straightest talking politician since JFK though. He told crowds in Detroit that their industry needs to do better. Wow. Does he even know that hes a politician?
Interesting articles:
Net export model
That was an article from Jeffrey Brown who goes by username Westexas on the oildrum. Written last year it warns that production declines from our top producing nations are not the only concern.
When you realize that many of the worlds net exporters actually subsidize their fuel price (they can afford to they are still net exporters! they use oil revenue to do it!) then you understand how oil consumption in those countries continues to rise in some cases at 3 or 4% per year.
A plateaued production curve or a decline suddenly looks much sharper when you account for their own increasing thirst for their own oil.
This makes you stop and think about the Saudis claims about excess production capacity. They may have some extra capacity - but they will likley need it just to cover their own needs - or face the prospect of removing some of those glorious subsidies. Imagine how your population reacts when they suddenly are forced to pay the market price for fuel!! Shock horror.
Thursday, May 29, 2008
Home energy
Attic temperature.
You probably dont think much about attic temperature, but it has a lot to do with your summer cooling load. The attic can get hot from the sun beating down on those asphalt shingles (another petroleum product that could start to get expensive). The shingles get so hot they radiate the heat into your attic. Without adequate ventilation the attic will get much hotter than the ambient air outside.
The problem with a hot attic is that this heat seeps into your house and needs to be cooled by the Air conditioning. Also most air conditioning blowers - and thus the feeding and returning air ducts are also located in the attic spaces. Although most modern air ducts are insulated (as are most attic floors) this insulation just slows the seepage - but doesnt stop it.
Some companies sell attic fans, some are even solar powered (clever!)
But I wanted to know for myself how bad my problem was. So I bought a little inside-outside thermometer
On a typical 80F day in late may - with lots of sun and little wind, my attic gets up to 110F!
with wind or cloud its usually much less like 95F. Still compared with the ambient temp of mid 80s thats a significant extra load to put on all that insulation.
Try it yourself - thermometers are about $10 to $15.
You probably dont think much about attic temperature, but it has a lot to do with your summer cooling load. The attic can get hot from the sun beating down on those asphalt shingles (another petroleum product that could start to get expensive). The shingles get so hot they radiate the heat into your attic. Without adequate ventilation the attic will get much hotter than the ambient air outside.
The problem with a hot attic is that this heat seeps into your house and needs to be cooled by the Air conditioning. Also most air conditioning blowers - and thus the feeding and returning air ducts are also located in the attic spaces. Although most modern air ducts are insulated (as are most attic floors) this insulation just slows the seepage - but doesnt stop it.
Some companies sell attic fans, some are even solar powered (clever!)
But I wanted to know for myself how bad my problem was. So I bought a little inside-outside thermometer
On a typical 80F day in late may - with lots of sun and little wind, my attic gets up to 110F!
with wind or cloud its usually much less like 95F. Still compared with the ambient temp of mid 80s thats a significant extra load to put on all that insulation.
Try it yourself - thermometers are about $10 to $15.
Wednesday, May 28, 2008
Car book
I mentioned I like cars.
Well someday Im going to make a book about my car, and a video. I will do this to prove just how pathetic and obsessed I am about the car. Hopefully I can accomplish this before gasoline becomes $50 per gallon and a ride in the country will require me to fill in forms and get a bank loan.
Im going to make a coffee table book with those nifty websites like shutterfly.
So far I have made a cover photo montage, and thats about as far as I have got.
Someday I will get around to organizing my photos and making something really striking.
Here is the cover art made up from photos of my car.
Well someday Im going to make a book about my car, and a video. I will do this to prove just how pathetic and obsessed I am about the car. Hopefully I can accomplish this before gasoline becomes $50 per gallon and a ride in the country will require me to fill in forms and get a bank loan.
Im going to make a coffee table book with those nifty websites like shutterfly.
So far I have made a cover photo montage, and thats about as far as I have got.
Someday I will get around to organizing my photos and making something really striking.
Here is the cover art made up from photos of my car.
May 28th
In the absence of anything better to do for a half hour I thought id roundup todays action.
Well we closed a whole buck higher today at 130, we had opened at 129. Big whoop.
No significant news, I imagine most of the action was money being moved around in response to other factors.
Interesting though in the face of all this news about demand destruction that so many chose to go long later in the day. The price had fallen 2 dollars in the morning and it gained it all back and then some. Today I cant help wondering what the Thursday weekly report will show. It was delayed a day because of Memorial day...
For those that are interested here is where youll be able to see the report:
EIA report
After 10:30 ET you get the basic text only report, then after 1pm they print a nice PDF file for those with ADHD.
Interesting how the government devotes so many resources to the gathering of this data.
You can bet there isnt an entire "administration" concerned with the consumption and production of bottled water. Perhaps this oil stuff is important after all...
For a little light bedtime reading, I have included an essay from Robert Rapier on theoildrum.com
Crude Assaying
Im sure you will agree that was Fascinating with a capital F. I will attempt in future to thoroughly explain octane ratings, either myself or by lifting an article off theoildrum again. If Im feeling wordy I may even explain how your engine may or may not benefit from different octane fuel.
Here is a cheesy looking graphic from the UK's Institute of Petroleum showing the distillation products. It doesnt show nearly the level of detail that we get from Roberts article but it a graphic and you can never have enough of those.
Well we closed a whole buck higher today at 130, we had opened at 129. Big whoop.
No significant news, I imagine most of the action was money being moved around in response to other factors.
Interesting though in the face of all this news about demand destruction that so many chose to go long later in the day. The price had fallen 2 dollars in the morning and it gained it all back and then some. Today I cant help wondering what the Thursday weekly report will show. It was delayed a day because of Memorial day...
For those that are interested here is where youll be able to see the report:
EIA report
After 10:30 ET you get the basic text only report, then after 1pm they print a nice PDF file for those with ADHD.
Interesting how the government devotes so many resources to the gathering of this data.
You can bet there isnt an entire "administration" concerned with the consumption and production of bottled water. Perhaps this oil stuff is important after all...
For a little light bedtime reading, I have included an essay from Robert Rapier on theoildrum.com
Crude Assaying
Im sure you will agree that was Fascinating with a capital F. I will attempt in future to thoroughly explain octane ratings, either myself or by lifting an article off theoildrum again. If Im feeling wordy I may even explain how your engine may or may not benefit from different octane fuel.
Here is a cheesy looking graphic from the UK's Institute of Petroleum showing the distillation products. It doesnt show nearly the level of detail that we get from Roberts article but it a graphic and you can never have enough of those.
Tuesday, May 27, 2008
One chart cont...
OK, back to where I was.
Where was I? Ah yes, why would someone want to place an order for oil to be delivered months or years from now?
Well the answer will help define the futures market.
