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Gold Mining Stocks: In Ground Value vs. Market Value
Kenneth J. Gerbino
Kenneth J. Gerbino & Company
Nov 1, 2006
http://www.321gold.com/editorials/gerbino/gerbino110106.html
Gold Mining Stocks: In Ground Value vs. Market Value
Kenneth J. Gerbino
Kenneth J. Gerbino & Company
Nov 1, 2006
http://www.321gold.com/editorials/gerbino/gerbino110106.html
Gold Mining Stocks: In Ground Value vs. Market Value
Kenneth J. Gerbino
Kenneth J. Gerbino & Company
Nov 1, 2006
http://www.321gold.com/editorials/gerbino/gerbino110106.html
Uranium Price Hits $60/lb in Wake of Cigar Lake
By Jon A. Nones
31 Oct 2006 at 08:26 PM EST
http://www.resourceinvestor.com/pebble.asp?relid=25308
Crisis at Cigar Lake: Time to Back Up the Truck on Uranium Stocks?
By Dave Forest
31 Oct 2006 at 10:48 AM EST
STOWE, Vermont (Casey Research Advertorial) -- The uranium industry is reeling. On October 23, Cameco, the world’s largest yellowcake producer, announced that its Cigar Lake mine had sprung a leak. Early attempts to seal the affected area failed, and the underground workings are now completely flooded.
This is a pivotal development. Cigar Lake is the world’s largest undeveloped uranium deposit, holding 232 million pounds U3O8 at a grade of 19%. Production from the mine was supposed to begin in early 2008; at peak, it was thought that the mine would have provided 17% of world uranium supply.
In short, this is one of the few projects that could make a significant difference for the uranium market… or, it was.
Cigar Lake’s future is now in doubt. Although Cameco’s management put on a brave face - saying they are “committed to develop plans to remediate the project” - we spoke with several uranium professionals in Saskatchewan who told us they now believe the mine may well be lost completely. At the very least, the flood will push back start-up for a minimum of one year, assuring that supply will be even tighter than anticipated over the next several years.
Considering that the market had little breathing room even with Cigar Lake’s supply, the situation verges on crisis. Especially in that a good deal of Cigar Lake’s output was already sold forward. Those buyers - who thought they had locked in supply - may well be forced to go to the spot market to buy. A further significant jump in the spot price over the coming weeks is a distinct possibility.
At the risk of hyperbole, the loss of Cigar could kick off a spectacular run for uranium stocks. Although share prices for uranium exploration companies have had stellar gains over the last three years (greater than 1,000% in a number of cases) a $5 or $10 jump in the uranium spot price over the coming months could touch off buying of even greater proportions. A frenzy reminiscent of tech stocks in the late 1990s is brewing.
Investors that haven’t already done so should be taking this chance to position themselves in quality uranium issues. While a uranium furor will lift all boats (at least at first), the truly spectacular gains will come from those companies that have the management expertise and prospective projects needed to produce a discovery during the bull run.
Take UEX Corp, for example. In June 2005, when uranium stocks in general were enjoying excellent gains, the company reported a staggering drill intercept of 58.3% U3O8 from its Shea Creek property. The stock jumped 80% in a single day. Less than three months later it was up 180%.
And that was when uranium was selling for $30 per pound. With the price now over $60 - and millions of new investors clambering to get a piece of the action - any company that comes up with a discovery stands to make huge returns for investors, nearly overnight. And if recent events at Cigar Lake kick the market into overdrive, gains could be of the once-in-a-lifetime variety.
Which companies have the right stuff to cash in? JNR Resources, one of the companies we’ve been following on behalf of subscribers to our Casey Energy Speculator newsletter, recently reported tantalizing surface samples of up to 48% U3O8 from its Way Lake project in Saskatchewan’s Athabasca Basin. Drilling is planned shortly. Although our subscribers have already made a tidy 85% return on JNR since our initial recommendation, we’re holding on. As the stars continue to align for a uranium mania, an 85% gain will look miniscule.
Of course, we’re not betting the farm on that one company. Another of our followed stocks is a micro-cap explorer sandwiched between uranium majors Cameco and Cogema in the uranium-rich southeast Athabasca Basin. Yet another is pioneering a new uranium district in Quebec. A major producer recently staked land surrounding this company’s projects - meaning that the world’s best uranium finders believe the geology is ripe for a discovery. We made 100% on this stock in 6 weeks, and we’re looking for more.
There is much that needs to be said about the universe of junior uranium explorers, the vast majority of which are little more than promotional exercises, but for now we’ll just say that taking the time to understand the difference between a paper shuffle and a well-run company with scale and grade in the right geological setting is time well spent. As the importance of the crisis at Cigar Lake becomes apparent, these stocks are going to the moon.
Copyright © Casey Research 2006
Dave Forest is Editor of the Casey Energy Speculator. To learn more about the Casey Energy Speculator, including how to sign up for a no-risk trial subscription, visit www.caseyresearch.com.
Goldcorp Founder to Appeal Vote Decision
Tuesday October 31, 4:28 pm ET
Goldcorp Founder to Appeal Vote Decision, Pushes Shareholders' Rights Issue
TORONTO (AP) -- Goldcorp Inc. founder and shareholder Robert McEwen will be in court Wednesday to argue against the rejection of his call for a shareholder vote over a proposed merger of Goldcorp and Glamis Gold Ltd.
The earlier court decision could "diminish the involvement of shareowners" in future acquisitions, McEwen said Tuesday.
McEwen, who owns a 1.5 percent stake in the company, has accused Goldcorp of trying to circumvent shareholders' rights by denying them a vote.
He has also denounced the $8.6-billion deal, calling it too expensive and saying it would cause too much share dilution.
In a letter Tuesday, he said that if the Court of Appeal denies a vote, it will "set a dangerous precedent" that will encourage transactions that only require the acquired company's shareholders to have a vote.
"Shareholders of the acquiring company will have no information, no right to vote, no right to dissent, no way to protect their investment," he said.
"The rules of the Toronto Stock Exchange do not prevent massive dilution and thus do not conform to international standards, where a shareholder vote would be required for share issuances greater than 20 to 25 percent."
A court ruling requiring a vote for Goldcorp shareholders, on the other hand, should cause the Toronto Stock Exchange and provincial securities commissions to enact regulatory changes and "address a major flaw in shareholder protection," he said.
Goldcorp CEO Ian Telfer has denied McEwen's assertions, repeatedly stating that McEwen is virtually alone in wanting a vote.
But McEwen says shareholders representing 28 million shares have pledged support to his fight, including the Ontario Teachers' Pension Plan, which holds about 2.3 million Goldcorp shares, or just over half of one percent of the company.
Last week, Glamis shareholders voted 98.6 percent in favor of the takeover, which will create a senior gold miner with production of 2.9 million ounces of gold in 2007, rising to 3.4 million ounces in 2008.
The deal will give Glamis shareholders 1.69 shares of Goldcorp for each Glamis share and leave them with about 40 percent of the new company. Glamis will also add 15.7 million proven and probable ounces of gold reserves and more than 617 million ounces of proven and probable silver reserves, including 575 million at its undeveloped Penasquito property in Mexico.
McEwen launched the initial challenge Oct. 4, in the Ontario Superior Court of Justice seeking a compliance order against Goldcorp under the Ontario Business Corporations Act.
Shares of Goldcorp rose 88 cents, or 3.5 percent, to close at $26.28; Glamis shares ended the session up $1.45, or 3.4 percent, to $44.10, both on the New York Stock Exchange.
BOSTON WORLD OIL CONFERENCE
http://www.fromthewilderness.com/members/103006_boston_oil.shtml
Silver Wheaton added to Cara 100, Mon., Oct. 30, 2006, 10:18 AM
It’s not difficult for me to make a case for silver, and, if you are interested in silver, in the shares of Silver Wheaton (SLW US$10.50) versus other silver “miners”.
For many years through the 1990s and until quite recently, the above-ground inventory of silver (central banks and others) had been too high – now, as this chart shows, it is very low and strong demand is growing from industrial applications and from China.
[continued in following link]
http://www.billcara.com/archives/2006/10/silver_wheaton_added_to_cara_1.html#more
Eastern Platinum Limited: Infill Drilling of Kareespruit Section at Crocodile River
Tuesday October 31, 2:00 am ET
VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 31, 2006) - Ian Rozier, President and CEO of Eastern Platinum Limited ("Eastplats") (TSX:ELR - News; AIM:ELR), and Chairman of Barplats Investments Limited ("Barplats"), is pleased to report that an infill drilling program is to be conducted on the Kareespruit section of the Crocodile River Mine ("CRM") Platinum Group Metals ("PGM") producer in South Africa. The Kareespruit section comprises an area of approximately 5 square kilometers located immediately adjacent to and west of the Maroelabult section of the CRM, being an on strike and downdip extension of the UG2 reef currently being mined at the Maroelabult section of CRM.
Thirteen diamond drillholes were put down at Kareespruit during a previous exploration program conducted by Impala Platinum Limited as part of their original valuation of the CRM property prior to Zandfontein and Maroelabult being put into production. Of these holes, ten intersected consistent UG2 reef at predicted depths of between 323m and 814m below surface. These data were used by Camden Geoserve ("CG") to prepare an Independent Technical Report dated April 2005 and by RSG Global in their Independent Technical Report dated January 2006. CG documented the following resource estimates for the UG2 at the Kareespruit section;
- Indicated Resource of 2.42 Mt at an average grade of 4.75g/t (5 PGE+Au) for 0.37M PGM ozs.
- Inferred Resource of 13.11 Mt at an average grade of 5.12 g/t (5 PGE+Au) for 2.16 M. PGM ozs.
- A further Inferred Resource of 1.5 Mt at an average grade of 5.36 g/t (5PGE+Au) for 0.275M ozs for the Kareespruit extension section area updip from Kareespruit.
- The metal contributions or 'prill splits' for the 5 PGE and gold assays at Kareespruit are; Pt 49.7%, Pd 21.6%, Rh 8.1%, Ru 16.6%, Ir 3.5% and Au 0.5%.
- As reported by CG, these resource estimates include a "conservative" provision of up to 45% for geological losses (Indicated 30% and Inferred 45%).
The quality of the reef intersections and the average grade suggests significant economic potential of the PGM resource at Kareespruit and warrants further definition drilling. The proposed program is an infill drill program designed to place the PGM Inferred Resource at Kareespruit into the 'Indicated' category in order to enable a pre-feasibility study to be undertaken, and will comprise 27 holes with a total estimated drill length of over 15,700m. As there is no surface property or structural geological boundary to the northwest (downdip of the Kareespruit section into the Maroelabult North section), drilling may be extended downdip to the north and west with the objective of evaluating the continuity of the UG2 reef to a maximum depth of 1000m over the strike length of approximately 5000m. The Kareespruit section has the potential to be developed into a significant PGM resource and is one of several other potential resource blocks that are known to exist on the CRM property.
"Kareespruit is just one of several resource blocks at CRM that Barplats will be evaluating in the near future with a view to bringing them to account. With the consistency of the reef intersections and grade across the property, the potential exists to develop a very large PGM resource base to be mined at CRM, and importantly, at relatively shallow depths," stated Ian Rozier, Chairman of Barplats.
Eastern Platinum Limited trades on the TSX and AIM stock exchanges under the trading symbol ELR.
The qualified person having prepared the contents of this news release is Mr. Ian Rozier, B.Sc.(Hons), M.Sc., P.Eng.
Certain statements included herein constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation. These forward-looking statements are based on certain assumptions by Eastplats and Barplats and as such are not a guarantee of future performance. Actual results could differ materially from those expressed or implied in such forward-looking statements due to factors such as general economic and market conditions, increased costs of production and a decline in metal prices. Eastplats is under no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws.
Contact:
Mr. Ian Rozier, M.Sc., P.Eng.
Eastern Platinum Limited
President and CEO
(604) 685-6851
(604) 685-6493 (FAX)
Website: www.eastplats.com
--------------------------------------------------------------------------------
Source: Eastern Platinum Limited
Sharks Take a Bite Out of Joint Pain
By W. Gifford-Jones, M.D. Oct 30, 2006
TAKING THE BITE OUT: Shark cartilage has been found helpful in relieving joint pain. (Mustafa Ozer/AFP/Getty Images)Every year in coastal regions of the United States, 1,500 people are killed by lightning and only 12 by sharks. During that same time worldwide, more people are killed by elephants, crocodiles and insect stings than sharks. Yet sharks get the scary headlines. So it's time to give sharks some credit, since they're responsible for a new medication that's taking a big bite out of bone and joint pain.
Today it's refreshing to see a Canadian company surviving when many are lost to international corporations. CV Technologies Inc. of Edmonton has bucked this trend by innovative research. Now, the company has developed a new remedy, CELL-fX®, to help fight the onset of osteoarthritis and relieve symptoms of bone and joint pain.
CELL-fX is an extract of shark cartilage rich in chondroitin sulfate, a naturally occurring, critical building block of cartilage. It's the gradual and progressive deterioration of cartilage that causes inflammation in joints and prevents them from moving smoothly. And when cartilage is no longer present, bones grind on bones—causing intense joint pain.
A recent independent analysis of seven controlled clinical trials involving 703 patients indicated that chondroitin sulfate relieved osteoarthritis pain symptoms by 50 percent.
CELL-fX differs from other chondroitin sulfate products because it is 100 percent soluble and readily available for absorption. And it's been shown to exhibit a 10-fold increase in potency because it is standardized using a patented process known as Chemical and Biological Finger Printing. This technology ensures measurable chemical and biological consistency from batch to batch.
CV Technologies Inc. has partnered with Canadian Football League (CFL) teams to put CELL-fX to the ultimate test: How much pain is relieved by CELL-fX on the Canadian football fields?
The Canadian football teams Argos, Eskimos, Stampeders, Lions and Ticats, have announced they will use CELL-fX to treat player injuries. It's hard to envision a more practical test when you consider the battering players receive during each game.
Matt Dunigan, a former CFL all-star quarterback and TSN analyst, knows all about the rigors of this sport. He says playing for 14 years and winning two Grey Cups afforded him wonderful experiences for a competitive athlete. He's recently been inducted into the Canadian Football Hall of Fame. But he paid a huge price for being knocked off his feet by 280-pound linemen.
During those years, Dunigan had 11 operations for broken bones, dislocations, lacerations, muscle tears and other injuries. Now, he says, with a grin, that he "prefers to take a pass on pain." He knows that CELL-fX will help minimize his bone and joint pain so he can continue an active lifestyle without the serious side effects of prescription drugs.
For years, the pain of osteoarthritis has been eased by non-steroidal anti-inflammatory drugs (NSAIDs). But every year in North America, over 75,000 patients are admitted to hospitals because of gastrointestinal complications due to NSAIDs. And in Canada, 2,000 people die annually from their use, often due to gastric hemorrhage.
Since CELL-fX is a natural product, it is safe and has no known side effects or drug interactions.
CELL-fX can be helpful to aging individuals who want to maintain healthy bones and joints, or to those who already are suffering from the pain of osteoarthritis. CELL-fX may also help prevent arthritis in those who engage in repetitive stressful activities, such as jogging.
The secret of treating osteoarthritis is not to let this problem get beyond the point of no return. Once you lose all the cartilage and you can hear and feel bones grinding on bone, the game is lost. At this point, the only solution is a new hip or a knee replacement.
Prevention is better than waiting for this to happen. Having a little shark in you restores chondroitin sulfate to normal levels and inhibits the breakdown of cartilage. And it stimulates the manufacture of collagen, a major constituent of cartilage.
The recommended dose is two tablets of CELL-fX daily. Hopefully, a little shark in CFL players will keep them in good shape for the annual Grey Cup game. And if CELL-fX is a good insurance policy for the trauma received by CFL players, think of what it can do for us lesser mortals.
Dr. Gifford-Jones is a medical journalist with a private medical practice in Toronto.
http://www.theepochtimes.com/news/6-10-30/47576.html
Treat yourself to silver
Commentary: Heavy silver demand suggests a very bullish fourth quarter
[SLW is a recommended buy]
http://tinyurl.com/y782ak
Impressions of ASPO-USA
by Dave Cohen
Published on 29 Oct 2006 by The Oil Drum. Archived on 29 Oct 2006.
http://www.energybulletin.net/21742.html
Got Gold Report - Gold Breakout Watch in Effect
By Gene Arensberg
29 Oct 2006 at 02:03 PM EST
http://www.resourceinvestor.com/pebble.asp?relid=25181
Goldcorp's Ian Telfer Responds to McEwen, Round Two Begins
By Gene Arensberg
27 Oct 2006 at 09:29 AM EDT
http://www.resourceinvestor.com/pebble.asp?relid=25139
Yamana Acquires Additional 2.7 Million Viceroy Shares and Commences Compulsory Acquisition
Friday October 27, 10:30 pm ET
TORONTO, ONTARIO--(MARKET WIRE)--Oct 27, 2006 -- Yamana Gold Inc. (Yamana) (TSX:YRI.TO - News)(AMEX:AUY - News)(AIM: YAU) is pleased to announce that it has acquired an additional 2,700,089 common shares of Viceroy Exploration Ltd. under its Offer to acquire all of the Viceroy common shares. Yamana has now acquired a total of 51,735,680 Viceroy common shares, representing approximately 95% of the outstanding Viceroy common shares and approximately 93% of the Viceroy common shares on a fully diluted basis. Yamana intends to issue Yamana common shares in payment for the recently tendered Viceroy common shares on October 31, 2006.
Yamana's offer has now expired. Since the offer was accepted by holders of more then 90% of the Viceroy common shares, Yamana will commence the compulsory acquisition of the remaining Viceroy common shares not already owned by Yamana at the same price of 0.97 Yamana common shares for each Viceroy common share.
