24 October 2007

Well, that's the stupidest thing I've ever heard....

Humans hard-wired for optimism, study finds
Last Updated: Wednesday, October 24, 2007 | 4:36 PM ET
CBC News
Humans are hard-wired for optimism and think good things will happen to them in the future despite no evidence to support such expectations, according to a study by U.S. and British researchers.

People expect to live longer and be healthier than average, underestimate their likelihood of getting a divorce and overestimate their prospects of career success, psychologists and neurologists from New York University and University College in London wrote in the latest issue of the periodical Nature.

The optimism is wired into the brain, they wrote, which recalls past events in an effort to imagine the future. Certain portions of the brain — the amygdala and the rostral anterior cingulate cortex — showed increased activity in test subjects who had been asked to imagine future events.

The researchers used magnetic resonance imaging to monitor subjects while they thought of future possible events, such as winning an award or the end of a relationship.

"When participants imagined positive future events relative to negative ones, enhanced activation was detected in the rostral anterior cingulate and amygdala, which are the same brain areas that seem to malfunction in depression," said lead author Tali Sharot, now a post-doctoral fellow at University College London.

More optimistic participants showed greater activity in the rostral anterior cingulate region when imagining future positive events, Sharot said.

The researchers found test subjects usually expected positive events to happen sooner than negative events, and generally imagined them with greater vividness.

"Our behavioural results suggest that while the past is constrained, the future is open to interpretation, allowing people to distance themselves from possible negative events and move closer toward positive ones," NYU professor Elizabeth Phelps said in a release.

"Understanding optimism is critical as optimism has been related to physical and mental health. On the other hand, a pessimistic view is correlated with severity of depression symptoms."

21 October 2007

17 October 2007

Talk of $100 oil -- again?

Column - The Organization of Petroleum Exporting Countries says the recent meteoric rise in oil prices has everything to do with market speculation while those supposedly doing the speculating are firm in their belief that the rise in prices is supported by supply-and-demand fundamentals. Either way, oil closed at US$87.61 per barrel Tuesday after going as high as $88.20; that is up more than 10% in the last week. Tuesday's close brought it closer to the inflation-adjusted record high of $90.46 reached in 1980. Many people have been calling for $100 a barrel for the better part of the last 12 months -- it could very well be that this milestone will be reached in the coming weeks, well before the end of the year.

But does $100 a barrel oil make sense? One way to look at it is by looking at the current state of affairs from the perspective of an oil producer. Between oil prices being high and the US dollar low, oil producers want to sell as much as they have into current market conditions in order to get the highest price and maintain purchasing power parity. This situation causes the inventory numbers to fall, because no one wants to hold the oil if they have the opportunity to unload at a higher price. It's a bit of a self-fulfilling prophecy. Is the situation sustainable? That depends on whether one buys into whether the sabre-rattling going on between Turkey and Iraq -- more specifically, Kurdistan -- materializes into something bigger and knocks out supply. The way the market has been behaving these last few days suggests it is anticipating a worst-case scenario. But the reality is there isn't much production from that part of the world and its impact on the oil price wouldn't be significant if something were to occur. Looked at another way, what this illustrates is the lack of spare capacity in oil producing nations. Making things more complicated is the fact that the non-OPEC suppliers are not delivering on their forecasted production increases. That's another reason why oil prices are so skittish. Then of course there is demand, which is pushing prices upwards as consumption in both China and India continue to rage. Most analysts expect prices will soften below the $80 mark, which is believed to be a more sustainable price range given current fundamentals. Still, it's unlikely the kind of price spike that has been seen in the oil markets of late won't be the last for 2007; there's no getting away from the basic facts that consumption is rising and supply is not and this isn't about to change any time soon.

Oil at $100? Don't bet against it.
(Calgary Herald 071017)

Okay, so who's telling the truth? Is the high price due to market jitters or is there truly a supply/demand squeeze that is creating a natural price increase? And if the latter, what would one expect for the winter season when fuel demands go up further?

Are events unfolding in such a way as to support the near-peak or the far-peak forecasts? If we define oil narrowly, then Deffeyes's forecast for a peak in 2005 may already be confirmed. According to the Energy Information Administration (EIA), a division of the US Department of Energy, the monthly average for daily world production rates for crude oil achieved 74.2 Mb/d in May 2005; that figure has not been equaled since. The last month for which totals have been published is April 2007, which saw average daily production of about 73.4 Mb/d.

