Friday, September 29, 2006

Watch out for the military

Update: I have some more stories for you to read if you wish.

Here is a Time blog where the terror bill has been a topic for a while. Good reading if you want to scroll through it and read all of it.

Here is a story about Bob Woodward. He wrote book (a whole book) about the military under-reporting the number of attacks in Iraq. Are we repeating what we did in Vietnam with under-reporting the death figures?

Here is a quick link to a discussion of the torture devices they wish to employ. I got this from the Time blog.

Tuco has something to say too. A Canadian perspective.
_________________________________________________________________

Well, they have approved the terror bill allowing torture and coercion and making it legal to hold "suspects" indefinately without cause or a trial. I thought we would take a look around the web to see what people are saying about this.

The general news media is here.

Here is another explanation. (HT: George)

And still another one here. And more thoughts here. (Bush interpreting anything on my behalf is scary.)

I guess Bushie doesn't believe this anymore. (HT: George)

There will be more on the blogsphere about this I'm sure. I'll update if I see something to post.

FGLB

Thursday, September 28, 2006

Fun with Customer Service Reps

I recently had an interesting run in with a customer service rep for our primary credit card. I thought I would detail the discussion here.

We had the misfortune of running a little short last billing period to completely payoff our primary credit card. It was just a timing issue as the bill was due the day before a paycheck came in and we were a little short. I figured this is no big deal really because we could pay off about 80% of it on the due date and then I would send in the leftover amount a day later. (We pay electronically so I can't play the mail/check float game, but should have in this instance)

I figured we could handle the couple of days of interest for the 20% until it got paid off. No big deal. I should explain to you now that the way we budget our income is to put everything that we possibly can on our cashback credit card. (maximize cash back) If the card stays below our specified target balance each month we pay it off and then know that we are doing OK budget wise. This is a lot easier for us compared to tracking down every single penny like some people, and works well for us because we always pay ourselves first. Not mention that we typically use the cashback aware to pay for our Christmas presents so we automatically have a predetermined cap on that spending. Anyway, this leads to us having a large balance each month that we payoff, and have, since we got the card about 8 years ago. Except this time.

I thought that we would be charged a couple days interest on the remaining 20% balance and that would be all.

But then I got my bill. They had charged me interest on the entire balance, and on some of the balance we had racked up in the new billing period, and hadn't given me any credit for my paydown. I was less than pleased with the situation. While I accepted that I would need to pay some interest on my remaining balance I have a real problem paying interest on money that I had paid them already prior to their imposed due date. Not to mention they are charging me interest on the money I haven't even been billed for because they use the stupid average daily balance thing. So I'm being charged interest for money I have not even had a chance to pay them yet because they haven't told me how much it was.

So I pick up the phone. After about 15 minutes (pretty quick I think for these companies) this is where we start.

CSR: How can I help you?

Me: Can you explain how you calculated the interest on my card?

CSR: Sure. You see the average daily balance figure on your statement? We multiply that by the daily interest rate figure and then add up each day's interest and summarize it on the front page.

Me: Ok. But how did you get the average daily balance figure? It's way higher than the amount I was billed for.

CSR: Well sir we keep a running tab of your balance each day and then multipy it by the daily interest figure and summarize it for the front page.

Me: I understand how you figured the interest. I have a Finance degree. I can do simple math. But how can you charge me interest off a balance that I haven't even been billed for? Your average daily balance figure is a lot more than what you requested I pay you. How can I be charged interest on that balance when I haven't been billed for it yet? On top of that, I was charged interest on a chunk of the balance that I paid you before the due date. Shouldn't I only have to pay interest on the leftover amount from the previous month?

CSR: Well sir, we charge interest from the beginning of the month and waive it when you make your full payment.

Me: How can it even be legal to charge me for money I haven't been billed for and on top of that give me no credit on my balance when I make a payment?

CSR: It's in your cardmember agreement sir. That's how we calculate the interest.

Me: Oh, that packet of legal mumbo jumbo you send me occassionally that no one but attorneys can understand?

CSR: Yes sir.

Me: Well that sucks. I've had this card for 8 years and this is the first time I didn't pay it in full and you totally took me to the cleaners.

CSR: Sir, I would be happy to waive that interest for you if that would make you happy to be a cardmember.

Me: (Good answer) Yes, that would make me very happy.

CSR: OK. Hang on. (Pause) Sir, I waived that interest and also the residual interest that would have appeared next month.

Me: Great. Thanks. Have a nice night.

Ha! Take that credit card company! You'll get no interest money from me! I know why they did it. The percentage kickback they get from each retailer we use our card at equals more than this amount of interest in about 4 months. They just want me to keep using the card so they can get their 2.5% of each dollar I spend, or whatever the amount is.

I just found it humorous that they caved on the interest so quickly. I mean, they are in business to make money right?

FGLB

Wednesday, September 27, 2006

Eco-bucks?

I was reading through my recent Fortune magazine and they had a little blurb about the social responsibility of Starbucks and how they have finally developed a cup with FDA approval that has recycled paper in it. (This bodes well for other companies to use the cup going forward) The article peaked my interest to go out and hit the Starbucks site to see what else they were doing. We can debate the merits of Starbucks for a long time, but I found it interesting that such a large company had such an intense social responsibility part of it's being.

To read more click here.


Burley?

I didn't even know Burley was having trouble.

FGLB

Scary shopping

My wife sent me to Target last night to get some jeans for the boys.

I don't want to do that anymore. It's scary. They have racks and racks of clothing. All poorly labeled. There isn't anyone around to help you find what you are looking for. You have to dig it up yourself. Very scary. I'll take cooking and yard duty anyday.

I would much rather go to Old Navy where someone will walk me to the section I need and pull out what I need. That is much safer. At least once I looked through the section I was able to slink over to the food section where I feel more comfortable.

She gave me a pair of jeans as an example. I came back empty handed. Turns out I was searching for jeans for the wrong boy.

As I was checking out at the register a couple of teenage boys were behind me with 4 18 packs of eggs. Me thinks they weren't making a big omelet.

FGLB

Tuesday, September 26, 2006

A big question finally answered

This past weekend we took a little road trip down south to visit my parents. Although they give lip service to their excitement to see us we know it's really all about the grand kids. And who can blame them. With kids this cute you have to be excited to see them, right?