Lets say I place an order, 1000 barrels of oil to be delivered in November at a price of $130/barrel. Realize that Im a trader and I have no intention of actually taking delivery of that oil. My motivation is the hope (based on some sound research hopefully!) that the actual price between now and that date will increase. So before I actually take delivery I can sell my contract to someone else. If the price rises to $140/barrel then I get to make $10,000, or a roughly 7% return on my investment, that would be a decent return for 5 months.
That would be called a "long" trade. Buying oil hoping the price will rise, so I can sell it later and make a profit.
There is however another way to do business.
I can sell someone oil that I do not have. This may seem to be the riskier move but its really no different. By selling oil I do not have today, I commit myself to buy some later. By making a contract now at todays price, I hope that the price later will be lower - the difference being profit
This is called selling "short".
It should be apparent that there are plenty of people who do need to buy oil, they need oil to refine it. But the key element is that there are lots of traders selling short, to other traders who are betting long. If more folks bet long then todays price must rise. In addition to todays price changing you can also look at the prices being charged for contracts way out into the future.
Various trading sites, and the NYMEX.com site will let you take a look at prices far out into the future like that.
Its possible to look at those future contracts and draw some conclusions about what traders think the market will do.
Thanks to Jeff Vail of theoildrum.com we have a chart that can let us see what I mean
Jeff made this chart on the 20th of May 2008 and it shows how the prices for future delivery (months out in the future on the X axis) vary compared with the front month price. The typical price structure is known as backwardation. This would involve distance future prices being lower than todays front month (earliest possible delivery point) price.
That should strike you as normal, because the alternative known as Contango leaves open some intersting possibilities. If you could see prices for distant contracts raising much higher figures than todays prices you would have contango. You could buy some oil at the front month price and sell some oil at the higher future price, then take delivery of the cheap "today" oil and store it for when youre future contracts delivery date comes up. Although we know the cost of storage would never be zero, we can still see why this situation would not be considered all that normal, it would lead to folks hoarding oil.
If the future price gets high enough (which means traders have decided that through the buying and selling of contracts) then hoarding is exactly what will happen. If futures prices get high enough (high enough to offset the cost of storage and inflation) then you could make money by simply storing oil. Its unlikley that the market can get that hot, the front month price will rise too fast, as traders start buying short term contracts to cover their long commitments.
Since Jeff made that chart the amount of Contango has settled back a little to mid May levels. But the point Jeff makes is that up until Mid April the market was still selling long term future contracts at LESS than the front month price (in backwardation). The fact that it is now higher is only significant from a purely theoretical perspective. With the costs of storing oil, and inflation taken into account you still couldnt make any money by simply hoarding oil.
But its a useful way of looking at the market to determin if its "hot" or not.
You wont see this kind of analysis in the media, I think because its too simplistic for the traders, and too complex for the average joe on the street. Hopefully you found it thrilling...
Where was I? Ah yes, why would someone want to place an order for oil to be delivered months or years from now?
Well the answer will help define the futures market.
Lets say I place an order, 1000 barrels of oil to be delivered in November at a price of $130/barrel. Realize that Im a trader and I have no intention of actually taking delivery of that oil. My motivation is the hope (based on some sound research hopefully!) that the actual price between now and that date will increase. So before I actually take delivery I can sell my contract to someone else. If the price rises to $140/barrel then I get to make $10,000, or a roughly 7% return on my investment, that would be a decent return for 5 months.
That would be called a "long" trade. Buying oil hoping the price will rise, so I can sell it later and make a profit.
There is however another way to do business.
I can sell someone oil that I do not have. This may seem to be the riskier move but its really no different. By selling oil I do not have today, I commit myself to buy some later. By making a contract now at todays price, I hope that the price later will be lower - the difference being profit
This is called selling "short".
It should be apparent that there are plenty of people who do need to buy oil, they need oil to refine it. But the key element is that there are lots of traders selling short, to other traders who are betting long. If more folks bet long then todays price must rise. In addition to todays price changing you can also look at the prices being charged for contracts way out into the future.
Various trading sites, and the NYMEX.com site will let you take a look at prices far out into the future like that.
Its possible to look at those future contracts and draw some conclusions about what traders think the market will do.
Thanks to Jeff Vail of theoildrum.com we have a chart that can let us see what I mean
Jeff made this chart on the 20th of May 2008 and it shows how the prices for future delivery (months out in the future on the X axis) vary compared with the front month price. The typical price structure is known as backwardation. This would involve distance future prices being lower than todays front month (earliest possible delivery point) price.
That should strike you as normal, because the alternative known as Contango leaves open some intersting possibilities. If you could see prices for distant contracts raising much higher figures than todays prices you would have contango. You could buy some oil at the front month price and sell some oil at the higher future price, then take delivery of the cheap "today" oil and store it for when youre future contracts delivery date comes up. Although we know the cost of storage would never be zero, we can still see why this situation would not be considered all that normal, it would lead to folks hoarding oil.
If the future price gets high enough (which means traders have decided that through the buying and selling of contracts) then hoarding is exactly what will happen. If futures prices get high enough (high enough to offset the cost of storage and inflation) then you could make money by simply storing oil. Its unlikley that the market can get that hot, the front month price will rise too fast, as traders start buying short term contracts to cover their long commitments.
Since Jeff made that chart the amount of Contango has settled back a little to mid May levels. But the point Jeff makes is that up until Mid April the market was still selling long term future contracts at LESS than the front month price (in backwardation). The fact that it is now higher is only significant from a purely theoretical perspective. With the costs of storing oil, and inflation taken into account you still couldnt make any money by simply hoarding oil.
But its a useful way of looking at the market to determin if its "hot" or not.
You wont see this kind of analysis in the media, I think because its too simplistic for the traders, and too complex for the average joe on the street. Hopefully you found it thrilling...
May 27th
Every now and then I will do a sort of news round up from the different sources I scan around the web. I wont have the time to do this every day, but hopefully I will connect it back to the last time I did a summary.
Apart from the 27th being the date of my Sisters Birthday, we didn't have a very eventful day.
Probably the biggest movement of the day was the price of oil. I guess my prediction of falling prices doesn't look quite so startling following a day like today. WTI went from around $133 to 128. A $5 drop is a big movement - around 4% in one day.
I don't have anything solid to go on here, but I imagine the reports that came out showing significant demand destruction have something to do with this movement, we might see more of that. Also I wonder if Wednesdays inventory report has something interesting in it. Rumors have a way of getting out on Tuesdays and whispers tend to cause a good bit of movement at the moment. We shall see, tomorrow may bring some higher than expected inventory numbers.