This by itself is an extraordinarily suggestive piece of information: the past two years have seen sustained high prices for oil, a situation that should provide a powerful incentive to increase production wherever possible. However, evidence presented below suggests that, on the whole, ramping up production may not be possible.

If oil is defined more loosely, the situation is similar, though the decline is less severe. Production rates for "all liquids" (a category that includes natural gas liquids and condensates, synthetic oil from tar sands, refinery gains, and biofuels) have been more or less static during the same period: according to the EIA, the twelve-month monthly average for daily production of "all liquids" reached a peak in
February 2006 at 84.578 Mb/d; for April 2007, the equivalent figure was 84.474 Mb/d, indicating essentially flat production rates for the past 14 months.

Production problems or actual production declines are being reported in all of the nations that produce 3 Mb/d or more (production figures are the averages for 2006):

1. Russia (9,247,000 b/d): forecast for future production is worsening; exports are declining
2. Saudi Arabia (9,152,000 b/d): production has been declining for over a year; the reasons for this are disputed
3. United States (5,136,000 b/d): production is in long-term decline
4. Iran (4,028,000 b/d): production is currently declining, apparently as a result of lack of investment in production infrastructure
5. China (3,686,000 b/d): production in the nation's largest oilfield (Daqing) is declining
6. Mexico (3,256,000 b/d): production in the nation's largest oilfield (Cantarell) is declining at a double-digit annual percentage rate
7. North Sea (Great Britain, Norway, and Denmark, collectively producing 4,343,000 b/d): production is declining rapidly; Britain is or will soon be a net oil importer.

Meanwhile, the most obvious confirmation of problems with the global oil supply is the fact that prices have soared from $12 a barrel in 1998 to over $80 today.

Can that be attributed to speculation spooks alone?


It's a murder

We can still see the power of natural instincts and processes at work even in a large urban center. Everyday, at almost the same time every day in the morning and evening, a huge murder of crows flies from southeast to northwest directly over our building. Hundreds of crows will fly around our building, some landing on top en route to their next destination. Presumably they are heading somewhere to nest in the evening and heading out to forage in the morning. It is quite the spectacle to see and hear as the sound of hundreds of flapping wings whiz by our patio door windows. I usually see the evening crew coming across the Beltline from the St. Mary's Cathedral roof, where they seem to collect before continuing north...I'm not sure if that's where they start, although it is close to the Elbow River. Maybe they are coming back from the SE landfills? It also appears that as the sun sets earlier every evening, so does the beginning of their trip. Monday night when I saw them, it was around 6:30pm. This morning, they were moving out at 6:30am, so normally they are out and about before I get a first glimpse out the window.

08 October 2007


Congressman: Dollar Could Collapse To Absolute Zero
Presidential candidate Ron Paul warns of coming global economic depression
Paul Joseph Watson
Prison Planet
Monday, October 8, 2007

Presidential candidate Ron Paul has made a dire prediction that the dollar could collapse to absolute zero - precipitating hyper inflation, soaring oil prices and a global economic depression if current policies are continued.

"Once they realize the American people have awakened to the con game that's been going on - I think those people running the banking and monetary system aren't going to be too happy," Paul told the Alex Jones Show on Friday.

The Texas Congressman forecasts that if current policies are prolonged, the dollar could crash all the way to nothing and be forced to start over.

"If Bush is foolish enough to start bombing Iran, that might precipitate such a crisis as oil going to $200 dollars a barrel and really dampening the enthusiasm of the whole dollar," said Paul.

"If they continue what they're doing, it's gonna go to zero, we're gonna have runaway inflation, all paper currencies eventually self-destruct and are ruined, and we're in uncharted waters right now - this is the first time in the history of man you've had no solid currencies around the world and this has been going on for 35 years."

Paul agreed that elitists would seize upon a global depression by posing as the saviors and offering more control, police state and big government as the solution.

"This was the whole thing that started in the last depression," said Paul, "Scare people to death instead of blaming the Federal Reserve for the depression and the financial bubble of the 20's, they said 'well capitalism failed, it was that stupid gold standard', therefore we have to have welfare and of course everything they did prolonged the depression."

Paul said his warnings about the impending collapse of the U.S. economy, which stretch back years, were helping his campaign gain credibility due to the unfolding crises in the market and the credit crunch.

"When the people understand how the Fed screws up the economy and causes all the bubbles and all the changes that have to come from that, I'm getting a lot more calls," said Paul.

The Congressman also discussed the continued success of his campaign and the establishment's attempts to stifle its importance.

