According to www.bellinghamherald.com:

Speaker urges transition now to tilling small plots

BELLINGHAM — Nuclear physicist John Rawlins has presented a grim vision of a world that could suddenly run out of oil and food, leaving billions to starve.

“In the near term, what’s going to bother us is food price escalation, and ultimately, food availability decline,” Rawlins said Monday during a lecture at Whatcom Community College. “Oil is a big input to food production.”

Rawlins is a WCC instructor who formerly worked for Westinghouse Hanford Co. He argued that because oil supplies are drying up, Western civilization has no choice but to start a painful transition from oil fueled agriculture to a future much like the distant past, in which much larger numbers of people till the soil by hand to raise food.

In Whatcom County, he said, that would likely mean 30,000 people tilling small plots to feed the rest of the population.

Rawlins urged his audience to start the transition now. He said he is tilling more of his own property to grow food.

“In cities, why are you growing grass?” he asked his audience of about 200. “You can’t eat grass.”

World oil supply appears to have peaked, and the available supply could drop rapidly a lot sooner than people think, Rawlins said, asserting that in 20 years production could be half what it is today.

In his view, the voracious consumption of fossil fuels in the past 100 years has allowed a vast increase in human population that won’t be sustainable. Before the fossil fuel economy, the Earth’s population was about 1.5 billion; today it is approaching 7 billion. Rawlins said some scholars predict a population crash of nightmarish proportions to get back to former levels.

Not everyone shares that bleak view.

Economist James Hamilton is author of the Econbrowser blog, www.econbrowser.com, and a professor of economics at the University of California-San Diego. In a telephone interview, Hamilton said he and many economists believe that as oil supplies dwindle and prices rise, the human race could manage an orderly transition to life support systems less reliant on fossil fuels. Hamilton also questions the assertion that world oil production has peaked, but says the peak may be no more than five or 10 years away.

While he characterized Rawlins’ views as extreme, he also said we can’t afford to be complacent about our fuel supply.

“There’s a middle ground between people who say Western civilization has to end, and those people who say everything can go on just the way it has been,” Hamilton said. “Within our lifetimes, within my children’s lifetimes anyway, we’re going to have to see a transition away from an oil-based economy.”

In 2005, when crude oil was $60 a barrel, Hamilton wrote a blog post expressing confidence that consumers would respond to steady price increases by reducing consumption. That, he argued, would stretch out world supplies long enough to allow an orderly transition away from fossil fuels.

Today, with the price of crude oil only recently retreating from $100 a barrel, Hamilton admitted his confidence has declined.

“I myself do worry about this issue more than I did in 2005,” he said.

The run-up in price since then has done little, if anything, to dampen world or U.S. demand.

“The nature of this transition could be more painful than I thought in 2005,” Hamilton said. “There’s less of a price response now. That means it’s going to take more of a price increase to get a change.”

- This is what I believe is the realization by these economist to slowly understand the problems of dependence of oil is not easily changed by price itself. The demand of oil is very very strong and most of it is very tight together with economic growth and sustainability of food supply and more. Oil is the food, energy and life blood of all man kind and it’s now limited in supply due to very strong and increasing global demand…it takes a much higher cost to deprive the demand of the world.

Strong price control of the world governments does unfortunately maintained high demand of oil today, soon the supply won’t be sufficient for even those who are prepare to pay more for it and shortages will start.

When oil shortages begins, food supply will be affected due to high dependencies of deliveries of food using oil and agriculture dependence of oil and natural gas for modern farming methods to cultivate the quantity the population needed.

All these are very real and is happening, try not to panic and plan to grow some food if possible otherwise prepare to earn more money if you can.

Oil prices once again on the rise again as expected from all the recovery from the market to a high of $91 up from $89 per barrel, gold prices shot through the super high of $920 and overall market suddenly become bullish instead of bearish.

There are many people will get their finger burned by playing the stocks by shorting them and betting it to go down and many will also become rich by betting for a bullish economy.

My friend even say should have bought those shares when they are very low and make a handsome profit now, well people sees this as an opportunity instead of slowing of the economy.

According to NASDAQ:

DAVOS, Switzerland -(Dow Jones)- The surprise Federal Reserve rate cut of 75 basis points Tuesday is good news for consumers and energy demand, a senior OPEC delegate based in the Persian Gulf said Tuesday.

“The rate cuts, I think, can only be seen as positive for consumers,” the delegate told Dow Jones Newswires by telephone. “From an energy perspective, there’s concern about the health of oil demand given all the financial problems, so this sort of action is positive for energy demand.”

The Fed cut its federal funds rate to 3.5% “in view of a weakening of the economic outlook and increasing downside risks to growth,” it said.