Edit: as it turns out this weeks "wednesday report" is coming out on Thursday. The report I refer to is the EIA report (US government report from the Energy Information Administration)
However on Tuesday a report did come out from the IEA (internation energy agency based in Paris) which highlighted some of the demand destruction above
My favorite article of the day is:
http://www.independent.co.uk/news/world/americas/black-gold-rush-834598.html
I'm not sure how long the Independent will keep these files up, so I am saving my favorite articles for future reference.
Speaking of future reference. My prized possession is a 2004 copy of national geographic. The "end of cheap oil" issue.
Here is that article online, again I don't know how long it will last but I bet this will stay a while since it appears to be a pretty well written article that is slowly being proved to be prescient.
http://ngm.nationalgeographic.com/ngm/0406/feature5/fulltext.html
Apart from the 27th being the date of my Sisters Birthday, we didn't have a very eventful day.
Probably the biggest movement of the day was the price of oil. I guess my prediction of falling prices doesn't look quite so startling following a day like today. WTI went from around $133 to 128. A $5 drop is a big movement - around 4% in one day.
I don't have anything solid to go on here, but I imagine the reports that came out showing significant demand destruction have something to do with this movement, we might see more of that. Also I wonder if Wednesdays inventory report has something interesting in it. Rumors have a way of getting out on Tuesdays and whispers tend to cause a good bit of movement at the moment. We shall see, tomorrow may bring some higher than expected inventory numbers.
Edit: as it turns out this weeks "wednesday report" is coming out on Thursday. The report I refer to is the EIA report (US government report from the Energy Information Administration)
However on Tuesday a report did come out from the IEA (internation energy agency based in Paris) which highlighted some of the demand destruction above
My favorite article of the day is:
http://www.independent.co.uk/news/world/americas/black-gold-rush-834598.html
I'm not sure how long the Independent will keep these files up, so I am saving my favorite articles for future reference.
Speaking of future reference. My prized possession is a 2004 copy of national geographic. The "end of cheap oil" issue.
Here is that article online, again I don't know how long it will last but I bet this will stay a while since it appears to be a pretty well written article that is slowly being proved to be prescient.
http://ngm.nationalgeographic.com/ngm/0406/feature5/fulltext.html
Predictions
This is where I leave planet earth behind and start making stuff up based on what I think might happen. Its a time capsule for later. I can come back and find out how much money I would have won or lost if I was actually wealthy enough to play in the commodities market.
My first statement - might seem kind of bold, especially considering that ive been reading all the peak oil doom and gloom latley.
I think the price of oil will fall. A bit.
Between now (late May) and about August, I think $130/bbl will return to about $120. I dont think the information that we have got us to $130. The last bit of run up seemed to be more speculation betting on severe supply disruptions. I dont think those panned out so I think we will see the market take a breather. In addition a lot of the extra money in oil came here because stocks and currency wasnt a safe place. I think theres a good chance people will start moving some money back to those places.
Then we have an IEA report due in November. After August we also have the election run up. I have a feeling that by then, maybe Sept we will start to see some more buying. I think the IEA report will be very bearing and maybe even catch a few people out. Im sure some info will leak out before the official report, so it may not be so sudden a shock.
So after about September/Oct I would expect to see it soar again.
Oh yeah, Obama wins the election, and the Cubs win the world series.
Sorry couldnt resist.
My first statement - might seem kind of bold, especially considering that ive been reading all the peak oil doom and gloom latley.
I think the price of oil will fall. A bit.
Between now (late May) and about August, I think $130/bbl will return to about $120. I dont think the information that we have got us to $130. The last bit of run up seemed to be more speculation betting on severe supply disruptions. I dont think those panned out so I think we will see the market take a breather. In addition a lot of the extra money in oil came here because stocks and currency wasnt a safe place. I think theres a good chance people will start moving some money back to those places.
Then we have an IEA report due in November. After August we also have the election run up. I have a feeling that by then, maybe Sept we will start to see some more buying. I think the IEA report will be very bearing and maybe even catch a few people out. Im sure some info will leak out before the official report, so it may not be so sudden a shock.
So after about September/Oct I would expect to see it soar again.
Oh yeah, Obama wins the election, and the Cubs win the world series.
Sorry couldnt resist.
Monday, May 26, 2008
8 Americas ate America.
Well we have a lot of ground to cover. We have already started talking about oil prices, the benchmark and what a few terms mean. In later posts id like to talk about fuels in more detail, but for this post I want to hit a few Geographical highlights.
While posting on another forum I often discuss the causes, and effects of energy prices. Its a great way to sharpen debate skills but more importantly skeptics force me to be more thorough in my research. Sometimes what "feels" right is wrong under closer scrutiny. Skeptics are a bloggers best friend, because they teach you how to reach out to folks who don't want to believe your message. What follows are excerpts from my response to a skeptic.
It is the opinion of the Author that high energy prices, high food prices and higher metals prices are primarily the result of demand from rapidly growing countries like China and India. One skeptic refused to belive that China and India could have grown sufficiently - so quickly - to influence prices in this way. Its is a hard concept to understand, and one that will take more than one post to cover - but I started thinking about a way to express the sheer scale of the population of India and China.
First of all I hope I dont offend anyone buy lumping both countries together for the sake of this comparison. I call the two countries Chindia. So lets compare Chindia with the USA.
Population:
USA, 300 Million (rough numbers guys)
Chindia, 2.4 Billion (or 2400 Million) Roughly 8 times the population of the Unites States - Hence my posts title.
The entire human race consists of about 6.7 Billion. So Chindia makes up more than one THIRD the entire Human race. Both global population and the population of Chindia is growing, global growth is still over 1% per year. Chinas population alone grows by about 60 million per year, enough people to populate the United Kindgom.
Here comes the fun part.
We have all heard the myth about how if everyone in China jumped at the same time, something awful would happen, like an earthquake or a tsunami or something.
Well It dawned on me that Chindia with its combined 2.4 Million have a great deal of power.
Before checking any facts I wondered what would happen if everyone in Chindia took a pee into the same river. This is how it turned out:
The Mississippi discharges about 16 million liters a second. If 2.4 Billion people urinate at about 1/100th of a liter per second, wed have 24 million liters a second of pee - or a river to rival to mighty Mississippi. Thats quite a benchmark I think you'll agree. Perhaps they should all get together and give it a try, they could call it the Missipissi.
Hopefully you get the point. Chindia has a staggering population. During 2006, China alone used about 2 barrels of oil per person. For comparison, Mexico used 6.6-- Chinese oil consumption could triple and they'd still be using less per person than Mexico is today. The U.S. used almost 25 barrels per person.