Anyway, because the Arkansas Razorbacks were playing Alabama in nearby Fayetteville every hotel room in the 4 state area was full. This doesn't impact me as I wouldn't pay for them anyway when I can stay for free at my parents, but my grandparents were there too (for reason see grand kids above but insert great grand kids) and they weren't able to get a hotel room like usual. So they stayed at my parents. This necessitated that I sleep in my sister's room with my wife. (she was relegated to sofa city) No big deal. I can handle this. Sleeping in an almost out of teenage years sister's room can't be that bad. Besides, she's away at college so she can't have much there anyway.

But when I walked in I was unprepared for what I saw.

I saw something that I had only heard about. Something I thought existed only in fairy tales. Something I never thought I would see with my own two eyes.

Staring back at me from the top of the TV was a real life copy of the movie Crossroads. One that someone actually bought. One that my sister apparantly had decided was worth her hard earned money.

The disbelief I felt was intolerable. I couldn't believe someone in my own family would do something like this. How could she? How could she support these spawns of Satan? I would have felt less contempt if she had told me she thought Dumbya was the best President we had ever had. At least then I would be able to look her in the face for having an opinion. But how can you defend this? You just can't.

At least I finally know who the person was that bought the one copy that was sold. You know, just in case it comes up in Final Jeopardy or something.

FGLB

Monday, September 25, 2006

New posting

My first feature article is up over at Groovy Green.

Check it out here.

FGLB

Wednesday, September 20, 2006

Plant update

Well it looks like they survived the frost last night. I was up this morning to take off the towels and the towels were crunchy with the frost, but I was hoping that the plants would come back with the sunny day we were going to have. They appear to have pulled through. At least most of them.

I'm heading out of town tomorrow for the next few days so you won't hear much from me until the middle part of next week. I'm sure you will enjoy the chance to catch your breath after the crazy amount of postings I've been doing for the summer. I've been so busy I haven't been riding my bike much but I'm hoping that things will slow down soon. I am closing on the delayed sale of an investment property on Friday so my workload should be reduced after work and that should help too.

If I could just get the sun to stay out longer I would be able to do something outside. By the time I eat supper now it's almost setting and I can't get anything done out there. Grrrr.

FGLB

Tuesday, September 19, 2006

Frost warning

I went out to cover up the peppers and tomatoes because it's going to get cold soon....

I had to use towels because I don't have any old sheets. This winter I'll sick my bargin hunter (aka mother in law) on it so I'll be ready next year.

I started digging through the pepper plants pulling off peppers, just in case they were ruined, and look what I found. An actual red one!

One of the peppers on my plants actually made it all the way to the red stage!!!!

Holy freaking cow.

It was buried inside the plants. You couldn't see it from the outside, but I found it, and seeing one that actually made it to be red affirms for me that my peppers were a success. I'll plant them again next year, just not 6 plants. 2 should be plenty.

Ethan looks kinda surprised that it's red. Yeah, me too.

FGLB

Monday, September 18, 2006

Book Reviews

I recently finished reading a few books that I thought I would mention and share a few thoughts on them.

Preserving the Harvest
I’m not even going to attempt to describe this book, I wouldn’t do it justice. Just know that if you have any interest in preserving garden goodies from the summer to eat in the winter you need to own this book. It’s going on my Christmas List so I can use it for the next 50 years.

Cutting into the meat packing line
This was an interesting sociological experiment written about a writer’s experiences when she became employed at a meat packing plant near her home to gather experience for this book. The focus on this book is Iowa centric as the writer is an Iowan who lives in Iowa and worked at a plant in Iowa. It was an interesting read as she gave history about how meat packing plants came to be, how they ended up like they are and she revealed a lot of information about how they treat their employees. She worked there for 4 months and she was one of the last few who remained in her job from her orientation group when she quit. It was sad to read how the companies treat their employees and how they abuse any system they can to make a few extra bucks. If you read this book don’t expect any big revelations about how they handle their product, because there weren’t any, but you can expect some revelations about how these companies run their businesses.

Better Off
This was a great book. I really enjoyed it. It was one of those books that I had a hard time putting down. The basic premise is that an MIT graduate student studying engineering moves to an Amish like community with his wife to experience and understand how life works without all the technologies we take for granted. He also has a goal of learning how to live a life that is low tech, so to speak. It was really just a great book to read about his thoughts on how the technology that is making our lives better is actually making them harder. He compares his previous life to his life on the farm and how he and his wife both thought they had more time now than they had before. He explores how time in the Amish like groups isn’t so rigidly divided as we consider our time now, and his experience helps him redefine what is and isn’t critical in his life, as far as technology goes. I had hoped the book would have more information about his experiences and learning steps as he learned the older methods. Even the mundane details of our lives where we are hungry and we open the fridge to get something to eat are a lot different in this world where a ready supply of food isn’t sitting around. And how do you deal with leftovers or when you have an abundance of items? He addresses those things a little but leaves them short as well. Overall I think it was a interesting read but it fell short for me from what I was hoping he would talk about, and that is how do you live in a world like that with no refrigeration or easily tapped energy source to do things when you need them done?

FGLB

Saturday, September 16, 2006

Local summer meal--the last one :-(

Well, my meal this week looks oddly like the meal last week.

We had mashed potatoes, carrots, broccoli and round steak.

Round steak isn't something that I ever really cooked before we purchased this quarter of a cow and I'm having a hard time learning how to cook with it. It's a tough cut so it likes to be cooked slow. The crock pot is all that I've found so far that makes it turn out good. I'm open to ideas if you want to submit them.

I made homemade biscuits to go with our meal. I have never made them from scratch before. The closest I've come is a Bisquick box. But I used whole grain organic flour and kneading the dough and everything. I think I kneading it too much as they turned out like hockey pucks, but you could slather a real hockey puck with rhubarb/strawberry preserves and I would wolf it down. As a biscuit they were edible. As a preserve delivery device they worked great. And the leftovers will be great tomorrow as biscuits and gravy after the gravy soaks into them and softens them up. MMMMM

This is the last local meal of the contest so you won't see pics of the meals up anymore. Well, maybe you will once in a while, but not every week. Thanks for putting this together Liz. It was fun and I am definately not going back to the way things were.