About Yamana
Yamana is a Canadian gold producer with significant gold production, gold and copper gold development stage properties, exploration properties, and land positions in Brazil, Argentina and Central America. Yamana expects to produce gold at intermediate company production levels in 2006 in addition to significant copper production by 2007. Company management plans to continue to build on this base through the advancement of its exploration properties and by targeting other gold consolidation opportunities in Brazil, Argentina and elsewhere in Latin America.
Forward Looking Statements
This news release contains "forward-looking statements", within the meaning of Canadian securities legislation, concerning the business, operations and financial performance and condition of each of Yamana and Viceroy. Forward-looking statements include, but are not limited to, statements with respect to estimated production, synergies and financial impact of the Offer; the completion of the compulsory acquisition, the benefits of the Offer and the development potential of Yamana's properties (including Gualcamayo); the future price of gold and copper; the estimation of mineral reserves and resources; the realization of mineral reserve estimates; the timing and amount of estimated future production; costs of production; capital expenditures; success of exploration activities; permitting time lines and permitting, mining or processing issues; currency exchange rate fluctuations; government regulation of mining operations; environmental risks; unanticipated reclamation expenses; title disputes or claims; and limitations on insurance coverage. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".
Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made, and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Yamana and Viceroy to be materially different from those expressed or implied by such forward-looking statements, including but not limited to risks related to: unexpected events during construction, expansion and start-up; variations in ore grade, tonnes mined, crushed or milled; variations in relative amounts of refractory, non-refractory and transition ores; delay or failure to receive board or government approvals; timing and availability of external financing on acceptable terms; the businesses of Yamana and Viceroy not being integrated successfully or such integration proving more difficult, time consuming or costly than expected; not realizing on the anticipated benefits from the Yamana/Viceroy transaction or not realizing on such anticipated benefits within the expected time frame; risks related to international operations; actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold and copper; possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in the completion of development or construction activities, as well as those factors discussed in or referred to in the current annual Management's Discussion and Analysis and current Annual Information Form of each of Yamana and Viceroy filed with the securities regulatory authorities in Canada and available at www.sedar.com, and Yamana's and Viceroy's Annual Reports or Form 40-F filed with the United States Securities and Exchange Commission. Although management of each of Yamana and Viceroy has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Neither Yamana nor Viceroy undertakes to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws.
This news release does not constitute an offer to buy or an invitation to sell, or the solicitation of an offer to buy or invitation to sell, any of the securities of Yamana or Viceroy. Such an offer may only be made pursuant to an offer and take-over bid circular filed with the securities regulatory authorities in Canada. On September 8, 2006, Yamana filed an offer and take-over bid circular with Canadian provincial securities regulators. Yamana also filed with the U.S. Securities and Exchange Commission a Registration Statement on Form F-8 as well as a Schedule 14D-1F tender offer statement, both of which include the offer and take-over bid circular. Investors and security holders are urged to read the offer and take-over bid circular regarding the proposed business combination transaction because they contain important information. Investors may obtain a free copy of the offer and take-over bid circular and other documents filed by Yamana with the Canadian provincial securities regulators on SEDAR at www.sedar.com, and with the SEC at the SEC's website at www.sec.gov. The offer and take-over bid circular and these other documents may also be obtained for free on Yamana's website or by directing a request to Yamana.
Contact:
Contacts:
Yamana Gold Inc.
Peter Marrone
President and Chief Executive Officer
(416) 815-0220
Yamana Gold Inc.
Leslie Powers
Director Investor & Public Relations
(416) 815-0220
Viceroy Exploration Ltd
Patrick Downey
President and Chief Executive Officer
(604) 669-4777
--------------------------------------------------------------------------------
Source: Yamana Gold Inc.
UPDATE 1-B.C. supreme court OKs Goldcorp-Glamis deal
Fri Oct 27, 2006 6:02pm ET
http://tinyurl.com/yj8phq
More Science Teachers Grasping Reality of Peak Oil
SAN FRANCISCO, CA (PRWEB via PRWeb) October 27, 2006 -- Just two or three years ago, if you had asked a science teacher about "peak oil," chances are he or she would have drawn a blank. But if the recent gathering of 3,000 science educators in San Francisco is any indication, a massive shift in awareness has taken place -- thanks in no small part to activists such as Richard Katz and Dennis Brumm.
Last week, these two San Francisco residents were busy working the floor of the California Science Education Conference, talking to teachers about peak oil -- the idea that global petroleum flows will soon crest and decline. They also passed out copies of The Oil Age, a richly detailed poster depicting the rise and fall of mankind's most valuable energy resource.
"I was amazed at how many teachers already understood the concept of peak oil and its implications for modern industrial societies," says Katz, a member of several local peak-oil community groups, including SF Post Carbon and SF Informatics, which produced the oil poster. "Science teachers grasp the issue of peak oil at a basic level because it's really a simple matter of geology and the fact that we are drawing down a finite resource."
[Continued in following link.]
http://www.investorshub.com/boards/post_new.asp?board_id=6609
World oil production may have peaked
Thu Oct 26, 2006 2:33pm ET
BOSTON, Oct 26 (Reuters) -
World production of crude oil may have already peaked, setting the stage for declining output that could lag demand, a top advocate of the "peak oil" theory said on Thursday.
Matthew Simmons, chairman of Simmons & Co. International, a Houston-based investment banking firm specializing in the energy sector, said U.S. government data showed that the world oil supply has declined through the first half of this year.
Energy Information Administration data showed world supply of crude oil has declined to 83.98 million barrels per day in the second quarter after hitting 84.35 million bpd in the fourth quarter of 2005.
"If you basically have another six to ten months of that decline lasting, then I think for certain we would look back and say, 'Guess what? We actually reached a sustainable peak in crude oil production in December 2005,'" Simmons said at a meeting of the United States of the the Association for the Study of Peak Oil and Gas.
The peak oil theory has detractors, who note technology can help extend the life of the world's oil reserves.
Simmons acknowledged his call may be premature, saying, "If that number turns around, that will be wrong."
TEMPERED VIEW
Other speakers at the conference took a more tempered view of the world's oil capacity, arguing that peak production is still a few years out.
"Conventional oil production is going to increase by a few million barrels a day between now and the period between 2010 and 2015," when it may peak, said Mike Rodgers, a partner at PFC Energy, an energy industry consulting company.
Advocates of the peak oil theory, however, said a decline in high oil prices was likely to lead to less pressure for oil companies to invest in production.
Rising demand for oil, stoked by the rapid economic development of China and India, have helped to drive oil prices to record highs. U.S. oil futures peaked above $78 in July, but have since eased to about $61 per barrel.
"If the supply and demand are such that we see declining oil prices, and given that the economy functioned pretty well through a period of high oil prices, the question is -- are policymakers going to lose focus on this problem?" Rodgers asked. "I would argue that they probably will."
It's hard to determine just how much oil is left in the world, since companies in different countries use varying standards to calculate their oil reserves, speakers said.
Major oil companies haven't raised the specter of peak supply with their shareholders.
One speaker said that could suggest their oil reserves are richer than many executives disclose, as a result of strict U.S. regulations on how public companies may estimate their reserves.
"We don't have data which allows us to study in detail the depletion of oil fields," said Jeremy Gilbert, managing director of Barrelmore Ltd. and a former top engineer at BP Plc. "The industry itself does know more about the way things are behaving, wells are producing and it may be that if we had access to that data, we might refine some of our estimates."
© Reuters 2006. All Rights Reserved.
Public Health: Slow Motion Disaster - by John Michael Greer
Published on 18 Oct 2006 by The Archdruid Report.
Sixth part of a nine-part series.
Of the four aspects of our deindustrial predicament I outlined in a previous post – fossil fuel depletion, economic contraction, declining public health, and political dysfunction – public health has received far and away the least attention from the peak oil community. This is ironic, to use no stronger word. I’ve argued at length elsewhere that the energy shortages and economic breakdowns sometimes claimed as causes of imminent industrial collapse will play out instead over decades of unsteady decline, and taken a certain amount of heat from apocalyptically minded peak oil theorists for that. Here, though, the shoe is on the other foot. Though it’s all but unnoticed outside of a small cadre of worried professionals, the disintegration of public health in coming decades promises a disaster in slow motion.
It’s not surprising that this particular crisis has gotten so little air time. Public health is one of the least regarded, though among the most necessary, of the basic services industrial society provides its citizens. It’s not exciting stuff. Sanitation, pest control, water treatment, food safety regulations, and the like are exactly the sort of humdrum bureaucratic activities that today’s popular culture ignores most readily. Even infectious disease control rarely achieves the level of intensity chronicled, say, in Randy Shilts’ history of the AIDS epidemic, And The Band Played On; more often it’s a matter of collecting statistics, tracing contacts, and sending emails to local officials and hospitals in the certain knowledge that most of the recipients will just hit the delete button. On these pedestrian activities, though, rests the industrial world’s relative freedom from the plagues that visited previous societies so regularly and killed so many of our ancestors.
The impending collapse of public health, like most aspects of our current predicament, has an abundance of causes.One is the failure of government at all levels to maintain even the very modest support public health once received. Lacking an influential constituency in the political class, public health departments far more often than not came out the losers in the tax and budget struggles that dominated American state and local politics in the last quarter of the 20th century. Worse, food safety regulations were among the consumer protections gutted by business-friendly politicians, with results that make the headlines tolerably often these days.
A second factor in collapsing public health is the end of the antibiotic age. Starting in the early years of the 20th century, when penicillin revolutionized the treatment of bacterial infections, antibiotics transformed medical practice. Dozens of once-lethal diseases – diphtheria, tuberculosis, bubonic plague, and many others – became treatable conditions. A few prescient researchers cautioned that microbes could evolve resistance to the new “wonder drugs” if the latter were used too indiscriminately, but their warnings went unheard amid the cheerleading of a pharmaceutical industry concerned only with increasing sales and profits, and a medical system that became little more than the pharmaceutical industry’s marketing arm. The result has been an explosion of antibiotic-resistant microbes. The media not long ago announced the emergence of XDR (extreme drug resistant) tuberculosis in Africa and Asia, adding to the list of microbes even the best modern antibiotics won’t treat.
A third and even more worrisome factor is the impact of ecological disruption on patterns of disease. As the number of people on an already overcrowded globe spirals upwards, more and more of the earth’s wild lands come under pressure, and microbes that have filled stable ecological niches since long before our species arrived on the scene end up coming into contact with new hosts and vectors. HIV, the virus that apparently causes AIDS, seems to have gotten into the human population that way; Ebola and a dozen other lethal hemorrhagic fevers certainly did, along with many others. At the same time, global warming driven by our smokestacks and tailpipes has changed distribution patterns of mosquitoes and other disease vectors, with the result that malaria, dengue fever, and other tropical diseases are starting to show up on the edges of today’s temperate zones.
Add the impact of fossil fuel depletion on these three factors and the results are unwelcome in the extreme. In a future of soaring energy costs and crumbling economies, public health is pretty much guaranteed less access to local government budgets than it has now, meaning that even the most basic public health services are likely to go by the boards. The same factors make it unlikely at best that pharmaceutical companies will be able to afford the expensive and resource-intensive process of developing new antibiotics that has kept physicians one step ahead of most of the antibiotic-resistant microbes so far. Finally, ecological disruption will only increase as a world population dependent on petroleum-based agriculture scrambles to survive the end of cheap oil, and the likelihood that many countries will switch to coal means that global warming will likely go into overdrive in the next few decades.
The inevitable result is the return of the health conditions of the 18th and 19th century, when deadly epidemics were routine events, childhood mortality was common, and most people could expect to die from infectious diseases rather than the chronic conditions that fill the “cause of death” slot on most death certificates these days. Factor in soaring rates of alcohol and drug abuse, violence, and malnutrition – all of them inevitable consequences of hard economic contraction – and you have a situation where the number of people on the planet will take a sharp downward turn. Statistics from Russia, where a similar scenario played out in the aftermath of the Soviet Union’s collapse, suggest that population levels could be halved in less than a century. This doesn’t require massive epidemics or the like; all it takes is a death rate from all causes well in excess of the birth rate, and that’s something we will certainly have as the deindustrial age begins.
The role of modern medicine in these transformations is complex. Especially in America, but not only there, economic forces long ago turned the theoretical triumphs of scientific medicine into a real-world fiasco. For well over a decade now, medical care has been the leading cause of death in the United States – add together the annual death toll from iatrogenic (physician-caused) diseases, nosocomial (hospital-transmitted) infections, drug side effects and interactions, risky but heavily advertised elective surgeries such as stomach stapling, and simple malpractice, and the resulting figure soars well above the annual toll for heart disease, or cancer, or anything else. As economic decline puts mainstream medical care out of reach of most people, death rates from these causes will drop correspondingly, and at least in the industrial world this may cushion the impact of the factors just discussed for a while.
Many people are already voting with their feet by abandoning conventional medicine for various alternative and traditional forms of medicine. Even when these don’t work – and of course some of them don’t – placebos are at least less likely to cause harm than the toxic drugs and invasive surgeries that form the mainstay of today’s conventional medicine. Many alternative health care systems, on the other hand, treat common illnesses quite effectively. Another factor, though, makes alternative methods much better suited to the coming deindustrial age than scientific medicine. Today’s medical system is among industrial civilization’s most voracious users of energy and natural resources; almost without exception, alternative medical treatments use much less of both. Many of the most effective alternative systems – herbalism and acupuncture come to mind – evolved long before the industrial system came into being and use very modest amounts of sustainable resources to treat illnesses. In an age of energy scarcity and hard ecological limits, systems like these are the wave of the future.
The tangled roots of the public health crisis make it a particular challenge to prepare for on an individual basis. Some things can certainly be done. A solid knowledge of first aid, nutrition, sanitation, and basic nursing procedures will go a long way. Sensible eating and healthy exercise are essential, though today’s obsessive pursuit of fashionable thinness needs to be jettisoned; people before the petroleum age, when reserves of body fat played a vital role in survival, tended to be plumper than current fashions allow, and a return to 19th-century standards of normal weight is as necessary as it is inevitable. Those who learn and practice effective alternative health care methods will be at a distinct advantage, and may also find themselves with a marketable trade.
Still, in the absence of effective public health measures, even the best health care – alternative or otherwise – will have its limits. No medicine can take the place of adequate sanitation, pure water, clean and wholesome food, and the other foundations of public health so many of us take for granted nowadays. All these things will be in short supply in the deindustrial future, and so illness and death will be a constant and familiar presence. Learning to live with that reality will also be an essential skill in the twilight of the industrial age. We will no longer be able to afford the fantasy that death is something that only happens to other people – and in the process of coming to terms with our own mortality, we may just learn something essential about being human.
acorn53.
Not to worry on this one; it is now more than a screaming buy at this price.
The price drop was probably a hugh investor dumping shares and going into another direction.
I have 75,000 shares and am not sweating it at all.
It seems that all my energy stocks took a big dip recently and all but one rebounded.
Acorn, our problem is is that we have penny stock investments and they are mercurial in nature.
I'm holding firm and if I was not attending the Peak Oil conference in Boston over the next two days, I would free up some money and buy Emgold. Monday I will add if the price is still down.
you take care,
sumisu
Interview with Charles Maxwell Senior oil analyst, Weeden & Co.
Oct 16, 2006 (Dow Jones Newswiresfrom Barron's)
You want an independent and informed appraisal of the outlook for energy? Then Charley Maxwell's your man. For almost 50 years, Maxwell in one way or another has been involved in the oil and gas industry: from when he started working for Mobil in 1957 to when he moved to Wall Street in 1968 and was routinely lauded as the No.1 oil analyst throughout the 'Seventies and 'Eighties. For more than 20 years, he's belonged to an elite group of industry executives and OPEC members that meets at Oxford University twice a year to assess trends. We dialed him up last week at Weeden & Co., the institutional trading company in Greenwich, Conn., that he's called home since 1999. Here are Maxwell's thoughts on the current energy scene.
Barron's: Did somebody say energy crisis?
Maxwell: We often say there are not a lot of advantages to getting old except that we have seen it all before. After a big move upward, there is always some counterreaction. We saw it during the 1973-74 crisis, in the '79 to '86 crisis and then in the two wars with Iraq. These crises were manipulations of the oil market by human beings. War, economic problems, but particularly military considerations, were creating, as they say, facts on the ground that worked into shortages that were real, but they were shortages created by the actions of man not nature. It is terribly important to differentiate between past periods and now.
Q: How is that?
A: There are four huge impediments to expanding production in a world in which we need to do this. Hubbert's Peak, the theory that says oil production will peak on a global basis, is a natural impediment. It is not yet the predominant factor but as these crises continue it is the one growing exponentially and by, say, 2015 or 2020 I expect it will dominate the outlook.
Q: What then is the biggest problem now?
A: About three-quarters of the world's production of oil today is lifted by national oil companies. Companies like Saudi Aramco, Petrobras, the Iran national oil company, the Iraq national oil company, the national companies that operate in Algeria and Libya, produce conservatively 75% of the world supply. Most of them were nationalized in the '70s and early '80s and they have real structural problems today. They bring in a lot of money but most of it goes to support the national Treasuries and the various political constituencies that are in favor in the various countries, whether it's the army or a host of other bureaucratic ministries. In the end, in the political battle for budgetary support the national oil companies tend to be a constituency with little or no political influence. All in all, the national oil companies have been shortchanged and held on a poverty diet for a long time.
Q: What are the other structural challenges they face?
A: What came out of the 1986-1987 collapse in prices was a huge overcapacity of about 20% in the world's oil production system. The international oil companies began to adjust their capital spending quickly to adapt to that and they more or less serviced a 1% increase in demand each year. The capacity surplus began to come down naturally. We have now had 20 years and taken that surplus down to about 2% to 3%. For efficiency in the energy industry, given the weather factors and political factors and so on, we need something in the 7% to 8% range of excess capacity in order to cover the mountains and the plains of demand and weather and political events. But when the surplus got down to those levels between 1997 and 2000, the companies didn't add to capacity at a fast enough rate.
Q: Bring this back to your point about the national oil companies.