Earlier Tuesday, the Organization of Petroleum Exporting Countries said in its monthly oil market report that uncertainty over the need for its oil has risen on fears of a recession in the U.S. and increased fuzziness on just how much crude non-OPEC producers such as Norway and Mexico would deliver.

“As always, OPEC member countries are monitoring market developments closely and will review the situation” when it meets Feb. 1 in Vienna, the report said.

The group, which has expanded its membership to include Angola and Ecuador in recent months, left its forecasts for world oil demand throughout this year almost unchanged. Demand growth of 1.52%, or 1.3 million barrels a day, is a tad lower than it expected a month ago, and demand is forecast at a little over 87 million barrels a day.

- The oil prices shot up from on Tuesday rebounding off $87.45 per barrel to shoot up to highest $89.71 per barrel at 2.21 am (+8 GMT Singapore Time)

This new definitely add fuel to the oil prices and probably bring back the higher oil prices as I had previously predicted. This can go both ways as the economic situation might either stabilize or go violently north or south depending on what’s happening in the world scene next.

It can be more violence in the middle east, IRAN tension at Straits of Hormuz, oil pipelines sabotages at Nigeria or OPEC decisions to remain same output or cut supply at the February Meeting.

The possibility of more serious subprime credit crisis to unveil at the Subprime Insurance industry or other credit industry to be affected. Does this cut in interest rates going to sustain the economic growth for long term, middle term or relatively short term?

We are going to be facing hyper inflation when oil prices shoots up or result in a depression? Question about the future that most economist dare not guarantee with 100% certainty. What I can predict is a sudden spike in oil prices before market “pause” or “shut down” to calm the market with a hope to stabilize it.

There are people who are investing in the markets that can earn money both in the bear market and bull market, it’s those who don’t have time to monitor and not savvy enough to control their own investments will lose big time. That means majority of the investors will have a possibility of losing out if they have absolutely no control or left their funds to incompetent fund managers.

Fund managers or economist may still have the mentality of the past where the economy will continue to be business as usual in any event of a depression or hyper inflation due to higher oil prices and zero or negative growth.

Go green on renewable energies that does not comes from food crops!…

According to electroniciraq.net:

BAGHDAD (IRIN) – Iraqis are once again facing days of power outages and queues hundreds of meters in length at petrol stations in parts of the capital, Baghdad, as well as in some of the country’s provinces.

Suffering civilians find themselves caught in a vicious circle of political finger-pointing and sabotage attacks.

The Iraqi electricity ministry has blamed the oil ministry for not providing sufficient fuel to run its generators. The oil ministry has blamed the electricity ministry for failing to provide its refineries with an uninterrupted power supply.

“Oil and gas pumping from Kirkuk fields to our northern and southern plants over the past two weeks has stopped and furthermore the decision on 4 January by Turkish power provider Kartet to stop exporting electricity to Iraq is also to blame,” Aziz Sultan, electricity ministry spokesman, said.

He added that sabotage attacks by militants had hampered efforts to distribute electricity. “Three bombs over the past two weeks have targeted the power lines that connect northern provinces with each other and with Baghdad,” he said.

In a statement Kartet said that it had stopped supplying electricity to Iraq because Iraq had stopped supplying it with refined fuel for its power station near the border.

The oil ministry has stated that it cannot produce fuel without power and has called on the electricity ministry to continue providing uninterrupted electricity to its oil and gas fields.

“We are doing our best,” Assem Jihad, oil ministry spokesman, said. “A power outage at IT1 power plant in Kirkuk has led to a decline in the [oil and gas] production in our northern fields,” Jihad said. “We cannot be blamed for this shortfall. Once there is a stable power supply we will have uninterrupted oil and gas production.”

Impact on Baghdad

Officials in Baghdad said that ministries, particularly the Ministry of Health, had about a month’s supply of fuel in reserve for such situations and could supply their respective institutions with electricity from an “emergency line”.

Dr Ahmed Nasser Yassin of al-Yarmouk hospital, one of Baghdad’s most renowned hospitals, told IRIN the hospital was still running normally and so far had not been affected by this latest power shortfall.

“Everything is going normally and smoothly in the hospital. We have our own big generators and fuel supplies, which will be sufficient for nearly a month, and we also have cooking gas. However, if this situation persists for longer we will be badly affected,” he said.

Exceptionally cold winter

Pressure on the country’s fragile power grid and demands on fuel products have been increased by an exceptionally cold winter. Recent Baghdad temperatures have hit a low of -4 degrees Celsius.

