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Low Oil Prices: Sign of a Debt Bubble Collapse, Leading to the End of Oil Supply?

Oil and other commodity prices have recently been dropping. Is this good news, or bad? Figure 1. Trend in Commodity Prices since January 2011. Brent spot oil price from EIA; Australian Coal from World Bank Prink Sheet; Food from UN’s FAO. I would argue that falling commodity prices are bad news . It likely means that the debt bubble which has been holding up the world economy for a very long–since World War II, at least–is failing to expand sufficiently. If the debt bubble collapses, we will be in huge difficulty. Many people have the impression that falling oil prices mean that the cost of production is falling, and thus that the feared “peak oil” is far in the distance. This is not the correct interpretation, especially when many types of commodities are decreasing in price at the same time. When prices are set in a world market, the […]

Posted On : Published By : Tom Whipple
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Paul Krugman’s Errors and Omissions

In a New York Times op-ed published September 18 titled “ Errors and Emissions ,” economist-columnist Paul Krugman took a swipe at my organization, Post Carbon Institute, lumping us together with the Koch brothers as purveyors of “climate despair.” No, the Koch brothers are not in despair about the climate; apparently our shared error is that we say fighting climate change and growing the economy are incompatible. And, according to Krugman, a new report from the New Climate Economy Project (NCEP) and a working paper from the International Monetary Fund (IMF) show that the falling cost of renewable energy means this is happily not the case. But in our view Krugman himself is guilty of five critical errors, and three equally serious omissions. First the errors: 1. He mistakes post-growth realism for anti-growth activism. While Krugman linked to my book The End of Growth , it seems he may […]

Posted On : Published By : Tom Whipple
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Brent Crude Declines Before China Manufacturing Data; WTI Drops

Brent crude declined for the third time in four days before manufacturing data from China, the world’s second-biggest oil consumer. West Texas Intermediate fell in New York . Futures dropped as much as 0.6 percent in London . An index of China’s factory output probably fell to 50 in September, a Bloomberg News survey showed before a preliminary reading from HSBC Holdings Plc tomorrow. That would be down from 50.2 for August. Libya was pumping 700,000 barrels a day of crude after it cut output at the Sharara field, National Oil Corp. said. “There’s some downward momentum in the market’s outlook for the Chinese economy at the moment,” Ric Spooner, a chief strategist at CMC Markets in Sydney, said by phone today. “The news has been consistently weak recently.” Brent for November settlement slid as much as 63 cents to $97.76 a barrel on the London-based ICE Futures Europe […]

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Secretary of State Kerry Meets With Iranian Counterpart in New York

NEW YORK—U.S. Secretary of State John Kerry met his Iranian counterpart Javad Zarif on Sunday for talks on Iran’s nuclear program and the threat posed by Sunni extremist group Islamic State, a senior State Department official said. The discussions on Syria come as Washington and Tehran have both insisted they won’t cooperate militarily in the fight against Islamic State in Iraq or Syria. The U.S. is building an international coalition to fight Islamic State but so far has excluded Iran from that group, although the two countries have discussed events in Iraq a number of times in recent weeks. Mr. Zarif has slammed the U.S.-led group as "the coalition of the repenters," saying many of the countries now pledging to fight the Sunni extremists have been supplying or assisting them over the past few years. A State Department official said Mr. Kerry and Mr. Zarif met for over an […]

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Exclusive: Iran seeks give and take on Islamic State militants, nuclear program

UNITED NATIONS (Reuters) – Iran is ready to work with the United States and its allies to stop Islamic State militants, but would like more flexibility on Iran’s uranium enrichment program in exchange, senior Iranian officials told Reuters. The comments from the officials, who asked not to be named, highlight how difficult it may be for the Western powers to keep the nuclear negotiations separate from other regional conflicts. Iran wields influence in the Syrian civil war and on the Iraqi government, which is fighting the advance of Islamic State fighters. Iran has sent mixed signals about its willingness to cooperate on defeating Islamic State (IS), a hard-line Sunni Islamist group that has seized large swaths of territory across Syria and Iraq and is blamed for a wave of sectarian violence, beheadings and massacres of civilians. Iran’s Supreme Leader Ayatollah Ali Khamenei said recently that he vetoed a U.S. […]

