Thursday, January 31, 2008

Alternative Energy Economy Begins

Here we are in early 2008 and at the same time as the credit disaster in the US is fully developed, slashing US purchasing power as reflected by a lousy christmas for retailers, the price of oil merrily goes along close to $100 per barrel.
US oil demand is surely in decline, yet in an off season the price is steady at its high. I suspect that when the history of this period is written, that we are experiencing a significant reallocation of resources in the face of declining options.
We have had the first substancial market break, heralding the commencement of a protracted down swing in securities. The banks are writting down their capital reserves which then makes them carefull lenders. There will be plenty of good credit looking for a home over the next few years. And the Fed is scrambling to find a way to lessen the impact to provide a soft landing.
And I think that for the first time since the depression, cities are getting into the housing business. Rather scary folks, isn't it?
As I have posted earlier, oil supply has lost its elasticity. We have had forty years of convenient oil out of the middle east and have forgotten that even this fabulous resource reaches a point in which its daily production must go into decline. And today all the available evidence is saying just that. It is telling that one of the great institutuional naysayers, Cambridge Energy Research Associates, are now stating global production declines of 4.5%.
In fact we have already felt the bite of that decline and we are watching our oil stocks shrink. That is why the price is so bouyant. Remember that the price is currently twice what it was a mere year or so ago. The open question now is how long can we drag this out before aggressive rationing by both price and regulation is imposed. Obviously, George bush is hoping to tip toe out of office before this load of bricks lands on his head. My sense is that we will be seeing major high prices for oil this summer in spite of everyone's best intention. It may even develop into a crisis atmosphere, particularly if the markets respond by going into a steady decline.
Anyway, this will continue the capital movement of resources into alternative fuel strategies upon which I comment heavily.
As I have previously said, we are entering a world of $100 to $300 oil. This will make the automobile inconvenient to operate except as an occasional luxury. And every alternative becomes viable to impliment. So although there will be pain, there will also be great capital intensive transitions to be involved in.

Wednesday, January 30, 2008

Oil Dependancy

The one thing that I have been emphasizing with my readers is the onset of something known as peak oil. Although everyone knows that the globe gets the majority of its import oil from the Middle East, most poorly appreciate just how much of our conventional reserves actually reside there. We all know that the largest single conventional reserve is in Saudi Arabia. What few appreciate is that number 2,3,4 &5 are not that much smaller and are all in the same Persian Gulf Basin. This means that the bulk of conventional reserves are in the Persian Gulf.

What is more important, is that they have all been exploited for decades and are all past peak or at least certainly appear to be. They are also easy to exploit, so there should be little recoverable residual oil to go after in depleted fields. The only remaining mystery is to what degree the owners are not disclosing field performance. This is a contentious issue and a serious concern and certainly, no one believes that they are telling the truth, particularly when they change quoted reserves at a whim. However, with the Saudis essentially cutting production, it is a very good bet that increases are now impossible.

Looking at the combined reserves in the Middle East it is hard not to believe that an increase is merely a snap of the fingers away. But it is not. Oil fields must be pumped slowly or they will physically deteriorate. And these wells and fields have been carefully managed for a long time and are certainly maximized.

I am reminded of a very greedy stupid individual that I knew whose brother bank financed the acquisition of a very productive gas well in the USA. He then proceeded to kick his brother out of the deal and then took over management of the well. It was a moment's effort to crank up the production rate to accelerate the payback. It took three days for the the well bore to become sand packed, cutting of all production. There was nothing to say after that.

The only other great exploitable oil resource readily available is the Alberta Tar Sands, similar in scope to the whole Persian Gulf and probably much much larger. I also suspect that we have not heard the last word of the conventional reserves of the related Mackenzie basin. But like the heavy oil reserves in the Amazon, access is a true bitch. Right now you have to be utterly determined and be prepared to operate in conditions similar to the North Slope over road less rugged terrain in the dead of winter.

The Alberta lands are much more accessible and the necessary infrastructure is already in place permitting incremental additions to production. This is why THAI is so utterly important to the future oil supply situation.

It turns an unconventional bitumen resource into a near conventional resource, although I can hear the howls of oil men everywhere. The fact that the successful use of a burn front adds value in terms of upgrading the production fluids while also obviously utilizing the production CO2 to mobilize the oli is an elegant resolution of an impossible problem. That it actually appears to be working is a modern day miracle. When I first saw the proposal, I thought that it was too good to be true. today, the only remaining question is well life and there is only one way to figure that out.

And with a next phase kicking in at 100,000 barrels per day, it is safe to say that the proponents are now total believers.

Thus we are left with an open mystery as to when the Middle East will find its production seriously collapsing, which some see as imminent. The advent of THAI can in time bridge this production shortfall provided the Middle East retains the capacity to maintain current levels. This is an extremely questionable assumption currently shared by no one.

You will notice that I make no suggestion that we can support actual increases in production. We will be extraordinarily lucky if it is possible to sustain current levels while high prices drive THAI production and a slew of alternate fuel sources.

We have high prices now. There is no more encouragement needed. A price burst upward will more reflect a sudden loss of production somewhere than anything else. The fact is is that we are now very vulnerable. And as I have said, our true strategic reserve is the automobile.

Tuesday, January 29, 2008

Cold snap reduces Pine Beetle

The interesting question this winter is how cold is it really. It certainly appears to match up to the cold winters experienced a couple of decades ago. For the past decade, all got used to fairly easy climes in the Northern zones. Now they are all a little surprised to get hit with lots of minus thirty as late as now.

In the meantime, we have a report on the temperature impact on the pine beetle in our northern forests. The good news is that the population will certainly be reduced and perhaps knocked out in those areas were they were marginal which is good news. However the population is so huge that it will take several years to bring the problem under control. The biologists still think that the infestation must run its course.

I am more interested in seeing the effect on the Arctic Sea Ice. I also wonder if we have not missed a mechanism for rapid heat loss in the Arctic triggered by open water. The models are always compelling until nature throws a curve ball. We supposedly accumulated a lot of heat in the Arctic this past summer and the onset of new ice may even have been delayed as a consequence.

Regardless the total sea ice was reduced to a major minimum. This makes the next warming season well worth monitoring.

And I think that a lot of new questions will need to be answered.

Monday, January 28, 2008

The Real Great Flood

The one aspect of the onset of the Holocene that I find difficult to understand is the fact that so little is made of it.

Before the break, mankind was restricted to operating in a very narrow tropical band on a small fraction of the globe's land surface. Every where else the climate marched back and forth very quickly over several degrees making agriculture totally impossible with the possible exception of some herding. And the carnivores made that pretty dicey.

Today, that same temperature swing is a half degree or so every century, and we still yell.

When the ice age ended 12,500 years ago, the northern ice melted raising the sea level 300 feet over a number of centuries. This sank the edge of the continental shelf below sea level everywhere, inundating coastal plains everywhere.

This certainly explains the Bronze age traditions of a great flood that humanity fled. The rest of the story means little in the face of the universality of this coastal inundation that destroyed most of the human habitat of the time.

My own small contribution is to attempt to understand the crustal shift mechanism that brought these changes into been. In any event, the actual collapse of the ice age is a historic reality, regardless of causation. At least my causation mechanism has the benefit of promising us a continuation of the Holocene (or Antropocene) for millions of years. Does anyone understand just how incredibly lucky we are to have the current crustal configuration that we have?

The Arctic is a nearly closed sea that could easily become an icecap again if any number of significant shifts took place . How did we end up with the right configuration in the first place? It has been suggested that the crust shifted several times in order to get it right. I find this difficult to subscribe to because it seems so unnecessary. Once by accident seems good enough. However, if the dynamic causation model in fact predominates, then multiple shifts become natural until the exact configuration emerges that eliminate the northern ice cap.

I also note that the southern ice cap is stable on a large land mass, but is tightly bounded ensuring any excess ice finds its way into the ocean long before there is enough build up to endanger global crustal balance.

I suspect that this configuration is stable until plate tectonics finally changes the configuration, millions of years from now.

This still begs the question of why are we not making more of the dramatic change that occurred a mere 12500 years age. It undoubtedly made it possible for the human animal to populate the globe as an agriculturalist. And it seems strange that the promoters of biblical studies do not jump on this, although it queers any more recent middle eastern scenario. However, they usually have no difficulty in questioning the age of anything.