FGLB

Friday, September 15, 2006

Apple Orchard visit

We visited an apple orchard last night. We had to hustle so we weren’t able to take any pictures, but it was great! My wife and kids had gone before with some of her girlfriends, but this was my first time. I wanted to share my thoughts about it.


1.) Buying apples at an orchard is not more expensive than the store.
I had always thought this to be the case, but in reality this place was less expensive per pound than the big grocery store chain around here. Granted you have to pick them yourself but that’s more fun than choosing between 5 kinds at the store that are from Washington or New Zealand anyway. (They had them picked too if you didn’t want to do the work) I’ve been buying them at the farmers markets, but going into the orchard is a lot more fun. And they have free samples. I think I ate 3 or 4 whole apples sampling different flavors. The Song of September flavor was our favorite. If you were willing to buy them off the ground (and I was but we didn’t have enough hands to carry all the necessary buckets) you can get them for just under half what they cost from the tree. Now that’s a good deal!

2.) Kids will surprise you.
My wife said the first time out there the kids whined a lot about all the walking, but this time (I think it was a shorter amount of time though) they had a good time running around the trees and picking the apples. Until the baskets got too heavy they carried them and they took great pleasure in closely inspecting all the smushed apples and looking at the sweat bees. And they ate plenty of apples. It was honestly one of the more enjoyable experiences that I remember having with the boys. Give it a try with your kids. They may not think it is that cool at first but you can make it cool for them, well, unless they are teenagers and then you are just out of luck. You’ll never be cool to them.

3.) Sometimes strange things happen
When we were walking out to leave we were leaving one section of trees and crossing a bridge over a creek. We stopped to watch the water as boys like to do and I had noticed a guy walking around out there without a basket and eating an apple. He walked by the bridge so I waved to him. He waved back and came over. He turned out to be part of the family that owned the orchard. He was doing his final walk through inspection and he spent a ton of time standing there talking to us. We talked about apples for storage (Gala and Honeycrisp and to buy them now at their freshest and they will last 10-12 months in the fridge) and our favorite (Song of September, his too) and how he liked working with the trees. He said he spent a lot of time walking around the orchard looking at the trees, determining what’s ripe and eating apples to “try them” (he eats up to 20-30 a day. I feel bad enough with the 6-8 I had yesterday). It was great talking to the person responsible for growing the trees you were eating apples from and he showed such great pride in them. You know what else was great? He walked the orchard instead of riding a 4 wheeler around (it was so quiet and tranquil) and he readily plucked apples from the trees and ate them while he was walking. It shows me that he is concerned about what is put on the trees and he must be comfortable with what is put on them or he wouldn’t just pick them and eat them. We learned a lot about his orchard and apples in general just from a 5 minute walk back to the office area. Neat experience. They even use soy bio-diesel in all their farm equipment and the house that his parents live in above the office is a passive solar designed house. Good to be around people with similar ideals.

4.) Cars can’t ruin every experience
Even in the middle of the orchard there were people who chose to drive around the orchard to pick their apples. This disturbs me. Have we gotten this lazy in America that we can’t even walk around an orchard? You drive up to the tree, get out, pick a few apples and then get back in the car? I did see one family that had two little babies in car seats, and I’ll give them a pass because that would be hard, but the rest should be ashamed of their behavior. I can’t believe the orchard people even let people drive back there, but of course they don’t want to turn away customers. But even cars back there couldn’t ruin the experience. Of all the places I expected to have to deal with cars the middle of an orchard is pretty far down the list.

Have you thought about going to a local orchard? Check out your local paper for classified ads about orchards; usually in the “good things to eat” section or they may run a special ad in the paper. It’s the perfect time as the weather starts to cool down again. I know we are going back at least one more time.

FGLB

Investing Summary

To read parts 1, 2 and 3 of my investing series click on the respective number.

At the end of the part 3 I mentioned that I was going to follow up the first 3 posts with a follow up summary post to detail what I see the future like and what my personal plans for the future are. After completing those three brain dumps onto you all I think I’ve formulated a decent (or descent, to play on a common Peak Oil term. HA!) strategy for the future.

Objective #1
My first objective is to pay down our family’s debt as rapidly as possible. I’ve already taken the first steps in this direction by selling my entire real estate portfolio, save for one. I have lowered our 401K contributions to the minimum percent necessary to receive the maximized company match and the excess funds will be directed toward debt repayment. I have a debt waterfall structure in place to allow us to focus on the debt most easily paid off first, than it will go in order of highest interest rate until they are paid in full. I imagine this will take a number of years unless I get lucky and win the lottery or something. (Hey, I play occasionally, “You can’t win if you don’t play!”)

Objective #2
Increase immediate savings to the point that we have 6-12 months of immediate living expenses saved. This is a lower priority than debt repayment because the interest earned is less than the interest paid on the debt. I’ll need to ensure that this savings is in a reputable bank that I have a good comfort level will still be operating in the long term. I’ll set these up in a laddered system of 6 month CDs so that each month a CD will expire and can be reinvested at the current interest rates. This will allow me to take advantage of interest rates as they rise. It also ensures that once each month my cash becomes available if I did need quick access to it.

Objective #3
When I’m making a decision about investment positions to hold or purchase the importance of Peak Oil will be prevalent in my decision. I’m going to allocate a larger percentage of our portfolio to international stocks and international mutual funds (401K included) than is normally recommended by most “experts”. I’m also going to maintain our domestic positions in companies with large international exposure. That means mostly large cap stocks will be our domestic holdings. I’m also going to start exploring some emerging market funds for opportunities.

Additionally, some recent information I have gathered has helped me realize that nuclear power and solar power might be able to hold their own in the period just after peak while energy is still readily available, only more expensive than it is now. I’m going to explore utility companies with a large amount of nuclear generation capabilities and also start to delve into solar companies for investment opportunities. My plan is to focus on solar companies that make solar products that are smart products and have more potential for mass productions. Examples of these would be solar ovens and solar water heaters over solar panels, because of the cost to benefit differential for the average consumer.

