New Allies In Arctic Oil Scramble

Germany And Norway Form Partnership, While Russia Plans Oil Exploration

They all say it’s not a land grab. Really, it isn’t. It’s an oil grab.

The scramble for the oil and other natural resources at the top of the world intensified — quietly — this week, as Norway and Germany announced a new oil exploration partnership, the Daily Telegraph reported today, and Russia confirmed its state-controlled oil companies would do its business in the Arctic, Russian state media reported yesterday.

The neo-colonial overtones were unmistakable last month when Russia planted a flag at the North Pole, even it if was little more than a publicity stunt. Canada decried the “15th Century” tactics, and the United States sent a ship — on a purely scientific mission, it claims — to the Arctic, even as the Senate continues to drag its feet on the signing of the U.N. Convention on the Law of the Sea, the key treaty that governs territorial claims in the open ocean.

Why is the icy realm suddenly so lucrative? First, global warming is opening up the ice. The extent of sea ice in the Arctic reached a record minimum this year — and a full month ahead of the peak of the Arctic summer free-ice period. Second, as much as a quarter of the world’s untapped fossil fuel reserves are locked under the remaining ice.

With so many questions remaining about the world’s supply of oil — a growing, if fringe, group of “peak oil” analysts believes the world is nearing a period when demand will far outstrip supply — any country that gets a lock on those reserves could wield tremendous power in the coming decades.

Oil grab? Scientific exploration? Call it what you want. It’s the geopolitics of global warming and peak oil, and the game is getting interesting.

Dan Shapley/ News Editor Blog

Mold and Depression May Be Linked

If you have ever seen, through teary eyes, the menacing spread of mold along the walls of your house, you know that the mycotoxins it releases can bring flu-like symptoms and respiratory problems.

When mold grows out of control, some people decide to abandon their homes rather than live with a constant cold. For those who are thinking about toughing it out, there is disturbing new research indicating that mold may damage the brain.

When suspicion about mold’s neurotoxicity started to build, Dr. Juliana Baldo performed a study for the Northern California Health Care System. Dr. Baldo found that a significantly higher percentage of those exposed to mold at home and work had impaired visuospatial learning, visuospatial memory, verbal learning, and psychomotor speed.

In addition to cognitive defects, exposed subjects were at greater risk for Axis I and II DSM-IV diagnoses, and they scored higher on the Beck Depression Inventory. The connection between depression and mold was reinforced yesterday by a press release from Brown University. Dr. Edmond Shenassa analyzed data from the Large Analysis and Review of European Housing and Health Status (LARES) study to look for patterns in the reports of depression.

Ironically, as he describes in the press release, Dr. Shenassa began this analysis in an attempt to debunk a theory that she was deeply skeptical of: We thought that once we statistically accounted for factors that could clearly contribute to depression – things like employment status and crowding – we would see any link vanish. But the link did not vanish.

The more Dr. Shenassa focused on the LARES data, the more clear it became that those living with mold were suffering mood problems in addition to physical symptoms like wheezing and sore throat.

Dr. Shenassa posits three possible explanations for the link: Respondents may be depressed because of their physical symptoms. If you are kept up all night coughing, you are unlikely to wake up cheerfully in the morning. They may be depressed because they feel that they are living in an unpleasant environment that they can’t improve (He fails to point out that the correlation could just as easily be flipped to say that depressed people are less likely to vigilantly maintain their homes).

It is difficult to resolve the ambiguities for this explanation. For example, post-Katrina New Orleans has elevated rates of depression and mold. Are citizens depressed by the sight of the mold they live with, or by the flood that took their friends and possessions to leave only mold and wreckage in exchange.

The most eldritch explanation is that mold directly affects the brain. This explanation could not be confirmed by the LARES study, but it is certainly plausible. Today, Michigan State coincidentally presented evidence that mold can destroy neurons.

Researchers exposed mice to fumes from black mold and found that their sense of smell was impaired. Satratoxin G from the fumes specifically destroyed olfactory neurons. The mice were exposed to toxin levels no greater than those that humans could expect to encounter in moldy homes, so these results may have grave implications for owners of damp homes.

Dr. Shenassa plans to conduct further research into whether human neurons are being destroyed by mold. Until the results are in, keep your house dry and look out for suspicious discolorations and gloomy thoughts.

United States, China Clash over Peak Oil May Endanger World Peace

By Ann Weaver Hart

Peak Oil may have put the United States on a collision course with China as the two nations compete for African oil reserves. "Peak Oil" refers to the fact that worldwide, per capita petroleum production peaked in 1979. Owing to population growth, even though more actual barrels of oil per day are extracted, the amount of oil pumped per person continues to drop.

American companies helped create the situation, but seem unconcerned over the prospect of facing off with China over petroleum.

In the late 1990s, one of GM's annual reports focused on that company's efforts to open the Chinese market to American-made cars. The report stated that GM intended to bring personal transportation to 1 billion Chinese. Investors and oil companies loved the idea of practically limitless profits, and GM continues its commitment to personal mobility in heavily populated Asian nations today.

In the United States, auto makers, encouraged by weakened environmental standards, produced and marketed gas-guzzlers like turbo-charged pickups, SUVs, and Humvees, which Americans bought in droves.

After the bombing of the World Trade Centers, Americans were barraged with advertisements for vehicles with low- and zero-interest loans. These promotions were almost exclusively for high-consumption vehicles. There were efficient vehicles being produced.

Toyota introduced both the Echo, a four-cylinder wonder that got 40 mph and the Prius, a gas-electric hybrid during this time, but the vehicles went nearly un-promoted. Soon after WTC, the U.S. military deployed to countries where petroleum production was the major business, coincidentally destabilizing governments and the oil markets, and causing gasoline prices to first double, and at times, triple.

Transportation is not the only petroleum-dependent industry in the United States. Prices of agricultural products are beginning to rise with production costs, and as the demand for agriculturally produced fuels places upward pressures on the price of corn.

Meanwhile, auto makers are creating a Chinese version of the American dream, with a car in every driveway, and the Chinese are faced with a rapidly growing demand for gasoline that has already outstripped domestic production.

At present, the U.S. military is present in Afghanistan and Iraq, and the current administration is eyeing Iran. Meanwhile, Chinese companies are busy in Africa attempting to stake their claims to that region's black gold. Not to be outdone, the United States Department of Defense is preparing AFRICOM for operations beginning in October.

In a Defense Department report, officials downplayed the military aspect of the operation, stressing its economic and diplomatic aims, but the organization is responsible for security, a primarily military objective, and is headed by General William E. "Kip" Ward.

Meanwhile, American and Chinese citizens burn as much gasoline as they can comfortably afford. Hybrid cars are expensive and still consume gasoline. Petroleum resources are finite.

The Chinese want oil, and lots of it. What remains to be seen is what they or the United States are willing to do to get it.