My publication of the Pleistocene Nonconformity a few months back covers the causation problem in some detail for the interested reader. It can be found on the View Zone.

Friday, January 25, 2008

Anthropocene Age

It is been proposed by a group of British geologists that the Holocene Age is over and that the new era should be named the Anthropocene Age to reflect the clear commencement of human induced geological change. The idea appears compelling although the fact is that human activity has modified the geological record since the onset of the Holocene which began with the Pleistocene nonconformity.

In fact our incredibly stable climate that has permitted the global rise of humanity as an organizing agent is unique to the Holocene and ended the million year northern ice age brought on be the closing of Panama. The key feature of this era has been the stable temperature range that has fluctuated only over a one degree range. Prior to that the global temperature galloped back and forth over a range of several degrees.

I have already explained now this major break came about in my item tittled the 'Pleistocene Nonconformity'.

The fact is that man's role has been paramount throughout the Holocene. The major change that has occurred in the past 200 years is that we have mastered the art of extracting geological carbon and burning it. I expect this to continue until it is all consumed, even if conservation drags the process out for a thousand years.

Since all this carbon has already overloaded the capacity of the biosphere to absorb it, as can be reasonably expected, we are now preparing to remove this carbon back into a sequestration protocol. Otherwise we are returning to the Carboniferous Age, when the globe early on was covered in huge accumulations of plant material.

It is here with the onset of terra preta sequestration in the soils that a true geological break will take place. Soils are like living organisms that live in the air soil contact and will actually migrate with any slow change of the surface. Otherwise all the sediments on earth would contain long sequences of buried carbon bearing soils. This is simply not true. In fact the main source of coal appears to be buried peat bogs were oxygen was quickly cut off. Which tells us that in a normal aerated soil that deeper plant carbon is recycled back to the surface by various mechanisms.

On the other hand terra preta soils will have a pure carbon component that will resist ever been easily broken down. That means that over thousands of years, that accumulating soils will begin to leave behind soils that are carbon rich yet already outside the growing zone. This will be a unique signature that will certainly be apparent in the geological record.

Since I anticipate that atmospheric water harvesting will soon open all temperate climes to plant husbandry of some sort, even if it is a Douglas fir on top of Ayer's rock, this means that a global geological event is really in the offing that will be more dramatic than almost any other major event. We can also expect this process to be sustained for as long as mankind occupies this planet, a time period surely as long and sustained as the reign of the dinosaurs. At the same time, the incipient soils will be built and nurtured with terra preta providing the signature.

Compared to that type of epoch, the ten thousand years of the Holocene is merely a prelude.

It may seem to some that this is all a bit optimistic, yet all the tools for a totally sustainable globe have already been described. Even some of the lesser perceived difficulties on the way to pure sustainability are resolvable.

I particularly point out that terra preta in will very likely allow the total recycling of the nutrient load eliminating dependence on chemical fertilizers. At the very least, it should reduce out consumption by an order of magnitude or two. In fact the fertilizer free exploitation of established terra preta soils for decades say exactly that.

It is easy now to imagine a human future in which mankind has small special purpose urban ares and is mostly living in small agrocomplexes, each in harmony with its square mile of farm and woodland. Such could readily support global populations vastly larger than the present.

Thursday, January 24, 2008

CNRS enters more data on 2007 Arctic sea ice

This item just out is providing us with a good update on the hard data that is emerging around the rapid ice retreat of last summer. Those who have followed my postings know that I was a very early proponent of an accelerating ice collapse in the Arctic, simply because if we only assume a simple constant small heat imbalance year after year the results on the ground are not actually linear at all and must end with a collapse crisis.

Last year we got a really good look at what a collapse crisis will look like. The remaining question right now is if this last summer was brought on be a combination of several bits of bad luck getting us ahead of the curve or if the unusual collateral effects are merely results.

The reason that I ask this question is that last year the Arctic seemed to get more than its share of lower latitude’s warm air, sped along by a strong shifting of boreal winds. It now seems to be returning the favor by giving us lots of cold polar air this winter. Is this a new climate cycle? In other words, something has happened this past year that was both completely unexpected and not clearly understood.

It almost looks like an emergent heat pumping action that will draw surplus heat into the Arctic at a much stronger rate than in the past. All this suggests that the sea ice will continue to retreat at an even faster rate than in the past. In any event, current results are now strongly supporting a full disappearance of summer sea ice by 2012.

They are also quite right to point out that the summer of 2008 will be critical on every level. It will confirm specific new trends or even give us a sharp reversal. My own analysis really supports the thesis that we have now entered the final collapse phase of the perennial sea ice which is actually been accelerated by the specific onset of Arctic spring like conditions.

In fact my worst case scenario now would be to have a few very cold Arctic winters in which the ice loss is merely zero. However, at some point sooner or later, we will have a warm summer or two and the balance of the sea ice will be eliminated. And honestly, if this cold winter does not reward us with a significant reversal of last year’s decision, then it is really over as far as the long term perennial sea ice is concerned.

Once the summer sea ice properly clears every summer, the Greenland ice cap can now be expected to largely retreat slightly from the shoreline over the following century eventually stabilizing with quite a bit of mass loss. This will have a marginal effect on sea levels.

Arctic ice-cap loss twice the size of France: research

PARIS (AFP) — The Arctic ice cap has shrunk by an area twice the size of France's land mass over the last two years, the Paris-based National Centre for Scientific Research (CNRS) said Wednesday.

"The year 2008 promises to be a critical year on every level," said Jean-Claude Gascard, the body's research director and coordinator of European scientific mission Damocles, which is monitoring the effects of climate change across the Arctic.

September 2007 measurements show ice covering 4.13 million square kilometres (1.6 million square miles), down from 5.3 million square kilometres in 2005.

"Melting could result in the loss of another million in one (2008) summer," he added at a press conference.

"Summer 2007 was marked by a major retreat in the ice-cap, one we were not anticipating," Gascard said. "The rate of decline is also two or three times faster than (observed) beforehand."

International models used to predict retreating ice have some "catching-up" to do, he said.

Over the last 20 years, 40 percent of the ice-cap has melted with the average thickness halved from three to 1.5 metres.

Year-round ice coverage has reduced, with summer melting also lasting longer, the centre reported.

The Damocles' exploration vessel Tara has been able to cross the 5,000-kilometre Arctic Ocean in just over 16 months -- less than half the time taken by a late 19th century Norwegian explorer.

Gascard said the ship had been able to travel at "twice the pace expected by organisers, and three times the speed models suggested".

Disruption to the thermal layers of atmosphere stacked over Earth's far north was cited as the principal cause by Swedish researchers earlier this month, in a study published in the journal Nature.

The Tara team recorded a temperature of 10 degrees Celsius (50 degrees Fahrenheit) at altitudes between 500 and 1,000 metres.

"The reduction in the intensity of cold (temperatures) during winter over these last 20 years corresponds to an accumulation (rise) of 1,000 degrees Celsius," Gascard said.

The team highlighted the role of ocean currents, namely in the northern Pacific, behind warming of waters.

Gascard's research colleague, Gerard Ancellet, also spoke of recently-formed Arctic mist, pollution clouds which "trap" Earth's naturally-emitted infrared rays thereby raising temperatures.

"Internal" Arctic pollution is the source, Ancellet said, highlighting Russian and northern Scandinavian gas and oil exploitation.

Carbon dioxide emissions among the major north American, European and south-east Asian economies was not the only other factor, he added.

Shipping traffic with additional nitrogen oxide emissions is a growing complication, given he estimated that 25 percent of the increase in future maritime transport "will be confined to the Arctic zone".

In summer 2007, the Northwest Passage, historically an ice-jammed potential shortcut between Europe and Asia, was "fully navigable" for the first time since monitoring began in 1978, according to the European Space Agency.

It lasted five weeks, according to Canada's environment ministry, with 100 vessels getting through.

How come we never heard this? I assume that this was all small boats, but it would be nice to see a freighter make it through. Once the long term ice is really gone, the Arctic shipping season should be at least two months. Right now it is still a nasty speculation especially as how strongly this was effected by unusual winds in 2007.