So heres a new phrase to help you remember the real source of price pressure:
8 Americas ate America.
While posting on another forum I often discuss the causes, and effects of energy prices. Its a great way to sharpen debate skills but more importantly skeptics force me to be more thorough in my research. Sometimes what "feels" right is wrong under closer scrutiny. Skeptics are a bloggers best friend, because they teach you how to reach out to folks who don't want to believe your message. What follows are excerpts from my response to a skeptic.
It is the opinion of the Author that high energy prices, high food prices and higher metals prices are primarily the result of demand from rapidly growing countries like China and India. One skeptic refused to belive that China and India could have grown sufficiently - so quickly - to influence prices in this way. Its is a hard concept to understand, and one that will take more than one post to cover - but I started thinking about a way to express the sheer scale of the population of India and China.
First of all I hope I dont offend anyone buy lumping both countries together for the sake of this comparison. I call the two countries Chindia. So lets compare Chindia with the USA.
Population:
USA, 300 Million (rough numbers guys)
Chindia, 2.4 Billion (or 2400 Million) Roughly 8 times the population of the Unites States - Hence my posts title.
The entire human race consists of about 6.7 Billion. So Chindia makes up more than one THIRD the entire Human race. Both global population and the population of Chindia is growing, global growth is still over 1% per year. Chinas population alone grows by about 60 million per year, enough people to populate the United Kindgom.
Here comes the fun part.
We have all heard the myth about how if everyone in China jumped at the same time, something awful would happen, like an earthquake or a tsunami or something.
Well It dawned on me that Chindia with its combined 2.4 Million have a great deal of power.
Before checking any facts I wondered what would happen if everyone in Chindia took a pee into the same river. This is how it turned out:
The Mississippi discharges about 16 million liters a second. If 2.4 Billion people urinate at about 1/100th of a liter per second, wed have 24 million liters a second of pee - or a river to rival to mighty Mississippi. Thats quite a benchmark I think you'll agree. Perhaps they should all get together and give it a try, they could call it the Missipissi.
Hopefully you get the point. Chindia has a staggering population. During 2006, China alone used about 2 barrels of oil per person. For comparison, Mexico used 6.6-- Chinese oil consumption could triple and they'd still be using less per person than Mexico is today. The U.S. used almost 25 barrels per person.
So heres a new phrase to help you remember the real source of price pressure:
8 Americas ate America.
The water is boiling
So we can see then that the price of oil is rising, and its rising very fast. The idea behind my title is the old wives tale about a frog in a pot of boiling water. If you put him in when the water is cold, he won't notice the slow steady rise in temperature and will cook. If you toss him in a pot of boiling water he'll jump out.
So anyway the prices are high, the water is starting to get very hot. Will we jump out or will this frog get cooked?
And what do all the numbers and information mean? Why do I care about the price of oil?
The prices shown on the previous graphs are the front month prices for West Texas Intermediate crude. This an oil that is known as a benchmark crude. Brent crude oil is another and is also traded on the NYMEX. Brent crude comes from the North Sea, and import source of oil for the UK, while WTI obviously comes from Texas. Both oils are what are commonly refered to as "Light Sweet" crude oils. What does that mean?
The oil that comes from the ground is found in many parts of the world, at different depths and in different conditions. Crude oil is made of many different components mixed together (in much the same way that sunlight is made of many different colors of light mixed together). Typical Crude oil contains a spectrum of products, from heavy think tar, to lighter more fluid kerosene and diesel fuels, all the way to lighter products that may be a gas at room temperature and pressure.
Here is a resource that helps explain things in a more visual way.
http://www.energy.ca.gov/gasoline/whats_in_barrel_oil.html
The relative amount of these products is important to the value of the crude oil. If the oil conatins mostly heavy products like tar - it will be less valuable. Lighter crude therefore = higher value. Lighter crude is easier to turn into the sought after products like diesel and gasoline and that why is more valuable.
So what does "sweet" mean? Whos tasting this stuff? Well in oil terms sweet or sour has nothing to do with taste. Sour crude contains toxic hydrogen sulphide, sweet crude does not. This makes sweet crude the prefered choice because its cheaper to handle and refine. So you can see now that light sweet crude is a double whammy of refining perfection - great for turning into motor fuels at the lowest possible cost. And thats why they are used for benchmarking - because they tend to influence the price of motor fuel. It is of course possible to buy heavy crude, or sour crude - obviously at lower prices.
What does the front month mean?
Well when you buy oil, its not like buying potato chips at Walmart. You dont place an order and recieve the oil the same day. There are logistics involved and there are also minimums - in the case of oil - 1000 barrels! So the current price reflects the cost if you were to order a delivery of oil at the earliest possible time - usually taking about a month to be delivered. Thats why its called the "front month". Alternativley you can order oil for delivery at some date in the future, which is how the commodities get their name for example "oil futures", or the "futures market".
Why would anyone delay delivery like that?
That can be the subject of another post.
So anyway the prices are high, the water is starting to get very hot. Will we jump out or will this frog get cooked?
And what do all the numbers and information mean? Why do I care about the price of oil?
The prices shown on the previous graphs are the front month prices for West Texas Intermediate crude. This an oil that is known as a benchmark crude. Brent crude oil is another and is also traded on the NYMEX. Brent crude comes from the North Sea, and import source of oil for the UK, while WTI obviously comes from Texas. Both oils are what are commonly refered to as "Light Sweet" crude oils. What does that mean?
The oil that comes from the ground is found in many parts of the world, at different depths and in different conditions. Crude oil is made of many different components mixed together (in much the same way that sunlight is made of many different colors of light mixed together). Typical Crude oil contains a spectrum of products, from heavy think tar, to lighter more fluid kerosene and diesel fuels, all the way to lighter products that may be a gas at room temperature and pressure.
Here is a resource that helps explain things in a more visual way.
http://www.energy.ca.gov/gasoline/whats_in_barrel_oil.html
The relative amount of these products is important to the value of the crude oil. If the oil conatins mostly heavy products like tar - it will be less valuable. Lighter crude therefore = higher value. Lighter crude is easier to turn into the sought after products like diesel and gasoline and that why is more valuable.
So what does "sweet" mean? Whos tasting this stuff? Well in oil terms sweet or sour has nothing to do with taste. Sour crude contains toxic hydrogen sulphide, sweet crude does not. This makes sweet crude the prefered choice because its cheaper to handle and refine. So you can see now that light sweet crude is a double whammy of refining perfection - great for turning into motor fuels at the lowest possible cost. And thats why they are used for benchmarking - because they tend to influence the price of motor fuel. It is of course possible to buy heavy crude, or sour crude - obviously at lower prices.
What does the front month mean?
Well when you buy oil, its not like buying potato chips at Walmart. You dont place an order and recieve the oil the same day. There are logistics involved and there are also minimums - in the case of oil - 1000 barrels! So the current price reflects the cost if you were to order a delivery of oil at the earliest possible time - usually taking about a month to be delivered. Thats why its called the "front month". Alternativley you can order oil for delivery at some date in the future, which is how the commodities get their name for example "oil futures", or the "futures market".