A: The national oil companies didn't react at all. At least the big international oil companies were producing the 1% to 2% each year that was required, but the national oil companies just tooled along on the backs of the surplus while it got smaller and smaller. The big international oil companies saw all this and didn't prepare for possible future tightening. One reason the NOCs, as the national oil companies are called, didn't respond was lack of money. Also, the NOCs, because of political patronage, have a shortage of skilled workers and experienced managers. Only Saudi Aramco is quite efficient and they are doubling and redoubling their efforts to find oil in the peninsula. They've gone from 10 rigs to 100 rigs and are headed to 125 rigs. They are modern and up to date. They've got a core of around 3,000 expatriates that are well paid and doing a helluva job. But this is unusual.
Q: Where does this lead?
A: I don't know how we get around the problem of the NOCs. They control so much of the world's production and they are bloody helpless. They don't have enough money and they don't have prestige and they don't have professionalism. These are big factors, any one of which would have been a strike against them and with all three it is a difficult situation.
The multinationals have the money but they haven't been that willing to spend it.
That's another big issue: the problem for the oil companies is coming to grips with the size of the production problem.
Q: Can you elaborate on that.
A: The oil companies, as a group, seem to believe the future production potential of the world is very large, very wide open and yet their production numbers don't indicate this is so. ExxonMobil (ticker: XOM) took out an advertisement earlier this year saying oil is not peaking, nor is there any peak visible that's going to impinge on production in the next 20 to 30 years and claims there is no practical limit to the oil it can find and there are new supplies that are developable. They are not alone in this thinking, though Dave O'Reilly [Chairman and CEO] of Chevron (CVX) has come around. But John Browne [CEO] of BP [INTV-ANS](BP)[INTV-ANS] is in the Exxon camp as is industry consultant Cambridge Energy Research Associates.
Q: The technology-will-save-the-day camp.
A: I'm not downplaying technology at all. But technology will save General Motors, too, if you believe that. Technology can't do everything. I'll give you an example of the vision of the oil companies.
Q: Go for it.
A: As we understand it, Exxon is not taking on any leases for deep-water drilling after 2008. They haven't leased anything. If you think deep-water leases are going to be very important, and the recent big discovery in the Gulf of Mexico suggests they will be, you would have contracted for the future use of rigs. But if you think the deep-water leases aren't going to be important because the oil found will be more expensive than the common garden-variety Texas oil from 6,000 foot down, and that you will have lots of oil coming from sources like that then you don't need these high-cost leases down the road. On the other hand, many major oil companies have taken these rigs to 2010 and 2012 and 2014 and are pre-empting Exxon's ability to get these rigs. Exxon is putting itself at a huge disadvantage if there should be a need for this type of deep oil. I find that remarkable.
Q: What's the gamble there?
A: The gamble is they won't need the deep-water leases because there will be big and lush supplies of oil spilling around at $30 a barrel and people will relinquish the rig contracts they've signed. Then Exxon would have the choice of picking up some of these contracts at 50 cents on the dollar, or maybe they won't need to pick them up at all. I think they are dead wrong.
Exxon has gone out of its way to take out advertising and make speeches saying there'll be plenty of future supplies. It verges on the irresponsible because it says to the government there is no problem. It says to the media there is no problem. It says to the public there is no problem. So we are now likely to march with fife and drum, banners flying, into the maw of destruction without so much as a sideways glance because Exxon tells us that the problem is resolved.
Q: It has been suggested they benefit from talking down the price of oil.
A: There is all kind of speculation on that. Another obvious thought would be if they wanted to buy, say, Yukos, which they had hopes of two years ago, they certainly wouldn't want to indicate they thought that the price of oil was going to go much higher down the road because of shortages. Some people think Exxon is cynical. I don't. I really think they believe what they say. It's a lack of vision. Last year, they spent more money on share repurchases and dividends than they did on exploring and developing oil reserves. Most big oil companies tend to be backward looking. They were slow, for instance, in seeing that sulfur standards for gasoline and diesel would be required in this country and getting their refineries set up to meet them. That's why we've had these advances in gasoline prices in the summers of 2005 and 2006 -- fear that the refining system in America and in Europe would be unable to handle these new standards. Oil companies will find it difficult to solve a tightening oil production problem if they don't recognize that it is tightening around their necks.
Q: That's the third impediment of four. What's left?
A: We as Americans think that because we want more oil these other countries should produce more oil. But there are increasing issues, brought on not just by President Bush and his policies, but also by a feeling that the developed world is imperialistic by nature and is intent on leaving the undeveloped world without resources. All these claims are greatly overdone, but nevertheless, it is a fact that if you live in Iraq you believe the oil companies, or the Americans, are there to get the oil. My point is the people in the Middle East are sophisticated enough to understand this could be Bedouin-to-Bedouin in Saudi Arabia in five generations.
Q: What do you mean by that?
A: Well two generations ago, many of these people were Bedouins. The majority of people working in the petroleum industry in Saudi Arabia today -- the supervisors and the drillers and so on -- had grandparents who were herding sheep or camels. They fear their great grandchildren could end up doing the same.
Q: Because?
A: Because the oil will be all gone. The image we have in this country of tumbleweeds running down the streets of abandoned Western mining towns is now beginning to stalk the public consciousness in the Middle East. About three months ago, they realized the second largest oil field in the world, Burgan in Kuwait, had peaked. They didn't expect it and they couldn't believe it. The No. 1 field in the world, the Ghawar, is pretty close to peaking if it hasn't already. These are people who have long believed that Allah was bestowing these oil gifts on them in perpetuity and there would be infinite production. The concept of Hubbert's Peak has only penetrated the Middle East in the last five years in the same way that it has only penetrated Europe in the last five years.
The non-OPEC world, 175 countries, of which only 30 produce meaningful amounts of oil, will peak around 2010. Then we become dependent on OPEC for all future growth in barrel needs and that should put us in a pretty difficult situation and the price of oil will begin to rise a little faster.
Q: Are the non-OPEC countries that close to peaking?
A: Eleven of the non-OPEC countries have peaked already, representing 34.3% of non-OPEC production. There are three on the cusp of peaking, and one of them is Mexico which may have already peaked and represents 7.9% of production. China will probably peak this year, or next, or in 2008. But they are at flat production levels now so it doesn't matter and they contribute 8.5%. More than 50% of the non-OPEC production will therefore have peaked. There are all kinds of issues as to when the whole world peaks. I use a range from 2015 to 2020, which depends on when the rest of the world wakes up to the need to conserve, which could delay the peak.
Q: What about a peak in gas production?
A: That's much, much further out. There is a lot of what they call stranded natural gas, big discoveries that are not tied to any local needs, or any local distribution system, and they will be tapped and brought in, in liquefied form to our country and to Europe and to Asia. The peak of natural gas now roughly looks like it will be in 2035 to 2040. There is a finite supply that is being drawn down, but it hasn't been exploited nearly as much as oil. The run-up in natural gas prices in the past year or so was because production in this country has peaked, and natural gas is more expensive and difficult to move from one continent to another, and we don't really have the means to do that yet. We are getting there and the big liquefied natural gas expansion is starting, and soon we are going to have interchangeability between continents. When one continent is short we can move gas there, which will keep prices down.
Q: Where are oil prices headed?
A: We are now getting a reaction to the higher oil prices. It is translating into slower economic growth and, of course, it is allied with a rise in interest rates. Don't think that it is just that rising oil prices equal lower economic growth. It is a question of rising oil prices and less liquidity and higher rates that's a triple threat. The bottom could be in the high 40s, though that wouldn't be sustainable. On a yearly average, we will stay in the 60s, but we'll spend a lot of time in the 50s. Then they'll start up again in 2008-2009 and go up for some time. When we get to 130 or 150 there will be another pullback.
Q: How do you get to those numbers?
A: In 1930 we found 10 billion new barrels of oil in the world and we used 1.5 billion. We reached a peak in 1964 when we found 48 billion barrels and used approximately 12 billion. In 1988, we found 23 billion barrels and used 23 billion barrels. That was the crossover when we started finding less than we were using. In 2005, we found about 5 billion to 6 billion and we used 30 billion. These numbers are just overwhelming.
Q: How are you advising people when it comes to the oil stocks?
A: You want to buy companies that have long- life reserves and are developing them, it's as simple as that. The average oil company, because they are all in the non-OPEC world, will by definition peak around 2010 or thereabouts. I estimate Exxon will peak in 2011. BP will peak in 2012. Total (TOT) in 2012. ConocoPhillips (COP) in 2013. Marathon Oil (MRO) in 2009. Royal Dutch (RDS-B) in 2009 and Hess (HES) in 2010. But a company like Suncor Energy (SU), which operates in the Canadian tar sands, will peak around 2045. It is a completely different world. EnCana (ECA), the big Canadian gas and tar sands producer, will peak around 2020. Canadian Natural Resources (CNQ) is another. I also like Nexen (NXY), another Canadian tar sands producer, and Lukoil (LUKOY) of Russia. The only one I'm recommending at the moment is EnCana because it has a large component of natural gas. The gas market is at a bottom now, whereas I see the oil market bottoming in the spring or summer of 2007, or even early 2008 if we have a recession.
Q: Why Lukoil?
A: Lukoil isn't owned by the Russian government. They've adopted Western accounting standards because they want to be listed on the New York Stock Exchange and raise capital and become a regular oil company. Lukoil has about 20 billion barrels of reserves and Exxon is No. 1 in the world with 21 billion. But the capitalization of Lukoil is one-sixth that of Exxon. So you are getting a huge advantage in oil barrels per share for a lot less money.
Thanks, Charley.
Copyright (c) 2006 Dow Jones & Company, Inc.
Emgold Mining Corporation appoints financial advisors
Tuesday October 24, 9:30 am ET
<< TSX Venture Exchange: EMR OTC Bulletin Board: EGMCF U.S. 20-F Registration: 000-51411 Frankfurt Stock Exchange: EML >>
VANCOUVER, Oct. 24 /CNW/ - Emgold Mining Corporation (EMR - TSX Venture) (the "Company" or "Emgold") is pleased to announce the engagement of M Partners as financial advisor to the Company. M Partners is a member of the Investment Dealer Association, a participating member of the Toronto Stock Exchange, the TSX Venture Exchange and the Canadian Investor Protection Fund.
M Partners is a full service investment dealer based in Toronto, Ontario, with extensive experience in the capital markets. The firm provides a wide range of financial services including debt and equity offerings, merger and acquisition advisory, as well as the implementation of creative strategies designed to maximize shareholder value.
Going forward, M Partners will advise and assist Emgold in raising the capital necessary to obtain a conditional mine use permit for the Idaho-Maryland Gold Mine located in Grass Valley, California. The mine plan includes the possible staged development of a combined gold mining and ceramics manufacturing facility. In addition, M Partners will review and advise on strategies to finance, form joint ventures and possibly spin out Emgold's wholly owned subsidiary, Golden Bear Ceramics Corporation, which holds the world wide rights to the Ceramext(TM) technology designed to convert a wide range of waste materials to 100% environmentally friendly ("green") stone and ceramic building products.
On behalf of the Board of Directors,
William J. (Bill) Witte, P.Eng.
President and Chief Executive Officer
No regulatory authority has approved or disapproved the information
contained in this news release.
For further information
Michael O'Connor, Manager, Investor Relations, Tel: (604) 687-4622, Fax: (604) 687-4212, Email: info@emgold.com
--------------------------------------------------------------------------------
Source: Emgold Mining Corporation
China to Start Filling 2nd Oil Reserve
Oct. 16, 2006, 8:08AM
© 2006 The Associated Press
SHANGHAI, China — China will begin piping crude oil into tanks at its second oil reserve by the end of the year, reports said Monday, a move likely to raise demand further following record oil imports in September.
The first phase of oil reserve facilities at Zhoushan, an archipelago south of Shanghai, will have storage capacity of 1.2 million cubic meters (about 7.5 million barrels of oil), the state-run newspaper Economic Observer and other reports said.
The reports cited an unnamed official at Zhoushan, one of four strategic national oil reserves under construction. Shipments to the first reserve, at Zhenhai, also south of Shanghai, began in August.
Chinese officials cited by the Economic Observer said the oil reserves would be filled gradually, with the government bearing the costs for construction, operation and stockpiling the reserves, which Beijing views as necessary for the country's economic security.
However, a top central bank official has countered expectations that China might devote some of its fast-growing foreign exchange reserves to buying up oil in international markets.
China's foreign reserves, which reached $987.9 billion by the end of September, cannot directly be used to buy energy assets, the official newspaper Securities Times cited People's Bank of China vice governor Wu Xiaoling as saying.
Purchases of such resources have to be made by buying foreign exchange from the central bank in exchange for yuan, she said. China's oil imports surged to a record high 3.29 million barrels a day in September.
When completed, China's four aboveground storage facilities in Zhenhai and Zhoushan in eastern China, in Qingdao in northeastern Shandong province, and at Dalian, further to the northeast in Liaoning province, will have a total capacity of around 100 million barrels of oil.
Future plans call for building underground tanks at other sites.
According to recent comments from Li Hui, vice-president of state-owned petrochemical company Sinochem International Co., it could cost China 60 billion yuan ($7.6 billion) to build strategic oil reserves equivalent to a 90-day supply, similar to those of the U.S. and Japan.
Glamis Joins Goldcorp in Fight Against McEwen
By Jon A. Nones
17 Oct 2006 at 05:52 PM EDT
St. LOUIS (ResourceInvestor.com) -- The Ontario Superior Court of Justice today granted Glamis intervenor status, giving the company the right to have a voice in the court action filed by Rob McEwen in opposition to the Goldcorp/Glamis merger.
[continued in following link]
http://www.resourceinvestor.com/pebble.asp?relid=24824
(post-)Hydrocarbon Aesthetics
by Richard Heinberg
Published on 18 Oct 2006 by Energy Bulletin. Archived on 18 Oct 2006.
Though I could hardly call myself a professional violinist these days, I still get the occasional call for a wedding or other special function, and I cherish these increasingly rare opportunities to work alongside competent players. This past April I was hired to play in a string quartet to provide the requisite “musical wallpaper” for the opening of a traveling exhibit (“International Arts and Crafts: From William Morris to Frank Lloyd Wright”) at the de Young Museum in San Francisco. As a tip to the musicians, the Museum offered us each a pair of tickets to the exhibit. Since my wife Janet and I have long been fascinated by the Arts and Crafts movement, we made use of those tickets a few weeks later.
The exhibit included top examples of the British, German, Scandinavian, American, and Japanese versions of the genre. There were fabric and book designs by William Morris, interiors by Frank Lloyd Wright, and furnishings by C.F.A. Yoysey and others.
As Janet and I walked through the exhibition I couldn’t help but reflect on its implications for humanity’s aesthetic past, present, and future.
The Arts and Crafts movement was, in essence, a critical aesthetic response to the industrial revolution. William Morris, the movement’s founder, saw the industrialization of Britain and deplored the results. Farmers, craftspeople, and manual workers often could not compete economically with fuel-fed engines, and so vocations and skills that had developed across generations vanished in favor of “jobs” tending machines. But the machines could not work intelligently or soulfully, and so the aesthetic environment of Britain became progressively more denatured and dehumanized.
During Morris’s lifetime, the designs of mass production usually merely imitated the symbolic elements of architecture and furnishings from previous eras. As the burgeoning “middle class” sought outer reassurance of its attainments, the factory system obliged with the ornate facades and kitsch bric-a-brac fashioned to impart an “upper-class” aura. Victorian buildings and cluttered parlors displayed an incoherent regurgitation of Greek, Roman, Renaissance, Egyptian, Chinese, and occasionally Aztec or Mayan themes mixed and mutilated often beyond recognition.
Morris and his colleagues drew inspiration instead from the philosophy of John Ruskin, especially as set forth in the books The Stones of Venice and Unto this Last, which related the moral and social health of a nation to the qualities of its architecture and designs. For Ruskin, and subsequently for Morris and other followers of the movement, the spirit of industrialism began with the Renaissance, when the rising mercantile class devalued and destroyed the traditions of free and mostly anonymous artists and craftspeople who had worked independently throughout the medieval period to build the free cities and great cathedrals of Europe.
Already, by the sixteenth century, architects, builders, painters, and carpenters had become mere hired workers whose efforts were mostly directed by—and meant to glorify—wealthy burghers. Thus, for Ruskin and Morris, inspiration had to come from an earlier era—the Gothic period, in which (in Morris’s words) “guildsmen of the Free Cities” enjoyed a “freedom of the hand and mind subordinated to the collective harmony which made freedom possible.” Morris’s aesthetic was thus politically grounded, and he, together with socialist colleagues such as Crane and Ashbee, looked not only backward in history but also forward—to an attainable, simpler way of life in which craftspeople, working in guilds, would control their own lives as well as the economies of cities and nations.
The aesthetic sensibilities of Morris and his followers echoed those of the Pre-Raphaelite painters such as Edward Burne-Jones, who were similarly inspired by Ruskin’s The Stones of Venice, and especially by the chapter “The Nature of Gothic.” Both movements sought to promote not just a backward-looking philosophy, but a practical alternative to the domination of humanity by its tools—and implicitly, by the enormous energies unleashed from fossil fuels.
The Arts and Crafts artisans aimed at a quality of design characterized by an organic simplicity flowing from the honoring of both the raw materials and the skill of the individual worker. Decorative themes emerged from functional necessity and from regional vernacular design vocabularies.
Art Nouveau was the Arts and Crafts movement’s decadent cousin. It produced luscious tendril-limned furniture and facades, but lacked the earnest social philosophy of Morris and his disciples.
In North America, Frank Lloyd Wright led the “prairie school” of architecture, which sought to make buildings fit into the landscape rather than arbitrarily dominating it. Wright hated the modern industrial city and its ubiquitous symbol—the skyscraper, which he regarded as a “human filing cabinet.” “The skyscraper as the typical expression of the city” he wrote, “is the human stable, stalls filled with the herd, all to be milked by the system that keeps the animals docile by such fodder as it puts in the manger and such warmth as the crowd instills in the crowd.” Wright viewed the urban street grid and the skyscraper as mere expedients of power and social control with “no higher ideal than commercial success.” A truly democratic society, he argued, must consist of a decentralized, organic human community integrated into the landscape around it.