###

Read more about Peak Oil

Watch Peak Oil Video

Whistle blowers get shaft in Iraq cases

One after another, the men and women who have stepped forward to report corruption in the massive effort to rebuild Iraq have been vilified, fired and demoted. Or worse.

For daring to report illegal arms sales, Navy veteran Donald Vance says he was imprisoned by the American military in a security compound outside Baghdad and subjected to harsh interrogation methods.

There were times, huddled on the floor in solitary confinement with that head-banging music blaring dawn to dusk and interrogators yelling the same questions over and over, that Vance began to wish he had just kept his mouth shut.

He had thought he was doing a good and noble thing when he started telling the FBI about the guns and the land mines and the rocket-launchers -- all of them being sold for cash, no receipts necessary, he said. He told a federal agent the buyers were Iraqi insurgents, American soldiers, State Department workers, and Iraqi embassy and ministry employees.

The seller, he claimed, was the Iraqi-owned company he worked for, Shield Group Security Co.

"It was a Wal-Mart for guns," he says. "It was all illegal, and everyone knew it."

So Vance says he blew the whistle, supplying photos and documents and other intelligence to an FBI agent in his hometown of Chicago because he didn't know whom to trust in Iraq.

For his trouble, he says, he got 97 days in an American military prison outside Baghdad that once held Saddam Hussein.

Also held was colleague Nathan Ertel, who helped Vance gather evidence documenting the sales, according to a federal lawsuit both have filed in Chicago, alleging they were illegally imprisoned and subjected to physical and mental interrogation tactics "reserved for terrorists and so-called enemy combatants."

Corruption has long plagued Iraq reconstruction. Hundreds of projects may never be finished, including repairs to the country's oil pipelines and electricity system. Congress gave more than $30 billion to rebuild Iraq, and at least $8.8 billion of it has disappeared, according to a government reconstruction audit.

Despite this staggering mess, there are no noble outcomes for those who have blown the whistle, according to a review of such cases by The Associated Press.

"If you do it, you will be destroyed," said William Weaver, professor of political science at the University of Texas-El Paso and senior adviser to the National Security Whistleblowers Coalition.

"Reconstruction is so rife with corruption. Sometimes people ask me, 'Should I do this?' And my answer is no. If they're married, they'll lose their family. They will lose their jobs. They will lose everything," Weaver said.

They have been fired or demoted, shunned by colleagues, and denied government support in whistleblower lawsuits filed against contracting firms.

"The only way we can find out what is going on is for someone to come forward and let us know," said Beth Daley of the Project on Government Oversight, an independent, nonprofit group that investigates corruption. "But when they do, the weight of the government comes down on them. The message is, 'Don't blow the whistle or we'll make your life hell.' "

Bunnatine "Bunny" Greenhouse knows this only too well. As the highest-ranking civilian contracting officer in the U.S. Army Corps of Engineers, she testified before a congressional committee in 2005 that she found widespread fraud in multibillion-dollar rebuilding contracts awarded to former Halliburton subsidiary KBR.

Soon after, Greenhouse was demoted.

She now sits in a tiny cubicle in a different department with very little to do and no decision-making authority, at the end of an otherwise exemplary 20-year career.

In her demotion, her supervisors said she was performing poorly. "They just wanted to get rid of me," she says softly. The Army Corps of Engineers denies her claims.

"You just don't have happy endings," said Weaver. "She was a wonderful example of a federal employee. They just completely creamed her. In the end, no one followed up; no one cared."

But Greenhouse regrets nothing.

"I have the courage to say what needs to be said. I paid the price," she says.

Then there is Robert Isakson, who filed a whistleblower suit against contractor Custer Battles in 2004, alleging the company -- with which he was briefly associated -- bilked the U.S. government out of tens of millions of dollars by filing fake invoices and padding other bills for reconstruction work.

He and his co-plaintiff, William Baldwin, a former employee fired by the firm, doggedly pursued the suit for two years, gathering evidence on their own and flying overseas to obtain more information from witnesses.

Eventually, a federal jury agreed with them and awarded a $10 million judgment against the now-defunct firm, which had denied all wrongdoing.

It was the first civil verdict for Iraq reconstruction fraud.

But in 2006, U.S. Dist. Judge T.S. Ellis III overturned the jury award. He said Isakson and Baldwin failed to prove that the Coalition Provisional Authority, the U.S.-backed occupier of Iraq for 14 months, was part of the U.S. government.

Not a single Iraq whistleblower suit has gone to trial since.

###

Learn more about the need for an additional $50 billion for the Iraq war

Electric deregulation fails to live up to promises as bills soar

BENTON, Ill. — This wasn't supposed to happen with deregulation. Electric bills were supposed to go down. Instead, Ellie Dorchincez can almost see the dollars evaporating every time she turns on the lights or opens the freezer at her small Farm Fresh grocery store.

Her electric bill, which used to be about $800 a month, has jumped to $1,800. She's shut down a large freezer of frozen treats and now closes the store an hour early to cut costs but fears she still may have to raise prices and lay off some workers.

"I'm just trying to figure any way that I can right now to keep my business afloat," Dorchincez said. "My life is at stake here."

The cause of her distress is a common problem: the failure of deregulation to deliver its promise of lower electricity prices. In many states, it's had the opposite effect with sharply higher rates — 72% in Maryland, up to 50% in Illinois.

Not one of the 16 states — plus the District of Columbia — that have pushed forward with deregulation since the late 1990s can call it a success. In fact, consumers in those states fared worse than residents in states that stuck with a policy of regulating their power industries.

John Shelk An Associated Press analysis of federal data shows consumers in the 17 deregulated areas paid an average of 30% more for power in 2006 than their counterparts in regulated states. That's up from a 24% gap in 1990.

The idea was to move from a monopoly situation to robust competition for electric customers, with backers promising potentially lower rates in state after state.

"We are good at taking money out of people's pockets, but seldom can somebody rise on the floor and say we are going to save people billions over a specific course of time," Illinois state Sen. William Mahar, a lead proponent of electric deregulation, said when his chamber passed a deregulation bill in 1997.

But competition, especially for residential and small business customers, rarely emerged...

Utilities say markets are still adjusting to many years of artificially low rates that drove potential competitors away. They point to states like Illinois, where rate caps just recently were lifted and where there already is talk of reinstating them.

Consumer groups, however, say deregulation has had a chance to prove itself. In Texas, for example, competition did develop after rate caps ended — but the energy prices remained higher.

The AP analysis was based on the average electric rate that residential consumers paid each year from 1990 to 2006, according to numbers provided by the U.S. Department of Energy. Numerical and percentage changes in utility rates of both deregulated and regulated states were compared.

The analysis found more than a widening price discrepancy. Consumers in deregulated states also have suffered from bigger price swings, as rate caps in place when deregulation began in the late 1990s were lifted in the last couple of years.

Now those states' lawmakers are scrambling to figure out how to provide short-term relief for consumers while coming up with a long-term approach to get lower and more stabilized prices.