The presidential candidate said the reason that the Democrats and Republicans are trying to speed up the primaries is because they don't like competition from third party and grass roots candidates and are trying to prevent them from gaining traction.

"The move right now is to try to close the primaries - do you think they're sincere when they say they want to have a big tent and invite new people in? They can invite a lot of new people in but they don't want constitutionalists evidently because they want to make it tough to vote in a Republican primary," said the Congressman.

"It confirms the fact that the control of this whole system has been one party so to speak, it's one group of people that control both parties and right now I think the people are getting disgusted with it and they're starting to wake up," he added.

The Congressman stated that the popularity of his campaign outstripped even his expectations and slammed the establishment networks for attempting to skew Paul as a fringe candidate.

"It doesn't discourage our supporters, it enrages them," said Paul, "They always claimed that there were just a few of us out there that cared and that they were bloggers manipulating the Internet - well you can't manipulate to the point where you get 35,000 new donors who average about $40 dollars a piece and raise $5 million dollars and outpace many of the other candidates."

Paul said the other candidates had initially tried to ignore his platform, before ridiculing it, to the point where they are now being forced to adopt constitutionalist rhetoric in order to compete with his burgeoning popularity.

Right Now

This Republican's got balls

Jerry Saunders, Mayor of San Diego.

03 October 2007

Running out of stuff...

Triple-digit oil prices to become norm as wells run dry, analyst says

Oil prices of at least US$100 a barrel are expected to become the norm as early as next year, as conventional supplies continue to decline and consumption in the developing world rises, CIBC chief economist Jeff Rubin said Tuesday. "We're in a world of triple-digit oil prices for the foreseeable future. Whether it's $100 or $140 a barrel ... is up to debate, but the bottom line is we're in the bottom of the ninth inning of the hydrocarbon age." Rubin said higher oil prices will spur technological innovations, as well as growth in nuclear power and biofuels. More of OPEC's production will go toward fuelling its energy needs. Despite Wall Street's obsession with oil consumption by China and India, oil use in Russia, Mexico and the OPEC nations outpaced the world's most populous country last year. By 2012, Canadian oilsands could become the single largest source of new oil supply for the United States as Mexico's supplies become depleted, Rubin said. Recent oilsands acquisitions by Royal Dutch Shell and Marathon Oil could be the "harbinger of things to come." Six of the largest oil suppliers to the US are poised to cut their global exports by nearly two million barrels a day by 2012, Rubin said. The projected cut - amounting to 7% - by Mexico, Venezuela, Saudi Arabia, Nigeria, Algeria and Russia, "reflect the growing struggle in these countries to grow production and manage their own soaring rates of oil consumption." Canada's oilsands production is expected to increase to 2.3 million barrels a day by 2015, up from about 1.1 million barrels a day in 2005, according to the US Energy Information Administration. Rubin's remarks come as big oil companies, such as Exxon Mobil, continue to forecast plenty of fossil fuel for the world's needs to at least 2030.
(Edmonton Journal 071003)

Industry water use worries experts

Upgraders in the industrial heartland northeast of Edmonton could use as much as 104 billion litres of water annually, almost as much as all the people and industries in the Greater Edmonton area combined. The eight current and proposed upgraders have applied to the government for 92.2 billion litres, while licences for another 11.9 billion litres has already been granted, according to data released to the Journal by Alberta Environment. "We have no idea what the effects of all these allocations might be," said Bill Donahue, a water research scientist. "What I think is most alarming is that the province has never had any plan for development in Alberta and they continue to approve and promote very water-intensive industries. . . they have minimal understanding of their water supply. They have no understanding of the effects of climate change and what they're going to be on the water supplies." Alberta Environment said Monday it had "done the science" on the river and had limits in mind. It will launch a new program today that considers the combined environmental impact of industrial activity on air, land and water. Instead of evaluating proposed projects on their own, the new plan is to add all existing and proposed projects together to determine the combined effect on air and water quality, as well as wildlife living in an area. Alberta Environment said it has already done scientific studies to figure out what the targets for air, land and water quality should be in the industrial heartland. Discussions with industry about how those targets will be implemented will begin right away. The facilities will have to work together to limit air emissions to a regional cap, for example. How protective of the environment these new limits will be depends on how stringent they are, said Chris Severson-Baker, director of the Pembina Institute's energy watch program. "If (targets) are set at the wrong level, then it's going to give a permit to pollute," Severson-Baker said.
(Edmonton Journal, Calgary Herald 071002)