Another American proponent of the Arts and Crafts sensibility was Elbert Hubbard of East Aurora, New York, who headed a community of artisans known as the Roycrofters. Hubbard was a homespun Yankee craftsman-philosopher, the kind of self-taught natural leader who, if he had lived in the 1970s, would probably have been the guru of a hippie cult. A congenital aphorist with vaguely right-wing political views (his most famous writing was the astonishingly popular pamphlet, “A Message to Garcia,” which extolled the diligence of a soldier in the Spanish American war who helped turn Cuba into a de facto US colony), Hubbard extolled independence and hard work but seldom criticized the expanding corporate structures of the American economy that were systematically undermining the livelihoods of small farmers and artisans. When Hubbard perished on the Lusitania in 1914, the Roycrofters lost their spokesman and guiding light. They soldiered on for a few years, but, by the end of the ’20s were merely reproducing a few popular designs from their heyday. Today in East Aurora one can still visit some of the Roycrofters’ old workshops and savor the afterglow of their happy experiment.
The Arts and Crafts movement spread also to continental Europe and Japan, in each instance acquiring the local flavors not only of traditional design elements but of indigenous social philosophies.
Nevertheless, by the end of the 1920s, it had mostly disappeared. Sadly but predictably, Morris and his followers had failed to create an enduring artisanal paradise. Industrialism and capitalism swallowed and digested their efforts, which in the end merely yielded buildings and ornaments for middle- and upper-class consumption.
Designing for the Tragic Interlude of Cheap Abundance
By the late 1920s the industrial mega-machine was extruding heaps of new objects with no Gothic predecessors. The most obvious and commercially significant was the personal automobile (what would a Gothic motorcar look like? Why bother even imagining one?). Here was the Machine Triumphant, the symbol and substance of personal attainment and ease of movement. Another significant invention was the airplane, with its capability of transcending limits of space and time through vertical ascent and sheer speed. As aircraft designers gradually began to appreciate the functional benefits of aerodynamics, the look of the airplane (and, for a while, that of the dirigible) began to be appropriated for use on objects whose function had little or nothing to do with flight or rapid motion—from staplers and blenders to lamps and toasters.
This transition from over-wrought Victorianism to streamlined modernism came about during a period when, with so many new inventions needing a marketable “look,” industrial design emerged as a burgeoning new field of specialization within the arts. Car designers competed to make fenders more voluptuous, dashboards more commanding—and to make cars look more like airplanes. Designers consciously incorporated modern style elements to stimulate sales; as advertising executive Earnest Elmo Calkins put it in a magazine article in 1927, “this new influence on articles of barter and sale is largely used to make people dissatisfied with what they have of the old order, still good and useful and efficient, but lacking in the newest touch. In the expressive slang of the day . . . [these goods] ‘date.’”
Streamlining led to an emphasis on curving, smooth surfaces, long lines, and the illusion of speed. It hid the jagged electrical motors or combustion engines of machines beneath flowing metallic skins, just as rumbling machines themselves cloaked the real source of their power—fossil fuels dug from mines or drawn from deep wells.
Streamlining was the Look of the Future. But in retrospect, once it had itself become “dated” by the endless imperative to reinvent style for the sake of sales, it became known as Art Deco.
In contrast to the Arts and Crafts style-philosophy, Art Deco took for granted—even glorified—the machine and machine-based production. Nevertheless, the best practitioners of the latter genre sought to develop a design vocabulary (using geometry and the primitivist elements commandeered by “modern” artists like Picasso) that, while fitting with the needs of the factory and the ad agency, still fed the human hunger for beauty.
Many of the early pioneers of industrial design described their efforts in idealistic terms. Architect Peter Behrens, hired in 1907 by the German industrial firm AEG to create a unified look for the company’s products and advertising, sought to infuse his work with a “spiritual” content as he replaced useless and tasteless ornamentation with clean, geometric lines. Here was a design philosophy for a new age of universal freedom and convenience!
However, modern industrial design grew up alongside advertising and the increasing need for advertising. As Morris had seen and predicted, fuel-fed machines could not help but overwhelm the human community and the skill and pride of craftsmanship. They likewise overwhelmed the ability of ordinary humans to buy and use material goods. So many goods could be produced, and so quickly, that markets were easily saturated; hence the need for new, quickly expanding credit and advertising industries. More invention required more investment, which required more capital accumulation, which in turn required more sales—more consumption. Therefore consumption had to be stimulated, and advertisers, using the scientific discoveries of the new science of psychology, were eager to oblige.
Meanwhile the corporation provided the legal, economic, and social nexus for organizing all of these efforts at finance, production, and advertising. Itself a kind of machine, with capital its fuel, the corporation had, and has, an inbuilt imperative for growth and the accumulation of power, one that transcends the personality or ethical views of any particular manager or executive.
Industrial design provided the soul and self-image for otherwise faceless corporate power, as each corporation sought its own identifiable “personality” expressed in color, shape, tone, and texture. The result: during the twentieth century, even the noblest efforts of industrial designers yielded products that were expressions of a system whose overall characteristics were dictated by scale, speed, accumulation, and efficiency—dictates that made both the shapers and ultimate users of products mere instruments for the attainment of a purpose ultimately at odds with cultural integrity, human sanity, and species survival. As Stuart Ewen put it in his brilliant book, All Consuming Images: On the Politics of Style in Contemporary Culture:
If the overarching image of a corporation points our eye’s mind toward the center of an apparently rational and well-intentioned system, the design of consumer products can ratify the prerogatives of that system in the details of everyday life. In the carefully calculated design of many consumer goods, the technological supremacy of the corporation is made seemingly accessible to the consumer. While at work many people spend their lives performing routine and minuscule elements within an impenetrable bureaucratic or productive maze, the designer of many products—particularly appliances and other electronic items—suggests that with the purchase of the product, you will have your hands on the controls. In a world where a genuine sense of mastery is elusive, and feelings of impotency abound, the well-designed product can provide a symbolism of autonomous proficiency and power.
As industrial design progressed after World War II and into the ’50s, ’60s, ’70s, ’80s, and ’90s, style continued to evolve, as it had to do in order to serve the purposes of fashion and planned obsolescence. Images and objects became more frankly seductive and more directly suggestive of the very qualities of which the lives of human beings were in fact being systematically drained—autonomy, creativity, and fulfillment.
In hindsight, it appears that Deco was the last hiccup of design originality for the hydrocarbon age. Everything after it has been essentially just imitative recycling. Today, the unified vision of Deco is attractively “retro,” and in its place contemporary designers have managed to achieve a kind of new Victorianism consisting of a mangled, chaotically tumbled style hurled together from the detritus of the past, a style they proudly term “post-modernism.”
Hydrocarbon Style: Big, Fast, and Ugly
I often feel a jarring visceral response upon leaving the best museum exhibits and returning to contemporary urban existence: everything outside looks ugly and pitiful by comparison. I get the same feeling when leaving a city like Venice or Kyoto and flying back to California. It’s a response I can only call aesthetic shock.
If Morris and his followers were alive today, they might regard a stroll through a Wal-Mart as a veritable descent into hell. Yet many Americans evidently think of it as a visit to consumer Paradise. Perhaps this is some gauge of the degree of our collective aesthetic degeneration.
Now, San Francisco is not the most beautiful of the world’s cities, but neither is it the ugliest—by a long shot (I’ll spare you my nominations for that prize). Nevertheless the endless concrete pavement, the buildings, and, more than anything else, the automobiles that surround us in most modern cities (certainly including San Francisco) are beyond dreary. The cars are so much a part of our lives that we are inured to their dominating, ubiquitous physical presence. Only when one has lived for at least a few days in an environment free from cars is one likely to notice how deeply the industrial aesthetic environment is entwined with them.
Our constant, habitual, unconscious psychic adaptation to the soullessness of the manufactured environment is part of our personal price of admission to the industrial fiesta. Who can be aesthetically proud of a car, a computer, a refrigerator? One might be proud of having one, if that is in question (I am certain there are millions of new car owners in China and Russia who do feel considerable pride in this regard). But what of the object itself as a product of human artistry? Inherent in our appreciation of its design is our knowledge that the appliance in question will be used up in a decade, obsolete in half that time. Consequently, it must exhibit only as much beauty or craftsmanship as is necessary to get it off the showroom floor and into our home or garage. We are satisfied—for now, but not for long.
This state of affairs might be barely acceptable if such objects were the exceptions, if we were surrounded by others that were more durable and that showed more signs of care and that nourished us in deeper ways. But in most modern industrial countries that is not the case. Our houses, our packaging, our furnishings, our electronic gadgets—all share the same disposable, transitory ephemerality-by-design. This is truly a throw-away culture. Yes, it is possible to obtain antiques (for example, I like to use old fountain pens instead of disposable plastic ballpoints), or one-off art pieces, or handmade shoes, but these are anomalies and affectations. Only the wealthy can afford to surround themselves with such things. The masses instead make do with stamped-out plastic-or-metal objects that evince no sign whatever that any living, breathing human ever worked them or thought much about them.
As a way of concealing or compensating for this we seek out “designer” lines of merchandise with names like Calvin Klein or Martha Stewart on their labels. But these are goods whose actual designers are people we never hear of, let alone meet. One can even find faux remakes of Arts and Crafts (“Mission-style”) pieces in the furniture section of Wal-Mart. What’s the problem? It looks just like the real thing.
As for the economic conditions of the people who actually produce these objects—well, you don’t know and you don’t want to know. It doesn’t take much imagining to divine what Morris would think of the situation.
Oh, To Be Hip Again
The Arts and Crafts movement inhabited the lower-upside of history’s energy bell-curve; now, after a century of cheap petroleum, we are just over the crest, contemplating our way back down. What happened in between was a brief, probably inevitable, but nonetheless tragic eruption of production and consumption on a scale never seen before, and never to be seen again. It is tempting to look back now, as we contemplate the downside of the curve, and view with nostalgia the ideas and productions of Morris, Wright, etc., just as they looked back to the craft guilds of the Middle Ages.
But what will the human-made world look like a few decades beyond Peak Oil? Will we see a fulfillment of the Arts and Crafts ideal? It would be nice to think so. However, the world in which Morris and his colleagues lived and worked—including the cultural symbols, the skills, even in some cases the raw materials then readily available—has evaporated, replaced by one in which most people are loyal not to land and place, but to product and image.
One relatively recent iteration of style—the hippie aesthetic of macramé, tie-dye, beads, sandals, long hair, dulcimers, and herb gardens—may hold a few cues and clues for the post-carbon future. Hippie houses and ornaments were hand-made, but often rather ineptly so. This in itself is perhaps a sign of what is to come, as we return by necessity to handcraft but without skill or cultural memory to guide us.
In its lucid moments, the hippie aesthetic (which was on the whole more musical than visual) articulated a coherent rejection of consumerism and an embrace of the “natural.” But while it attempted a profound critique of the industrial-corporate system, it showed only limited similarity to Arts and Crafts ideals. This was partly because of the changed infrastructural context: by this point in history, cars and electronic machines were so embedded in the lives of people in industrialized nations that few could imagine a realistic alternative. Moreover, the baby boomers’ rebellion was at least partly enabled by the very wealth that cheap energy produced: rents were cheap, transportation was cheap, and food was cheap; as a result, dropping out of the employment rat race for a few months in order to tune in and turn on carried little real personal risk. Thus rejection and critique were inherently self-limiting.
The counterculture expressed itself through dreams of footloose, motored mobility (Easy Rider), and in music amped to the max with inexpensive electricity. The latter was hardly incidental: the voltage that made Harrison’s and Clapton’s guitars gently weep, and that wafted Grace Slick’s and Janis Joplin’s voices past the back rows in amphitheaters seating tens of thousands—in short, the power of the music that united a generation—flowed ultimately from coal-fired generating plants. That same 110 volt, 60 cycle AC current energized the stereo sets in dorm rooms and apartments across America, allowing ten million teenagers to memorize the lyrics to songs impressed on vinyl (i.e., petroleum) disks in the certain knowledge that these were revelatory words that would change the course of history.
If the hippie aesthetic was at least occasionally endearing, it was easily stereotyped, and, when profitable, readily co-opted by cynical ad executives. Also, it was often naively uncritical of its own assumptions. If you want to appreciate for yourself the embedded contradictions of the movement, just rent the movie Woodstock: the wide-eyed, self-congratulatory idealism of the “kids”—who arrived by automobile to liberate themselves through amateur psychopharmacology and to worship at the altar of electric amplification—is simultaneously touching and unbearable. It was no wonder the revolution failed: without an understanding of the energetic basis of industrialism, and therefore of the modern corporate state, rebellion could never have been more than symbolic.
Where the hippie aesthetic drew on deeper philosophical and political roots (such as the back-to-the-land philosophy of Scott and Helen Nearing), it persisted—as it still does to this day. Perhaps the most durable and intelligent product of the era was a design philosophy known as Permaculture, developed in Australia by ecologists Bill Mollison and David Holmgren. A practical—rather than an aesthetic—design system for producing food, energy, and shelter, Permaculture was conceived in prescient expectation of the looming era of limits, and it is endlessly adaptable to differing climates and cultures. In the future, its principles may serve as the fundamental frame of reference for builders and craftspeople as they elaborate new aesthetic styles.
Manifesto for a Post-Carbon Aesthetic
Will industrial production survive in the post-hydrocarbon era? The answer will of course depend on how much energy humans will have at their disposal. The total amount, as well as the per capita amount, will certainly be substantially reduced, especially in the most highly industrialized societies—but by how much? The very earliest factories were powered by water and wind, resources that presumably will still be available to future generations. Will these sources provide enough power to run the machine tools to make the lathes to make the sophisticated wind turbines (and other energy production devices) that will be needed in order to maintain some semblance of an electrical grid, or a manufacturing economy? It is impossible to know the answer at this point.
What can be said with confidence is that everything in the post-hydrocarbon world will operate on a smaller scale (let us hope that E. F. Schumacher was right in insisting that “small is beautiful”). There will be less of nearly everything to go around, and virtually every process of production and transport will occur more slowly.
The prospect of returning to human muscles for productive power is both exciting and scary. Will this mean an explosion of craftsmanship, or a return to drudgery (particularly for women)? Most likely, it will result in both. However, if adopted widely, the Permaculture design system could at least minimize the drudgery and hence provide opportunity for devotion of more attention to the quality and beauty of products.
At first thought, aesthetics might seem utterly incidental, given the survival challenges imposed by Peak Oil, climate chaos, mass extinctions, and so on. However, art is part of the necessary process of cultural adaptation. People inevitably find ways not just to endure, but to enjoy—to find happiness in the midst of change. We are, after all, environment shapers. As birds build nests, we build campsites, fashion clothing, and (if we are civilized humans) build cities. But as we shape our environments, those environments in turn mold our perceptions, our judgments, our expectations, our very consciousness. Art, religion, politics, and economics, will all have to adjust as the world’s energy infrastructure shifts. And the forms we create to express and embody those shifts and adjustments will in turn alter us. Cultural change is a process of reverberation.
It may be presumptuous to try to forecast what post-hydrocarbon style will look like, as people will have to make it up as they go along—and creativity is, almost by definition, difficult to predict. It will by definition be true post-modernism—though the use of the term may be more confusing than helpful. In any case, the following are a few of the characteristics that must inevitably adhere to the new aesthetic.
1. Workers will incorporate no or minimal fossil fuels, either as raw material or as energy source, in production processes. This is the defining condition for all that follows, and its implications will be profound.
2. Construction of buildings and objects will depend substantially on the application of muscle power and hand-craft. This necessarily follows from (1).
3. Pride in workmanship will therefore return.
4. Previously cheap petrochemical-based materials (such as plastics) will gradually disappear, necessitating the use of natural materials; however, many of the latter (such as wood) will also become rarer and more expensive (as is already happening). Thus workers will inevitably develop more respect for natural materials.
5. Because buildings and objects being produced will require more hand labor and scarce raw materials, the throw-away mentality and the phenomenon of planned obsolescence will disappear. Durability will be a required attribute of all products.
6. For the same reasons, reparability will also be requisite: the average person will need to know how to fix anything that breaks.
7. Since products themselves will need to be durable and reparable, the continued rapid changes of fashion and style will seem nonsensical and counter-productive. Planned aesthetic obsolescence will be replaced by the imperative to lend an enduring quality to all design.
8. Because the transitional era (i.e., the coming century) will be one in which species will continue to vanish, and because people will find themselves having to adapt to weather and other natural conditions (since they will no longer be able to insulate themselves from these with high-energy buildings and machines), workers will probably be inspired to incorporate themes from nature into their products.
9. In their efforts to identify aesthetic themes appropriate to hand labor and natural materials, workers will likely end up drawing upon vernacular design traditions.
10. Because people living in the transitional era will be witnessing the passing of the fossil-fueled machine culture of their youth, they will probably be inspired to incorporate occasional ironic or nostalgic comments on that passing into their artistic output.
11. Beauty may to a certain extent be in the eye of the beholder, but there are universal principles of harmony and proportion that perennially reappear; and, given that workers will be required to invent much of their aesthetic vocabulary from scratch, they will no doubt fall back upon these principles frequently.
12. Since we are entering an era of declining availability of raw materials, the new aesthetic will by necessity emphasize leanness and simplicity, and will eschew superfluous decoration. The Zen architecture of Japan may serve as an inspiration in this regard.
These are, of course, only the most general of parameters within which specific new regional styles may emerge over the coming decades. What exactly these styles will look like won’t be known until millions of craftspeople and builders undertake the processes of (re-)learning skills and producing large numbers of buildings, tools, furnishings, and artworks. However, one can hardly help noting that most of the characteristics listed above apply to the products of the Arts and Crafts movement.