Objective #4
If I’m so convinced that upon Peak Oil the market will decline than I should just short the market. This is easy to do by purchasing some ETFs and selling them short. (When you short sell something in the market you are betting it will decline rather than “going long” and betting it will rise over time) There are a couple problems with shorting stocks though; 1) If it continues to rise you may have a call by your brokerage to add cash to your account and 2.) We keep our portfolios in Roth IRAs which I’ve been told can’t be used to short sell stocks. On the other hand, some places say that it can be used that way.

I’m going to need to think more about how best to handle the drop I forsee so we can maintain our asset positions without us losing a corresponding amount of worth.

To summarize:

Maintain asset positions in companies with substantial international operations and in internationally focused mutual funds.
Increase cash position to 6-12 months of expenses and then ladder CDs of 6 month terms to increase yields on cash and have cash available.
Apply excess cash to debt repayment to facilitate the removal of monthly obligations and to lower future cash flow needs. Pay back debt in a waterfall scheme starting with the debt with the most easily paid off balance and then proceeding down in order of interest rate.
Determine effective strategies for capturing returns when market descends after Peak Oil is a proven fact. These strategies could be short selling stocks, ETFs or buying puts, or something else I dream up.

I hope this series helped. It might not have been the best investment advice the world has ever seen, but I do hope that it made you think about the future and how something like Peak Oil can affect your current situation in ways you may not have imagined. I hope that you took at least something away from this as you make decisions for the future.

FGLB

Thursday, September 14, 2006

The stronger species

“I'm a man who discovered the wheel and built the Eiffel Tower out of metal and brawn. That's what kind of man I am. You're just a woman with a small brain. With a brain a third the size of us. It's science.”
(Don’t know the movie? Click here.)

It’s official, men are smarter than women.

It’s true. Click here for the story.

Everything on the internet is true so it has to be true. Right?

Even if it is true (and really how much is 4 IQ points anyway?) I’m not so sure that men really are smarter than women.
Example 1) White House
Example 2) Congress.
And men seem to have a general lack of common sense when compared to women, myself included. I’m just saying…

But, I guess it’s a proven fact now that men are technically smarter than women.

FGLB

Train ad

You remember in my post a while back that I stated that trains can pull more freight for their fuel load than trucks?

Well in my recent Fortune magazine there was an ad from Norfolk Southern railway that stated that their engines get 410 MPG. Now this caught my attention, so I read the ad. (I have tried all over the place to find the ad or get it scanned onto here but haven’t been able to make it work) Basically they are stating their trains can pull one ton of freight 410 miles on one gallon of diesel fuel. I’m curious what trucks can do.

I tried to find the mileage on trucks but it doesn’t seem they really put that information out there, so I’ll be very nice to semi trucks and say they get 10 mpg. That seems fair don’t you think?

How much weight can a truck carry? I really have no idea. Perhaps 5 tons on average? Maybe more? What constitutes a “heavy load”? Let’s just assume they haul 5 tons. Some probably carry less. I imagine a truck full of Fritos weighs very little while a truck load of cars or Pepsi’s would be very heavy.

But if a truck holds 5 tons and it gets 10 MPG then wouldn’t it be able to go 50 miles on one gallon of fuel if it only had 1 ton?

So, a train is 8 times more efficient per ton of freight in its use of diesel fuel.

Now, I know that this is a seriously simple exercise and there are plenty of variables here and we don’t even know how accurate the train company’s number is, but it still bears weight about showing how much more efficient trains are than trucks.

You know what else is cool about trains? They pay for their transportation needs as part of their business. Yeah trucks pay use taxes and tolls, etc, but that doesn’t come anywhere close to covering the cost of the roads they travel on. But trains bear the cost of their rail system completely. They might get some tax breaks here and there on it (and I bet trucks do too) but that is a huge difference to our society from trucks. One maintains its own system for its use and the other acts like a parasite on a system funded by tax dollars.

FGLB

Wednesday, September 13, 2006

Groovy Green

I was recently asked to become a contributor at Groovy Green, a website about living a more green lifestyle. I'm pleased to be joining their group and I'm looking forward to contributing to the website. Make sure to check out the site frequently as it is undergoing some changes and will be bringing forward a lot of great diverse information.

My first posting is up at their site. It's a rehash of my green links post from here, but as a teaser, it does include some revealing information about me that you may not know...

FGLB

Tuesday, September 12, 2006

Review of the energy expo

I showed up at the IRenew Energy Expo 2006 at around 8:45 or so. The main reason I came to this was to hear Steve Andrews speak about Peak Oil as the keynote speaker at 1:00 on Saturday, but there were some other workshops that interested me as well.

I attended 3 workshops that I’m going to just mention I attended them so I can save space for the 2 that held some merit. I attended Me and Mother Earth, Energy Efficient Strategies and Financing your RE investment.

I went to a solar hot water heating workshop next. This workshop at least mildly covered its intended topic. (I won’t address whether or not the speaker did a very good job of conducting the workshop) The speaker started with some discussion about how much money he had saved using solar hot water heating since 1977. It has been quite substantial and was enough to pay for his system 4 times over. He explained that he now has expanded his system so that he also heats up his domestic hot water for his hot water heating (a darn good idea) so that he barely uses any natural gas in the winter to heat his house or to heat up his water.
He then went on to explain how the solar water heater works and how it would be schematically laid out in a house. I thought this was great because while I had a picture in my mind I wasn’t sure if it was completely accurate or not. At this point our hour was up. I had a few problems with his presentation though.

He basically poo poo’d anyone doing anything other than a complete hot water system that relied on antifreeze to heat up water in a completely separate water heater from the main water heater. These are commonly referred to as “Drain down” systems. These systems range from $3,000 to $5,000. He wasn’t interested in Thermosyphic systems or batch systems, both of which are considerably cheaper and still pretty darn efficient. He didn’t think that they were good options as they were mostly warm weather choices. I figure, who cares? If they work most of the time and your cost invested it less than you can still get an acceptable payback. If you are trying this for the first time and just want to test it before you really sink a bunch of capital into it I think these options are perfectly acceptable. Besides, some people use these as their only systems and are quite pleased with them. Why is the most technological way always the preferred way in America? Well, that doesn’t work for me. I don’t just go along with what people tell me. I have to understand all the other options before I’ll make a decision about what other things to do. That kind of turned me off to this guy and I wasn’t sad when the workshop was over.