Why would anyone delay delivery like that?
That can be the subject of another post.
Sunday, May 25, 2008
One chart
If there is one chart, this is it.
If you look at this chart and think about this a bit, then I already achieved a lot of what I set out for here. Even if you go no further you cant help but be a little "touched" by this chart and what they might mean.
For a guy who was interested in energy prices and their effects on society, this was it. This was the chart that made it all happen for me.
Of course this didnt happen overnight. Ive been quietly paying attention since - oh about September 2001 when some airplanes were flown into some important buildings in the United States. You can see what has happened since then.
This chart shows the price of WTI oil as traded on the New York Mercantile Exchange in US dollars. The chart comes from the NYMEX website and you can create your own graphs all day long there. What fun!
Its the king of all the charts - the source of debate, worry and for some a source of great wealth.
Here is a cleaner version from Gasbuddy.com showing gasoline prices and oil prices for the last 6 years (up to 2008)
Im going to let you look at those charts and think about it some.
Next post, what do they REALLY show, and what are the possible causes for such a dramatic price rise.
If you look at this chart and think about this a bit, then I already achieved a lot of what I set out for here. Even if you go no further you cant help but be a little "touched" by this chart and what they might mean.
For a guy who was interested in energy prices and their effects on society, this was it. This was the chart that made it all happen for me.
Of course this didnt happen overnight. Ive been quietly paying attention since - oh about September 2001 when some airplanes were flown into some important buildings in the United States. You can see what has happened since then.
This chart shows the price of WTI oil as traded on the New York Mercantile Exchange in US dollars. The chart comes from the NYMEX website and you can create your own graphs all day long there. What fun!
Its the king of all the charts - the source of debate, worry and for some a source of great wealth.
Here is a cleaner version from Gasbuddy.com showing gasoline prices and oil prices for the last 6 years (up to 2008)
Im going to let you look at those charts and think about it some.
Next post, what do they REALLY show, and what are the possible causes for such a dramatic price rise.
Whats in store?
Well lets get down to business.
In the next few posts I will be setting the agenda, making a few fun predictions and showing some charts to set the scene.
First, I should explain how I began to get so caught up in this interest.
The first time I began to question the exsisting "cornicopian" view of resources was back in Geography class. Different teachers would make mention of exponential population numbers, and also of limited resources with XX number of years remaining. Some of those teachers would make brief mention of these facts together as if to suggest that something bad might be around the corner - but without actually saying much about it. It always seemed to me that the combination of these two trends ought to be causing some concern in the big wide world - yet everyone seemed blissfully unaware. That was about 20 years ago...
When I moved to the USA my jaw dropped. I suppose it was no secret that in the UK we have some steep sales taxes - especially on fuel. But when I saw the prices of fuel and the way people behaved with it in the US, I was a little shaken. The population in the UK is about 60 million, in the US its around 300 Million. To find this many people consuming energy in what could only be described as an orgy of waste, lets say that was enlightening.
As I settled in I started to become more and more American, caring less about what I consumed. Occasionally academics or media commentators would talk about resources and a rebuttal was always made by an economist. Economists have typically approached resources with the cornicopian model. This model tells us that technology always finds a way to extract resources more efficiently, and to exploit them more fully (leave less in the ground). In effect nothing ever runs out, we either keep finding more, of we find something even better.
Another phrase you'll hear is "the stone age didnt end due to lack of stones". This analogy tells us that we should simply expect something better to come along, and not worry about the supply/demand constraints.
Another side hobby of mine has been to observe differences between my old home in Europe and my new home. Everywhere I looked, EVERYWHERE that I found differences between the UK and the US I find a connection with energy prices.
Some things you might not connect? Obesity, Home prices and Climate to name a few. Ah shucks I just mentioned climate. Its worth noting early on that will not talk a whole lot about climate change. Frankly I think the other issue outweigh climate change. I dont think theres much to talk about with climate change. If its true, the world gets a bit hotter, the sea levels rise a bit, some things change a bit. The extent and the true cause of the changes appear to be the cause of a great deal of debate. I will blog my full opinion on the matter some day but thats not the real reason for this effort.
So understand the effects of energy prices has been a bit of a side hobby of mine. Trying to make sense of it all is possible, but we will need to look at some charts and graphs. And occasionally to spice things up we will talk about things like food prices, water, vegetarians and some others things.
We will also talk about what might be done as a solution, what life might be like in the future and make some predictions which we refer back to later.
In the next few posts I will be setting the agenda, making a few fun predictions and showing some charts to set the scene.
First, I should explain how I began to get so caught up in this interest.
The first time I began to question the exsisting "cornicopian" view of resources was back in Geography class. Different teachers would make mention of exponential population numbers, and also of limited resources with XX number of years remaining. Some of those teachers would make brief mention of these facts together as if to suggest that something bad might be around the corner - but without actually saying much about it. It always seemed to me that the combination of these two trends ought to be causing some concern in the big wide world - yet everyone seemed blissfully unaware. That was about 20 years ago...
When I moved to the USA my jaw dropped. I suppose it was no secret that in the UK we have some steep sales taxes - especially on fuel. But when I saw the prices of fuel and the way people behaved with it in the US, I was a little shaken. The population in the UK is about 60 million, in the US its around 300 Million. To find this many people consuming energy in what could only be described as an orgy of waste, lets say that was enlightening.
As I settled in I started to become more and more American, caring less about what I consumed. Occasionally academics or media commentators would talk about resources and a rebuttal was always made by an economist. Economists have typically approached resources with the cornicopian model. This model tells us that technology always finds a way to extract resources more efficiently, and to exploit them more fully (leave less in the ground). In effect nothing ever runs out, we either keep finding more, of we find something even better.
Another phrase you'll hear is "the stone age didnt end due to lack of stones". This analogy tells us that we should simply expect something better to come along, and not worry about the supply/demand constraints.
Another side hobby of mine has been to observe differences between my old home in Europe and my new home. Everywhere I looked, EVERYWHERE that I found differences between the UK and the US I find a connection with energy prices.
Some things you might not connect? Obesity, Home prices and Climate to name a few. Ah shucks I just mentioned climate. Its worth noting early on that will not talk a whole lot about climate change. Frankly I think the other issue outweigh climate change. I dont think theres much to talk about with climate change. If its true, the world gets a bit hotter, the sea levels rise a bit, some things change a bit. The extent and the true cause of the changes appear to be the cause of a great deal of debate. I will blog my full opinion on the matter some day but thats not the real reason for this effort.