And so, perhaps the way down the hydrocarbon curve will, at least in the best instances, indeed look a little like the way up.
Quote of the month:
Even the alarmingly large crowd of people who would rather show off than conserve will change their habits when energy consumption becomes an instant indicator of stupidity and social indifference. —Scott Burns, financial adviser
~~~~~~~~~~~~~~~ Editorial Notes ~~~~~~~~~~~~~~~~~~~
Richard has a new website where you can access past museletters and order his books including the latest The Oil Depletion Protocol: A Plan to Avert Oil Wars, Terrorism and Economic Collapse.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
http://www.energybulletin.net/21466.html
Goldmarca Limited: Geophysical Anomalies Indicate Drill Targets 300 to 500 Metres West of Aurelian Discovery at Eccolmetals
Tuesday October 17, 3:24 pm ET
PANAMA CITY, PANAMA--(CCNMatthews - Oct. 17, 2006) - Further to news release of August 9 2006 at the Eccolmetals property Goldmarca Limited (TSX VENTURE:GML - News; BERLIN:GDQ - News; FWB:GDQ) is pleased to report the induced polarization survey has located zones of high chargeability that may represent sulphide mineralization at depth. Gold at the adjacent Aurelian property is associated with sulphide mineralization. The Eccolmetals property is 300 metres west of Aurelian's high-grade gold properties Fruta del Norte ("FDN") in the Condor Gold Belt Ecuador and indicates highly prospective zones for gold mineralization.
A first pass geophysical interpretation has been completed. The survey is being conducted by Geofisica Consultores SRL from Peru. See Figures 1 to 7 attached to this release. Preliminary geological interpretation by Goldmarca suggests the gold mineralization in the FDN discovery zone and adjacent properties is controlled by major faults and shear zones and preserved in graben structures where the sandstone cover the gold system from erosion. The geophysical anomalies coincide with previously reported prospective zones having favorable geology and structures. This coincidence further localizes the drill targets and gives them a higher ranking. The prospective zone been has mapped over the grid for 3km length and the geophysical survey has confirmed the prospective zone for the first 800 metres of length .some 500 metres wide and up to 400 metres depth. Another anomaly indicates structures or possible fault zone that may link to the Aurelian type in the east of the Eccolmetals property. Drill testing of the geophysical anomalies is justified. Goldmarca is planning to mobilize a drill rig to commence drilling in November 2006.
Work Programme Progress
The 46km of grid lines have been cut. 16km of induced polarization geophysical lines have been completed out of a planned 46km. The lines completed comprise four east west lines and two north south lines. Drill sites are being located.
Dr. Howard Lahti, Ph.D. Geology is acting as Qualified Person in compliance with National Instrument 43-101 with respect to this release. He has reviewed the contents for accuracy.
On behalf of the Board of Directors,
Robin Slaughter, President and Chief Executive Officer
ABOUT GOLDMARCA: Goldmarca Limited (TSX VENTURE:GML - News) is an international mining company that is engaged in adding value to gold and base metal projects with a primary focus on assets in South America and Australia. By applying unique technology and expertise, Goldmarca is focused on delivering a low-cost option to develop resource projects that can provide a one-year payback of all capital costs. Goldmarca is also listed on the Frankfurt and Berlin exchanges under the symbol "GDQ". For more information, please visit www.goldmarca.com.
Safe Harbor Statement: Statements contained in this release that are not historical facts are forward-looking statements which involve risk and uncertainties, which could cause actual results to differ materially from those, expressed in forward-looking statements including the following: changes in economic or environmental conditions and the Company's ability to execute its business model and strategic plans. The Company relies on litigation protection for forward-looking statements.
To view the attached maps please click on the following link: http://www.ccnmatthews.com/docs/1017gml1.pdf
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.
Contact:
Robin Slaughter
Goldmarca Limited
President & CEO
507-66714370
Nick Demare
Goldmarca Limited
Director & CFO
(604) 685-9316
Email: info@goldmarca.com
Website: www.goldmarca.com
--------------------------------------------------------------------------------
Source: Goldmarca Limited
Goldmarca Limited: Geophysical Anomalies Indicate Drill Targets 300 to 500 Metres West of Aurelian Discovery at Eccolmetals
Tuesday October 17, 3:24 pm ET
PANAMA CITY, PANAMA--(CCNMatthews - Oct. 17, 2006) - Further to news release of August 9 2006 at the Eccolmetals property Goldmarca Limited (TSX VENTURE:GML - News; BERLIN:GDQ - News; FWB:GDQ) is pleased to report the induced polarization survey has located zones of high chargeability that may represent sulphide mineralization at depth. Gold at the adjacent Aurelian property is associated with sulphide mineralization. The Eccolmetals property is 300 metres west of Aurelian's high-grade gold properties Fruta del Norte ("FDN") in the Condor Gold Belt Ecuador and indicates highly prospective zones for gold mineralization.
A first pass geophysical interpretation has been completed. The survey is being conducted by Geofisica Consultores SRL from Peru. See Figures 1 to 7 attached to this release. Preliminary geological interpretation by Goldmarca suggests the gold mineralization in the FDN discovery zone and adjacent properties is controlled by major faults and shear zones and preserved in graben structures where the sandstone cover the gold system from erosion. The geophysical anomalies coincide with previously reported prospective zones having favorable geology and structures. This coincidence further localizes the drill targets and gives them a higher ranking. The prospective zone been has mapped over the grid for 3km length and the geophysical survey has confirmed the prospective zone for the first 800 metres of length .some 500 metres wide and up to 400 metres depth. Another anomaly indicates structures or possible fault zone that may link to the Aurelian type in the east of the Eccolmetals property. Drill testing of the geophysical anomalies is justified. Goldmarca is planning to mobilize a drill rig to commence drilling in November 2006.
Work Programme Progress
The 46km of grid lines have been cut. 16km of induced polarization geophysical lines have been completed out of a planned 46km. The lines completed comprise four east west lines and two north south lines. Drill sites are being located.
Dr. Howard Lahti, Ph.D. Geology is acting as Qualified Person in compliance with National Instrument 43-101 with respect to this release. He has reviewed the contents for accuracy.
On behalf of the Board of Directors,
Robin Slaughter, President and Chief Executive Officer
ABOUT GOLDMARCA: Goldmarca Limited (TSX VENTURE:GML - News) is an international mining company that is engaged in adding value to gold and base metal projects with a primary focus on assets in South America and Australia. By applying unique technology and expertise, Goldmarca is focused on delivering a low-cost option to develop resource projects that can provide a one-year payback of all capital costs. Goldmarca is also listed on the Frankfurt and Berlin exchanges under the symbol "GDQ". For more information, please visit www.goldmarca.com.
Safe Harbor Statement: Statements contained in this release that are not historical facts are forward-looking statements which involve risk and uncertainties, which could cause actual results to differ materially from those, expressed in forward-looking statements including the following: changes in economic or environmental conditions and the Company's ability to execute its business model and strategic plans. The Company relies on litigation protection for forward-looking statements.
To view the attached maps please click on the following link: http://www.ccnmatthews.com/docs/1017gml1.pdf
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.
Contact:
Robin Slaughter
Goldmarca Limited
President & CEO
507-66714370
Nick Demare
Goldmarca Limited
Director & CFO
(604) 685-9316
Email: info@goldmarca.com
Website: www.goldmarca.com
--------------------------------------------------------------------------------
Source: Goldmarca Limited
Payback Analysis: An Impediment to Sustainability
by Michael Vickerman, RENEW Wisconsin
Petroleum and Natural Gas Watch, Vol. 5, Number 7
October 16, 2006
In my 15 years of promoting renewable energy use in Wisconsin, I have come to believe that the most persuasive advocates are those who back up their words with their wallets. So when the federal government in August 2005 established tax credits for residential solar water heaters, it was time for me to act.
Last January our household became one of a growing number of households that heats a portion of their domestic water with a solar system. Between April and September the solar system provided most of the hot water we use. During the cooler months, the natural gas water heater becomes the primary—though not the sole--source of hot water. If we chance upon a sunny stretch of weather during the winter solstice, our solar collector is there to gobble up the low-altitude sunshine and convert it into warm water.
Scaling back consumption of natural gas, a high-density and highly versatile fossil fuel, serves two beneficial purposes. First, the less we burn, the less carbon dioxide is released into the atmosphere. Even though natural gas has a reputation as a clean fossil fuel, the amount of CO2 that is released from a combustion process weighs more than the gas that went into it.
Though our furnaces and water heaters are every bit as responsible for climate change as automobiles and power plants, they are generally overlooked as greenhouse gas sources, in large part because burning natural gas produces less schmutz--Yiddish for impurities-- than coal, diesel or gasoline.
The second purpose served by substituting sunlight for natural gas is that it slows down the unnecessary depletion of a high-quality energy resource that should be used for other, more valuable purposes. This is not an academic matter in North America, where, according to recent government estimates, natural gas reserves amount to about 10 years’ supply at present rates of consumption.
Consisting primarily of a collector panel (66 square feet) and a second hot water tank that stores the preheated water, our relatively small system was purchased and installed for $6,700. Between an installer’s rebate, a Focus on Energy cash-back reward and the federal tax credit, our share of the system came to about $3,000, which we paid out of a savings account.
The site assessor who characterized our “solar window” predicted, on average, savings of 120 therms per year, or 10 therms a month. Presently, Madison Gas and Electric charges natural gas customers about $1.00 per therm. Thus, if the price of natural gas keeps pace with the prevailing rate of inflation, it would take 25 years before our annual savings of $120 would equal the $3,000 we shelled out for this system.
To a traditional economist, one who boils life’s complexities down to income, outflows and the time value of money, our decision to install a solar domestic hot water system doesn’t make a whole lot of sense, principally because the return is tiny relative to the large up-front outlay.
But in reducing this transaction to simple, measurable flows of dollars in and dollars out, economists filter out a great deal of relevant information that might confound their notions of rational economic decision-making. Though economists will concede that there are other valid factors besides pure price considerations on which to base one’s purchasing or investment decisions, they aren’t likely to register meaningfully in the economic models they use. Instead, these factors are categorized—and marginalized—as “externalities”—a semantic purgatory designed to ensure that they will not enter the mainstream of economic theory, where they could be used to justify government decisions to support “no-build” options.
Moreover, such crude calculations rest on two assumptions that are highly questionable and cannot help but lead to distorted conclusions. One is that the solar water heating system is a typical appliance which depreciates over time, just like a toaster. The other is that natural gas is a limitless source of energy that will not become scarce and/or expensive over time.
Regarding the first point, a solar water heater is a simple, low-maintenance system that, once installed, can be kept in good working order for many decades at little cost. It is different from other household appliances like microwaves ovens and furnaces in that the outside source of energy (sunlight falling on the roof) it runs on is cost-free, a savings which is reflected in every monthly energy bill. For that reason, it is more proper to consider a solar domestic hot water system as a built-in feature of the house it serves, rather like south-facing windows. If kept in good repair, houses tend to appreciate over time, unlike microwave ovens and furnaces. All else being equal, a house with a solar water heater should command a higher selling price than a house without one.
As for natural gas supplies, the outlook is not good. Thanks to decades of depletion, the North American resource base is in terminal decline. It simply cannot support consumption at present levels, no matter what price point you pick. Imports from overseas suppliers like Qatar will increase to be sure, but will they be able to offset declining output from mature fields? Not very likely.
But those individuals who believe that my solar water heater will take 25 years to pay itself back also assume, with complete confidence, that enough new sources of natural gas will be discovered and brought to market to keep overall supplies from diminishing. Unless they happen to be petroleum geologists, they can’t possibly know what will happen to natural gas supplies in five years, but that doesn’t stop them from making calculations that discount the importance of future supplies.
Solar water heaters aren’t as flashy as other renewable energy systems, like photovoltaics or windpower, perhaps because they involve plumbing and don’t produce electricity. But they can be counted on to produce savings month after month, rather like interest from Treasury bills or a money market account. Unlike the interest from these instruments, the savings from a solar water heating system are not taxed. And if the price of natural gas goes up, the savings grow larger.
Alas, Americans would rather spend discretionary dollars in casinos or on cruise ships than take preventative action against the possibility of higher heating prices. This should not be surprising in a society where the very idea of personal savings has become passé. Last year, the personal savings rate went negative for the first time since the Great Depression. It is the borrowing against future income that is propping up the American economy right now, not the savings from past and present wealth. Instead of directing present-day wealth to make more lifeboats for ourselves and our children, we are, as a society, chopping up the ones we have for firewood to help us stay warm a little longer. There is nothing remotely sustainable about this arrangement.
When people first started asking me: “How long is the payback on your solar water heater,” it took all my self-control to keep from responding with “It’s paid back the day I have hot water in my house and you don’t.” In actuality, I believe my out-of-pocket portion of the system will be fully captured in the sale price of my house, though I have no intention of testing that proposition any time soon. Until then, we plan on taking the $10 or more in monthly savings and applying them to our son’s college education.
Note: Portions of this column appear in the October 2006 issue of Sustainable Times.
Petroleum and Natural Gas Watch is a RENEW Wisconsin initiative tracking the
supply demand equation for these fossil fuels, and analyzing its effects on prices,
consumption levels, and the development of energy conservation strategies and renewable energy alternatives. For more information on the global and national petroleum and natural gas supply picture, visit "The End of Cheap Oil" section in RENEW Wisconsin's web site: www.renewwisconsin.org. These commentaries also posted on RENEW’s blog: http://www.zmetro.com/community/us/wi/madison/renew
and Madison Peak Oil Group’s blog: http://www.madisonpeakoil-blog.blogspot.com.
Contributed by Ed Blume
HD,
Thanks for the link; I had not yet seen it.
Well, if silver is the poor man's gold, then I qualify.
My other primary silver holding is SLW, a pure silver play. You might want to review the SLW board (or you might own it already).
Yes, I'm a firm believer in Peak Oil. Not much interest in it right now, but that's good for me and other believers, as we
load up on energy stocks before they become too expensive.
Have a good day,
sumisu
Permitting Advances on Perama Hill Gold Project in Greece
Tuesday October 17, 9:11 am ET
VANCOUVER, Oct. 17 /CNW/ - Frontier Pacific Mining Corporation (TSX-V:FRP - News; the "Company") announces that its operating subsidiary, Thracean Gold Mining S.A. ("Thracean"), in Greece, was informed that the Environmental Terms of Reference ("ETR") have been formalized by the engineering and scientific management within the Ministry of Environment of Greece. The ETR is now in the process of being reviewed by the governing Joint Ministerial Council ("JMC") and the formal approval is expected.
The studies prepared by Thracean, as contained in the Environmental Impact Statement ("EIS"), and the ministerial review of the ETR by the JMC are designed to insure that the environment is totally protected within the projected mine development and operating plan. The receipt of the formal approval of the ETR by the JMC is a key step in the regulatory and legislative process in Greece to allow Thracean to develop and operate the proposed Perama Hill gold mine.
In anticipation of the formal JMC approval, Thracean is actively engaged with local, regional and interested parties to fully inform them about the environmental safeguards and the safe operational management of the environment that have been applied to the proposed mine development as outlined in the ETR. In addition, Thracean is engaged with the local communities in the area to build social and economic relationships that can lead to the creation of sustainable projects that can last long after mining operations cease.
Revised estimated capital costs (2006), are currently being prepared by Aker Kvaerner Engineering (UK), Golder & Associates and Scott Wilson (parent company of Roscoe Postle) and will be completed by the end of October.
Perama Hill has an indicated near surface oxide resource of 11.7Mt grading 3.62 g/tonne gold and 8.2 g/tonne silver with an overall waste to ore strip ratio of 0.4:1. Average annual production is 131,000 ounces of gold per year and includes an average of 170,000 ounces per year for the first three years.
Peter Tegart, P.Geo., a Qualified Person under the guidelines of National Instrument 43-101 policies, is responsible for the contents of this news release
About Frontier Pacific:
-----------------------
Frontier Pacific acquired Perama Hill in December 2004 from Newmont Mining Corporation and S&B Industrial Minerals S.A. for US$12 million plus a further US$3 million payment at the start of commercial production and a 2.5% Net Smelter Royalty Return. In addition to Perama Hill, the Company holds an option to earn a 50% interest in the Macusani Uranium Project from joint-venture partner Solex Resources Corp.(TSX-V: SOX - News) and a 100% mining lease option on the Dixie Creek gold property in Nevada's Carlin Trend. Please visit http://www.frontierpacific.com for more information on Frontier Pacific.
On behalf of the Board of Directors,
FRONTIER PACIFIC MINING CORPORATION
"Peter F. Tegart"
Peter F. Tegart, P. Geo., President & CEO
The statements made in this News Release may contain certain forward-looking statements. Actual events and/or results may differ from the Company's expectations. Certain risk factors may also affect the actual results achieved by the Company. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
For further information
FRONTIER PACIFIC MINING CORPORATION (TSX-V: FRP - News), Suite 875 - 555 Burrard Street, Box 205 - Bentall Two Centre, Vancouver, B.C., Canada, V7X 1M8, Phone: (604) 717-6488, Fax: (604) 717-6427, www.frontierpacific.com, info@frontierpacific.com
--------------------------------------------------------------------------------
Source: Frontier Pacific Mining Corporation
Permitting Advances on Perama Hill Gold Project in Greece
Tuesday October 17, 9:11 am ET
VANCOUVER, Oct. 17 /CNW/ - Frontier Pacific Mining Corporation (TSX-V:FRP - News; the "Company") announces that its operating subsidiary, Thracean Gold Mining S.A. ("Thracean"), in Greece, was informed that the Environmental Terms of Reference ("ETR") have been formalized by the engineering and scientific management within the Ministry of Environment of Greece. The ETR is now in the process of being reviewed by the governing Joint Ministerial Council ("JMC") and the formal approval is expected.