Wednesday, January 23, 2008

20,000,000 Per Day Production Gap Looming

I can understand why almost no one gets it with the approaching perfect storm in the Oil industry.

Just as we find it difficult to understand compound interest, it is difficult to imagine the collapse of an industry built on a declining resource, even when everyone is in it. Grand banks cod was destroyed for that same reason as was the whale oil business. Yet everyone operated with a business as usual stance to the day it ended.

I hate scaring people, and it is clear that the political leadership is tiptoeing around the issue in every way it can. No one wants to say 'hey guys, the crap is going to hit the fan like it never did before'. I am certain that George Bush is hoping to be long gone before the shoe drops. 'just give me eleven more months, lord, so that I don't get blamed for that too!'

When the first oil crisis occurred in 1975 or so, there was no mystery were the oil was going to come from. There were ample supplies in Saudi Arabia for the turning of the tap.

Today there is no tap to turn and the Saudis know that they are now facing decline if it has not already commenced. Yet even they are pretending business is as usual.

No matter. Our current annual production level of 85,000,000 barrels per day is about to decline at around 4,000,000 barrels per day per year for several years. We have to to be ready to open up new production at this level each year to just stand still. Right now we simply cannot do it.

Accelerating current production of established operations simply will not be possible and has never been possible in the oil business. In fact, you maximize production volumes by slowing the actual lifting rate. For sure, that is why the Saudis have already lowered their output levels.

Recall that thirty five years of very high relative oil prices has not halted the decline in US oil production.

Right now the THAI pilot operation in Alberta is ramping up to 100,000 barrels per day as fast as humanly possible. That will take at least two years to commence and about two years to build out. Accelerated permitting can then build out an additional 900,000 barrels over the next three years. So in my most aggressive back of the envelope scenario, THAI can hit 1,000,000 barrels per day by 2012 at the earliest. At the moment we still do not know what a real world depletion and decline curve looks like for the THAI well pairs. We will though by 2012.

However, once that is well underway, it should then be easy to add an additional 1,000,000 barrels per day per year for a long time. It may even be possible to ramp up to 4,000,000 barrels per day per year over the succeeding five years so that by 2017 we are recovering back to current levels of production.

In my most optimistic scenario, which is becoming available to us thanks only to THAI, we will lose about 20,000,000 barrels per day of production and then slowly creep back to current levels by 2018. That is a pretty ugly swing however stated.

And yes, throughout this transition, it will be possible to scramble in resources, including a lot of oil that will also alleviate the pressure.

This scenario suggests that Alberta must achieve production levels of an unbelievable 20 to 30 million barrels per day within the next two decades. This is a billion barrels or so per year. And strangely enough, from what I know of the actual resources, this can be sustained for a thousand years at least although the rest of the world will dry far sooner.

I also suspect that undiscovered mega fields may exist in the remaining valley of the MacKenzie although most folks would rather go to the middle of the Amazon.

In other words it is impossible to understate the importance of the successful pilot test of the THAI system. All the major problems associated with heavy oil disappear, including maximizing recovery. For the record, I have been watching this pilot since before they got the money to do the pilot test, and so far it has succeeded as advertised with only the usual predictable problems. Expect engineers to skimp on sand handling when you don't quite believe that the underlying premise is going to work. The courage to immediately permit a next stage to 100,000 barrels per day is a huge internal vote of confidence that the technology is licked and is truly working.

Let us hope that my optimistic scenario ends up been the global production floor. This still means that the personal automobile is almost going to be banned as that is the only place that we can remove 20,000,000 barrels per day of production. There is no other source until THAI and even replacement technologies kick in.

I personally hate to write posts about the developing economic situation, but shared knowledge is the only way to be able to position yourself in the middle of a pending economic transition crisis. Otherwise one freezes up in the face of rapid changes which rather obviously have already begun.

You need only imagine the post that I would have to write if THAI was not working, particularly since few comprehend the lead times necessary to bring on new technologies like algae oil and methanol at the scale necessary.

Tuesday, January 22, 2008

Major THAI Expansion

Today, I am going to share with you an extract just published by PetroBank Energy (PBG.TO). The reason is that this company who is pioneering THAI production has just decided to really reach in terms of their expansion. Obviously they are very happy with results to the present and production bottlenecks have been eliminated.

The most important thing that this all tells us is that they can go to 100,000 barrels per day very easily. This means that the step to 1 million barrels per day is just as easy and the next several million barrels per day is very feasible. This implies that Canada' s two trillion barrels of heavy oil reserves will soon become measured reserves.

More importantly, the oil resource requires a negligible amount of input energy unlike the mined surface deposits. In fact the technique will likely find its way into conventional oil fields because of its ability to reform oil in place and thus mobilize it. I am still a little amazed that this is possible.

There are huge amounts of conventional oil in place that was unrecoverable equal to all the oil ever recovered. This may access a lot of it.

So while we are surely sweating the developing production shortfall faced globally, this is a true light at the end of the tunnel for the long interim we need to bring alternative sources on line.

Heavy Oil Business Unit


Recent operations at the Whitesands site have focused on the installation of the new sand-handling system which became operational for all three wells late in December 2007. This system has increased on-stream time and enhanced our ability to manage produced sand and ultimately flow the wells to their target capacity. In conjunction with the new sand-handling system, upgrade modifications to other plant operations were made to facilitate the addition of the planned three well expansion. Another key upgrade was further enhancement to our H2S treating facilities, which are installed and ready to operate, however regulatory approval to operate this system has been delayed and is now not expected until early February. This delay has limited our ability to increase air injection and therefore increase production levels in the short term.

As previously discussed, our three well expansion project is also waiting on regulatory approval which is delaying the drilling of the next three THAI(TM)/CAPRI(TM) wells. Because of this, we have decided to drill at least one additional well on the current plant footprint which will be our first THAI(TM)/CAPRI(TM) well. As this well is located on the existing plant footprint, the regulatory process is more streamlined. This will also enable us to advance the testing of our CAPRI(TM) completion design and our revised slotted liner designed for improved downhole sand control. In addition, we can start producing from this well sooner, using the existing combustion zone, which should allow us to avoid the pre-ignition-heating cycle. Advancing this well provides an opportunity for continued optimization of our project design and reduction of execution times for future projects.

In December 2007, we also completed a 4D-seismic survey over the current project site, which we believe will provide valuable information on the morphology of the combustion zone. We have also completed five additional stratigraphic evaluation wells, the results of which will be included in the updated resource evaluation being conducted by our independent reserve auditors. We plan to drill up to an additional 23 oil sands exploration wells during our 2008 drilling program.

May River

Our earlier plan at the Whitesands site was to have filed a 10,000 barrel per day project application by the end of 2007. This plan has been modified as we have enhanced our process design to allow for a larger central facility with ultimate capacity for 100,000 barrels per day, as well as other facilities improvements based on data from our current operations. This new project will be known as May River. The central facility design will lower the overall environmental footprint of the project and requires a different surface location than previously planned. We now expect to file the first phase application for the initial ten to fifteen thousand barrel per day stage of the project by mid-2008, which will include pre-development for the larger overall development. This approval will require additional environmental fieldwork to accommodate the larger initial scope of May River.

To facilitate the application process for the overall project design, we have released our public disclosure document ("PDD") for the May River project describing our 100,000 barrel per day THAI(TM) development plans for the Whitesands leases. The PDD is the first step in the public consultation process and is a key aspect of the overall project approval process. The PDD will allow us to consult on our full development plan, thereby potentially shortening the overall approval process, rather than undertaking a detailed public consultation for each separate phase. The rationale for initiating this full-scale development plan with a ten to fifteen thousand barrel per day initial stage, is that while the overall project will require a comprehensive environmental impact assessment ("EIA"), the first phase will only require a localized environmental assessment that we can commence immediately. We will also initiate the full scale EIA in the first quarter of 2008.

Monday, January 21, 2008

Polar Bear Nonsense

I am forever amazed at how uncritical opinion so often is shouted about through the press with little in the way of rebuttal. A perusal of the press coverage of the past while regarding sea ice would have you believe that the polar bear is about to be wiped out. At the same time, the enviro political crowd is pushing to have the bear declared endangered. Perhaps the enviro crowd intimidates the press.