Bank injects $855M into financial markets

The Bank of Canada intervened in financial markets again yesterday, buying $855-million of securities to defend its target overnight interest rate. Since Thursday, Canada's central bank has intervened four times for a total of $3.815-billion. In such purchase and resale transactions, the Bank of Canada buys government bonds from major financial institutions with an agreement to sell them back at a predetermined price the next business day. The bank made the transactions to maintain its overnight loan target rate, which is 4.5%. The Bank of Canada and other central banks, including the US Federal Reserve, have been pumping money or “liquidity” into the global financial system to ease a credit squeeze related to the collapse of the US subprime mortgage market.
(Globe and Mail 071003)

Public wants oilpatch to pay more

An overwhelming number of Albertans - 88% - believe they are not getting their "fair share" from oil and gas royalties, and two-thirds want Premier Ed Stelmach to fully adopt the contents of a review panel report that has the oilpatch seething. Those are results of a poll commissioned by the Calgary Herald and Edmonton Journal, which also shows, despite dire warnings from the energy industry, a majority of Albertans believe oil and gas companies won't flee the province if the government hikes royalties. Industry fiercely opposes implementing the panel's full report and warns that the province could miss out on billions of energy investment dollars - though proponents note Alberta's adjusted royalty scheme would still be in the middle of the pack internationally. The poll indicates there's a significant appetite for change. Of the 88% of Albertans who believe they are not getting their fair share from oil and gas royalties, 51% "strongly agree" with that sentiment while only 4% "strongly disagree." While the review panel's recommendations are ruffling industry's feathers, 67% of the poll's respondents agree with panel chairman Bill Hunter, who said the government should adopt the report in its entirety. Respondents were also asked whether royalties should be increased, decreased or kept the same for each of natural gas, conventional oil and the oilsands. On natural gas, 44% called for an increase in royalties. On conventional oil, 48% support a hike. But on oilsands - Canada's marquee energy play and the future of oil development in Alberta - 55% of respondents said there should be higher royalties. Interestingly, 56% of respondents believe any royalty increase should apply to both new and existing projects, instead of "grandfathering" the old rules for projects already in place.

Alberta Auditor General Fred Dunn said Tuesday that royalty rates should be increased to even higher levels than the review panel recommends. His report, released Monday said the energy department has determined a royalty rate of about 66% would keep the province competitive with other jurisdictions. Even if the government decided to take a bit more than that - in the 70% range - it would still be fair, he said. "What is the risk that the industry sees which would therefore justify the owners - Albertans - selling the resource for less than other jurisdictions?" Dunn said. Meanwhile, Canada's oil and gas lobby moved into high gear Tuesday in its battle against proposed royalty increases. "Changing the current balance would involve trade-offs," Canadian Association of Petroleum Producers president Pierre Alvarez told a Calgary Chamber of Commerce luncheon. "The panel low-balled costs faced by industry by billions of dollars and shrank the revenues paid to government by industry, again by billions of dollars. When you stick to and consider all of the facts, it is clear that the picture does not reflect our current reality." Citing numerous analyses - many from investment bankers and brokerages that serve the industry - that have reached the same conclusion, Alvarez cited industry cost estimates used by the panel and described them as outdated and far too low. Alvarez's speech came the same day that Crescent Point Energy Trust said it will devote all of its preliminary $150-million 2008 capital budget to projects in Saskatchewan due to what it called the "uncertainty" created by the report's recommendations. "Some companies have choices where they can spend their dollars and it will happen," said ceo Scott Saxberg. About 80% of the trust's production is based in Saskatchewan, but he said the company could have spent between $50M and $100M on capital projects in Alberta. "We're deferring that," Saxberg said. "Those projects become less economic compared to our projects in Saskatchewan."

Meanwhile, total supply costs of oilsands ventures in Alberta have increased 23 to 86% over the past 12 months depending on the nature of the projects, the Canadian Energy Research Institute said Tuesday - throwing more fuel onto the heated royalty debate. "Costs at the plant gate are about $35 to $37 per barrel of bitumen, with another $27 or so for upgrading to synthetic crude oil (SCO)," said the report. The report also incorporated costs to be incurred by oilsands producers for dealing with greenhouse gas emissions. It did not factor in an increase in supply costs, if the panel's recommendations are accepted by the government. Derek Butter, head of corporate analysis with Wood Mackenzie, said on Tuesday internal rate of returns will be a contentious issue irrespective of what might be the final outcome of recommendations from the provincial royalty review. However, rising costs in Alberta are not likely to get in the way of the province increasing its bitumen production significantly.
(Calgary Herald, Globe and Mail, National Post 071003)