The studies prepared by Thracean, as contained in the Environmental Impact Statement ("EIS"), and the ministerial review of the ETR by the JMC are designed to insure that the environment is totally protected within the projected mine development and operating plan. The receipt of the formal approval of the ETR by the JMC is a key step in the regulatory and legislative process in Greece to allow Thracean to develop and operate the proposed Perama Hill gold mine.
In anticipation of the formal JMC approval, Thracean is actively engaged with local, regional and interested parties to fully inform them about the environmental safeguards and the safe operational management of the environment that have been applied to the proposed mine development as outlined in the ETR. In addition, Thracean is engaged with the local communities in the area to build social and economic relationships that can lead to the creation of sustainable projects that can last long after mining operations cease.
Revised estimated capital costs (2006), are currently being prepared by Aker Kvaerner Engineering (UK), Golder & Associates and Scott Wilson (parent company of Roscoe Postle) and will be completed by the end of October.
Perama Hill has an indicated near surface oxide resource of 11.7Mt grading 3.62 g/tonne gold and 8.2 g/tonne silver with an overall waste to ore strip ratio of 0.4:1. Average annual production is 131,000 ounces of gold per year and includes an average of 170,000 ounces per year for the first three years.
Peter Tegart, P.Geo., a Qualified Person under the guidelines of National Instrument 43-101 policies, is responsible for the contents of this news release
About Frontier Pacific:
-----------------------
Frontier Pacific acquired Perama Hill in December 2004 from Newmont Mining Corporation and S&B Industrial Minerals S.A. for US$12 million plus a further US$3 million payment at the start of commercial production and a 2.5% Net Smelter Royalty Return. In addition to Perama Hill, the Company holds an option to earn a 50% interest in the Macusani Uranium Project from joint-venture partner Solex Resources Corp.(TSX-V: SOX - News) and a 100% mining lease option on the Dixie Creek gold property in Nevada's Carlin Trend. Please visit http://www.frontierpacific.com for more information on Frontier Pacific.
On behalf of the Board of Directors,
FRONTIER PACIFIC MINING CORPORATION
"Peter F. Tegart"
Peter F. Tegart, P. Geo., President & CEO
The statements made in this News Release may contain certain forward-looking statements. Actual events and/or results may differ from the Company's expectations. Certain risk factors may also affect the actual results achieved by the Company. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
For further information
FRONTIER PACIFIC MINING CORPORATION (TSX-V: FRP - News), Suite 875 - 555 Burrard Street, Box 205 - Bentall Two Centre, Vancouver, B.C., Canada, V7X 1M8, Phone: (604) 717-6488, Fax: (604) 717-6427, www.frontierpacific.com, info@frontierpacific.com
--------------------------------------------------------------------------------
Source: Frontier Pacific Mining Corporation
Hopeful Diogenes,
I just have 2500 shares of Great Panther, but I like the outlook.
You will be interested in the link below.
http://www.investorshub.com/boards/read_msg.asp?message_id=14065832
sumisu
Relativity
By: Theodore Butler
-- Posted 16 October, 2006
One of the soundest money principles is relative value. The true value investor is always on the hunt for that which offers the best intrinsic value when measured against comparable choices. This is a common sense exercise for all of us when buying anything, from groceries, to gasoline, to clothing on a daily basis, or big-ticket items like cars or computers or houses. We instinctively seek out the best relative value, the best buy. It’s all about getting the most bang for your buck.
Nowhere is this principle more important than in the investment world. We want to put our money into not only the best investment class, but also the best choices within that investment class. If one decides to invest in bonds, then the search begins for the very best bonds. Same with stocks, or real estate, or anything. Yes, this is very basic stuff, but rock solid.
The beauty of relative value is that, once you have decided which asset class to invest in, finding the best value within that class is fairly straightforward. Once you have decided to invest in common stocks, for instance, your search is then narrowed to finding the best stocks. While it is always possible to choose wrong, the relative choice between which computer stock to buy is easier than deciding if computer stocks are a good investment in general. That’s because the criteria for decision are greatly narrowed. Basically it comes down to how comparative stocks will do against each other, and not broad macroeconomic concerns.
There’s nothing complicated about finding the best relative specific investment once you decide on an asset class. You simply want to buy the cheapest item; the one that offers the biggest price discount from comparable intrinsic values.
I think natural resources are the best long-term asset class, due to demographics and world economic growth and future mineral production constraints. I’ll tell you a bit more why in general, and then why I feel that silver is the best possible relative choice in that asset class. Even if you disagree that natural resources are likely to be the best asset class for the long term, there’s always still merit in deciding what single component may be the best relative value in any asset class. That’s because if you pick the best relative bargain in any asset class, it can turn out well even if you picked the wrong asset class.
Within the natural resource asset class I choose to focus on the major non-ferrous metals, including copper, aluminum, zinc, nickel and lead. Many of these metals have been hitting new all-time price highs as I write this article. I’ve excluded tin (because it is financially insignificant compared to the others), but have included gold and silver from the precious metals group. Silver is, of course, considered both industrial and precious, and I am including gold because it is the logical and obvious precious metal companion of silver. I’ve excluded the other precious metals, including platinum and palladium, for a variety of reasons.
This comparative look at metals is not a new concept and I’ve written about it before in articles such as, "Friedman’s Theory" which discussed relative amounts of below ground resources and "The Relative Value of Silver" which compared production ratios of copper, gold and silver versus price[b/]. (If you want to do something interesting update that article by substituting current prices for copper and gold and see what new silver price is projected. Hint- it’s a lot higher than in the original examples) While the concept may not be new, I’ll look at some new methods of comparison, in the quest to determining correct relativity.
Before the specific comparisons, let me explain why I have chosen natural resources, and specifically, the non-ferrous metals as my preferred general asset class. The total world economic output (GDP) runs more than 45 trillion dollars annually. It has been growing at close to 5% annually, for the past few years, or more than $2 trillion per year. Without natural resources (energy, foodstuffs, all metals and other commodities), there wouldn’t be a world economy. Just like there wouldn’t be life without air, water and food. Natural resources are a necessary and vital component of the world economy.
Further, there would be no modern world economy without the industrial metals. How could there be? Yet in a $45 trillion world economy, the total annual cost to the world for all the copper, aluminum, nickel, zinc, lead, and silver consumed (plus gold, although gold is not industrial) is only $315 billion. Please think about that for a moment. The cost of these metals is less than 1% of the total world economy. Yet, without these metals there would be no world economy. And this is after all of these metals have at least double from low price points, with some up 3, 4, and 5-fold.
My point here is simple – the price tag to the world economy for the metal in question, even after the dramatic increases over the past few years, is small. That is not to say prices can’t or won’t come down at some point, but at less than a 1% cost to the world economy, they don’t have to come down because the total cost is excessive or onerous. Add in the growing demand, for as far as the eye can see, and you have the basis for this being my choice for the best asset class.
Now, to the specific comparisons. Here’s a breakdown of the dollar cost to the world annually for the metals’ mine production in question, based upon current prices compared to four years ago. (Sources – LME, Silver Institute, World Gold Council).
In Billions of Dollars–
METAL 2006 2002
Aluminum - 65 35
Copper - 115 22
Nickel - 36 7
Zinc - 34 7
Lead - 9 3
Gold - 48 24
Silver - 8 3
TOTAL 315 101
A few observations about this data, before my conclusions. The annual cost to the world economy, from 4 years ago, as a result of these price increases has grown by $214 billion. Compared to the $8 trillion growth in the world economy over that same period, this means the increase in these metals is less than 3% of just the growth in the world economy. As stated above, the total current cost of these metals makes up less than 1% of the $45 trillion world GDP.
To put the increase in these metal costs to the world in further perspective, the current cost to the world for crude oil has grown by almost $1 trillion from 2002, or almost 5 times the increased current cost of these metals combined.
My first conclusion is that it would appear that the world has and can "afford" the price increases in these metals. Certainly, I am aware of no credible assertions that the increase prices of these metals threaten world economic growth. Further, considering that the easy inventories and scrap has already been consumed over the past few years, those already-consumed supplies are no longer the price depressant they once were. From this point forward, it’s going to take plain vanilla increased mine production and decreased consumption to balance supply and demand. Only price incentives can accomplish that. This is at the heart of why this asset class looks attractive to me.
Another point is that it has been increased demand and world economic growth behind the surge in prices of these metals, versus any serious supply disruptions. There has been a demand-push theme to the price increases to date. There is no way that these industrial metals could all be subject to simultaneous tightness and dramatic inventory drawdowns without strong world economic growth.
Specifically regarding silver, there is no way that all the base metals could be experiencing across the board demand and inventory drawdowns without the same thing occurring in silver. After all, the one thing you can say about the base metals is that they are demographic and GDP-sensitive. This is even truer with silver, since the industrial applications for silver are more diverse and varied than all the base metals combined.
Further, on the supply side, since silver is principally produced as a by-product of the very metals being discussed, any suggestion that silver production is growing while copper, nickel, zinc, lead and gold production is stagnant is absurd. The link between silver and the rest of these metals is as close as it gets, from both a production and industrial consumption basis.
My principal conclusion regarding the information in the table is straightforward. Simply stated, the world economy cannot exist in its current form without copper, zinc, nickel or lead, or any important industrial commodity. It will pay what it has to pay in order to have these materials. There is no other choice. The same goes, in spades, for silver. So ask yourself - if the world can afford an increased annual cost of $93 billion for copper, or $29 billion for nickel, or $27 billion for zinc, or $24 billion for gold with no obvious dislocations, what could the world afford to pay for silver? Based upon those examples, it would appear that the world could afford $50 to $150 ounce silver.
Therefore, on a total affordability basis, silver would appear to have a great deal of catch up to the other metals. That makes it, in my opinion, the best relative value among the industrial metals (ex gold) by this calculation. But there are other, even more important considerations that mandate silver as the best relative choice. Chief among them are practicality.
How the heck does the average investor buy real copper, zinc, nickel or lead? The short answer is he can’t. He can buy common stocks in mining concerns, but that involves extra complications (which is why I don’t publicly recommend them). He can buy pure paper contracts with no metal backing, including the LME nickel contract currently in delivery default. But this is not the same as buying real metal. In silver, he can buy real metal.
Sometimes, the choice is very easy. This is the case with buying silver versus the other industrial metals. Not only is silver the best relative investment from a pricing basis, but it is also the only practical possibility on a real metal basis. If someone chose to participate in the natural resource asset class and wanted the very best component of that class, I am hard-pressed to see how that choice wouldn’t be silver.
The Real Gold/Silver Ratio
Obviously, investors can also buy real gold as a natural resource asset class choice. As I have written, I think gold is currently a good buy on a risk reward basis, due to the favorable COT structure. But since gold is not considered an industrial metal, it’s hard to justify buying it as a substitute for copper, nickel, zinc or lead. Silver, yes, but not gold. But on a precious metal basis, gold does represent an easy alternative to silver. It’s not as bulky and the bid/ask spreads are much tighter. And gold is certainly more popular than silver.
So is easy and popular the way to go? Not to me, but you have to decide for yourself. The key to investing, once again, is to get the most bang for your buck, not to do what is easier or more popular. It amazes me to hear many pundits acknowledge and actually predict that silver will outperform gold, and then turn around and suggest people buy gold instead of silver. It makes no sense to put your money in anything other than what you think will perform the best. If one believes gold will outperform silver in the long term, then, by all means, he should invest in gold over silver. But is that a well-founded belief? You decide.
Just about all the "fundamentals" attributed to gold, like it being a currency or inflation hedge, or as some type of money, apply to silver as well. There are obvious differences, like color and price and physical and chemical properties and the amounts held by world governments, but these are fairly well known. Much less well known are other important differences.
There is more above ground gold than silver. There is more above ground gold created everyday, while there is less silver everyday. There is fewer years’ production below ground of silver than gold, according to the US Geological Survey. Since silver is an industrial metal, it is needed by the world economy, like copper or nickel. That means the world will pay any price necessary to get silver for industry. Gold is not an industrial commodity, but a highly desired item. Silver is needed and may be wanted, gold is only wanted. Need and want are qualities that can result in higher prices. I think industrial need is the more powerful, particularly if industrial users go into an attempted inventory-building panic, but the key point is that silver has both qualities, need and want, while gold has only want.
Perhaps the greatest difference between gold and silver is the "market capitalization" of each. While this factor is as widely unknown as is how rare silver is compared to gold, when just a small number of gold-only investors grasp this concept, there will be a profound impact on the price of silver.
By market capitalization, I am referring to how much all the gold in the world is worth, versus how much all the silver in the world is worth. It’s a very simple concept that is widely used in the investment world for relative measurements. All you do is multiply the amount thought to be in existence by the current price.
In gold, there is said to be more than 4 billion ounces in above ground existence that could possibly be available to the market near current prices. At $600 an ounce, the market cap comes to $2.4 trillion. In silver, there is thought to be less than one billion ounces available, near current prices, giving a market cap, at $12 an ounce, of 12 billion dollars. The gold market cap is 200 times the market cap in silver.
There is 200 times more gold than silver in the world, in dollar value. Dollar value is the basic measuring yardstick in the investment world. I would submit that 200 to 1 is the real gold/silver ratio Stated in the reverse, this means that all the silver in the world is worth one half of one percent of what all the gold in the world is worth. Please think about this for a moment.
What this means, to me, is that this is a one-way trade. (It is also why I have recommended a switch from gold to silver for many years.) Because there such a large market cap in gold compared to silver, even if all the owners of silver decided simultaneously to sell their silver and buy gold, it would only amount to 0.5% of the market cap of gold. But if only one half of one percent of gold owners decided to switch into silver, that would represent 100% of the silver market cap. This would impact of incredible proportions on the price of silver.
I am absolutely convinced that very few grasp this concept. The truly remarkable aspect is that it is completely unnecessary that many grasp it in order for it to have a profound impact on silver. Just let a few big holders of gold try to make the switch into silver and you will see real fireworks.
If you are looking for a reason as to why and how something like this go unnoticed for so long, I have a one-word answer – price. The world’s investors get their main clue from price. That’s not real analysis, but it is reality. Because gold has traded 50 times or more the price of silver, the investors of the world assume that gold is more rare than silver. They haven’t the slightest clue that the market cap of gold is 200 times greater than silver. They haven’t the slightest clue how vital silver is to industry and their own modern standard of living. Or that there is more gold being created everyday, while the amount of silver in existence is shrinking daily. They only know the price of gold is so much higher than the price of silver.
But price is a two-edged sword. It cuts both ways. Just like the (manipulated) low price of silver convinced investors how it must be super-abundant compared to gold, as the price of silver gains on the price of gold, the world’s investors will take notice. If history and human nature is any guide, the relatively stronger price of silver will beget silver investment, creating a self-fulfilling momentum of silver buying. The real opportunity is, as always, positioning oneself before the masses react.
Whether on an industrial metal comparison, or compared to its age-old precious metal companion, silver is a screaming relative buy.
http://news.silverseek.com/TedButler/1161030691.php
Iron Ore Down Under
By Andrew K. Burger
16 Oct 2006 at 11:26 AM EDT
DAMMAM, Saudi Arabia (ResourceInvestor.com) -- With a 19% per tonne price increase for 2006 piled on top of last year’s record-setting 72% increase, and with Asian, particularly Chinese, demand for steel still going strong, it’s hard to imagine better conditions for iron ore producers and explorers. Industry giants, such as BHP Billiton [NYSE:BHP], Brazil’s CVRD [NYSE:RIO] and Rio Tinto [NYSE:RTP], as well as smaller producers, have been posting record-setting earnings, and interest in their shares has risen in tandem.
All this has led to a no-holds barred push to ramp up development and production schedules, as well as locate promising new prospects. Constraining the acceleration are the high cost of fossil fuels and a dearth of skilled labour. It is also contributing to a rush of currents and cross-currents to do with the other principal means of acquiring producing assets: mergers and acquisitions.
A case in point is Australia, the world’s largest iron ore exporter, whose iron ore market has been a hotbed of exploration, production and mergers and acquisitions activity.
Iron Ore Bonanza
“Driven by the increasing dominance of the blast furnace in world steelmaking, iron ore mine expansion plans are being accelerated, new capacity is being brought on stream, and producer companies are pushing to extract benefits from industry consolidation and cost improvement programmes,” according to Sydney-based AME Mineral Economics’ “Iron Ore 2006” cost analysis report.
The report “shows how the industry is responding to an unparalleled demand surge and to a new global business environment characterized by record prices, stratospheric ocean freight rates, and a weaker U.S. dollar,” according to AME information.
“Although the industry’s giants – CVRD, Rio Tinto and BHP Billiton –have fast-tracked new projects to feed China’s insatiable demand, they continue to report being sold out well into the future. And the big three alone have a combined production in 2004 of more than 450Mt-- this accounts for roughly 35% of world production!” the authors state. A May 2006 Wall Street Journal article puts the three companies’ market share at 75%.
Australia’s iron ore community, which includes a host of smaller iron ore producers and explorers looking to capitalise on the good times, has been rife with news and rumours of industry consolidation for some time now. Mining executives, analysts and investment bankers have been very busy assessing the lay of the land and prospects for merging with, or acquiring, another producer as the fastest and cheapest route to growing assets, revenues, and profits. As long as demand, and hence prices, don’t collapse, industry consolidation looks likely to remain in the cards.
Western Plains & Southern
Accounting for more than 90% of Australia’s estimated reserves, the state of Western Australia has been a crucible of iron ore mining activity and mergers and acquisitions. Prominent among the latter is fast-growing Mt.Gibson’s [ASX:MGX] ongoing attempt to acquire Aztec Resources. [ASX:AZR]. Among the latest news in this ongoing hostile bid was the extension, to Oct. 27, of its A$280 million (US$211 million), 1:3 stock swap for control of Aztec.
More recently, and elsewhere in Australia, Southern Iron Pty. Ltd., which is being acquired by Western Plains Gold Ltd. [ASX:WPG], Oct. 10 announced that it had signed a Memorandum of Understanding (MOU) with China Kingdom International Group Co. Ltd.