I personally suspect that summer sea ice will completely clear out of the Arctic as early as 2012. I also suspect that this will stimulate a thriving Arctic biosphere as much more solar energy is absorbed into the sea. There may still be extensive floes in and around the islands.

In any event, the polar bears will hardly notice. In fact, I suspect that the odds favor them doing a lot better. Lest we forget, they effectively hibernate during the short summer. In James Bay, this summer lasts as much as five months which pushes the envelope for pregnant females, but not the males. This summer is a lot shorter almost immediately as you travel north. So our bears always have the option of hiking north a few hundred miles to more hospitable waters.

The bears will colonize anywhere that sustains a covering of winter sea ice since the related seals are their principal food source. If the great lakes had seals, we would be watching annual polar bear migrations to exploit the resource.

In the meantime, the increase in Arctic solar energy means a sharp rise in the food stocks available to the seals, whose population should also expand providing a larger range for the bears. I expect that the bear will continue to prosper, since he has no meaningful predators whatsoever.

The only question that I am left with is to ask how far into the Arctic Sea that the bears travel during the winter. All of it is prospective hunting ground for the bears so I suspect that they cover all of it, one way or the other. They are very much like the lions of Africa in that they truly dominate their environment.

In the meantime, folks only destroy their own credibility by espousing environmental propaganda that is so patently wrongheaded and diverts public energy away from an ocean of environmental problems that clearly needs champions like unrestricted factory harvesting of our fish stocks on the high seas.

The environmental movement would do themselves a great service if they consciously became the champions of global tenure of all biological stocks in order to create global law and management protocols. Simple ownership of viable stocks would end the global competition for the last fish. In fact, stakeholders then become stock maximizers.

To date, the movement has been beset by the old leftest dream of governmental management by a chosen elite operating in competition with other stakeholders. We know that never works and simply throws a new level of cost into the mix.

This will be a long process to properly establish. In some cases, it is necessary to let the stocks be destroyed as has happened to the Grand banks. It is easier to impose common sense to a group of losers, than to a group of addicted gamblers still living of the last great hand.

A grand banks commission could now operate successfully to work at restoring the fishery and be funded by a combination of tenure fees and royalties as is done in the oil patch. Foreign involvement ensures a form of compliance also.

This is only one important example.

Friday, January 18, 2008

Aubie Baltin on US Credit Contraction

After my cheery note yesterday on the looming stress of very expensive oil, I realized that I forgot to mention the one other way in which it will be partially resolved. By a global slowdown in general demand while the economy retools for other energy resources.

I share with you this investment letter by Aubie Baltin which makes the case of how bad it will get. It is meant to scare the hell out of you, so do not take it to heart.

Without question the US economy has to unwind a lending spree that was huge. The good news is that the rest of the world was simply not so stupid and retains a sound currency and credit system and will inject the necessary equity to clean up the mess. And yes they will extract their pound of flesh as well they should. And the rest of the world is now big enough to do this.

However, it means that equity will be king for a decade in the US as the banking system goes back to behaving like banks. The credit balloon is gone having been stolen, leaving the banks with the fallout.

In the meantime, it is wise to recall that what happens in the wrong neighborhood in Cleveland to mortgage debt is simply the absolute extreme worse case and does not reflect what is really happening in the rest of the country which will ride through this storm very nicely.

The only damage most will incur is a lowering of their expectations. And the need to not drive the car so much.

Also, let us not forget that THAI oil production promises to deliver the necessary crude to our refineries and could do it easily within the current price regime.

We are in the early days of a global transition out of the oil economy and massive volatility is a natural part of this unpleasant process.


In my letters dating back to the beginning of 2007, I selected a credit spread between Junk Bonds and Treasuries (buy Treasuries, short Junk Bonds) as my #1 best, lowest risk SURE THING trade. The spread has increased from a near all time low of 3% to a current spread approaching 7.5% and “you ain’t seen nothing yet.”

But that was just a trade, why should you have listened? But that trade was not the only thing that you heard here first. Month after month, there has been a total barrage of optimistic projections from all avenues calling for a continuing Goldilocks Economy, leading to accelerating earnings and an ever rising stock market not only here in the USA but around the world as well, especially in the emerging markets. They were right about the rest of the world, but I stood front and center against this constant harangue of optimism, pointing out the expanding cracks in the dam that everybody else either refused to see or actually did not notice. The seeds of a MAJOR BEAR MARKET were being sown. And it would not be just an ordinary Bear Market like we had in 1998 or 1994 or 1990, but more along the lines of a 50% 1973-74 breakdown and quite possibly a 15 to 20 year 30’s type Depression.. Not very many, if any, analysts agree with me yet, but I no longer hear any of them laughing.


We can never know in advance the actual start date of a recession. It is only after all the numbers, that everyone waits for with baited breath, have been revised 3 or 5 times can we know for sure when a recession started; it won’t be too much longer before my call that we started the recession in the 4th quarter of 2007 is confirmed. And yet the Government, the FED, Wall Street and the Media keep insisting that, at worst, we will just have a slowdown in the first half of 2008 with a resumption to 4% plus growth by the second half of the year. The drop in housing prices is now over 18 months old, the longest sustained drop in history, but we still have no recession? The first people laid off were the illegals, so they didn’t show up in the unemployment figures. What do you think the numbers will show next quarter after the carnage in the financial sectors hits? And I always thought smoking dope was illegal!


All modes of deals that appear like sure things must and will fail for one or both of two reasons. The takeover and buyout private equity craze always sows the seeds of its own destruction as more and more money chases fewer and fewer good deals. They become overpriced and making the deal becomes of prime importance as they worry about the workout later. After all, the deal makers like the Hedge Fund managers, take their money up front and the Banks always are left holding the bag, Secondly, interest rates are so low that risks are no longer being taken into account. Underestimating risk is the surest road to doom and we are already witnessing the consequences. Here too “we ain’t seen nothing yet” as the margin calls begin to fly and there is a scramble to rob Peter to pay Paul, as one deal after another gets into serious trouble and collapses since no provisions at all were made for a possible recession. We are now witnessing what can happen to the biggest and best such as C, CFC, MER and BSC and how many more shoes are yet to fall?



Most everyone still refers to the sub-prime loans as being the problem. But nothing could be further from the truth. The mere fact that the President, Congress and all of the presidential hopefuls are coming up with plans to solve the effect and not the problem is proof positive that sub-prime is not the real problem. It is the massive 5 to 10 year overhang of unsold homes brought about by the massive over building that five years of 25% plus per year compounded price increases that fueled massive speculation and was exacerbated by the 1% zero down ARMS that allowed even poor people to speculate and rich people to over speculate. Sub–prime was just the beginning as it has already spread to Alt 1-A and prime loans as people walk away from their negative equity, overpriced homes.

In the 4th quarter of 2007, we saw the biggest increase in auto loan delinquencies in 8 years, in conjunction with $350 million loss to Sally May and a suspension of all types of securitization sales by 1st Marblehead Corp. And don’t forget the 26% increase in credit card delinquencies. THE DOMINOS HAVE JUST BEGUN TO FALL.

More importantly is the fact that banks must shrink lending 20% to 25% and call in loans in an effort to return their capital ratios to their mandated levels. Brokers and Hedge Funds must also curtail their borrowing at somewhere between $18 to $25 for each $1 lost.

THE PSYCHOLOGICAL FOUNDATION OF LENDING AND THEREFORE LIQUIDITY IS CONFIDENCE. When confidence is lost and the credit spigot is shut off, it ties the hands of the FED so that they can do nothing about increasing the money supply and all the rate cutting has and will go for naught: Except to weaken the Dollar.


In 2007, the consumer represented 72% of GDP and in the face of a crashing real estate market, which involves an all time high 70% of the population, THEY kept on insisting that consumer sales would not be affected even in the face of $100 /bbl oil. Be careful to whom you are listening to. Go back and check what your favorite analysts have been saying over the last 6 months to a year or so. If they could not see the 10 foot high writing on the wall then, what makes you think that they can do anything else but follow the crowd in the future as they all continue in their myopic ways all the way down to the eventual bottom If you want to stay abreast or even ahead of what is coming, don’t forget to mail in your subscription to “UNCOMMON COMMON SENSE.”