Ideas range from continued rate freezes — vehemently fought by utilities — to re-regulation of the industry.

"We said back then it was a raw deal for consumers. We now know it was a raw deal for consumers," said Johanna Neumann of Maryland Public Interest Research Group.

But an industry official argues that such comparisons don't adequately show the peaks and valleys in rates during that time, and among individual states. And utility executives say that over the last decade, rates in deregulated and regulated states have generally increased at similar levels, thanks largely to sharp spikes in fuel costs — not deregulation.

John Shelk, president of the Electrical Power Supply Association trade group based in Washington, D.C., says all states have seen large rate increases in the last decade, largely because of the increased price of natural gas and building power plants.

The average U.S. price for natural gas used by the electric power sector tripled from $2.76 per million Btus in 1997 to $8.21 per thousand cubic feet in 2005, a peak year for natural gas prices, according to federal energy statistics. Prices dropped slightly in 2006 but are projected to rise again over the next two years.

Utility officials say natural gas prices, environmental regulations, property taxes, the cost of building nuclear plants and other expenses in states that deregulated had already driven prices higher than in other states.

But years after many states deregulated, the rate gap between those states and regulated states had widened even more, experts and consumers advocates say, because consumers in deregulated states were left paying market prices — even though in many cases no competitive market existed.

"Now they're trying to come to grips with the reality that the market isn't working as well as they thought it would," Ken Rose, a senior fellow with the Institute of Public Utilities at Michigan State University, says of decision-makers in deregulated states.

Shelk says consumers in states like Illinois are seeing "sticker shock" because their rates were artificially low for years, and that forced a large increase to get back to market prices when rate caps were lifted.

"It's kind of like pulling the Band-Aid off," Shelk said. "I think you can fault the design that said you can roll these rates back and freeze them."

He predicts that the rate gap between deregulated and regulated states will shrink in the next few years when regulated states in the Southeast that rely heavily on coal-fueled power see prices soar under heavier environmental restrictions.

"It's so easy to focus only on the here and now ... and draw the wrong conclusions, which is 'Oh, gee, we're going to be better off regulating,' because we're not," Shelk said.

Shelk also contends that deregulation has been successful in states like Texas because, despite price jumps there, the competition has kept rates lower than they would have been under monopoly conditions, and still has produced a more predictable market for utilities and customers.

Exelon executive vice president Betsy Moler said rates in all states, regardless of their regulatory structure, have soared about 34% since 1996, mirroring fuel cost increases. That should overshadow critics' blame of deregulation, she argues.

"It's really not about deregulation," Moler said. "It's all about the cost of fuel."

Yet the last decade saw extended rate freezes in many states, and more recent data shows a returning gap between regulated and deregulated states once those freezes end.

Illinois' deregulation plan froze rates for 10 years. The freeze ended in January and rates immediately soared 30% to 50% for millions of people. Some have seen their bills double and even triple.

In Carterville in southern Illinois, Dorothy Petersen is looking for a second job to supplement her $1,000-a-month income after seeing her electric bill more than double, to $450.

A single mother with four kids — all with health or development problems — Petersen is heating only the kids' rooms and turning off lights.

"If it was just me, it wouldn't matter. There's things I could do," Petersen said. "But I have these kids."

Maryland faced a 72% rate increase last summer, until lawmakers stepped in and cut the initial jump to 15% to 25%. Now consumers must pay the remainder this summer, and advocates fear problems for the most vulnerable citizens — seniors, low-income households, working families.

Texas residents like recent retiree Bill Sebenoler of Arlington have more utility choices under deregulation, but that hasn't kept prices down. Sebenoler said his bill reached nearly $500 in September 2006, up 82% from a year earlier.

"It's irritating as hell, and that money would go somewhere else," Sebenoler said. "Something ain't working right."

Consumers in Delaware, Rhode Island and Connecticut have seen rate spikes in recent years, putting their rates among the nation's highest. That led to more than 25,000 electricity shutoffs in Rhode Island last year, a new state record, said Henry Shelton of the George Wiley Center advocacy group.

In Montana, Ed Eaton says he and other consumers have seen a 40% increase since rate caps were lifted in 2001. Eaton said he's cut expenses by eating more canned tuna for meals.

"I probably could have turned this into a weight loss program and benefited," said Eaton, a former state employee.

Deregulation was sold to state decision-makers as a boon for everyone. The thinking was that by separating electricity generators from distributors and letting the market determine prices, competition would thrive and customers would benefit from better choices and lower rates.

Experts and advocates acknowledge that some consumers have seen those benefits.

In some states, large industrial and business users have seen increased competition, giving them the ability to switch to other utilities. Residential users in states such as Texas also have a few more options. But besides a small group of commercial users, consumers in deregulated states have seen a disappointing result.

Instead of competition producing lower rates, the choices are between high or higher prices. In some states such as Illinois, residents have no choice but to get their power from one or two mega-utilities, who are passing on soaring costs for the power they're buying.

ComEd, for example, has about 3.3 million residential customers in and around Chicago, while Ameren covers 1.2 million customers in central and southern Illinois. Combined, they control about 98% of Illinois' investor-owned market, according to the Illinois Commerce Commission.

"In terms of price, you can't see the customers benefiting," said Rose, the Michigan utility expert.

Utilities say they're not to blame for consumers' higher costs.

Since they no longer produce their own power, the utilities in Illinois, for example, say they've simply passed on their higher purchasing costs to consumers, resulting in the higher rates.

While some of the generation companies have ownership ties to the retail utilities like ComEd and Ameren, Illinois regulators note they have strict rules to ensure affiliates do not trade information or conspire on pricing.

The utilities also note that they warned consumers last year about the pending increases and offered assistance through some financial aid and a phase-in plan.

"I think we've done all the things we know how to do as a utility to soften the transition into the new rates," ComEd CEO Frank Clark said in February.

The poster child of deregulation failure is California, which saw a combination of skyrocketing rates and service problems before scrapping the experiment.

Some other states such as Virginia tried deregulation but rejected it after it didn't provide lower rates.

States that did embrace deregulation now are trying to figure out what to do next.

In Illinois, lawmakers are debating rolling back rates to 2006 levels and freezing them for up to three years. They're also negotiating with the utilities for millions of dollars in rate rebates for consumers hit hardest by the increases.

Re-regulating the market is a popular idea. State-owned utilities are another possibility. Utilities and their advocates are urging caution for states considering dumping deregulation.

They say competition couldn't thrive under rate caps but should now that many of those caps have been lifted and the market is determining rates.

The utilities also warn that any further rate rollbacks and caps could create financial disaster, sending them quickly into bankruptcy if they're forced to buy power at higher costs than they can recoup from customers.

Even so, consumers like Dorchincez are looking for relief now.