During lunch I walked around and looked at a few things. They had a lot of biodiesel exhibits set up, along with some information about other local places you can work with for your renewable energy needs. I was interested in the solar oven so I spent some time talk to the gentleman about that. I’ve spent a lot of time researching these ovens online so it was nice to see them up close and personal. Good use of technology to free people from the demands and expense of fossil fuel based cooking. I’ll probably get one of these someday.



The real reason I was there was for the key note speaker, Steve Andrews from ASPO-USA. Unfortunately they only gave him an hour to talk because he could have held the floor for at least 3 or 4 in my book. I’m just going to give a few highlights that I scribbled down from his speech.

He started off discussing Natural Gas and the peak in Natural Gas. He mentioned that it experienced its first peak in 1973 and its second peak in 2000 and has been declining since, even though there are 3X as many NG wells now as there were in 1973. He talked about how the government put out statistics in the early 90s about how NG production was going to steadily increase by about 15% from then to now, when in actuality it was decreased by 4%, even accounting for the run up to 2000 for the peak. (This is why all the utilities built NG plants. They had bad data from our own government.)

In the battle for our declining NG supplies the fertilizer companies have lost out and they’ve bad to shift production overseas to be closer to the supplies. Right now we have enough NG to feed our power plants and fuel our needs for home heating. As it continues to decline which one will start to be used less?

After that he talked about the new Jack 2 well that was found in the Gulf and how it would only supply America for 21 months if it really did have 15Billion barrels in it and they were able to extract every single ounce of it. If you have read any Peak Oil information you already knew this information. These new discoveries aren’t the answer folks.

After these two topics he spent his time discussing Peak Oil. He had a ton of great graphs; I wish I could have captured some for here.

Did you know that Exxon Mobile is the 11th largest oil company in the world? Yes, 11th. The Saudi company (nationalized) is the largest at 11.0 million barrels per day, followed by the Iranian Company at 6.0 million barrels per day. Exxon Mobile pumps 2.5 million barrels per day. Yes, Exxon Mobil is basically 25% as large as the Saudi company.

Can you figure out now why those people in the Middle East have so much money now?

He stated that the US uses 21 mmb of oil per day, 14 mmb of that in transportation and 9.5mmb of that makes gasoline.

The last chart he gave us that I wanted to share was his projections of where we will get our “oil” from in 2015. By this I mean all the means other than actually buying barrels of oil. So if you think some of these great technologies will be our savior, here are the hard numbers.

Efficiency increases: 1.5-3.0 mmb
Oil Sands: 1.0-2.0 mmb
Gas to liquids .5-.75 mmb
Ethanol <.5 mmb
Coal to liquids .2-.5 mmb
Biodiesel .1 mmb (maybe)
Plug in hybrids 0-.2 mmb
Oil from shale 0-.1 mmb
Hydrogen 0 mmb (yes, zero)
Mode shifting 1.0-3.0 mmb

So basically he assumes that we will be able to garner, at most, 4.1 mmb (mmb is million barrels per day) from our fabulous technology and we could garner at most 6 mmb if we choose smarter cars (efficiency gains) or changed our method of transportation (mode shifting—moving to bikes, mass transit, walking, etc).

It seems like the easiest answer is to be smarter with your transportation needs. Buy a car that makes sense and use it only when you really have to. If we started doing that we could cut our daily oil usage by over 60% (6.0 mmb/9.5 mmb). (Alert, serious math numbers coming up) On top of that, we currently produce 40% of our oil needs (8.4 mmb—21 mmb *.40) so if we were smarter with our transportation uses we would have excess oil resources of 4.9 mmb (8.4 – 3.5 (reduced fuel use)) for other uses so we would only need to import 2.1 mmb instead of our current amount of 13.1 mmb.

Now that’s smart thinking. What kind of impact would that have on the world and our economy? I’m glad you asked. At our current rate of consumption and with the current price for a barrel of oil we are sending $851 million (13.1 mmb * $65) per day out of our country to buy oil. If we reduced our daily need to 2.1 mmb of imported oil it would be $136.5 million. A difference of $714.5 million PER DAY!!!!! Over a year that amounts to $257,220 million ($714.5 million * 360) or $227 BILLION per year. If would be nice to have that kind of pocket change back for our schools or for companies and people to have here in the country instead of being used for who knows what around the world.

It’s time for us to put on our smart caps instead of our dunce caps people.

FGLB

Monday, September 11, 2006

Garden blues

I've got a case of the garden blues.

I can't believe garden season is already over. I know some of you who have large gardens are probably excited and happy that things are winding down, but for some reason I'm not. I feel like I was just ramping up. I'm starting to learn more about things and I actually finally have things ready to pull up and eat. I actually kind of understand how things are working too. It's kind of sad that I have to stop soon and wait for the cold weather to go away and for the snow to melt before I can really even start thinking about the garden again. Combine that with a Monday and here I am.

I’m waiting for the spinach and arugala to come up for some tasty dishes. Those are great with eggs and I think I’ll freeze some up to add to soups this winter. I’ll be planting the garlic this week if it ever stops raining. I’ll keep harvesting whatever I can get off the plants but I’m not expecting a lot as the temperatures wind down.

If I can come up with the resources I’m hoping to double the size of the garden next summer. That will take a lot of work so we’ll see if I can get it all together or not. It’ll involve ripping out some existing plants and digging them up and building some new raised beds over the tops of those spots.

We had a busy weekend. I attended a renewable energy expo in nearby Solon, IA. I took copious amounts of notes and I’ll write those up shortly. I was both happy and disappointed with the expo, which I’ll discuss in more detail in my post.

We also put up even more food. What space I had in the freezer is now gone. I was only able to get 5 lbs of green beans, all my carrots, a dozen ears of corn and 9 zucchini fruits (is that the right term??) put up this weekend. I still have 3 lbs of green beans to do but I think we might just eat those this week. I hope more peas come in. When they were plentiful this spring we were eating them faster than I bought them so not very many were put away for the winter. I was also planning to do up some applesauce but time constraints kept me from even picking up enough apples. Perhaps this week I’ll get that done. I used the Food Saver this time around when I bagged them so they would stay fresh until they are needed in the late winter. It was nice to use it again since the first month I got it about 5 years ago. I hope the pears at the neighbors are ready soon. I definitely want to make up some pear sauce for this winter.