Last month, we were hit with a 0.8% per month inflation number, which annualized comes out to an inflation rate of over 9.6% per year and they claim it was only a one month aberration, that there is no inflation. If everyone is still insisting that inflation is not anything to worry about, then why is Bernanke not cutting interest rates by at least 50 basis points if not a full 100 basis points in order to get ahead of the curve? What is wrong with all these so called experts? Are they still living in a dream world refusing to admit to themselves that the party is over? INFLATION is, despite all the manipulation, beginning to roar. Don’t they realize that rampant inflation always leads to a crash?


.The first thing that you must do is to GET OUT OF DEBT, especially margin debt. Those of you who have been following me are now sitting comfortably in cash and have sold into the December rally. Although it did not make the new all time high that I was hoping for, it was nevertheless a good enough rally to have allowed you to get OUT of all your long positions in great shape. If you were smart enough to have gone short, it is time to take your profits and wait for the coming bounce to re-establish your shorts.



For those of you who have been long time readers of my letters, you should have at least 1/3 to 1/2 of your liquid assets in Gold and Silver Bullion as well as their underlying stocks. For both old and new fans, you can start accumulating the higher quality Juniors and buy Bullion and the Majors on any $45 to $75 pullback in the price of Gold. THERE IS NO RUSH. The first major Wave I has probably just been completed even if only at the lower end of my target range. But have no fear, we still have up Waves III and V to look forward too. DO NOT TRADE YOUR CORE GOLD POSITIONS.



Pardon the shortness of this letter, but it is only an interim letter that I don’t usually write. I just thought that, given the situations in the markets, a little hand holding was in order. Even I would not mind a little hand holding from time to time. As far as my own portfolio is concerned, I had a terrific month so far: I covered most of my shorts yesterday (Tuesday) into the close and I sold a few calls against some of my Gold positions on Monday. I know that I don’t have a crystal ball, but maybe I have a crystal eye or better yet, a little good luck. I’ll take luck over brains any time. Next week, my letter will be all about how to make the most money out of a MAJOR BULL MARKET IN GOLD. For those of you who are not lazy and would like a head start, go back into the archives at and re-read “RIDING THE GOLDEN BULL and 21st Century Gold Rush.

GOOD LUCK AND GOD BLESS January 16, 2008

UNCOMMON COMMON SENSE:. Start date is February 1st Subscribers will be receiving it two weeks early and it will contain specific buy and sell (sell short) recommendations. The fee is $199 per year and there is a 100%, satisfaction guarantee

Aubie Baltin CFA. CTA. CFP. PhD

2078 Bonisle Circle

Palm Beach Gardens FL. 33418


Thursday, January 17, 2008

Great Oil Crisis Deepening

As me readers know, I have been very pessimistic about the real future of our century old oil economy. We are confronting one of the great crisis of history. It is necessary to transition to a non oil energy regime for the all critical transportation sector.

Current production is sort of cruising around 85 million barrels per day. Projected demand increase over the next twenty years is about 30 million barrels per day. Anticipated decline of current production is another 30 million barrels over the next twenty years.

We need to discover at least six Saudi Arabias to plug this hole. In the past 100 years we have discovered exactly one. It is simply not going to happen.

We will add a million barrels per day, here and there. The tar sands is good for a couple, and several deep sea projects are good for several million more.

The fact is someone has put pencil to paper to estimate how much must be invested and it is several times the entirety of the US gnp. We must do a centuries worth of capital investment in the next decade or two.

The only glimmer of hope in this ugly oil picture is the nascent advent of THAI technology. It is now in early days in the tar sands. It works by injecting air at high pressure into the oil bearing formation at the toe of a horizontal production well. Spontaneous combustion ensues at 600 atmospheres achieving a 600 degree burn front. This liberates oil that is also upgraded to about 15 gravity oil that then flows easily into the production well. It appears to work, and quite frankly, it has to work.

This technology should unleash most of the global tar sands for high yield production. It is believed that Canada has about 2 trillion barrels of such reserves in place and our friend, Mr Chavez, has another trillion. It may even do something for the infamous Green River shale in the Western USA.

The point that I am remaking is that we have to resolve a potential 75% swing in global oil production in the next two decades starting yesterday as tightening supplies and rising prices are confirming.

The first fix will be to drive the personal automobile off the road, and as I posted earlier, this means $300 per barrel oil. This will be able to offset the first decade of production decline.

The second fix is to use THAI to ramp up tar sand production to the levels necessary. The good news there is that the capital roll out will be fairly fast.

If we are really lucky, we may even get to drive our cars once in a while. D0es anyone still recall world war II gasoline rationing? Coupons anybody?

In any event, the new price regime should make oil non competitive against various renewable options. And that is the third and permanent fix.

In the meantime, we all need to take stock on how we will cope if the automobile abruptly ceases to be available regardless of price and hope it is not necessary, because that will be the break point. That gasoline is our real strategic reserve.

This is shaping up to be a revisit of the first oil crisis, even to the housing crash and reckless banking. The only thing we are missing is a run up in interest rates to 18%. They are not that stupid this time around.

Tuesday, January 15, 2008

20 billion Population sustainable

When I started his blog, my central thesis was that the global need to reorganize the way we handled CO2, called for nothing less than the terra forming of the Earth. My central tool was the establishment of a well planned global silviculture support system. This was because agriculture and forest management are close enough that it is possible to establish mutual support.

What our investigation has brought home is that our tool kit is much better than anyone imagined and even more invasive than anyone imagined. And I mean invasive in a good manner. We can often help mother nature to maximize results.

The core economic unit is still the private farm. Preferably the village farm, although the family farm will still be important.

I have discussed the need to tie our civilization more directly to our agricultural roots. This will mean that a farm unit needs to be integrated with a condominium tower containing a couple hundred families with rapid access to the urban job market. This supplies the farm with a ready supply of temporary labor as needed to take advantage of higher yield crops and supply labor intensive maintenance.

A single family can operate a thousand acre $200 gross per grain farm. That same family could just as easily operate a high yielding crop worth several times as much on a fraction of the land. Somewhere in between there is an agricultural coop type system as used for centuries in Europe in which all labor was honored and valuable.

The point that I want to make is that part time labor must be available if we hope to harness the potential that we are describing in these posts. And it has to be welcome labor respecting a person's time and place in life and honoring his input. This problem has been well solved in the past, but has been forgotten in the rush to the family farm and the industrial farm.

Our hypothetical farm unit today can be built around several new virtuous cycles.

1 The terra preta - corn culture builds soils and restores full fertility while permanently sequestering one ton per acre of carbon per year.

2 Woodlot management produces forest products and a steady stream of waste wood chips while building up to 25 to 50 tons of sequestered carbon per year. The wood chips make a good feedstock for methanol production, but not as likely for biochar since it requires grinding.

3 Cattle culture produces a waste stream that may now be diverted into algae production. This will produce an oil byproduct that makes good biodiesel and a solid byproduct that may either be used as cattle feed or used in fermentation or both. That is still a speculation, but something like this seems possible. It would be clearly superior to prior practice which has always been unsatisfactory.

4 Atmospheric water production will open up progressively the earth's arid lands. I say progressively since it is all about growing trees that then dump the moisture back into the atmosphere for reuse. The same rainfall can theoretically water the Sahara desert over and over again. Of course it is not that simple and will require progressive tweaking even when the cost of the technology has become cheaper than needed.

5 Woodlot management that produces economic amounts of forest products and also a viable fuel will progressively convert the wildwood into viable farm units, even in the rainforests. Good management will become possible even while maximizing diversity. Again, the main challenge is to eliminate short term exploitation tenures. And the best way to do that is to do that is to tax the resource through a long term partnership that demands a sustained species mix. It is pretty hard to cut all the oak if you are going to be taxed in perpetuity for those non existent oaks at current market value. Inflation alone will bankrupt such a practitioner eventually.

6 Proper wildlife husbandry is completely feasible and needs only the establishment of proper ownership to bring under effective management.

The main business of mankind is to produce enough food and now, enough fuel through sustainable sources. These protocols make a global population of even 20 billion possible and sustainable.

Monday, January 14, 2008

Methanol Economy

We have posted extensively on bio diesel oil production from an algae feedstock. Its allure comes from the ability to generate very high yields on a sqare foot basis. This is rather critical for a transportation fuel where most proposed sources cannot hope to supplant fossil fuel demand.