So understand the effects of energy prices has been a bit of a side hobby of mine. Trying to make sense of it all is possible, but we will need to look at some charts and graphs. And occasionally to spice things up we will talk about things like food prices, water, vegetarians and some others things.
We will also talk about what might be done as a solution, what life might be like in the future and make some predictions which we refer back to later.
Friday, May 23, 2008
Milkshake?
So whats the deal with the title?
well once I get rolling with the blog we will get to talk about oil. Oil and lots of other stuff.
But the title is a reference to a movie about oil, and the movie is making reference to a scandal that occured in Warren Hardings Administration.
The movie:
There will be Blood, staring Daniel Day Lewis as an early Oil prospector who strikes it rich in Southern California
The scandal:
The teapot dome scandal.
The connection is Edward L Dehoney the man who Daniel Day Lewis's Character (Vern Roscoe) is very loosley based on in the movie.
And the phrase "I drink your milkshake" is paraphrased from New Mexico Senator Albert Fall from the Teapot dome Scandal.
I have made a decision to not violate copyrights in my blog, so I'm not going to post a link to the scene in the movie on youtube. But now you know its on youtube so the rest is up to you.
Anyway glad we have that sorted out. Now you know. And if you have not seen the movie I recommend it. Its gritty, contains some bad language, and it won't tell you much about oil - its more of an interesting character story.
well once I get rolling with the blog we will get to talk about oil. Oil and lots of other stuff.
But the title is a reference to a movie about oil, and the movie is making reference to a scandal that occured in Warren Hardings Administration.
The movie:
There will be Blood, staring Daniel Day Lewis as an early Oil prospector who strikes it rich in Southern California
The scandal:
The teapot dome scandal.
The connection is Edward L Dehoney the man who Daniel Day Lewis's Character (Vern Roscoe) is very loosley based on in the movie.
And the phrase "I drink your milkshake" is paraphrased from New Mexico Senator Albert Fall from the Teapot dome Scandal.
I have made a decision to not violate copyrights in my blog, so I'm not going to post a link to the scene in the movie on youtube. But now you know its on youtube so the rest is up to you.
Anyway glad we have that sorted out. Now you know. And if you have not seen the movie I recommend it. Its gritty, contains some bad language, and it won't tell you much about oil - its more of an interesting character story.
Credibility?
OK, I'm done with the 3rd person junk, fun as it was.
This post is intended to introduce you to the real me, all of me, both sides of the coin.
Firstly my professional life - with important details left out, names changed, and stunt men used for the dangerous stuff.
Obviously I cant tell you all the really interesting bits relating to diesel engine design because my competitors might be reading. Loose lips sink ships, and get Phil fired. The highlights though might let you get a sense of my experiences and hopefully lend me some credibility.
Ive worked on Internal combustion engines for 10 years now (sometimes we call then infernal combustion engines). You'd think that after 100+ years of developments there wouldn't be much left for me to do. That would be the case if it wasn't for our good old friends the EPA. Much of modern engine development is focused on meeting new emission standards to keep your lungs clean. Ive worked on Diesel engines and Natural gas engines that are used in a variety of applications and over broad size range. From Marine, Electric power generation, Military applications, mining and construction equipment, pumps, drills, chippers, shredders, shovels, trains, planes and automobiles - Ive been involved with them all. And from 600cc up to over 100 liters in total displacement, from single cylinders to 24 cylinders and from a 30hp to over 3000. I cant tell you who I work with, or what I'm doing now but this line of work does give me some insight into the technology involved in extracting earths resources, and the engines do a bit of consuming too. Obviously designing engines that burn diesel fuel means you learn a bit about fuel, where it comes from and what the future might hold.
The other side of my coin has at one time included some of the following:
The boy scout movement
Learned a bit about camping, shooting and lightin' fires. You can see the attraction immediately!
Racing Radio controlled cars
Probably started to become an Engineer here. You'd be surprised at the technology level in racing too. Carbon Fiber, Titanium, Kevlar, Teflon, progressive rate springs, limited slip differentials. So I started learning about cars before i was old enough to really afford one or drive one.
Air Force Cadets (more correctly known as ATC - Air Training Corps)
I thought I wanted to be a pilot - my dad was in the RAF, it should have been a natural fit. I learned to fly (more accurately I learned how to do aerobatics) in a Chipmunk, and also learned basic glider handling. I learned more shooting - even got some kind of marksman award for getting 10 shots grouped in the diameter of a quarter (it was actually the old 10p piece but the US quarter is roughly the same size) at 25 yards with open sights. They do teach some basic aerodynamics and aeronautic technology, but lets be honest I joined up so I could fly. Then I realized flying had its limits. No offence to pilots, but the whole thing struck me as a bit boring after a while. And then there's the endless parading around in uniform and the dingbat officers who command respect while earning none. Turns out I wasn't good with authority figures.
Mountain Bike Racing
I started just enjoying a good bike ride, but the engineer in me started lusting after the latest gadget, and before long I was racing as a way to justify spending all that money on the bike. I started racing cross country (XC as its known). That was OK for while, but after college the big trend was towards the faster and more dangerous downhill (DH) racing. I avoided that for a while - because I enjoyed being alive, but it wasn't long before all that suspension technology sucked me in. This all pretty much ended for me when I moved to Indiana. Fewer places to ride, and no hills. You can join the dots.
Music and Hi-Fi
This was a college thing for me, I started buying music in college, my CD collection grew exponentially. Then I had to feed the technology beast, Buying up high end speakers, CD players and amplifiers. You see how things tend to spiral, starting with a normal interest and spiraling into some kind of technology orgy. My music phase culminated in a Sunday morning job as a radio DJ on college radio. That's when I thought I was cool and started wearing strange colorful clothes.
Snowboarding
I gravitated towards this while living close to Michigan and trying to find something both dangerous and involving technology. Everyone in Michigan knows how to handle Skis and snowboards - even babies and grandparents. Snowboarding had a surprisingly short half-life even for me. After I learned how to do it - and how surprisingly easy it is - I just quit. Not enough technology I think. Oh yeah and Tara really hates it - too much snow for a Georgia girl.
Camping
This is a great way to de-stress and get away from the hurly burly of modern life. For me camping means also getting away from other people, not solitude exactly but getting away from people I don't know, to spend time exclusively with people I do know. And of course the camping world is full of expensive gadgets.
Climbing and Abseiling (rappelling for you US folks)
This started in the Air Force Cadets. Its a great way to show off how fearless you are to your younger peers. Plus more techno-gadgets. This mixes well with camping on weekends, since often the good places to climb are remote and camping allows you to spend more time in places like that.
Photography
I took a summer class in high school. It is a bit artsy fartsy, but it does have the single most important ingredient in any Phil hobby - Technology. So of course I have a camera bag full of latest digital SLR gear and lenses. Well OK maybe not the latest, but still some good stuff. You'll have to judge for yourselves if it was worth the investment. I expect I will post some photos around this place to make it look nice.