China Kingdom is a vertically integrated conglomerate focused on international trade, investment and financial services, along the lines of CITIC. It has ties to the JiuQuan Iron and Steel Plant, one of China’s largest producers, and supplies iron ore to the Baotou Stell Plant, Shijiazhuang and AnShan stell plants. The company is also a major shareholder in Shanxi Iron and Stell Co. Ltd., which has a 3 million tonnes per annum steelmaking capacity.
If a 45-day due diligence process proves favorable, China Kingdom has agreed to take an A$5 million (US$3.7 million) equity interest in Southern Iron or WPG, as well as a joint venture interest in Southern’s Peculiar Knob iron ore project in South Australia. Included is a loan of up to A$30 million (US$22.6 million) for development of a direct shipping iron ore mine and China Kingdom being granted an option to purchase the majority of the ore mined at Peculiar Knob on a take-or-pay basis with terms favourable to WPG.
Peculiar Knob was estimated in 1997 to contain an inferred resource of 14 million tonnes of haemetite mineralization at an average grade of 63.2% iron with low levels of impurities, mainly phosphorous, at 0.02%.
WPG shareholders at an extraordinary general meeting on Oct. 26 are set to consider and approve or disapprove of the Southern Iron acquisition, along with other matters. These include management’s plans to initiate a drilling programme shortly thereafter, which aims to upgrade the status of Peculiar Knob’s inferred resources to the measured and indicated categories, to explore for additional mineable ore at depth and to obtain metallurgical and geotechnical data for use in mine design studies, according to information released through the Australian Stock Exchange.
Southern is also exploring and developing the Hawks Nest property, which reportedly contains two large and promising iron ore prospects: Kestrel (magnetite) and Buzzard (haemetite), with an indicated and inferred resource of 6.7 million tonnes at a 60% grade.
A Three-Way Play
Meanwhile, jockeying for position and the favour of shareholders continues between the managements at Mt. Gibson Iron Ore and Aztec Resources. Given recent developments at its potential 4 million tonne plus potential Koolan Island iron ore property, Aztec’s management has claimed that Mt. Gibson’s bid is opportunistic and undervalued.
It appears that most shareholders agree, or at least are willing to hold out and wait for further developments. With Mt. Gibson’s Oct. 6 voting deadline having passed without it garnering anywhere near its initially stipulated 90% of shares Mt. Gibson has extended its 3:1 stock swap offer to Oct. 27.
Outside of the nearly 32% stake granted by Cambrian Resources, Aztec’s largest shareholder, Mt. Gibson, as of October 11, now has tenders for 33.5% of Aztec’s issued and fully paid shares. Management has called into question Aztec management’s skills, citing recent comments by an Ernst & Young accountant that question whether Aztec has enough cash to survive past the end of the month.
Aztec management responded that an A$100 million (US$75 million) bank facility will be in place by month’s end. It also recently secured an A$65 lease for mobile mining equipment with Japan’s Komatsu and announced that it is accelerating Koolan’s development schedule, with production commencing any day now, a year ahead of initial plans.
It also previously raised more than $84 million in equity and signed an off-take agreement with China’s CITIC Group and Marubeni, the Japanese trading house.
In any takeover bid, it’s worthwhile noting the interests of incumbent management. “If Mt. Gibson’s bid was to succeed, “As I understand it, the bidder has indicated that two of the Directors be retained with [Chairman Ian] Burston becoming a NED of Mt. Gibson and Peter Bilbe [Aztec’s managing director] the chief operating officer of the group,” Tim Barker, resources analyst and portfolio manager at Australia’s BT Financial Group, told RI.
“It is unclear what will happen to other personnel although there would appear to be little in the way of direct rationalisation benefits outside of the head office, suggesting that concurrent development of the two companies’ ore bodies will require the continuation of current personnel outside of Perth,” he added.
From Barker’s perspective, “Aztec has certainly picked up a following of larger institutional shareholders but not exclusively so. The Chairman has a wide following in the market from his numerous appointments at other companies so I would expect a reasonable retail component as well,” he said.
“At the end of the day shareholders will take notice of both sides and make a decision as they see fit. However, the lack of board endorsement must be taken into account despite the apparent approval of the major shareholder to the deal. In the end the ability to receive roll-over relief from capital gains tax if the bidder accepts less than the required level may have some impact on the desirability of the offer to some shareholders.”
Yamana Initiates Start-Up at its Chapada Mine and Provides Production Update on Other Mines
Monday October 16, 12:01 am ET
TORONTO, ONTARIO--(MARKET WIRE)--Oct 16, 2006 -- YAMANA GOLD INC. (TSX:YRI.TO - News)(AMEX:AUY - News)(AIM: YAU) is pleased to provide an update on the start-up of its Chapada copper-gold mine and a production update for its Sao Francisco and Jacobina mines, its two other principal gold mines in Brazil. Yamana operates six mines in Latin America, five of which are in Brazil including the Chapada, Sao Francisco and Jacobina mines. The Chapada mine is Yamana's largest mine. The period ended September 30, 2006 is the first quarter of commercial production at the Sao Francisco mine and the first full quarter in which Yamana has owned the Jacobina mine. Yamana is also in the process of assuming ownership of the advanced stage Gualcamayo project in Argentina resulting from its successful take-over bid of Viceroy Exploration Ltd.
[Continued in following link.]
http://ca.us.biz.yahoo.com/iw/061016/0172719.html
Nortec Ventures (V:NVT) announces the appointment of New Director
Monday October 16, 3:13 pm ET
VANCOUVER, Oct. 16 /CNW/ - Nortec Ventures Corp. (TSX-V:NVT - News), ("Nortec" or the "Company"), is pleased to announce the appointment of Mr. Etienne Walter to the Company's board of directors.
Mr. Walter is the Honorary Consul General of the Republic of Ecuador with jurisdiction over the Provinces of Alberta and British Columbia, the Northwest Territories and the Yukon Territory. His appointment was in December 1993, and has been recognized by the Canadian Government since March 17, 1994. Mr. Walter lived in Ecuador from the age of three years until his graduation from high school; he then traveled to Europe to further his studies in France, Germany, and Great Britain. He earned his diploma in Hotel Management and Financial Administration from the Ecole Hôtelière de la Société Suisse des Hôteliers in Lausanne, Switzerland in November 1972 and he has worked for some of the world's leading hotels. Since coming to Canada in 1975, Mr. Walter worked for public and private corporations until he formed his own company, Andes Trade and Investment Ltd. Nortec is looking forward to a long and fruitful relationship with Mr. Walter.
The Company's subsidiary, Minera Nortec Ecuador SA ("Nortec Ecuador"), is at present carrying out diamond core drilling on the Ganarin epithermal gold-silver project, Southern Ecuador. The drilling was progressing at a slower rate than anticipated due to very hard highly siliceous chalcedony-quartz breccia and stockwork zones. Core sample shipments will be made on a regular basis and results will be released on receipt. ALS Chemex Labs, with preparation labs in Quito, Ecuador, and analytical labs in Lima, Peru, will perform the analyses. The samples will be analyzed for gold by fire assay with atomic absorption finish and for other elements by the 34 element aqua regia ICP method.
The Company holds an option to earn a 51% interest in the Ganarin epithermal gold-silver project and 70% interest in the Condorcocha Project, Southern Ecuador, from joint-venture partner Doubloon Exploration Corp. The Ganarin property is situated in the prolific Ganarin Mineral Belt. Iamgold Corporation's Quimsacocha gold deposit occurs in the same belt approximately 30 kilometres northeast of the Ganarin Property. Indicated resources within a one-kilometre long defined area of the Quimsacocha deposit recently updated to contain 3.4 million ounces of gold and 26.2 million ounces of silver.
In other news, the Company is announcing the grant of 300,000 stock options to directors of the Company at an exercise price of $0.28 per share for a period of 5 years from the date of the grant.
Mohan R. Vulimiri, M.Sc. P.Geo., President and Director of Nortec, is the person responsible for initiating and guiding the work programs on the Property. Brian T. Malahoff, P.Geo, is the person responsible for the on-site management of the exploration programs on the Property. Mr. Vulimiri and Mr. Malahoff are qualified persons in accordance with National Instrument 43-101 guidelines.
For further details and locations of the various zones on the Ganarin Property and information on Nortec Ventures Corp., please visit the Company's website at http://www.nortecventures.com and review the Company's press releases. Nortec is a mineral exploration and development company based in Vancouver, British Columbia.
Nortec is earning an undivided 70% interest in Kollismaa-Naranka nickel-copper-PGE project, northern Finland and a 51% interest in TL nickel property, Voisey's Bay area, northern Labrador.
On behalf of the Board of Directors,
NORTEC VENTURES CORP.
"Mohan R. Vulimiri"
Mohan R. Vulimiri, President & CEO
The statements made in this News Release may contain certain forward-looking statements. Actual events or results may differ from the Company's expectations. Certain risk factors may also affect the actual results achieved by the Company. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
For further information
Nortec Ventures Corp. (TSX-V: NVT - News), Suite 875, 555 Burrard Street, Box 205, Bentall Two Centre, Vancouver, BC, Canada, V7X 1M8, Ph: (604) 717-6426, Fax: (604) 717-6427, www.nortecventures.com, info@nortecventures.com
--------------------------------------------------------------------------------
Source: Nortec Ventures Corp.
Proposing Plan C: Report on the Third U.S. Conference on Peak Oil and Community Solutions
By Megan Quinn
Yellow Springs, Ohio – Participants at the Third U.S. Conference on "Peak Oil" and Community Solutions learned how they must use less energy, save and share resources and grow food in their communities.
This response to the coming peak and permanent decline of global oil production, dubbed "Plan C: Curtailment, Cooperation, and Community," was a major theme at the conference last month in this small southwestern Ohio town, the epicenter for a growing national movement.
More than 300 activists, educators and others from 33 states attended the three-day conference at Antioch College to hear from nationally-known experts on ways to meet food, housing, transportation and other needs in an energy-starved world through lifestyle changes – not promised technologies.
At the conference, participants learned energy-saving tips, other practical strategies and new perspectives and visions of a post-Peak Oil world.
Continued in following link:
http://www.communitysolution.org/06pconf1.html
The Sound of Aunt Edna's Knitting - by John Michael Greer
Published on 12 Oct 2006 by The Archdruid Report.
Fifth part of a nine-part series
If the economic landscape beyond Hubbert’s peak proves to be the sort of rough terrain outlined in my last two Archdruid Report posts, how can individuals, families, and communities deal with it? On the large scale, opportunities for action are limited at best, not least because the noise of volatility can too easily hide the signal of decline. Just as recent plunges in the price of oil and natural gas have encouraged the delusion that we no longer have to worry about energy, the upside of the post-peak economy – the fortunes made, the speculative gambles that pay off, the boomtimes when demand destruction crashes energy prices and all seems right with the world – will make it easy for people to convince themselves that industrial society is still on track.
It’s easy to understand this sort of thinking, since the alternative is to accept the unacceptable: to admit that the industrial age is ending, and the luxuries, conveniences, and standard of living that define ordinary lifestyles in the modern world are going away, not just for a little while, but forever. That the unacceptable is also inevitable makes it no easier to cope with. Still, accepting the unacceptable is the crucial step in dealing with the economic impact of peak oil. Every assumption about the future has to be reassessed in the light of a contracting economy in which money and other forms of abstract wealth no longer guarantee access to goods and services.
Not that long ago in historical terms, it's worth recalling, money actually played a fairly small role in the overall economic picture. Until well after 1700, more than half of all goods and services in the western world were produced and consumed in household and community economies, and exchanged in customary networks governed by obligation and reciprocity, not supply and demand. Most households produced the great majority of their own food, clothing, and other necessities, and used surpluses to barter for specialty goods with other local producers. Cash served as a means of exchange for things produced so far away that transport costs and spoilage made barter unworkable. It took cheap, abundant fossil fuel energy to make transportation so cheap that centralized production and distribution of commodities could take the place of local production for local use.
In the aftermath of peak oil, such local economies are the wave of the future, and the money economy of the present and recent past is an anachronism. Since fossil fuel depletion is a gradual process, though, the changeover won’t happen all at once. This is a good thing, since the vast majority of people in the industrial world today lack the skills and tools to function in a local economy. Their jobs – from executives and consultants through salespeople, office staff, and all the other cubicle-shaped pigeonholes in the corporate caste system – serve functions internal to the industrial economy instead of producing goods and services people want or need.
The jobs that matter in a deindustrial economy, by contrast, are the ones that meet human needs directly. Farming is the classic example. If you grow food crops with your own labor, you don’t actually need the money economy, except insofar as it forces itself on you by way of property taxes and the like. Your labor provides you with value directly, since some of your crops end up on your own kitchen table; the rest can be exchanged with other local sources of goods and services you need – the seamstress next door, the blacksmith down the road, the general store in town. Money is a convenient way of facilitating these exchanges, but it’s not necessary; you can as well use barter, or local scrip, or any other means of exchanging value that comes to hand. Because what you produce has value to other people, you can trade for the things other people produce that you need, whether or not the money economy is there to mediate the trade.
Compare the farmer to a corporate marketing assistant or a factory worker in an injection-casting plant and the differences become clear. The marketing assistant provides a service – helping to create and manage marketing plans for a corporation – that has no value outside the money economy. If she wanted to barter with a farmer for food, she probably wouldn’t get far offering to help manage his corporate identity via a media campaign! The factory worker is in a slightly better position. If the money economy comes unglued, the factory owners might pay him in castings, and he could then try to barter these for the goods and services he needs; exactly this arrangement was common in the former Soviet Union during the economic collapse of the early 1990s. Still, he depends on the factory and its owners to provide him with a workplace and some form of pay, and in a volatile, crumbling economy his situation is a precarious one.
In the deindustrial age, then, the farmer’s economic model is the more viable, because it can do without the mediation of the money economy. Other professions that produce necessary goods and services will be in the same comfortable position, since people will continue to need food, clothing, shoes, tools, and the like, and will trade for them using whatever means are available. Except in the most difficult times, they will also be willing to trade for other things that aren’t quite necessities; someone who brews good beer, for example, can count on a market for his wares in all but the most apocalyptic times, and quite possibly even then.
Since the twilight of the money economy will be a gradual process, it won’t necessarily be possible for individuals to make the transition to a deindustrial career in a single leap. What can and must be tackled right now is the learning curve demanded by any of these skilled trades. It’s not enough to line your shelves with books about organic farming, for example; you need to start buying tools, digging garden beds, and growing your own crops, and you need to do this as soon as possible, because mastering the craft of organic farming takes time. The same is true if you decide to take up blacksmithying, brewing, small appliance repair, or any other useful trade: you need to get the tools and start learning the craft, so you’ll have your Plan B firmly in place when the money economy folds out from under you.
Skilled trades for local exchange are part of the picture, but another part is just as essential – the reinvention of the household economy. Not so long ago, a large fraction of all economic value came from the household sector. Many of us still remember grandmothers who always had jars of homemade jelly in the cupboard and crochet hooks dancing in their hands, and grandfathers whose garages were as full of well-worn tools as their gardens were of ripe tomatoes. The marketing campaigns that squeezed the last traces of the household economy out of existence stigmatized these activities as hobbies, and dowdy hobbies at that, but they were once a good deal more – and in a world on the brink of deindustrialization, they desperately need to be revived.
People have different opportunities and talents, and one size emphatically does not fit all. For those who have access to garden space, though, a household garden is probably the top priority here. It’s not necessary to grow all your own food, or even a large proportion of your total calorie intake, for this to have a significant impact on your quality of life. In America, at least, bulk crops such as grains and beans will likely be available via the money economy for many years to come. Fruits, vegetables, and animal foods – that is, sources of vitamins, minerals, and protein – are another matter. A vegetable garden, a couple of fruit trees, and perhaps a rabbit hutch or a tank for carp or tilapia may mean the difference between malnutrition and health.
If you don’t have access to garden space, consider taking up a useful handicraft or two. Aunt Edna’s habit of knitting cardigans for all and sundry may have seemed quaint in the heyday of the industrial economy, but when central heating prices itself out of existence and transport costs put paid to clothing imports from Third World sweatshops, warm clothing you can make with your own hands has obvious value, and may also be a useful item of barter. The same is true of many other skills, from soapmaking and herbal medicine to the handyman skills that allow plumbing, furniture, and appliances to be repaired at home.
Another response to human wants and needs outside the money economy will be vital during the deindustrial age, and needs to be revived and practiced as soon as possible. This is the art of doing without. The industrial economy has trained all of us to think that the only possible thing to do with a desire is fulfill it, preferably by spending money on some consumer product or other. The contracting economy of the deindustrial age will offer very little leeway to this sort of self-indulgent thinking. On the far side of Hubbert’s peak, your capacity to survive will largely be measured by the number of things you can do without. It’s hardly an accident, either, that the world’s spiritual traditions also affirm the value of being unattached to material things.
Among the things we will have to learn to do without, though, perhaps the most important is not a material thing at all, but a habit – the deliberate cultivation of uselessness that goes by the name of “leisure.” Only a society flush with cheap energy could convince itself that the highest goal of human life is to sit around doing nothing, and even so it takes the nonstop blare of the media to distract us from the fact that sitting around doing nothing is the dullest of all human activities. Our grandparents’ generation and their ancestors knew as much, which is why leisure a century ago focused on creative activities rather than indolence, and why Aunt Edna knitted all those cardigans long after the industrial economy made home production of clothing unnecessary. The twilight of industrial society, like the fall of other civilizations before it, will doubtless be accompanied by plenty of tumult and shouting, but the real story – the signal behind all that noise – will be a much fainter sound: the soft clatter of Aunt Edna’s knitting needles, beginning to knit the fabric of a new and more sustainable world.
China's Oil Reserves Surge
Oct. 12, 2006, 3:28PM
By ELAINE KURTENBACH AP Business Writer
© 2006 The Associated Press
SHANGHAI, China — China's oil imports surged to a record 3.3 million barrels a day in September, the government reported Thursday, as the country recently began filling its newly built strategic oil reserves.