I have also posted briefly on ethanol showing that we are dealing with the same trap. The reality is that only the USA and Brazil can hope to exploit crop sources for ethanol in a meaningful manner. And even then, gasohol is a ten percent blend of gasoline and ethanol. This is not much of an improvement.

We have not talked about methanol. Methanol is good old methyl alcohol and also makes a high quality fuel. It is also safer and more benign that gasoline. More importantly there are multiple processes for the conversion of various feed stocks into methanol. It is safe to say that the high quality fuel of the future will be methanol. It will act as a feedstock to the petrochemical industry.

A review of the literature shows us that it is possible to convert any carbon based feedstock into methanol with a moderate consumption of energy. The easiest method of course is to reform the bio mass to produce methane and CO2, which is then used to produce methanol.

Today most methanol is produced by the conversion of methane in areas with a natural gas surplus such as Saudi Arabia, as a feedstock for the petrochemical industry. And this begs the next question. Methanol is obviously too valuable to be extensively used as fuel and the auto racing industry which is now using it exclusively really does not count. Methanol is also a key feedstock in the production of synthetic hydrocarbons.

The whole problem with methanol is that it needs a large integrated industrial plant to produce the volumes needed for the transportation industry and this market is simply not yet attractive enough. It appears that society will have to make a conscious effort to establish a methanol economy to replace our current hydrocarbon economy. That it can be done is a given with known technology. We have to learn to view all available waste organic streams as we currently view oil reservoirs. A bit of a challenge when there are so many options and so much related engineering.

Our civilization is a past master at solving one difficult problem at a time. The problem with methanol is that its production is a multi step process that needs to be high yield. The engineering problem encourages very large plants. Been able to replicate this type of solution for processing bio mass runs into the problem of scale and feedstock assemblage.

So the problem becomes something very different. Is it possible to develop a ten ton batch plant that converts any biomass into methanol on site? This is the same problem we had with biochar production. If that could be done, then we have a way of converting waste organics into a shippable fuel that would need little additional processing if any.

We can now understand why methanol is not common fuel today. It makes no sense to convert hydrocarbons into another type of fuel unless it is absolutely necessary. And the conversion of organic waste into fuel is possible only if we can reduce the operating scale to the scale of the organic waste industry. Otherwise we will be hauling massive amounts of feedstock around the country.

If we actually pursue this option, I think that a subsidy for this type of small scale methanol production is fully justified to encourage the establishment and growth of the industry, if it can be done at all. Otherwise no one can do it in the face of methanol dumping by the oil industry.

This also links into the need to properly create an economic model for the proper maintenance of woodlands and could easily be part of the same dollar if we are really lucky.

Extraction of waste wood is necessary and conversion to methanol is a superior solution to simple reduction to bio char which is a less than satisfactory practice. It will take an expensive piece of hardware, although some shipping will be possible.

Friday, January 11, 2008

Duane Storey posts on fifty percent loss of sea ice voulme since 2004

Nice little story by Duane Storey on the Arctic Sea Ice. The new information that he refers to is that the actual volume of sea ice has halved since 2004. This is far more that I hade thought. My earlier postings on the mathematical effect of a constant annual supply of heat into the Arctic as experienced for the past thirty years or so informed us of the final collapse phenomena. It nothing changes, all the sea ice will thus clear in the next three to four years. It can only now be postponed by a bitter cold winter comparable to the winters of the late fifties. We actually need a string of very cold winters.

Do not hold your breathe. We are having a real winter this year but I am unconvinced as to its comparable coldness. Last year was anomalous and just plain weird. This winter is very normal in terms of the last decade. The high level of winter storms is actually releasing heat in the northeast corridor taking the edge of the Arctic air mass. I also have not heard any howls from the common super cold weather we catch out west from time to time. Of course, I simply may not have heard it and as yet I do not have data. The point is that the weather looks normal if you think 2005 was normal, but not necessarily normal as per 1995. I really want to hear that the pine beetle is in retreat.

January 10th, 2008 | By Duane Storey

Big Trouble In Little Arctic

I get a lot of notifications in my inbox daily about scientific rumblings going on in the world, but this one caught my eye this evening. Some recent NASA data in the arctic region seems to point to a huge acceleration in the melting rate of the ice — should the melting continue at its current rate, NASA scientists project that it’s only a matter of years before the arctic might be completely ice free in the summers.

An already relentless melting of the Arctic greatly accelerated this summer, a warning sign that some scientists worry could mean global warming has passed an ominous tipping point. One even speculated that summer sea ice would be gone in five years.

Greenland’s ice sheet melted nearly 19 billion tons more than the previous high mark, and the volume of Arctic sea ice at summer’s end was half what it was just four years earlier, according to new NASA satellite data obtained by The Associated Press.

The Arctic is screaming,” said Mark Serreze, senior scientist at the government’s snow and ice data center in Boulder, Colo.

Just last year, two top scientists surprised their colleagues by projecting that the Arctic sea ice was melting so rapidly that it could disappear entirely by the summer of 2040.

This week, after reviewing his own new data, NASA climate scientist Jay Zwally said: “At this rate, the Arctic Ocean could be nearly ice-free at the end of summer by 2012, much faster than previous predictions.”

So scientists in recent days have been asking themselves these questions: Was the record melt seen all over the Arctic in 2007 a blip amid relentless and steady warming? Or has everything sped up to a new climate cycle that goes beyond the worst case scenarios presented by computer models?

“The Arctic is often cited as the canary in the coal mine for climate warming,” said Zwally, who as a teenager hauled coal. “Now as a sign of climate warming, the canary has died. It is time to start getting out of the coal mines.”

The surface area of summer sea ice floating in the Arctic Ocean this summer was nearly 23 percent below the previous record. The dwindling sea ice already has affected wildlife, with 6,000 walruses coming ashore in northwest Alaska in October for the first time in recorded history. Another first: the Northwest Passage was open to navigation.

Still to be released is NASA data showing the remaining Arctic sea ice to be unusually thin, another record. That makes it more likely to melt in future summers. Combining the shrinking area covered by sea ice with the new thinness of the remaining ice, scientists calculate that the overall volume of ice is half of 2004’s total.

In addition to changes in the arctic ice, there are also many changes going on with permafrost regions in the arctic, in particular with Greenland and Alaska:

Alaska’s frozen permafrost is warming, not quite thawing yet. But temperature measurements 66 feet deep in the frozen soil rose nearly four-tenths of a degree from 2006 to 2007, according to measurements from the University of Alaska. While that may not sound like much, “it’s very significant,” said University of Alaska professor Vladimir Romanovsky.

Surface temperatures in the Arctic Ocean this summer were the highest in 77 years of record-keeping, with some places 8 degrees Fahrenheit above normal, according to research to be released Wednesday by University of Washington’s Michael Steele.

Greenland, in particular, is a significant bellwether. Most of its surface is covered by ice. If it completely melted something key scientists think would likely take centuries, not decades it could add more than 22 feet to the world’s sea level.

However, for nearly the past 30 years, the data pattern of its ice sheet melt has zigzagged. A bad year, like 2005, would be followed by a couple of lesser years.

According to that pattern, 2007 shouldn’t have been a major melt year, but it was, said Konrad Steffen, of the University of Colorado, which gathered the latest data.

“I’m quite concerned,” he said. “Now I look at 2008. Will it be even warmer than the past year?”

If you’ve followed any reports on global warming in the past few years, the main consensus with most of them is that we are really at a point of no return, something that this latest batch of data also seems to suggest.

Thursday, January 10, 2008

Nikolaus Foidl reports of waste wood burns

Nikolaus Foidl has given us an excellent report on the experience gained attempting to exploit the products of an open burn of waste wood. It also brings home my ongoing disquiet surrounding the drawing of conclusions from this and many other similar tests. In this case particularly, a huge amount of ash was produced that was not fully incorporated into the surrounding soils. This made the soil initially very rich in soluble salts which had to be leached away before any benefits could emerge. The soil is actually ‘burned’ by an overload of nutrients.

I suspect that this is a problem with traditional slash and burn protocols also, however it may be obviated.

When we set out to produce a uniform end product of either charcoal or bio char or Terra Preta, it is necessary to manage the variables of temperature, airflow and end product production.