In addition to the problems at her grocery store, Dorchincez got hit at home, where her bill jumped from $230 to $700. She's looking to cut back wherever she can — turning down the store's thermostat, shutting off other freezers and soda machines, turning off lights in the parking lot.

Consumer advocates say states should be able to see the folly that deregulation created and should act soon to prevent more consumer suffering.

"It's never going to work.

There's never going to be robust competition created," said David Hughes of Citizen Power, an advocacy group covering Pennsylvania and Ohio.

"It just doesn't lend itself to the volatility of the marketplace."

By Ryan Keith, Associated Press

Future of incandescent bulb dims as energy-efficient options gain power

WASHINGTON (MarketWatch) -- If U.S. lawmakers have their way the lights may soon go out on Thomas Edison's greatest invention -- the incandescent light bulb. The 19th century inventor brought illumination to the world's fingertips but according to Congress his invention isn't efficient enough for an age anxious about energy supplies.

Edison figured out how to create light by feeding electricity to a slender piece of metal inside a bulb until it was hot enough to glow. But little of the energy consumed during this process is used to produce light."

Only 10% of the power used by today's incandescent bulbs is emitted as light, while the other 90% is released as heat," Rep. Jane Harman, D-Calif., said when she introduced her legislation to ban standard light bulbs. To eliminate this waste, Harman has proposed legislation that would effectively eliminate incandescent light bulbs from store shelves nationwide as early by 2012.

Her proposal was incorporated as part of an energy bill passed by the House of Representatives earlier this month. A Senate energy bill passed in June does not contain a similar provision but does express support for raising the efficiency standard of light bulbs over the next 10 years. The two chambers will try to reach a compromise on energy legislation in the fall.

Though the incandescent light bulb has logged more than 125 years as the reigning light technology with little competition, lawmakers supporting the legislation see the 4 billion light-bulb sockets in American homes as an obvious way to curtail energy consumption and reduce emissions of greenhouse gasses.

Democratic lawmakers think compact florescent lights and other lighting technology under development can fulfill the nation's lighting needs more efficiently.

"By simply replacing the light bulbs in their homes, our constituents will be saving money in addition to energy," Rep. Jay Inslee, D-Wash., said during the House floor debate this month.

If every U.S. home replaced one light bulb with a compact florescent light, the country would save more than $600 million in annual energy costs, according to the government, which has a Web site with information on compact florescent bulbs. Visit the site.

Not everyone is willing to shatter Edison's legacy. Rep. Ted Poe, R-Texas, has criticized the provision, saying it turns the government into the "light bulb police business."

Other legislators think compact florescent technology hasn't come far enough and that it fails to provide the same quality of light as incandescent bulbs. Rep. John Peterson, R-Pa., has compact florescent bulbs in his home but says they are not the equivalent of incandescent bulbs.

"They are not very bright. They are not good for reading," Peterson said on the House floor. "They buzz sometimes, they just buzz like a transformer."

Still, a concerted marketing effort by lighting manufacturers such as Royal Philips Electronics which hope to sell these alternative lights, has emboldened lawmakers to push for a total parting with the incandescent bulb.

The legislation would mean a change in consumer buying habits for an overwhelming majority of U.S. homes.

"This will mean a complete transformation of the [lighting] market," Jim Presswood, energy advocate for the Natural Resources Defense Council said.

Second time around

The House energy bill would mandate an increase of more than 30% in the lumens produced by standard 60 watt to 100 watt bulbs, between 2012 and 2014. Lumens are a measure of the total amount of light generated. A standard 100-watt bulb produces about 1,600 lumens.

"What we know as today's incandescent light bulbs would not be able to meet this standard," Jeff Harris, vice president of programs at the Alliance to Save Energy, said in an interview.

Current compact florescent lighting technology would be able to meet this requirement, according to Presswood. These compact florescent lights use less electricity to produce ultraviolet light that is transformed into visible light.

Compact florescent lights may seem like an unlikely savior to those who remember their debut in 1979. They were a consumer flop and made little headway in the U.S. in the 1980s and '90s amid complaints of bulb burnout, poor light quality, buzzing noise and high prices. Since then they have seen a quirky redesign and now resemble the shape of a cork screw.

Certain enhanced halogen lights -- known as halogen incandescent lights -- which are also sold today would meet the standards set in 2012 and 2014, said Harris.

These lights are 30% more efficient than today's incandescent bulbs. "It is incandescent technology but an improved incandescent," Harris said.

In 2020, the standard would step up dramatically and lights would need to emit at least 300% of the brightness emitted by the 100 watt incandescent bulbs available today. Incandescent bulbs will be unable to meet this standard but compact florescent light technology should be able to, experts say.

Anticipated advances in so-called LED lighting -- light comprised of semiconductor light-emitting diodes -- could bring another option to the market.

Long-term savings, higher cost up front

Supporters see the provision as a way to pare rising consumer energy costs. "Since indoor and outdoor lighting accounts for up to 15% of energy use in the average residence, inefficient light bulbs can consume large amounts of excess energy," Inslee said during the House floor debate.

The savings that come from switching bulbs can add up, Harris said, though consumers will have to lay out a bit more cash up front when buying them. Compact florescent lights and halogen incandescent lights cost in the $2 to $3 dollar range but both last longer than incandescent bulbs, Harris said.

The 2012 to 2014 standards would bring a savings of about 30% to the lighting part of homeowners' electricity bills, Harris said. The 2020 standard would lift the savings to around 75%.

A manufacturer of florescent bulbs, has a calculator on its Web site that lets users determine the savings that comes with replacing bulbs. Replacing 10 of the standard 60 watt bulbs and five 100 watt bulbs with equivalent compact florescent lights would save a homeowner $120 a year or $656 over the life of the bulbs, according to the site. Check out the calculator.

The environment will also benefit if the standard light bulb heads into retirement, according to supporters of the legislation. Using less energy means less demand for electricity, which in the U.S. is predominantly generated by power plants that run off of large amounts of coal and natural gas.

One energy-efficient bulb can prevent the release of over 450 pounds of greenhouse gases, according to Harman. The 2020 standard in the House energy bill would slow the growth of U.S. emissions by roughly 104 million metric tons of carbon dioxide, or 1.4% of U.S. greenhouse gas emissions in 2005.

Corporate market the key?

Not everyone thinks the government needs to intervene to make compact florescent lights take off and the corporate rather than the residential market may be the key to making a serious cut in energy consumption.

"New CFL bulbs are becoming more mainstream without the need for government intervention," according to a July 31 analysts' note from Thomas Weisel Partners LLC.

"We see a gradual increase in replacement rates with new low power usage bulbs over time. We see a big market for residential replacement but believe the corporate market is where to make the biggest dent," the report continued…

GM Testing Engine That Could Up Fuel Savings by 15%

DETROIT - General Motors Corp is testing a combustion engine that could increase fuel economy in traditional engines by up to 15 percent, the automaker said on Friday.