In other news, my most recent Adventure Cycling magazine has a review of the Surly Long Haul trucker touring rig. I’ve been salivating over this bike for the better part of 2 years. They gave it a glowing review as a touring or all around bike. I expected as much from what I had heard from people who had them. Perhaps someday I’ll get one.

FGLB

Friday, September 08, 2006

Local meal week 11

I neglected to capture a photo before we ate it all so you'll have to make do with a description and use your imaginations. We were in a hurry last night because we had tickets to the circus and I knew I didn't want to fool with cooking something as we were trying to get out the door with two little boys, so I used the crockpot.

(By the way, the circus was a little disappointing. It was far from the greatest show on earth. I guess they have multiple circus shows and we got the minor league team. It’s still a nice family experience, but not what we were expecting when we entered the arena. We were going to buy the boys some popcorn or cotton candy as a treat, but the prices made me long for a movie theater. $10 for a box of popcorn? Um, excuse me? How about you just take my first born? Here, just take him.)

The local meal this week was:
Roast beef (55 miles)
Potatoes (0 miles, given to me by a friend)
Carrots (0 miles)
Cucumber (0 miles)

Non local ingredients were some salt and pepper and some seasoning salt sprinkled on the cucumber.

FGLB

Friday's links

I'm going to start compiling links that I think everyone might be interested in and posting them on Friday's so you can have some extended reading over the weekend. Enjoy!

Here is a story about a fuel cell powered bike light. Seems pretty cool. I wonder how you get the hydrogen though. It’s not like that is being sold down at 7-11 next to the Mountain Dew.

This is kind of cool way to grow herbs for use year round. Anyone have any ideas on how to save a basil plant and overwinter it? I have a fantastic basil plant in my garden that I would love to keep going all winter. Is it as easy as just repotting it and putting it in a sunny place inside? Seems too easy…

On the same topic, I need to preserve some of the basil and I'm not really interested in making pesto. Anyone have any other ideas, other than drying?

Organic milk is more healthy than other milk. In other news, the world is round.

Here is an entry about eating locally. Follow the links for some info about a farmer putting up a greenhouse and other Treehugger stories.

A Toyota Motor Company subsidiary has developed a green roof system. Looks pretty darn cool. Also, some American groups that have them are Green Grid Roofs and ELT Green Roofs. The attic space in our house in unbearable in the summer because even with insulation the heat comes through and it is stifling. Maybe having a green roof would help that…

The blue Mega Mart is trying to get people to switch to compact fluorescent bulbs. I like the initiative but I’m not sure how they are going to get people to switch. Make sure to follow the link to the actual article which was a lot more detailed and was really, really good. Currently I see more emphasis at the hardware store for these bulbs than the last time I was in Wally World. Have you switched yet? You should have. Check with your utility company. Ours gave us a rebate back up to 50% of the cost of them. You need to switch, you’re just throwing money away otherwise. If you have money to burn let me know, I’ll give you my address.

New study by Edmunds says that Hybrids pay for themselves in less than 2 years. While the numbers work (statistics are what they are) they are assuming that people drive 15K miles a year. Hey!! If you want to save money drive less. It doesn’t matter if you have a fancy hybrid or not, you’ll save money. Break out that rusty bike for the short trips around your house.

After reading Garbageland and noting in my post the other day how much industry fills up our landfill this story about Subaru recycling and reusing items in its factory was kind of a nice read. Of course, they still make cars, but it’s a start.

I think this is a great idea. All that greywater going down my drain has been bugging me for a while…I’ll have to see if they sell it in America…what Uncle Sam doesn’t know won’t hurt them... right???

I’ve been mulling this idea over for a while. One of my projects this winter is to get something like this built and running for next spring. We have an electric water heater and pre-warming the water that enters it should greatly reduce our need to heat the water up. And I’ve got a perfect spot lined up in the backyard where the logistics of the pipe runs will be fairly easy. You’ll see the information here for sure.

Why work so hard to grow non-native plants when there are native plants that are easy to grow? Jerusalem Artichokes next year in the garden me thinks. They sound good. Easy to grow and taste good. I was going to grow sunflowers to attract beneficial insects but perhaps this one can take that place instead.

Will “green” fuels work?

Need a program to reduce your carbon output on the world? Follow the PHD diet.

FGLB

Thursday, September 07, 2006

Investing update #2

This is part 3 in the series. 1 and 2 are linked if you want to look over them.

Energy
What to discuss in this area is quite a mystery. Obviously the oil/natural gas groups can be discussed. As I've said before I can't morally invest my assets in these areas, but if you don't have a problem with that these areas will be good areas, at least until they aren't able to obtain the natural resources. If you believe in Peak Oil then you obviously have no trouble making the leap that oil at $150 or $200 a barrel is quite possible, and if that happens the profits these companies are seeing now will be a distant memory compared to the profits then. But you would also need to remember how quickly the usage of oil would slow down with oil at those prices. So they will sell less oil, but most likely for a higher margin. It would basically be the same thought process for the Natural Gas companies, of which the big oil companies are heavily involved as well. The only real difference is that Natural Gas is expected to peak about 5-10 years later according to all the information I've seen to date.

Coal would be another possibility, but I don't see how coal will be a bonanza for the future. I know that America is the Saudi Arabia of coal, but how easy will it be to attain? Today they use huge machines to mine it. All these machines run on oil. Will it still be economically viable to continue to mine coal when oil is twice as much per barrel? Or three times as much? I don't see how it can be. Coal is a little too cloudy for me right now. Perhaps this would be something worth being involved in for the next 20 years but each year that oil is more expensive I think coal becomes less profitable. Perhaps it won't since it will be the fuel that most likely will be fueling a large portion of the remaining electric infrastructure. Currently 30% of our electricity is generated by Natural Gas. As Natural Gas declines it will have to be replaced by something. My first thought would be coal. (I also think we'll see large increases in the cost of electricity and thus, more conservation of electricity by its consumers) Coal is extremely polluting both in its burning and it's mining. For me, coal isn't an option because of these factors.