This can be done in an industrial kiln to great satisfaction. Tight packed wood with restricted air flow also seems to work okay. The earthen kiln that I have proposed for corn culture fits in between in terms of its ability to manage the process.

First and most important, the air flow must pass through an earthen wall several inches in thickness in order to reach the hot zone. This strictly limits the amount of oxygen and its velocity.

Second, the combustion is primarily fed by the heat generated from light gases such as methane which ignites first closest to unburnt material producing the most heat directly were it is needed, continuing the reduction process. Heavier unburnt volatiles enter the chimney were they may or may not be consumed if there is any remaining oxygen. These hot gases are then forced back into the stack at the top of the chimney traveling into the corn and back through the soil cap. Two things happen. A lot of the produced heat is absorbed by the unburnt corn stover preparing it for combustion. The gases then enter the soil giving up much of the unburnt volatiles including most pyrolysis fluids. They are also well distributed in the process and depending on the thickness of the soil cap, most are captured.

Once the fuel is totally processed, the capping soil is mixed with the reduced bio char and ash to properly distribute the combustion products throughout the soil. This virgin terra preta soil blend can then be taken in baskets or shovel loads to produce seed hills. Biological agents will quickly destroy any complex organics not already reduced by the heat leaving a carbon enriched soil that can hold nutrients for years as demonstrated in the Amazon. Rather importantly, they must also succeed in quickly reducing the high acid content of the pyrolysis fluid. That will need to be studied in field tests.

What I find particularly beguiling about this earthen kiln protocol is that it allows for quite a bit of variation in the air flow through changing the thickness of the earthen shell itself. This allows for a maximization of output over time. More importantly, this method is completely within the skill set and capital resources of every subsistence farmer in the world. He and his family merely need to be shown once.

From: Nikolaus Foidl <>

Date: Wed, 09 Jan 2008 16:28:52 -0400

To: ""<>

Conversation: Charcoal in soil

Subject: Charcoal in soil

Dear All!

Looking on the trials done so far with Charcoal in soil and terra preta, the most common plant used was corn so far. I do trials with charcoal since one year and I have as well soils at hand where huge amounts of forests after clearing where piled up in long rows and burned down, leaving behind ashes, charcoal and torrefied wood and all the condensates from the burning.( as well a good amount of soil burned together with the wood because the soil was on the roots and part of the logs and branches where covered by soil when they pushed the chained down trees to a row with caterpillars.

In the first 2 years only certain grasses ( brachiaria) would grow on those stripes. After some 3 years the planted corn and soy and sunflower show pronounced growth in the beginning but after about 60 to 70 days all plants in the field reach the same height and have the same state of development.

Looking at the harvest data there is no significant difference between charcoal and non charcoal in fertile well fertilized land not suffering drought. If there is drought during the development of the plants then the charcoal plot is more sensible and shows earlier drought damage in the plants.

If you make a mass balance over the amount of forest cut down and dragged with a caterpillar from a stripe of 50 meter each side to a small long heap of about 15meter width then you accumulate some 5 times the volume of the intact forest in the stripe of 15 meter or you concentrate the amount of 5 ha forest in one ha area and burn it . If we suppose a average dry mass yield of total biomass per ha (including roots) of some 200 to 250 tons this would be some 1000 to 1250 tons of dry biomass burning in this ha.

From sampling I can estimate that there are some 150 to 180 tons of partially or fully charred material per ha in the burning zone. So this leaves us with a huge amount of ashes in the same area. As most of the material are trees with an average diameter of 15 to 20 cm ( some are more then 60 cm, but most are smaller brush like trees) we have a good amount of barks with quite a high ash content. Wood without bark is in the range of 0.3 to 0.8 % ash and barks are in average around 7 to 8 % ash, some more.

Do you have any idea what this naturally reduces to in terms of elemental charcoal? Otherwise the amounts appear excellent and suggest that modern land clearing could be judiciously used to sequester a lot of carbon.

We urgently need to make mineral mass balances about the ashes and we need to know as well in which chemical form those ashes are in the soil and to what chemical form they convert. From the first look it seems to me that potassium and calcium and then magnesium and phosphor would be the mayor constituents.( someone has figured out the plant availability of those ashes?)

Now imagine that the indios additional used these burn and char areas as waste disposal and most of there waste where ashes from cooking fire and rests from there meals like fish heads and spines or bones or non edible parts of the animals beefing there diet ( as well needed a mass balance over at least a period of several tens of years to get a grip on quantities and content of minerals) then you easy can imagine that the terra preta sites are an enormous accumulation of minerals in different chemical forms. The adding of biologic material enhances whatever biology is working there and for sure will enhance growth of whatever plant you grow there.

We all believe that this is likely, but I also think that the land needed by a family was at least four or five acres. That means a pretty broad distribution of human and fish waste into the field. Has anyone mapped distribution over several acres to find out if it was consistent. If I were personally handling high grade wastes in such a setting, I would focus on the household garden to get the biggest bang for my effort. Of course a communal village could well have shifted this every several years.

Now the charcoal does not play an important active role in the beginning but degradation over the centuries transforms the charcoal into more stable chemics like humic acid and fulvic acid etc. which have high interchange capacity and high chelating capacity.

Is this a derivative of pure carbon or remnant organics? Does terra preta show such an acid profile? If not why not?

Maize reacts very strongly to high amounts of potassium ( the mayor ingredient of ashes)as well does soy and sunflower. Brachiaria as well is addict to high potassium. Other grasses do have problems with high potassium and do not grow in the first years in those burned areas.( dont think that this is a coincidence)

Conclusion is that we may be get distracted by fast visible effects on corn and other potassium and only relate those effects with charcoal but not with ashes and other micro minerals accumulated in waste disposal sites.

I believe in several enhancing effects of charcoal like vigor enhancing from the liquids produced during charring but I think there is very low direct short time effect from charcoal itself on growth of plants ( first 10 to 50 years). There is without doubt a indirect sink and source effect by its capacity to adsorb micro and macro nutrients.

Ancient terra preta soils are been continuously cropped over decades without significant fertilization. This implies that the carbon essentially fixed nutrients in the growing zone. Otherwise fertility would have collapsed.

Best regards Nikolaus

Wednesday, January 9, 2008

Terra Preta Commentary,Dave Yarrow,Gerald Van Koeverden,Larry Williams,Duane Pendergast

I posted yesterday’s posting on the terra preta group and got some good feed back that is helpful. Formating presents my response first before the comment and it was a bit too much trouble to get it the other way around.


I totally agree, but they can be associated with the time of manufacture and can powerfully indicate the principal crops. Their actual presence is actually anomalous for the region in any event, or at least corn is.

What I have been able to extract to date is the pollen evidence for corn and cassava culture. And yes large chunks of wood charcoal should retain cellular information that can support identification. The problem we have with effectively powdered soft plant charcoal is that it may not be that easy and could have been easily overlooked.

I would have screened the material and picked out the nice shiny chunks reasonably assuming this was representative of the fine powder and been totally misled. This is however a question that may be answered by a specialist in this type of identification who is forewarned. Do we have samples to hand and a specialist? Most identification of this type is focused on wood identification.

Actually, my kids have access to the UBC forestry faculty who would be able to do this type of work. They may even be able to char some corn stover in an oven to compare while we are at it.

does someone have good samples of terra preta?.

----- Original Message ----
From: Gerald Van Koeverden <>
To: Robert Klein <>
Sent: Tuesday, January 8, 2008 2:41:43 PM
Subject: Re: [Terrapreta] Early Terra Preta Production

Pollen evidence only tells us what plants grew in the area, not what the charcoal was made from. As you can see by the quote from a study below, scientists have the means of identifying both the age and species of the source origin of charcoal buried in the soil. Its called "soil forensics." Certainly, it must have already been done for terra pretas??

"The charcoal collections were carried out in the main massifs of present-day rainforest between latitudes 15-degrees-30'S and 19-degrees-15'S and longitudes 145-degrees-E and 146-degrees-30'E. All charcoal was collected from locations which precluded the possibility that the charcoal had been transported. Much of the charcoal retained cellular structure, and the taxonomic source was determined using an electron scanning microscope and wood identification keys. All positive identifications belonged to the genus Eucalyptus. Radiocarbon dated samples revealed ages between approximately 27,000 BP and 3500 BP with the majority of samples in the period 13,000-8000 BP."