The process will help vehicles get more miles per gallon without requiring the emissions controls that increase the cost of engines.

The engine would save fuel by using compression of fuel and air, rather than a spark, to produce heat required to power the engine. GM is testing the technology in two drivable concept vehicles -- Saturn Aura and Opel Vectra.

GM said it is working to refine the engine before it will be available on the mass market.

"Although our development costs have been substantial, we have made tremendous strides," said Prof. Dr. Uwe Grebe, executive director for GM Powertrain Advanced Engineering."

Additional development costs, including research and testing programs, are required to make the technology ready."

The process ignites a mixture of fuel and air by compressing it in a cylinder, melding characteristics of a diesel and traditional internal combustion engine.

GM has also said it will begin road testing its Chevrolet Volt plug-in hybrid next spring and plans to produce the rechargeable car by late 2010.

Unlike earlier gasoline-electric hybrids, which run on a parallel system twinning battery power and a combustion engine, plug-in cars are designed to allow short trips powered entirely by the electric motor, using a battery that can be charged through an electric socket.


(Reporting by Jui Chakravorty)

REUTERS NEWS SERVICE

Stricter US Refinery Emission Rules Not Needed - EPA

WASHINGTON - Health risks linked with toxic air pollution from crude oil refineries are "acceptably low" and don't justify tighter federal rules, the US Environmental Protection Agency said Thursday.

The EPA was required to review its policy on refinery pollutants by a settlement reached in 2006 with environmental groups like the Sierra Club, who had sued the agency in 2005 for missing a 2003 deadline for issuing its review.

In a policy statement, the EPA declined to update refinery emission rules it issued in 1995 because "the risks to human health and the environment are low enough that no further controls are warranted."

Environmental groups said the rules would put the 90 million Americans who live within 30 miles of an oil refinery at increased risk of cancer and other health hazards due to higher exposure to chemicals like naphthalene, toluene and hexane, which the EPA defines as "hazardous air pollutants."

The lifetime cancer risk from exposure to refinery emissions from the proposal - 70 per one million -- is 70 times higher than federal limits, according to the Natural Resources Defense Council.

"We will strongly oppose the Bush administration EPA's do-nothing approach to cancer-causing pollution from oil refineries and urge them to require clean-up measures that will protect the public," said John Walke, an attorney at the environmental group.

The Sierra Club said the EPA was ignoring improvements in emission-reduction equipment since the EPA issued its rules in 1995 to comply with the Clean Air Act.

"The scientific evidence shows that these standards are not protective of public health as required under the Clean Air Act," said Alice McKeown at the Sierra Club.

The EPA said the 1995 standards have reduced emissions from refineries nationwide by about 53,000 tons per year.

The rules were a subject of an Aug. 2 meeting at the White House Office of Management and Budget, which included industry representatives from the American Petroleum Institute, American Chemistry Council and the National Petrochemical and Refiners Association.

"We appreciate the collaborative effort with the EPA to ensure that the risk information reviewed was accurate," said Bill Holbrook, a spokesman for the refinery group, which lobbies for big US refiners like Valero Energy Corp.

EPA said it could still require reductions from storage vessels and wastewater treatment plants at refineries, which could reduce toxic air emissions at 153 facilities by up to 4,600 tons per year.

The agency action is the end result of a risk-analysis process the EPA must conduct on refinery emissions every eight years to comply with the Clean Air Act.

The EPA is still weighing separate but related rules proposed in April to expand pollution controls on the nation's aging oil refineries, forcing companies to install emission-reduction equipment if they build or expand.

The EPA has also issued rules governing the amount of cancer-causing benzene in gasoline.

Story by Chris Baltimore
REUTERS NEWS SERVICE

Interior Dept. Poised to Relax Mountaintop Removal Regulations

The Associated Press
WASHINGTON - The Bush administration wants to quit requiring coal operators to prove that their surface mining will not damage streams, fish and wildlife.

Under proposed new regulations being issued Friday for public comment, strip mine operators would have to show only that they intend "to prevent, to the extent possible using the best technology currently available," such damage.

Ben Owens, a spokesman for the Interior Department's Office of Surface Mining, said Thursday that the proposed changes are intended to clear up "confusion regarding the requirements pertinent to mining in and around streams."

Current policy says land within 100 feet of a stream cannot be disturbed by mining unless a company can prove it will not affect the water's quality and quantity.

Interior officials have said that complying with that buffer zone requirement is impossible in "mountaintop removal mining," which involves shearing off the tops of ridges to expose a coal seam. Dirt and rock are pushed below, often into stream beds, a practice known as valley fill.

The new regulations would allow mining that would alter a stream's flow as long as any damages to the environment are repaired later.

Valley fills allowed under the old, 1983 regulations will still be permitted. The volume of rock that can be displaced to get to the surface of a coal seam and the area where that rock is put can be "no larger than needed," according to the proposal.

Environmentalists want such fills banned entirely.

"The Bush administration just doesn't give up in its quest to give away more and more legal protections to the mountaintop removal polluters," said Joan Mulhern, an attorney for the Earthjustice legal firm.

The latest changes to the buffer-zone rule were first proposed more than three years ago.
At a hearing in March 2004, opponents talked of floods and flattened peaks and of homes swept away or devalued in central Appalachia.

A lawyer for the National Mining Association said the mines' preference was to get rid of the rule entirely, because it is confusing and there are other protections for streams in federal law.
After a 60 day-comment period on the proposal, a final rule probably would not be issued before next year.

The International Race to Mine the Moon

Lab experiments suggest that future fusion reactors could use helium-3 gathered from the moon.

At the 21st century's start, few would have predicted that by 2007, a second race for the moon would be under way. Yet the signs are that this is now the case. Furthermore, in today's moon race, unlike the one that took place between the United States and the U.S.S.R. in the 1960s, a full roster of 21st-century global powers, including China and India, are competing.

Even more surprising is that one reason for much of the interest appears to be plans to mine helium-3--purportedly an ideal fuel for fusion reactors but almost unavailable on Earth--from the moon's surface. NASA's Vision for Space Exploration has U.S. astronauts scheduled to be back on the moon in 2020 and permanently staffing a base there by 2024. While the U.S. space agency has neither announced nor denied any desire to mine helium-3, it has nevertheless placed advocates of mining He3 in influential positions. For its part, Russia claims that the aim of any lunar program of its own--for what it's worth, the rocket corporation Energia recently started blustering, Soviet-style, that it will build a permanent moon base by 2015-2020--will be extracting He3.

The Chinese, too, apparently believe that helium-3 from the moon can enable fusion plants on Earth. This fall, the People's Republic expects to orbit a satellite around the moon and then land an unmanned vehicle there in 2011.