“We have not had electricity for a week now and it took me about four hours to buy fuel for my car. Meanwhile, our kerosene for heaters is running out,” said Jaafar Dhia Ali, 44, who lives in east Baghdad.

“There are 20 of us living in this house as I’m hosting my two displaced brothers’ families. We three are all government employees [on low salaries] and can’t afford to buy from the black market,” Ali, a father-of-six, added.

Little kerosene is available on the state-run market at the subsidized price of US$0.14 a liter but on the black market it sells for more than US$1 a liter.

“We need at least 10 liters a day to stay warm which means that we need to pay US$300 a month for fuel,” Ali said.

- Ok, from these articles…clearly power outages seems to be a common plight by oil producing countries starting from Iran, S. Africa and now Iraq. I believe these countries have some common problems from their politicians to the people and the availability of fossil fuels…which is finite and declining.

Now, this power outage seems to be causing some problem in the oil producing side of IRAQ….that means…

According to BBC.CO.UK:

South Africa’s state-owned electricity company Eskom has stopped supplying power to neighbouring countries because of acute domestic shortages.

Zimbabwe and Mozambique are thought to be the worst affected countries.

A BBC correspondent says the recent daily power cuts have caused chaos and are threatening to have a major impact on South Africa’s economy.

On Friday, enraged commuters set fire to trains in Pretoria after power cuts caused two-hour train delays.

The BBC’s Peter Biles in Johannesburg says many small businesses are being crippled by the blackouts.

Mbeki ‘wrong’

Economists are warning that the country’s target of 6% economic growth by 2010 – when South Africa will host the football World Cup – is fast becoming a pipedream.

President Thabo Mbeki on Sunday met Eskom’s executives to discuss the power shortages.

Mr Mbeki last month admitted the government had been wrong to refuse Eskom’s request for more investment in power generation several years ago, reports the AFP news agency.

“We were wrong. Eskom was right,” Mr Mbeki said.

The governing African National Congress has now recommended the urgent development of a national response plan, to keep the electricity flowing.

Zimbabwe was hit by a black-out on Saturday night, although power was later restored.

It is not clear if this was linked to the Eskom decision.

State radio has blamed the problem on an unspecified breakdown.

Zimbabwe is believed to import about 40% of its electricity and has had trouble paying its bills because of its lack of foreign currency.

- The frequent blackouts may eventually cost the people of Zimbabwe and Mozambique dearly with some surge in violence and chaos due to the black out. It’s unclear how this crisis may end but it’s definitely going to be tough living in such condition if they demands high consumption of electricity.

According to Yahoo!News:

ABU DHABI (Reuters) – U.S. Energy Secretary Sam Bodman repeated his plea on Monday for more oil from top exporter Saudi Arabia, undeterred by OPEC’s cautious response to Washington’s request so far.

Oil has fallen by more than 10 percent from a record high of $100.09 a barrel hit early this month, easing some of the pressure on OPEC to raise supplies, analysts said.

Bodman told reporters in Abu Dhabi there were short-term concerns about the performance of the U.S. economy and he was hopeful Riyadh would steer a decision to increase oil supplies at OPEC’s meeting on February 1 in Vienna.

“I continue to believe in my earlier statement that we are hopeful they will increase supplies,” he said. “I am of the view that there needs to be increased supply in order to call the markets of the world well supplied with oil.”

Bodman, who met the Saudi oil minister at the weekend, said the United States expected oil inventories to drop in the first half of 2008 but the Saudis held “different views.”

The United Arab Emirates Oil Minister Mohammed al-Hamli said OPEC would examine all options when its ministers meet.

“OPEC … will look then at all the options,” Hamli told reporters on the sidelines of a green energy conference. “There is a disconnect between fundamentals and the price.”

When asked what OPEC should do at the meeting, he said: “We haven’t yet decided. We will decide in Vienna with all the other OPEC ministers.”

Bodman’s appeal came days after U.S. President George W. Bush asked for more oil on a separate visit to Riyadh, and less than two weeks before OPEC’s next meeting.

He has said the challenges caused by high oil prices posed a serious problem for the United States, the world’s biggest consumer of fuel, and for developing economies.

He added however, that the United States had no intention of changing the rate at which it was filling its strategic petroleum reserves despite high oil prices.

“We are filling the SPR at 70,000 barrels per day (bpd). The world uses 84 million bpd. It is a very small fraction,” Bodman said.

- The question now is why would U.S. energy chief pleads for more Saudi Oil if the market is well supplied with oil which OPEC had claimed previously. Now, clearly that had spark some curious questions indeed. The spin from OPEC officials and OPEC ministers have some impact to the oil prices but soon it will no longer be a credible source of information as they kept everyone guessing their real intentions.