Preliminary data from the General Administration of Customs showed crude oil imports jumped 24 percent over the same month a year earlier to 13.5 million metric tons (15 million U.S. tons) in September.
That would be an all-time high for any month, beating the 13.2 million metric tons of crude oil China imported in January, said David Hurd, a Beijing-based oil and gas research analyst at Deutsche Bank.
China recently completed construction of a storage facility in Zhenhai, a city south of Shanghai, the first of four planned strategic oil reserves. Filling of those tanks began in August with a shipment of Russian crude from the Urals, state media reported earlier this week.
China is the world's second largest oil consumer after the United States and construction of a state-controlled crude oil reserve is viewed as a strategic priority. Until now, Chinese oil companies have held between 10-30 days of oil stocks, but the country as a whole has not kept emergency reserves.
Eventually, Beijing is expected to stockpile up to 100 million barrels of petroleum, or the equivalent of a month's national consumption. The U.S., Japan and other countries have similar reserves.
Chinese analysts say the reserves will be filled gradually and are unlikely to impact international prices.
"Oil prices are mainly decided by the Middle East, U.S. and Russia," said Zou Jianhua, an expert on the oil industry at Zhongshan University in the southern city of Guangzhou.
"Compared to U.S. reserves, I think China's reserves are not big enough to impact the international market," Zou said.
So far, 3 million barrels of Russian oil have been shipped to Zhenhai, reports said. Earlier reports said China was also reserving some of its domestic offshore output for the reserves, though the ratio of imported to domestic oil to be stocked has not been disclosed.
The extent to which China may increase its international demand for crude oil to fill its strategic reserves remains unclear. Wary of accusations that rising Chinese demand may push oil prices higher, Beijing has released few details about how and when it will fill the reserves.
China's top economic planner, Ma Kai, said in March that the reserve at Zhenhai had been completed. But shipments apparently did not begin until after oil prices peaked at about $78 a barrel in July.
Since then, the cost of crude oil has plunged by more than 25 percent amid rising global inventories, concerns about slowing economic growth and a milder-than-anticipated hurricane season.
Oil prices edged up Thursday, with light, sweet crude for November delivery rising 26 cents to $57.85 a barrel in Asian electronic trading on the New York Mercantile Exchange.
The spike in Chinese demand may also reflect higher shipments to refiners taking advantage of lower costs, analysts said.
Whether China uses domestic or imported oil to fill the reserves, demand is bound to increase with the economy growing at a rate of more than 10 percent a year. Any diversion of locally pumped oil will have to be compensated for by higher purchases abroad.
Crude oil imports totaled 109.3 million tons, or 765 million barrels, in January-September, up 16.3 percent over the same period of 2005, figures showed.
Meanwhile, exports fell 22 percent year-on-year, to 4.3 million tons, or 30 million barrels, in the first nine months of the year, the customs figures showed. In September, China's crude oil exports fell 76 percent year-on-year in September, to 130,000 tons or about 910,000 barrels.
Three more reserves, at Daishan, also near Shanghai; Huangdao, in Shandong province, and Xingang, in northeastern Liaoning province, are due to be built in coming years.
Hubbert's Defense Department
Published on 12 Oct 2006 by Whiskey & Gunpowder
by Byron W. King
WHAT WILL THE WORLD LOOK LIKE on the backside of Hubbert's Peak? What you see depends upon where you stand. If you happen to stand in the Pentagon, the headquarters of the U.S. Department of Defense, the view is rather sobering. Well, what I mean to say is that if the view is not rather sobering, then whoever is doing the looking had better get their eyes checked.
The World's Largest Fuel-Burning Entity
The U.S. government, as a whole, consumes not quite 2% of all the liquid fuel that the entire U.S. economy uses in a given year. That translates into about 440,000 barrels of oil per day, or slightly more than the entire output of the oil field at Prudhoe Bay, when the pipelines are not shut down due to corrosion. Multiply by 365 days per year, and the U.S. government burns up about 160 million barrels of oil per year, at a cost of something over $10 billion at recent price levels.
Of the total U.S. government liquid fuel use, about 97% of that is consumed by the Department of Defense, making that agency the world's single largest fuel-burning entity. But even within the U.S. DOD, the respective services are themselves gargantuan users of liquid fuel. According to data supplied by the Defense Energy Support Center, the interservice breakdown for fuel use is as follows:
Department of the Air Force: 53%
Department of the Navy (including Marine Corps): 32%
Department of the Army: 12%
In recent testimony before the U.S. Congress, a DOD representative stated that "mobility"-type fuel, used in aircraft, ships, and vehicles, accounts for almost 75% of total DOD energy consumption. Thus fuel used to heat and power buildings and facilities accounts for about 25% of DOD energy usage. In terms of fuel types, jet fuel accounts for 58% of mobility fuel. (Jet fuel is used in aircraft and nonaircraft platforms, such as tanks, other ground vehicles, and power generators.) The balance of energy usage comes from marine diesel, electricity, fuel oil, gasoline, and other sources, such as nuclear, wind, and solar. Yes, the DOD is one of the largest single generators and users of renewable power in the U.S.
Walk the Line
Any way you look at it, the Air Force, Army, and the Navy and Marine Corps just plain use a lot of gas, or I should call it "mobility fuel." You certainly know it when you see it, especially if you have ever walked the line along just about any U.S. military installation and taken a glance at the equipment. The Air Force is all about airlift and platforms that can deliver strike packages from the air. The Navy and Marine Corps are all about sealift and sea-delivered strike packages. And the Army is all about maneuvering and fighting, seizing and holding. And this is merely a bare-bones simplification of the respective service missions, which are quite broad, complex, and very much interrelated.
But the point on which I want to focus in this discussion is that the availability of liquid fuel is one of the fundamental assumptions at all levels of U.S. military activities. From the tactical level of fighting to the operational level of war, and from operations to the highest levels of strategic thinking, "burning gas" (whoops, I mean "mobility fuel") is built into all U.S. doctrine. Energy, and in particular energy derived from liquid fuel, is at the heart and soul of the U.S. military power.
The Navy, for Example...
For example, let me illustrate this point. Let's take a look at one service, the U.S. Navy, and its concept of operations. A recent and authoritative publication entitled Naval Operations Concept 2006, co-signed by both the chief of naval operations and the commandant of the Marine Corps, listed what it called "Strategic Missions" and "Naval Missions" of the Navy and Marine Corps. The Strategic Missions are:
-Homeland defense
-War on terror and irregular warfare
-Conventional campaigns
-Deterrence
-Shaping and stability operations.
Each of these "strategic" missions could be the subject of many articles, if not many volumes. I have not the space in this article to describe the details of each mission, but I hope that you can see how each mission involves a vast scope of complex operations in order to carry it out. All of these missions require trained personnel and suitable equipment, such as ships, aircraft, ground vehicles, and other devices that are bolted to the floors of fixed installation or which orbit the Earth and look down from on high. And all of this equipment requires energy in order to move it into position and make it all work.
Subordinate to the Strategic Missions, but embodied within them from the standpoint of operations, are a series of what are called Naval Missions. These are, according to the recent Naval Operations Concept 2006 publication:
-Forward naval presence
-Crisis response
-Expeditionary power projection
-Maritime security operations
-Sea control
-Deterrence
-Security cooperation
-Civil-military operations
-Counterinsurgency
-Counterterrorism
-Counterproliferation
-Air and missile defense
-Information operations.
Again, all of these "naval" missions could be the subject of many articles, if not many volumes. I cannot go into detail here, but each mission requires people and equipment to carry it out. And most surely, each and every mission requires energy sources to power the systems.
Where Are the Aircraft Carriers?
There is a famous saying within the halls of politics and political-military statecraft in and around Washington, D.C. It goes something like this: "When something bad happens in the world, the president of the United States turns to his advisers and asks, 'Where are the aircraft carriers?'" The president might actually say "aircraft carriers." But he could just as soon mean, "Where are the submarines?" or "Can I get strategic airlift into that area?" or "Do you have some Marines on a ship nearby?" or "What else can you give me to help shape the events?"
The "bad" thing to which the president refers might be a civil war in equatorial Africa, or a hot war in the Middle East, or a tsunami in Indonesia, or an earthquake in Iran or Pakistan. Whatever it is, the U.S. president has grown accustomed, over the past half century or so, to having the military flexibility to send in large ships, with embarked aircraft and trained combat or medical forces in close proximity, and to do it on a rapid basis. Or Mr. President has the ability to send long-range airlifters into a particular theater, there to disgorge people and equipment that can make a difference in a hurry.
But when you boil it all down and distill this "influencing and shaping" process to its very essence, this entire concept of operations is based on U.S. military equipment burning gas.
Don't Run out of Gas
The strange thing is that in the keystone documents that define and control the elements of strategy of the U.S., you hardly ever see a reference to that "mobility fuel" as being the sine qua non of U.S. military power. Look, for example, in the National Security Strategy of the United States. Or look in the National Military Strategy of the United States. Or try the National Strategy for Maritime Security.
These important publications discuss big-picture operational and strategic issues, but provide essentially no guidance on one very fundamental concept. That is, "Don't run out of gas."
Some of That "Logistics" Stuff
Perhaps the point of not running out of gas is so fundamental that it is considered silly even to raise it in such ethereal policy documents. Within the political and military planning process at almost every level, "mobility fuel" is usually relegated to the nether world of "logistics." That is, if our guys need fuel to drive their ships or airplanes, then the logistics people will get it and deliver it to where it is needed. After all, that is why we have logistics people, right?
One well-known comment on the subject came from U.S. Navy Adm. Ernest J. King (no relation to me, by the way). At one point during the Second World War, Adm. King said, "I do not know what the hell this 'Logistics' stuff is that everyone is talking about, but I want some of it." Of course, Adm. King was just kidding around when he said that. Every military planner knows that supplies will make or break a campaign. "Modern" logistics had its start with the campaigns of Wallenstein in the 17th century. In the early 1800s, no less an authority than Napoleon said, "An army travels on its stomach." Today, a modern army travels only as far as its supply lines will carry it. Run out of supplies, and you may as well be in Stalingrad or Dien Bien Phu, if not part of an encircled Egyptian army on the Sinai Peninsula.
Which brings us back to the concept of Hubbert's Peak, or the "peak" in the volume of conventional oil that can be extracted on a daily basis from the crust of the Earth. U.S. military power, in all its forms, is distinctly a creation of a world in which large quantities of conventional oil were available, and relatively affordable. The U.S. military machine is built on and around cheap and available "mobility fuel," and virtually its entire body of doctrine is founded on pre-Peak Oil thinking. If the world is at or fast approaching a state of Peak Oil, where does that leave us?
"Who Is in Charge?"
In a three-paragraph memo dated Dec. 14, 2005, Defense Secretary Donald Rumsfeld noted to his deputy, Gordon England, that the DOD "should be doing all it can" to save energy. Rumsfeld then went on to ask whether the DOD was doing enough, asking: "Who in the department is in charge?"
Memo to Mr. Rumsfeld: "Sir, no one is really in charge."
Nobody is in charge? That is not quite what they teach at the Harvard Business School. But perhaps a better way to look at it is that there is no single point within the DOD at which all wiring diagrams end, except for maybe one office currently occupied by a certain Donald Rumsfeld. So aside from the occupant of the Office of the Secretary of Defense, there is no one person to blame if things go wrong. Not, of course, that things ever go wrong in the field of energy supply, right? (Just kidding.)
The good news is, I believe, that there are actually a lot of people within the DOD who are doing different things about energy, but no one person or office monitors or controls things. Yes, it sounds counterintuitive, but maybe we should call it a "market" approach to solving energy problems. From the most advanced research and development laboratories to the troops in the field, people within the DOD are thinking about energy issues. And there is some very good thinking going on.
Out in the Fleet and Field
The Marine Corps commanding general in Anbar Province, Iraq, has recently placed a top-priority request for renewable energy systems to power fixed bases and installations in his area of responsibility. Currently, U.S. military operations in Anbar are dependent on long logistics lines, stretching back into Kuwait, over which large volumes of fuel must be hauled just to do such a mundane thing as power generators that keep the lights on and run the computers. The drivers, trucks, and, of course, the fuel, are all subject to attack along the lines of travel. The Marine Corps general wants to reduce the requirement for liquid fuel supplies, and has requested systems that are based on photovoltaic power generation, supplemented by easily installed wind systems, coupled to battery storage cells. These systems are in production, have already been deployed elsewhere in the world, and are available. This is one form of post-Peak Oil military thinking.
The U.S. Army is redesigning the ubiquitous Humvee. One of the key complaints about this versatile battlefield vehicle is that it consumes too much fuel. The Humvee has become an icon of the military services over the past two decades, since it replaced the World War II-era Jeep. But the Humvee gets as few as 4 miles per gallon in city driving and a paltry 8 miles per gallon on the highway. The Army wants to see a Humvee replacement that weighs 30-40% less and that uses proportionately less fuel.
The U.S. Air Force is qualifying new types of fuel derived from both natural gas and coal. On Sept, 19, 2006, a B-52 bomber actually flew with one engine mount using a newly produced liquid fuel derived entirely from natural gas. Due to the nature of the manufacturing process, the fuel contains virtually no sulfur and hardly any heavy metals, as opposed to jet fuel derived from refined petroleum. In ground-based testing, the engines that burned this new type of fuel did not experience any measurable loss of performance and required less maintenance. Another virtue of this synthetic fuel is that it has a storage life that is orders of magnitude longer than petroleum-derived fuels.
The U.S. Navy is experimenting with ship designs and construction techniques that are orders of magnitude more efficient than in years past. Naval architects and ship designers are working to build performance into ship systems, anticipating future oil costs in the range of $200 per barrel. Some novel ideas envision certain future classes of Navy ships using masts and sails, with the sails and the exterior of the hulls coated with photovoltaic cells. All of this is with the goal of reducing the requirement for liquid "mobility fuel."
Ashore, both the Navy and the Air Force are among the largest generators and consumers of "green" energy, almost all of it derived from windmills. And all of this has been happening with no one really, as the expression goes, "in charge."
"More Than Anyone Else"
There is an old criticism of the military, along the lines that "the generals always plan to fight the last war." In my view, however, I think that it depends on the general, and it depends on the war. One could just as easily say that it is the bulk of politicians, the mainstream media, and the large body of the people who are the ones fixated on fighting that "last war." Don't be so hard on the people who are tasked with doing the hard work of making the U.S. national defense system work. It is actually quite a difficult job.
According to U.S. Rep. Roscoe G. Bartlett, a Republican member of Congress from Western Maryland, the U.S. military is "doing more than anyone else -- in the government or around the country" to address a future in which energy supplies will be scarce and expensive. Rep. Bartlett adds, "I don't think the country as a whole has any perception of the danger" of America's reliance on foreign oil.
As I wrote at the beginning of this article, what you see depends on where you stand. For all of its vast size and energy usage, some of the most pioneering work in addressing the issue of Peak Oil is presently being conducted within the DOD. It is too much to say that we are witness to "Hubbert's Defense Department." But the resources of the DOD are vast, and this department of the U.S. government appears to be getting the message.
The question for the DOD is the same as the question for the U.S. broadly, and for the developed world generally. How fast can we adapt to a post-Peak Oil future? Can we change consumption habits faster than depletion leads to the declining availability of conventional oil? As I have said in other articles in Whiskey & Gunpowder, this is a race against time.
Until we meet again...
Byron W. King
P.S.: Will I see you at the Peak Oil conference in Boston, Oct. 25-27, 2006?
I want to take the opportunity to let you know that the Association for the Study of Peak Oil-USA (ASPO-USA) and Boston University (BU) will co-sponsor the 2006 World Oil Conference, Time for Action: A Midnight Ride for Peak Oil, on the BU campus, October 26-27, 2006.
The conference will bring together energy experts from around the world to discuss the likely timing, impacts, and intelligent responses to the growing Peak Oil challenge. As you probably know, virtually every sector of our society and economy will be affected by Peak Oil, from transportation, manufacturing, airfreight, and agriculture to homebuilding, city planning, and finance.
"What better place than Boston to hold A Midnight Ride for Peak Oil ?" asks Matthew Simmons, chair of ASPO-USA's advisory board. "We are recruiting the best minds in the business -- geologists, industry experts, academics, and environmentalists -- to take up arms with scientific data to meet the historic challenge of Peak Oil." Simmons is author of The Wall Street Journal -listed bestseller Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. For conference details, please see: www.aspousa.org/fall2006/index.cfm
In addition to Matthew Simmons and Robert Kaufmann, conference speakers will include numerous individuals who are considered among the foremost scholars in the field of Peak Oil studies. The full list of speakers may be viewed at the Conference Website.
Conference topics include:
Oil and Gas Depletion (What's the evidence on Peak Oil? What geologic, political, economic, and technical constraints limit oil production? Why is forecasting a date for Peak Oil an inexact science?)
Mitigation (What responses are available, and when can they be implemented?)
Alternative Energy (What unconventional petroleum and nonpetroleum energy sources are available, and can they fill the depletion gap?)
Economics (What economic challenges do decreasing energy supplies present?)
Transportation (What is the future direction of personal transportation, its limitations and prospects, and how should planners and fleet managers respond?)
Net Energy (What's the meaning of energy return on energy invested -- EROEI -- and why is it critical to intelligent responses to the Peak Oil dilemma?)
Energy Security (Can we achieve energy security in a world of escalating competition for a finite resource?)
Government Policy (What is the direction of energy policy at the local, state, and federal levels? Do these policies need obvious tweaks, or a massive overhaul?)
Strategic Investment's Dan Amoss and I are both planning to attend, and I hope that many of you who read Whiskey & Gunpowder will also be there.
Note: Agora Financial, LLC has no financial or other business relationship to ASPO-USA, Boston University, or the World Oil Conference. We are running this promotional piece as a public service, and because we believe that the conference offers our readers the opportunity to improve their understanding of the critical topic of Peak Oil.