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Egypt militants claim blast near foreign ministry

CAIRO (AP) — An Egyptian militant group claimed responsibility for Sunday’s bomb blast in a busy downtown Cairo street near the Foreign Ministry that killed two senior police officers and wounded several other policemen. Ajnad Misr, or Soldiers of Egypt, which has claimed previous attacks on police, said in a statement posted late Sunday on its Twitter account and on a militant website that it had used an explosive device on "officers of the criminal apparatus" as part of its campaign against security forces. It said a group of its members carried out "a new penetration operation to reach the foreign ministry’s perimeter and plant the explosive device." It did not say how they detonated the explosives. It said the attacks will not stop until "the ruling tyrants fall and God’s Shariah is established … and that when a hero dies he will be replaced by several heroes who […]

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Some 130,000 Syrians reach Turkey, fleeing IS

ANKARA, Turkey (AP) — The number of Syrian refugees who have reached Turkey in the past four days after fleeing the advance of Islamic State militants now totals 130,000, Turkey’s deputy prime minister said Monday. Numan Kurtulmus warned that the number could rise further but insisted that Turkey was ready to react to "the worst case scenario." "I hope that we are not faced with a more populous refugee wave, but if we are, we have taken our precautions," Kurtulmus said. "A refugee wave that can be expressed by hundreds of thousands is a possibility." The refugees have been flooding into Turkey since Thursday, escaping an Islamic State offensive that has pushed the conflict nearly within eyeshot of the Turkish border. The conflict in Syria has pushed more than a million people over the border in the past 3 1/2 years. The al-Qaida breakaway group, which has established an […]

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Turkey clamps down on Syria border after Kurdish unrest

On Sunday, Turkish troops fired tear gas at the Syrian border, as Mark Lowen reports Continue reading the main story Turkey has begun to close some of its border crossings with Syria after about 130,000 Kurdish refugees entered the country over the past two days. On Sunday Turkish security forces clashed with Kurds protesting in solidarity with the refugees. Some protesters were reportedly trying to go to Syria to fight Islamic State (IS). Most refugees are from Kobane, a town threatened by the advancing militants. IS has taken over large swathes of Iraq and Syria in recent months. Before the latest influx, there were already more than one million Syrian refugees in Turkey. They have fled since the start of the uprising against Syrian President Bashar al-Assad three years ago. Some of the new arrivals are being sheltered in overcrowded schools, as Turkey struggles to cope with the influx. […]

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Dangers Aside, Railways Reshape Crude Market

Railroad tank cars are filled with oil at the Musket Corp. Windsor Crude Terminal in Windsor, Colo. Bloomberg In May 2008, a locomotive with a grizzly bear painted on its side pulled into a railroad siding next to an abandoned grain elevator in the ghost town of Dore, N.D. The engine, property of the Yellowstone Valley Railroad, hitched up a couple of tank cars of crude from nearby oil wells and set off on a thousand-mile journey to Oklahoma. Dore would never be the same—and neither would the U.S. energy industry. Until then, most oil pumped in North America moved around the continent in pipelines. Suddenly, and just as the oil industry began a period of unprecedented growth, there was an alternative: "crude by rail." Today, 1.6 million barrels of oil a day are riding the rails, close to 20% of the total pumped in the U.S., according to […]

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California gov. signs laws to boost clean-air vehicles, bike use

Gov. Jerry Brown has signed into law several bills designed to boost use of clean-air vehicles and bicycles in California. One bill signed Sunday allows 15,000 additional electric and partial zero-emissions vehicles, or 70,000 total vehicles, to get green stickers that allow driving in carpool lanes even when solo. Another requires freeway high-occupancy toll lane operators to allow clean air vehicles to drive for free or reduced rates. Such roads exist in Orange and Riverside counties, and the San Francisco area. Another bill requires a property owner, rather than the person leasing it, to install an electric vehicle charging station and its infrastructure in most cases. He also signed a bill that would allow local governments to ask voters to approve an annual $5 fee on their vehicle registration for bicycle projects , according to the Sacramento Bee . Two-thirds of voters would have to approve the fee, which […]

Posted On : Published By : Tom Whipple