Nor does India intend to be left out. (See "India's Space Ambitions Soar.") This past spring, its president, A.P.J. Kalam, and its prime minister, Manmohan Singh, made major speeches asserting that, besides constructing giant solar collectors in orbit and on the moon, the world's largest democracy likewise intends to mine He3 from the lunar surface. India's probe, Chandrayaan-1, will take off next year, and ISRO, the Indian Space Research Organization, is talking about sending Chandrayaan-2, a surface rover, in 2010 or 2011. Simultaneously, Japan and Germany are also making noises about launching their own moon missions at around that time, and talking up the possibility of mining He3 and bringing it back to fuel fusion-based nuclear reactors on Earth.

Could He3 from the moon truly be a feasible solution to our power needs on Earth? Practical nuclear fusion is nowadays projected to be five decades off--the same prediction that was made at the 1958 Atoms for Peace conference in Brussels. If fusion power's arrival date has remained constantly 50 years away since 1958, why would helium-3 suddenly make fusion power more feasible?

Advocates of He3-based fusion point to the fact that current efforts to develop fusion-based power generation, like the ITER megaproject, use the deuterium-tritium fuel cycle, which is problematical. (See "International Fusion Research.") Deuterium and tritium are both hydrogen isotopes, and when they're fused in a superheated plasma, two nuclei come together to create a helium nucleus--consisting of two protons and two neutrons--and a high-energy neutron.

A deuterium-tritium fusion reaction releases 80 percent of its energy in a stream of high-energy neutrons, which are highly destructive for anything they hit, including a reactor's containment vessel. Since tritium is highly radioactive, that makes containment a big problem as structures weaken and need to be replaced. Thus, whatever materials are used in a deuterium-tritium fusion power plant will have to endure serious punishment. And if that's achievable, when that fusion reactor is eventually decommissioned, there will still be a lot of radioactive waste.

Helium-3 advocates claim that it, conversely, would be nonradioactive, obviating all those problems. But a serious critic has charged that in reality, He3-based fusion isn't even a feasible option. In the August issue of Physics World, theoretical physicist Frank Close, at Oxford in the UK, has published an article called "Fears Over Factoids" in which, among other things, he summarizes some claims of the "helium aficionados," then dismisses those claims as essentially fantasy.

Close points out that in a tokamak--a machine that generates a doughnut-shaped magnetic field to confine the superheated plasmas necessary for fusion--deuterium reacts up to 100 times more slowly with helium-3 than it does with tritium. In a plasma contained in a tokamak, Close stresses, all the nuclei in the fuel get mixed together, so what's most probable is that two deuterium nuclei will rapidly fuse and produce a tritium nucleus and proton. That tritium, in turn, will likely fuse with deuterium and finally yield one helium-4 atom and a neutron. In short, Close says, if helium-3 is mined from the moon and brought to Earth, in a standard tokamak the final result will still be deuterium-tritium fusion.

Second, Close rejects the claim that two helium-3 nuclei could realistically be made to fuse with each other to produce deuterium, an alpha particle and energy. That reaction occurs even more slowly than deuterium-tritium fusion, and the fuel would have to be heated to impractically high temperatures--six times the heat of the sun's interior, by some calculations--that would be beyond the reach of any tokamak. Hence, Close concludes, "the lunar-helium-3 story is, to my mind, moonshine."

So, is He3-based fusion untenable? In fact, Close is correct in his claims about how impracticable both deuterium-helium-3 fusion and pure helium-3 fusion in tokamak-based reactors would be. But there might be alternatives. For example, Gerald Kulcinski, a professor of nuclear engineering at the University of Wisconsin-Madison, has maintained the only helium-3 fusion reactor in the world on an annual budget that's barely into six figures.

Kulcinski's He3-based fusion reactor, located in the Fusion Technology Institute at the University of Wisconsin, is very small. When running, it contains a spherical plasma roughly 10 centimeters in diameter that can produce sustained fusion with 200 million reactions per second. To produce a milliwatt of power, unfortunately, the reactor consumes a kilowatt. Close's response is, therefore, valid enough: "When practical fusion occurs with a demonstrated net power output, I--and the world's fusion community--can take note."

Still, that critique applies equally to ITER and the tokamak-based reactor effort, which also haven't yet achieved breakeven (the point at which a fusion reactor produces as much energy as it consumes). What's significant about the reactor in Wisconsin is that, as Kulcinski says, "We are doing both deuterium-He3 and He3-He3 reactions. We run deuterium-He3 fusion reactions daily, so we are very familiar with that reaction. We are also doing He3-He3 because if we can control that, it will have immense potential."

The reactor at the Fusion Technology Institute uses a technology called inertial electrostatic confinement (IEC). Kulcinski explains: "If we used a tokamak to do deuterium-helium-3, it would need to be bigger than the ITER device, which already is stretching the bounds of credibility. Our IEC devices, on the other hand, are tabletop-sized, and during our deuterium-He3 runs, we do get some neutrons produced by side reaction with deuterium."

Nevertheless, Kulcinski continues, when side reactions occur that involve two deuterium nuclei fusing to produce a tritium nucleus and proton, the tritium produced is at such a higher energy level than the confinement system that it immediately escapes. "Consequently, the radioactivity in our deuterium-He3 system is only 2 percent of the radioactivity in a deuterium-tritium system."

More significant is the He3-He3 fusion reaction that Kulcinski and his assistants produce with their IEC-based reactor. In Kulcinski's reactor, two helium-3 nuclei, each with two protons and one neutron, instead fuse to produce one helium-4 nucleus, consisting of two protons and two neutrons, and two highly energetic protons.

"He3-He3 is not an easy reaction to promote," Kulcinski says. "But He3-He3 fusion has the greatest potential." That's because helium-3, unlike tritium, is nonradioactive, which, first, means that Kulcinski's reactor doesn't need the massive containment vessel that deuterium-tritium fusion requires. Second, the protons it produces--unlike the neutrons produced by deuterium-tritium reactions--possess charges and can be contained using electric and magnetic fields, which in turn results in direct electricity generation. Kulcinski says that one of his graduate assistants at the Fusion Technology Institute is working on a solid-state device to capture the protons and convert their energy directly into electricity.

Still, Kulcinski's reactor proves only the theoretical feasibility and advantages of He3-He3 fusion, with commercial viability lying decades in the future. "Currently," he says, "the Department of Energy will tell us, 'We'll make fusion work. But you're never going to go back to the moon, and that's the only way you'll get massive amounts of helium-3. So forget it.'

Meanwhile, the NASA folks tell us, 'We can get the helium-3. But you'll never get fusion to work.' So DOE doesn't think NASA can do its job, NASA doesn't think that DOE can do its job, and we're in between trying to get the two to work together." Right now, Kulcinski's funding comes from two wealthy individuals who are, he says, only interested in the research and without expectation of financial profit.

Overall, then, helium-3 is not the low-hanging fruit among potential fuels to create practical fusion power, and it's one that we will have to reach the moon to pluck. That said, if pure He3-based fusion power is realizable, it would have immense advantages.