The last option I see would be renewable energy sources. There is obviously a lot of buzz now about wind energy, solar power, biomass, wave energy capture, etc, but I see a lot of problems with these sources. They are great now when oil is inexpensive and it is relatively easy to manufacture and transport these items. But what happens when that is no longer the case? Will the generation of electricity be a higher priority than other types of manufacturing, and thus they would be eligible to whatever resources are mined? Building wind turbines or solar panels requires massive amounts of inputs. Copper, silicon, steel, aluminum, etc that will all be difficult to produce in an environment where it is hard to mine for the resources and expensive to expend the energy to manufacture them. In these kinds of environments how will these great energy generators be built in the first place? (Life after the oil crash discusses this fairly well.) and amount of energy needed to manufacture parts of our life that we take for granted now) I don't know what the answer is. I'm interested in investing in this arena, but I need to answer some more questions before I can safely walk down this path.

Financial Services
Financial Services is a tough industry to analyze too. On one hand the services offered by these companies are extremely important to society, but on the other hand these companies should experience serious discomfort Post Peak Oil. I'm just going to come out and say that companies like Goldman Sachs, Morgan Stanley and other investment banks will suffer mightily after Peak Oil, and if they survive at all will be shells of their formers selves. The huge mega banks we have in place today will also suffer. Banks like US Bank, Bank of America, JP Morgan Chase and Citigroup should all experience a lot of problems and will likely meet their demise. I can't imagine running businesses that size in an environment of depleted energy supplies. How do you do it? In reality I think all banks will suffer mightily. Massive defaults for all types of loans and incredibly high interest rates should force banks into the same problems they had in the late 70s when interest rates went sky high and they weren't able to adjust their rates of return quick enough. Economic activity will grind to a halt and this will seriously tap out most of these banks. Most of them are running with their capital structure in such a situation that they are loaning out $4, $5, $6 or more for every dollar they keep back in reserve. When the loan payments stop coming in they won't be able to meet the demands of their account holders and they will have cash flow problems.

Another problem they will have is the massive devaluation of their assets/collateral. Real estate especially is going to experience a rapid devaluation so even a loan that appears to be adequately valued today will appear not to be in 6 months, and 6 months after that it will be worth even less. Their asset bases will deplete rapidly as loans are defaulted and they are given back properties that are worth a fraction of what was expected just a short time before. And as business' go under their loans will be defaulted, and borrower's who owned real estate to lease to business will default and the cycle will continue until it reaches a point where the level of activity is sustainable. And don't forget about all the loans that banks make for real estate development. Those loans will be defaulted for the most part, and the banks will end up with massive amounts of real estate on their books.

Bonds and stocks will experience a similar fate. They are both valued on Wall Street and are valued thousands of times per day so their drop can be even more quick and frightening. Banks and insurance companies hold plenty of stocks and bonds in their portfolios. These will have a large impact on their asset bases. Not to mention all the revenue and profit that comes from trading in these markets that will vanish very quickly.

Long term I think financial services is a great place to be invested, but I wouldn't get involved until the Peak Oil aftermath is stabilized and you have a fairly clear picture of what the future holds. I see in our future a lot of smaller companies serving our needs on a more regional basis and companies that will be more in tuned to the needs of their respective local economy. You'll see a return to a world where we will have all local/regional banks supporting our local economies followed by local/regional insurance companies serving the areas.

I'm expecting massive defaults, bankruptcies and divestures in the financial services are Post Peak Oil. Because of these defaults I would recommend moving your cash out of the large mega banks and into lowly capitalized local/regional banks that are more conservative on the hope that when things teeter they won't fold and take your cash with you. Granted bank accounts are FDIC insured, but I'm not sure if the FDIC (or Uncle Sam) will have enough money to pay out all the claims I would expect them to have during this period.

Clothing
How do you determine what clothing would be deemed "necessary" by the masses after the time of Peak Oil? While I doubt it would be places like Abercrombie and Aeropostle, I also can't be completely certain that the clothing would consist of only Carhartts and Levis. (Which aren't publicly traded companies anyway.) It would seem that in a time of financial contraction clothing appearance and style would seem to be less important than what is expected today, but perhaps people will cling to their appearance as the last means of showing the world how things were in the past and flaunting their wealth? I'm not sure. Besides, clothing is not within my circle of competence as anyone who has seen me dressed can tell you. I'll take a pass on clothing as an option, personally, but if you are someone who understands clothing it might be a good option if you can figure out where the market would head.

Personal Goods
Personal Goods is something that I think holds quite a bit of merit. I think Personal Goods can be broken down into a myriad of different categories. One category would be personal care products. By this I mean razor blades, aspirin, shampoo, medicines, etc. While it's true that a lot of these objects can be made at home, a lot of them can not. Even when people are in dire financial straits it stands to reason, to me, that they would still take care of themselves. (Using personal care products seems like a little inconsequential way to brighten up your day in you are struggling with your lot in life too). Now there are issues, such as how to manufacture these products and transport them in a world of dwindling oil supplies, but the manufacturing was more localized in the past and it could be in the future. Because these products don't expire (for the most part) they can be transported using slower methods like horses or trains. Companies like P&G, Clorox, J&J, Church Dwight and Co (Arm and Hammer) could all stand to benefit as they manufacture common products that we all use in our everyday life. Granted, some of these products are frivolous and might disappear, but a lot of them will stick around for the foreseeable future. These companies also have the benefit of having significant overseas operations. While I think Peak Oil will be felt the world over I think the impacts in America will be the greatest and the impact to Europe will be much less because they have done a better job of being less dependent on oil. Although they are seeing more suburbanization lately. I would expect these companies to see a pretty large drop in revenues though to correspond with the drop in population we will most likely suffer, but I still think they will be a valuable part of our economy.

I also think there is a future in the changeover from our current mechanized world to a future of less mechanization. Stores like TSC (Tractor Supply Company), Farm and Fleet, Theisen's and others could potentially benefit from this changeover, provided they adapt quickly enough to our reduced need for motorized items and refill their stores with appropriate items. I also think we will see a resurgence in the localized hardware store of the past which will be better able and more suited to fill the needs of each individual town's demands. Currently it's easy for a Lowe's or a Home Depot to fill the needs of a lot of consumers, because we all have needs that are similar and easily grouped together for purchase. But going forward I would think we would see a branching of the consumer into a lot of different groups based on how able and willing they are to adapt to the changes in the world. Some people may need a nice straight forward type of hardware store and these big box retailers may fill that need. But I think a lot more consumers will be more interested in maintaining items they own then they are currently. I think advice will also have a lot more importance in the future. These things are the bread and butter of the local hardware store. Already I've stopped going to the big box retailers in favor of the local Ace because it's A) closer and B) full of people who know what they hell they're doing. It's smaller and as soon as I walk in the door someone asks what I need help with and directs me to that area of the store and answer my questions. That never happens at the blue or orange stores. Frankly, I think it's worth a few extra bucks for the information.