Gerrit Van Koeverden


Hi David

That is good information and like yourself, I wonder if forensic analysis will help us. Thanks for mentioning the three sisters. I have a great deal of respect for the achievements of our agricultural forebears and the corn bean pumpkin cycle is one of the great crop innovations ever. The beans are nitrogen fixers and this allows vigorous growth in the corn. Pure genius. Now if the seed hill is made from corn biochar, I almost believe that we can crop anything.

Weed infestation is fought by close spaced weeding, and after repeating the cycle several seasons, we can expect the infestation to be much less. The seeds in the soil are depleted. Also the only soil turning will be caused by the removal of weeds in these original conditions. This will also reduce the exposure of new seeds.

In other words, aggressive weeding practices can work even in the jungle, as long as you are able to get back in almost every day. That also tells us the limiting factor for these early agriculturists in the Amazon. The problem will be much easier in temperate soils.

Thank you for this input. We today forget the labor cost of freshly clearing and initially maintaining a piece of land. It must be a bitter pill for slash and burn farmers to abandon recently cleared rain forest for lack of fertility.



----- Original Message ----
From: "" <>
Cc: Robert Klein <>
Sent: Tuesday, January 8, 2008 7:25:29 PM
Subject: Re: [Terrapreta] Early Terra Preta Production

thanks, robert, for keeping this important discussion alive. the
relax assumption is charcoal = wood. but we need a broader
perspective of likely feedstocks for char production.

35 years ago, living in new mexico, i learned the navajo method to
make pottery by firing the ots in a pit filled with dried cow pies --
areadily available and abundant resource in that arid climate. worked
wonderful. it was common knowledge how to close up the pit, and
create a reducing fire that yielded beautiful black pottery. of
course, before the spaniards appeared 500 years go, there were no cows
in the southwest.

cornstalks make excellent feedstock to make biochar -- or just for
cooking in the kitchen. especially tropical strains of corn, which
often grow 12 to 15 feet tall. i grew some guatamalan corn in my
backyard garden in upstate NY a few years ago in a classic three
sisters garden, and was startled how high the stalks grew.
unfortunately, before they tassled, the frost killed them.

however, my own conclusion is indigenous amazonians used more than
crop residues. fertile soil in a tropical climate erupts with an
abundant diversity of green growth. maintaining cropland means steady
efforts to remove weeds, bushes and saplings sprouting from the soil.
i doubt the indigenous growers -- mostly the women -- practiced the
kind of clean cultivation of modern farmers, where the soil is swept
bare except for the designated crop. indigenous weed removal would
have been more selective and thoughtful.

i would guess that the average amazon field produced far more weed
biomass each year than crop residue. and most of this would have been
non-woody weeds that will crumble easily into dust once converted to
char in a pottery kiln. how can forensic soil analysis identify this
non-woody biochar after 300+ years of residence in the soil?

david yarrow


Hi Larry

This will take a bit of trial and error to shake out properly but I can make a couple of comments. The roots can be overlapped a couple of times to get a thicker wall and better internal packing. This has to be played with in the field until we get it right. The main task is to create a thick enough wall of mud that is still porous enough to permit incoming slow airflow. This will vary with the soil type. The top of the stack can be well mudded of course.

It is a combination of slow incoming air and exiting combustion gases reducing the stover that makes this work. I suspect that slower works best as long as it is not so slow as to allow too much heat loss. It would have to be tended by a chap with a shovel to throw dirt who develops the necessary experience. Recall that a properly managed industrial system takes a good 12 hours to do its job, and then you have to wait for it to cool off.

I am skeptical about even alder since the root ball is not compact, or at least I do not think so. i never tried to pull one or if i did I was singularly unsuccessful. Corn on the other hand is a sweetheart to pull. The disc is perhaps nine inches across and the stalk with leaves is a good inch or so. It could not be designed better for a planned packing procedure. The only question is what packing plan will work best. For that we need to go do it.

Unfortunately i no longer have a corn field at my finger tips, so I need access to like minded folks to do field tests.

The main thing about corn is that we can tight pack the stalks themselves, preventing uneven burning and hotspots that would destroy a lot of product.

I am pleased that you are experimenting. There are plenty of problems with wood charcoal, but after all that work is done to make this very special product we have to actually crush it. This means the use of grinding stones to reduce tons of char each and every year to a usable powder. My sense is that this is way too hard and that it never happened that way. Corn and other soft plant residues completely eliminates this problem. And there is enough corn stover per acre to prove the value of the method the very next season.

A group of harvesters made it work the first time and it was then quickly adopted. I suspect that we will discover that this method was far more widespread that realized but used only occasionally in drier climates. It will take soil analysis to find that out but to date no one has really looked, or has misidentified any powdered charcoal seen.

A microscopic test procedure that we could trust would test that hypothesis.


----- Original Message ----
From: Larry Williams <>
To: Robert Klein <>
Cc: Miles Tom <>
Sent: Tuesday, January 8, 2008 3:04:34 PM
Subject: Fwd: [Terrapreta] Early Terra Preta Production... and a Western Red Alder fantasy

Robert-------Thanks for reposting this information. After making
charcoal with Richard Haard, I can say that it takes a lot of work to
build and manage a firing and have wondered how we could afford to
make a mound type firing with very high priced fuel or no fuel. I am
into efficiency. Richard has followed the work of John Flottvik and
has received a fine grade of charcoal as a result. With many thanks
for John's support, free charcoal is not in the cards in the future.

I fully agree that transporting organics to a distant site makes no
sense or should I say "cents". Currently, we plan to do another
firing of wood in a few months for acquiring more charcoal and to see
what we can learn about the products from a firing. It seem that we
should consider doing a field burn in the late fall with corn stalks
to learn of the difficulties of using stover material. I would assume
that freshly dug damp clayey soil is essential in the process that
you describe.

We live under some regulations concerning air quality and this may
mean that the fall timing of a test may be a problem.

Have you made stover charcoal? It would seem that the stacked roots
would need some mudding to better seal the firing chamber. I have
wondered is there is a fire proof blanket that could be used instead
of dirt if we tried a similar technic using small Western Red Alder
trees as you used the roots of the corn plants. As I write this it
comes to mind that I might be able to use a mixture of hay/ straw/
grass and clay to provide sealed surface to contain the firing
chamber. In local areas of high water tables young and old alder
trees have a flat roots mass. I might be able to use a jute mesh or
stuff the spaces between the roots with hay/ straw/ grass and clay to
assist in holding the surface together because the Alder roots are
not close knit. Using alder as the wood source would allow for a year
round firing potential... a fun fantasy. As you may be able to tell I
am writing as I work out the details.

With a stover kiln, how air tight do you think that it was? I have an
idea that it was fairly well sealed?

I much appreciate your thoughts-------Larry



The persistence of charcoal is ample evidence that charcoal resists any form of chemical weathering which makes sense but needed to be proved. Terra preta proves it. It is not resistant to mechanical weathering, however,and the type of corn char that we are proposing would start of been very fine. The remaining question is whether any particles large enough to show cell structure would survive. It is very fragile stuff.

The pottery shards may do some magic, but I think that will be a needle in a haystack, as the clay would be worked on the river bank and sun dried there.



----- Original Message ----
From: Gerald Van Koeverden <>
To: Greg and April <>
Cc: Terra Preta <>
Sent: Tuesday, January 8, 2008 6:36:58 PM
Subject: Re: [Terrapreta] Early Terra Preta Production

Nobody would bother hiring a soil forensics scientist who has to depend on finding perfect specimens encased in ceramics or preserved in amber in order to make some deductions...


Hi Duane

Not as nicely as wood, but it should be possible to take it to the high probability level while confirming the use of fast growing annuals.


----- Original Message ----
From: Duane Pendergast <>
To: Robert Klein <>
Sent: Wednesday, January 9, 2008 10:57:43 AM
Subject: RE: [Terrapreta] Early Terra Preta Production


I got that the point of the eucalyptus example was simply to point that examination of the charcoal can reveal it’s source, presumably from microscopic structure. I wonder if corn charcoal is similarly identifiable

Duane Pendergast