My.TechnologyReview.com:

Bush must release global warming reports

SAN FRANCISCO - A federal judge ordered the Bush administration to issue two scientific reports on global warming, siding with environmentalists who sued the White House for failing to produce the documents.

U.S. District Court Judge Saundra Armstrong ruled Tuesday that the Bush administration had violated a 1990 law when it failed to meet deadlines for an updated U.S. climate change research plan and impact assessment.

Armstrong set a March 1 deadline for the administration to issue the research plan, which is meant to guide federal research on climate change. Federal law calls for an updated plan every three years, she said. The last one was issued in 2003.

The judge set a May 31 deadline to produce a national assessment containing the most recent scientific data on global warming and its projected effects on the country's environment, economy and public health. The government is required to complete a national assessment every four years, the judge ruled.

The last one was issued by the Clinton administration in 2000.

The administration had claimed that it had discretion over how and when it produced the reports — an argument the judge rejected Tuesday.

"The defendants are wrong," Armstrong wrote in the 38-page ruling. "Congress has conferred no discretion upon the defendants as to when they will issue revised Research Plans and National Assessments."

The plaintiffs — the Center for Biological Diversity, Friends of the Earth and Greenpeace — said the ruling was a rebuke to an administration that has systematically denied and suppressed information on global warming.

"It's a huge victory holding the administration accountable for its attempts to suppress science," said Kassie Siegel, an attorney for the Center for Biological Diversity, one of the plaintiffs that filed suit in Oakland federal court in November.

Bush administration officials were still reviewing the ruling Tuesday and could not comment on it directly, said Kristin Scuderi, a spokeswoman for the U.S. Office of Science and Technology Policy, which was named in the lawsuit.

But the administration is complying with the law, Scuderi said. The U.S. Climate Change Science Program is working on 21 separate reports on global warming's projected effects on the U.S and has started to prepare a new research plan, she said.

By TERENCE CHEA, Associated Press Writer

Bush changes tack on global warming

United States President George W Bush is under increasing pressure to tackle global warming, and has initiated an international summit on cutting emissions.

Climate change has been singled out as a key point for discussion at the APEC conference, due to start in Sydney in a little over two weeks.

But without the agreement of the world's biggest polluter, the United States, any consensus would be meaningless.

Recently Mr Bush invited the European Union and 15 other countries, including Australia, to take part in a summit at the end of next month to develop long-term voluntary goals to cut greenhouse emissions.

The United States is the world's biggest greenhouse gas emitter, responsible for almost 7.5 billion tonnes of greenhouse emissions a year. Yet the US has been dragging its feet on tackling the threat of global warming.

But Elliot Diringer from the Pew Centre on Global Climate Change says there are signs of change.

"I'd say it's possible that we could see comprehensive climate legislation signed while President Bush is in office. [But] I think it's more likely that that will come after the 2008 election," he said.

The Bush Administration has long opposed mandatory caps on carbon dioxide emissions - the major contributor to global warming - but its position is shifting.

Mr Bush recently made a surprise pledge to seek international agreement on long-term greenhouse gas reductions, inviting the world's biggest polluters, including Australia, to a meeting in Washington next month.

David Hawkins heads the Climate Centre at the Natural Resources Defence Council. He is urging the President to back legislation to curb global warming and to set up a carbon trading system before the conference.

"We have to be sceptical, unfortunately, because the President has taken his whole two terms of office talking about global warming but unfortunately not doing very much about it," he said.

Mr Hawkins says Australia should only attend the Washington conference if Mr Bush acts.

"From our standpoint, the countries that he's invited to come to this meeting should basically say... to our President, 'If you want us to come to this meeting we have to know that it's worth coming to'," he said.

Mr Diringer says action from the US is crucial to the global effort.

"The global effort really is at a standstill at the moment and that's primarily because the US has stood off to the side," he said.

"What we need now is for the US to adopt some mandatory limits on its emissions here at home and then to re-engage internationally and lead the effort to establish a really strong global agreement."

Mr Bush insists he is following commonsense policies when it comes to energy and the environment. He wants regulations to cut gasoline consumption by 20 per cent over 10 years, in part by producing 35 billion gallons of alternative fuels.

Energy legislation

The US Congress is a step ahead. This month the House of Representatives passed legislation requiring most utilities to produce 15 per cent of their electricity from renewable sources.

But the 786 Bill did not include an increase in fuel efficiency standards for cars and light trucks, which supporters call the most effective way of cutting oil consumption and reducing greenhouse gas emissions.

The Senate passed its own energy legislation in June. It does require better fuel mileage for vehicles as well as making sure half of all the new cars made by 2015 are capable of running on either 85 per cent ethanol or on biodiesel.

But so far, only individual politicians have been touting a cap-and-trade program for greenhouse gas emissions, and none of their proposals have been passed.

The House and Senate now have to sort out their differences before passing the revised legislation to the President.

Mr Diringer says the legislation signifies a major shift in political focus.

"The difference today from just six or seven months ago is really quite profound," he said.

"Congress is at this stage deeply engaged in the climate debate, focused very heavily on designing domestic legislation to set those mandatory limits."

Many US business leaders sense that carbon constraints are inevitable and are voluntarily reducing emissions. Seventeen US states have also vowed to reduce greenhouse gas emissions.

It seems that the American political climate is beginning to favour action on climate change.

ABC News

By North America correspondent Kim Landers

Peak Oil Forecasters Win Converts on Wall Street to $200 Crude

On a sweltering Tuesday in mid-July, in the fields outside Pisa, Italy, Willem Kadijk scribbles notes as a ragtag troupe of doomsayers predict the end of the Oil Age.

With his shaved head, jeans and sandals, Kadijk, 48, blends into a crowd gathered under a white tent to hear of the coming calamity. The death of cheap, abundant crude, the forecasters warn, might unleash war and plunge the world into a second Great Depression.

That's not the prophecy of some apocalyptic cult. Kadijk, a hedge fund adviser, had flown from Amsterdam to attend a conference on a geologic theory known as peak oil.

Proponents of this controversial idea say global oil production is now at or near its zenith. Once the flow crests and starts to decline -- and some geologists say it already has -- oil will no longer be able to slake the world's growing thirst for energy. The result will be the oil shock to end all oil shocks. The price of a barrel of crude will spiral to $200 -- and keep rising. To the peaksters, today's energy crunch is nothing next to the pain that will follow.

``Peak oil is a reality,'' says Kadijk, a senior equity salesman at Kepler Equities, an Amsterdam-based brokerage. He plans to start a fund to capitalize on what he sees as a looming crisis for the world's fossil fuel-based economy and the ultimate bull market in oil.

As energy prices soar and violence convulses the Middle East, the peak-oil movement -- an unlikely alliance of geologists, physicists, oil industry consultants and environmental activists -- is winning converts. Peak-oil ideas are bubbling up from scientific journals and offbeat Web sites, much the way warnings of global warming did a decade ago. For the first time, the peaksters have begun to grab the attention of Washington and Wall Street.