The unfortunate part of this whole thing is that local hardware stores aren't public companies for you to invest in. ACE or True Value would be good options as they are the providers for most of the local hardware stores that are left, but they aren't available. TSC is a public company. I don't think Orscheln's, Farm and Fleet and Theisen's are. Are there any other stores in this category that I'm not thinking of?

One area that I hadn't thought of before was newspapers. As energy costs rise I would expect to see the Internet disappear (sorry folks). The internet is a huge suck of electrical use, which should be prioritized to other areas, and people are going to be too busy working and trying to live to spend excess hours on the internet getting information. While this will be too bad for our communication and information needs (the internet is a great tool for this) shifting back to more localize information will help rebuild local communities. Part of this will be the resurgence of the local newspapers. I wouldn't expect that TV will hold such an important place in our society after Peak Oil either (not to mention the idea of how important would all of our sporting events be then?? Or video games?? Or cell phones?? How will all our young people survive??). Newspapers will take over this role as the information source for the majority of people in America. I would also expect that we will see a return to magazine/periodical/book reading as a means of entertainment and information gathering. Investment wise this will be a good thing after the initial fallout, but there will be some rejiggering of the newspaper business as right now it is massively consolidated. There should be an initiative underway to localize the operations to take advantage of the newspaper advantage on a local level. Of course, newspapers are energy intensive too so they could have problems in a world with less available energy.

As this post is long enough, I'm going to detail a 3rd post to summarize all this information into one easy to use page and give a basic outline of my personal plans on how to handle this approaching time period.

FGLB

Wednesday, September 06, 2006

Garden pics

So, I'm heading into the backyard to mow the lawn when I figured I'd swing by the garden and pick a few things. I went away this weekend and while I was gone some cucumbers grew, not to mention a little broccoli (finally!! It only took all freaking summer!!) and of course some tomatoes. I finally have something other than tomatoes in the garden. It finally feels like a real garden. It's pretty exciting!

I started to dig around in the carrot patch. My carrots have been a little disappointing so far this summer. They have all been really small little things that were really hard to work with. I guess I just didn't give them enough time to grow, cuz they look fine now. Now that they are gone I have room to slide in the garlic.

Come on peppers, hold on a just a little longer. You can make it. You can get finished before the frost comes. I planted 6 pepper plants which I think was a few too many. Hey, it was the same price to buy 6 as buying 2, so I went for the value. Anybody need some peppers?




Do I have the most ugly spot of tomatoes ever? Chicken wire to keep out the rabbits and an old bed frame for the tomato plants to climb up. You won't find that on Martha Stewart!

Post Peak Oil transportation

Nathan sent me a link that I wanted to share.

You remember from my investing update post where I wonder how transportation would work Post Peak Oil to ship goods around the country? Well, there are some people already thinking about that. Click here and here.

I'm feverishly working on my next investing post. I hope to have it completed sometime this week.

FGLB

Friday, September 01, 2006

A different perspective

My wife rode her bike to work yesterday, and she had a few thoughts that I thought I would post for a new perspective, and because it's a biking blog and it needs a little biking. I have added my comment in italics.

Being FGLB's wife, I have had the first experience of what it feels like to be in his shoes. Unfortunately, I don't have the luxury of riding my bike to work every day. Instead, I load the kids in the car, rush to the daycare, drop the kids off and then rush to work. Never enjoying the smell of fresh air or feeling the wind on my face. (In my defense, I work late right now which will be changing next week and then we are already set to switch off on the bike riding.)

I hurry to work like most Americans. I get out of my car, go to my office and sit on my hinny all day. I am conscious of my sedimentary lifestyle so I take my allotted 15 minute breaks and walk around the area. My office is set amongst other businesses, but also residential areas. Until today, I did not realize how BORING walking is.
I only live a mile from work, so I never get the true feeling of what it is like to really ride your bike. And when we go with the kids, I am busy making sure that they are safe and having fun. (Funny, I don't worry about that...) But today. Today was different. I decided for my allotted 15 minute break I was going to ride my bike to the local pharmacy and pick up a prescription. So, I get on my bike and I am off. Zoom, zoom.

I never realized how much time you have to think about things and really think about yourself. As I am being passed by cars, I think about what must have been like years ago. Before the invention of cars, before factories with smoke producing chimneys, before anything that polluted the precious air we breathe. I bet breathing that air was a completely different feeling than that of today. Clean air. Air that makes your lungs breathe deeply. The kind of air that my lungs and the generation's after me will never know.

Then my thoughts move on. I think about all the other pathetic stressed out people like me that go to jobs and sit all day behind a computer and go home to take care of loved ones and do nothing for themselves. We are stuck in this mundane schedule that we call life. When you are on the bike, the stresses of the world seem to slip away and it is just you, the wind and the road. Your heart is pumping, your blood is flowing and the stress just lifts from your body. You feel ALIVE!!!!

Then I come to a stoplight. My thoughts are concentrated on crossing the busy intersection without looking like a squashed bug on a car windshield. (Who hasn't felt like that before??)
Cross the road I do, and ironically go through the drive thru at the pharmacy. I get my meds and am headed back to work. (I guess they don't have a problem with people riding bikes through the drive through.)

Thoughts linger back to how much happier we would be if we could all just get away for 15 minutes to ride, feel the blood moving, wake up with the wind on our face and breathe the fresh (or not so fresh) air. Cars race by me like they are in this huge hurry. "Take a second for yourself and get on a bike" is what I am telling myself. Rid yourself of all your worries and get out there and LIVE!!!! Thoughts of FGLB blog come in my mind and I realize now, finally, I know what it is like to RIDE!!!!

(Me thinks it will be less difficult to get an OK nod when I want a bike related item now...)

FGLB and FGLB's wife.