Bowling
Yes you can find technology in the least likely places. You'd think a bowling ball would be a simple affair, but once I found out about lane oiling patterns and reactive coverstocks I was "hooked". That's a bowling pun. Never mind. I quit after about a year, still have the ball should I ever feel the need. I did learn the importance of keeping ones balls clean though, OK stop I know your sides are splitting.
Hot rodding
You cant come to America, having spent 22 years paying $5 or $6 dollars a gallon for gasoline, and not take an interest in cars. Suddenly gas cost a mere $1 a gallon, I could afford a V8! The petrol fumes took over and by 2002 I had a shiny 1968 mustang parked in front of my apartment. You'll see other bits about the mustang but between the car and the photography that's pretty much whats left of all these part time pursuits.
Hunting and guns
Vegetarians look away now. I have at various times enjoyed hunting - but mostly I just like shooting. Paper target or clay pigeons its really just a bunch of fun. Hunting brings with it a whole Pandora's box of ethical questions. Luckily for me I avoided them by eating the stuff I shot. Now I cant look at a rabbit without thinking of a nice rabbit sandwich with mayo. My friends and I like to discuss gun ownership rights and what they mean to public safety. I think I bring some interesting perspectives to the table coming from Britain, they just think I'm wrong - coming from Britain.
It should be apparent then that I like to mess with technology, if it shoots, goes bang or has any entertainment value at all I have probably messed with it. Speaking of going bang, making solid rocket fuel out of household chemicals, or making a musket with a tent pole and a firecracker should have been in that list. Yes yes, I know who McGyver is, I was one of those geeks who watched that show just to critique it for technical acuracy.
This kind of background has given me a broad range of experiences from which to draw, a whole bunch of friends and yes even a few folks who lets say, didn't appreciate my enthusiasm.
Here's something that I never cared for: English. You'll see what I mean
This post is intended to introduce you to the real me, all of me, both sides of the coin.
Firstly my professional life - with important details left out, names changed, and stunt men used for the dangerous stuff.
Obviously I cant tell you all the really interesting bits relating to diesel engine design because my competitors might be reading. Loose lips sink ships, and get Phil fired. The highlights though might let you get a sense of my experiences and hopefully lend me some credibility.
Ive worked on Internal combustion engines for 10 years now (sometimes we call then infernal combustion engines). You'd think that after 100+ years of developments there wouldn't be much left for me to do. That would be the case if it wasn't for our good old friends the EPA. Much of modern engine development is focused on meeting new emission standards to keep your lungs clean. Ive worked on Diesel engines and Natural gas engines that are used in a variety of applications and over broad size range. From Marine, Electric power generation, Military applications, mining and construction equipment, pumps, drills, chippers, shredders, shovels, trains, planes and automobiles - Ive been involved with them all. And from 600cc up to over 100 liters in total displacement, from single cylinders to 24 cylinders and from a 30hp to over 3000. I cant tell you who I work with, or what I'm doing now but this line of work does give me some insight into the technology involved in extracting earths resources, and the engines do a bit of consuming too. Obviously designing engines that burn diesel fuel means you learn a bit about fuel, where it comes from and what the future might hold.
The other side of my coin has at one time included some of the following:
The boy scout movement
Learned a bit about camping, shooting and lightin' fires. You can see the attraction immediately!
Racing Radio controlled cars
Probably started to become an Engineer here. You'd be surprised at the technology level in racing too. Carbon Fiber, Titanium, Kevlar, Teflon, progressive rate springs, limited slip differentials. So I started learning about cars before i was old enough to really afford one or drive one.
Air Force Cadets (more correctly known as ATC - Air Training Corps)
I thought I wanted to be a pilot - my dad was in the RAF, it should have been a natural fit. I learned to fly (more accurately I learned how to do aerobatics) in a Chipmunk, and also learned basic glider handling. I learned more shooting - even got some kind of marksman award for getting 10 shots grouped in the diameter of a quarter (it was actually the old 10p piece but the US quarter is roughly the same size) at 25 yards with open sights. They do teach some basic aerodynamics and aeronautic technology, but lets be honest I joined up so I could fly. Then I realized flying had its limits. No offence to pilots, but the whole thing struck me as a bit boring after a while. And then there's the endless parading around in uniform and the dingbat officers who command respect while earning none. Turns out I wasn't good with authority figures.
Mountain Bike Racing
I started just enjoying a good bike ride, but the engineer in me started lusting after the latest gadget, and before long I was racing as a way to justify spending all that money on the bike. I started racing cross country (XC as its known). That was OK for while, but after college the big trend was towards the faster and more dangerous downhill (DH) racing. I avoided that for a while - because I enjoyed being alive, but it wasn't long before all that suspension technology sucked me in. This all pretty much ended for me when I moved to Indiana. Fewer places to ride, and no hills. You can join the dots.
Music and Hi-Fi
This was a college thing for me, I started buying music in college, my CD collection grew exponentially. Then I had to feed the technology beast, Buying up high end speakers, CD players and amplifiers. You see how things tend to spiral, starting with a normal interest and spiraling into some kind of technology orgy. My music phase culminated in a Sunday morning job as a radio DJ on college radio. That's when I thought I was cool and started wearing strange colorful clothes.
Snowboarding
I gravitated towards this while living close to Michigan and trying to find something both dangerous and involving technology. Everyone in Michigan knows how to handle Skis and snowboards - even babies and grandparents. Snowboarding had a surprisingly short half-life even for me. After I learned how to do it - and how surprisingly easy it is - I just quit. Not enough technology I think. Oh yeah and Tara really hates it - too much snow for a Georgia girl.
Camping
This is a great way to de-stress and get away from the hurly burly of modern life. For me camping means also getting away from other people, not solitude exactly but getting away from people I don't know, to spend time exclusively with people I do know. And of course the camping world is full of expensive gadgets.
Climbing and Abseiling (rappelling for you US folks)
This started in the Air Force Cadets. Its a great way to show off how fearless you are to your younger peers. Plus more techno-gadgets. This mixes well with camping on weekends, since often the good places to climb are remote and camping allows you to spend more time in places like that.
Photography
I took a summer class in high school. It is a bit artsy fartsy, but it does have the single most important ingredient in any Phil hobby - Technology. So of course I have a camera bag full of latest digital SLR gear and lenses. Well OK maybe not the latest, but still some good stuff. You'll have to judge for yourselves if it was worth the investment. I expect I will post some photos around this place to make it look nice.
Bowling
Yes you can find technology in the least likely places. You'd think a bowling ball would be a simple affair, but once I found out about lane oiling patterns and reactive coverstocks I was "hooked". That's a bowling pun. Never mind. I quit after about a year, still have the ball should I ever feel the need. I did learn the importance of keeping ones balls clean though, OK stop I know your sides are splitting.
Hot rodding
You cant come to America, having spent 22 years paying $5 or $6 dollars a gallon for gasoline, and not take an interest in cars. Suddenly gas cost a mere $1 a gallon, I could afford a V8! The petrol fumes took over and by 2002 I had a shiny 1968 mustang parked in front of my apartment. You'll see other bits about the mustang but between the car and the photography that's pretty much whats left of all these part time pursuits.
Hunting and guns
Vegetarians look away now. I have at various times enjoyed hunting - but mostly I just like shooting. Paper target or clay pigeons its really just a bunch of fun. Hunting brings with it a whole Pandora's box of ethical questions. Luckily for me I avoided them by eating the stuff I shot. Now I cant look at a rabbit without thinking of a nice rabbit sandwich with mayo. My friends and I like to discuss gun ownership rights and what they mean to public safety. I think I bring some interesting perspectives to the table coming from Britain, they just think I'm wrong - coming from Britain.
It should be apparent then that I like to mess with technology, if it shoots, goes bang or has any entertainment value at all I have probably messed with it. Speaking of going bang, making solid rocket fuel out of household chemicals, or making a musket with a tent pole and a firecracker should have been in that list. Yes yes, I know who McGyver is, I was one of those geeks who watched that show just to critique it for technical acuracy.
This kind of background has given me a broad range of experiences from which to draw, a whole bunch of friends and yes even a few folks who lets say, didn't appreciate my enthusiasm.
Here's something that I never cared for: English. You'll see what I mean
Day 1
I Finally got around to setting this up, so I can focus my efforts. Ive been flailing around posting on various forums and want to start putting my thoughts down for future reference.
Might as well post about me, if I write in 3rd person it makes me sound more important - like its an autobiography.
Phil was born in Wales in 1977. Phil's father was employed by Her Majesty's Royal Air Force, so there was some moving around until about 1985 ish. Phil's family settled in the town of King's Lynn on the East coast of England. Phil finished high school at what is now known as "The Park" high school. At the time it was simply known as "Gaywood", yes I think we can agree the name change was a positive step for them. Incidentally Phil designed the schools logo for them as part of an art competition sometime around 1991. Phil then went to Brunel University, in Uxbridge to Study Mechanical Engineering. For the geographically challenged - Uxbridge is in West London, a few miles north of Heathrow airport.
After graduating from Brunel in 1998, Phil spent a few months un-employed, fiddling with an old 1978 LWB Landrover. Luckily he managed to find employment with Perkins Engines - ending that rather brief but financially "sub optimal" phase of his life.
His new job relocated him to Shrewsbury England, where Phil learned the finer points of designing Diesel engines. Perkins it turned out was a wholly owned subsiduary of Caterpillar Inc, and it became apparent to Phil that it might be wise to work for the parent company and not the newly aquired subsidiary. The particular Perkins business that Phil had joined had some products in common with Caterpillar and this tranistion to the parent company later proved to be something of a darn good idea.
Phil moved to the United States in 2000, to work for Caterpillar in Lafayette IN. More diesel engine design work followed, while Phil worked on convincing the beautiful Tara Sellers that she need look no further for a suitor. His devious plan succeeded and Tara Married Phil on June 8th 2002 to become Tara Ball. The more astute readers will notice that if mumbled quickly her name now sounds like "terrible". That gives you some idea about who got the better end of the deal.
Further relocation occured in 2004 when Phil and Tara moved to Georgia so Phil could continue his interesting career in diesel engine design, and so they could be closer to Taras family.
Then in December 2006, the clocks stopped, the pool balls suddenly rolled to a stop on the table and our first child was born, changing everything and making life infinitley richer. Tara and Phil were thus joined by Sophia in their walk through life.
Phil is still working for Caterpillar Inc, still designs diesel engines (must be something about it that he likes!) and they are all still living happily in Georgia.
Now might be a good time to remind readers that the opinions expressed here are not the opinions of Caterpillar Inc or its subsidiarys. But golly gosh Caterpillar is a great company with a bright future, so investors might want to go to http://www.cat.com/ for closer look.
I think thats enough trumpet blowing for one post.
Might as well post about me, if I write in 3rd person it makes me sound more important - like its an autobiography.
Phil was born in Wales in 1977. Phil's father was employed by Her Majesty's Royal Air Force, so there was some moving around until about 1985 ish. Phil's family settled in the town of King's Lynn on the East coast of England. Phil finished high school at what is now known as "The Park" high school. At the time it was simply known as "Gaywood", yes I think we can agree the name change was a positive step for them. Incidentally Phil designed the schools logo for them as part of an art competition sometime around 1991. Phil then went to Brunel University, in Uxbridge to Study Mechanical Engineering. For the geographically challenged - Uxbridge is in West London, a few miles north of Heathrow airport.
After graduating from Brunel in 1998, Phil spent a few months un-employed, fiddling with an old 1978 LWB Landrover. Luckily he managed to find employment with Perkins Engines - ending that rather brief but financially "sub optimal" phase of his life.
His new job relocated him to Shrewsbury England, where Phil learned the finer points of designing Diesel engines. Perkins it turned out was a wholly owned subsiduary of Caterpillar Inc, and it became apparent to Phil that it might be wise to work for the parent company and not the newly aquired subsidiary. The particular Perkins business that Phil had joined had some products in common with Caterpillar and this tranistion to the parent company later proved to be something of a darn good idea.
Phil moved to the United States in 2000, to work for Caterpillar in Lafayette IN. More diesel engine design work followed, while Phil worked on convincing the beautiful Tara Sellers that she need look no further for a suitor. His devious plan succeeded and Tara Married Phil on June 8th 2002 to become Tara Ball. The more astute readers will notice that if mumbled quickly her name now sounds like "terrible". That gives you some idea about who got the better end of the deal.
Further relocation occured in 2004 when Phil and Tara moved to Georgia so Phil could continue his interesting career in diesel engine design, and so they could be closer to Taras family.
Then in December 2006, the clocks stopped, the pool balls suddenly rolled to a stop on the table and our first child was born, changing everything and making life infinitley richer. Tara and Phil were thus joined by Sophia in their walk through life.
Phil is still working for Caterpillar Inc, still designs diesel engines (must be something about it that he likes!) and they are all still living happily in Georgia.
Now might be a good time to remind readers that the opinions expressed here are not the opinions of Caterpillar Inc or its subsidiarys. But golly gosh Caterpillar is a great company with a bright future, so investors might want to go to http://www.cat.com/ for closer look.
I think thats enough trumpet blowing for one post.
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