Congressional Caucus

U.S. Energy Secretary Samuel Bodman, former boss of Boston- based Cabot Corp., an oil and chemicals company, has asked the National Petroleum Council, which advises him, to investigate whether oil supplies can keep pace with demand. The U.S. Government Accountability Office, the nonpartisan congressional watchdog, is due to release a study on peak oil this November. Rep. Roscoe Bartlett, a Maryland Republican, has formed the Congressional Peak Oil Caucus to sound the alarm.

``The world has never faced a problem like this,'' Bartlett says.

Everyone agrees we'll run out of crude eventually. Oil, after all, is a finite resource: The Earth holds only so much of it. The controversial issue is when a global peak will occur -- and what will happen then.

Colin Campbell, a British geologist who popularized the peak- oil theory in his book ``The Coming Oil Crisis'' (Multi-Science Publishing Co. and Petroconsultants SA, 1997, 210 pages) says world production of conventional oil, the kind that comes from gushing wells, is reaching its apex.

End of Oil Age

Society isn't prepared for the consequences, Campbell, 75, says. It's too late to develop alternative sources of power, such as solar cells, nuclear reactors and windmills, to fill the oil gap before energy prices soar, says Campbell, who has a doctorate in geology from the University of Oxford and more than 40 years of experience in the oil industry.

``We have come to the end of the first half of the Oil Age,'' Campbell says.

Nonsense, says Russ Roberts, a spokesman for Exxon Mobil Corp., the world's largest oil company. Exxon Mobil, which has reaped record profits as the price of oil has surged, has taken out ads dismissing peak oil in U.S. newspapers such as the New York Times.

The Irving, Texas-based oil giant says the peaksters are being alarmist. In all, the world probably has 4 trillion barrels of oil left, four times the amount we have used so far, the ad says.

Time to Think

``The world is nowhere near running out of oil,'' Roberts says. Exxon Mobil geologists believe global oil production will keep rising through 2030, he says.

Cambridge Energy Research Associates, whose chairman, Daniel Yergin, is a leading peak-oil critic, says production will reach an ``undulating plateau'' sometime in the future.

``Our outlook goes to 2020, and we see no evidence of a peak,'' CERA geologist Peter Jackson says. ``Eventually, we will start to see a decline. There is still time to think about alternatives.''

Predictions of an imminent oil famine are as old as the industry itself. When production at the first U.S. wells, located in western Pennsylvania, began to decline in the late 19th century, some people predicted the country would soon run out of oil. Then crude was discovered in east Texas, whose oil fields yielded so much black gold that the Texas Railroad Commission capped production to support prices.

Peak Moment

In the past, Campbell or his disciples have forecast the oil peak down to the year or even the day only to push back the fateful moment. In 1997, Campbell said it would occur in 2001. Now, he says total production, which includes oil from deep-water wells and fuel derived from natural gases, will reach its height sometime after 2010.

Kenneth Deffeyes, a geologist and professor emeritus at Princeton University, first pinpointed Nov. 24, 2005, as the peak- oil date and then revised it to Dec. 16, 2005.

Campbell says the exact day or year isn't important. What matters is that peak oil is coming, and soon. Almost a century and a half after the first U.S. wells were drilled in Titusville, Pennsylvania, production has begun to decline in more than a dozen countries, including the U.S., according to the BP Statistical Review of World Energy. Production at the giant Cantarell oil field in Mexico is likely to decline 8 percent this year, according to Mexican state oil monopoly Petroleos Mexicanos.

U.S. Addiction

At a time when U.S. President George W. Bush has urged the country to break its addiction to foreign oil, the fact is, the U.S. is becoming ever more dependent on overseas crude. U.S. oil production peaked 36 years ago, in 1970, at 11.3 million barrels a day. Since then, output has fallen 39 percent, to 6.8 million barrels a day, or 8 percent of the world total, in 2005, according to BP.

Investors have started to listen to the peaksters. Billionaire Boone Pickens says he's a peak believer. So does Peter Thiel, who co-founded PayPal Inc. and now runs Clarium Capital Management LLC, a $2.1 billion hedge fund firm. Pickens, Thiel and other investors are positioning themselves to profit from what they say will be the biggest oil squeeze of all time.

Even some oil companies and industry veterans sound nervous. Chevron Corp. has run a series of full-page ads in U.S. newspapers that highlight surging oil consumption and declare, ``The era of easy oil is over.''

Chicken Littles

Thierry Desmarest, chief executive officer of Paris-based Total SA, told the World Gas Conference in Amsterdam in June that global oil production would peak in 2020. Matthew Simmons, whose Houston-based investment bank, Simmons & Co., trades oil and gas stocks, says Saudi Arabia's production may decline soon.

Alex Cranberg, chairman of Denver-based independent oil company Aspect Energy LLC, calls the peaksters Chicken Littles -- misguided souls who think the sky is falling.

In fact, Cranberg hired two people to dress in chicken costumes and hand out fliers dismissing peak oil at the conference Kadijk attended in July.

Like many oil-industry vets, Cranberg, 51, says market forces and technological advances will ultimately cure our energy ills. As oil prices rise, companies will be more willing to hunt for crude and extract it. They'll invest in expensive deep-water wells and new technologies to wring more oil from existing fields. Consumers will start conserving energy. Even now, stock market investors and Silicon Valley venture capitalists are pouring billions of dollars into companies developing ethanol, solar power and other alternative sources of energy.

$3-a-Gallon Gas

More and more, however, the peaksters are drowning out everyone else, Cranberg says. ``You can't turn around without seeing or hearing these ideas,'' he says. ``I think they are gaining.''
You don't have to be a geologist to understand why. The price of crude has tripled since 2000. In the U.S., $3-a-gallon gasoline has sapped consumers' confidence. Nearly half of Americans believe the economy is doing poorly, according to a July 28-Aug. 1 Bloomberg/Los Angeles Times poll. Fifty-nine percent of Americans expressed a negative view of Bush's handling of the economy.

``If oil was still at $20, no one would be talking about peak oil,'' says Manouchehr Takin, senior petroleum upstream analyst at the Centre for Global Energy Studies, a London-based consulting firm.

High oil prices are only part of the story, however. The world is straining to feed its energy habit. Today, we consume 85 million barrels of oil a day, according to the U.S. Energy Information Administration (EIA). By 2030, the world will devour 118 million barrels a day, as China and India emerge as economic superpowers.

Big Question Mark

No one knows for sure how much oil the world has. That's a big question mark because the peaksters say production will max out once half of the oil has been pumped. So far, we've extracted about 1 trillion barrels in all. In 2000, the U.S. Geological Survey estimated global resources at 3 trillion barrels, enough to push peak production out to 2037, according to the EIA. Campbell puts the total lower, at 2.5 trillion barrels.

Oil is certainly getting harder -- and more expensive -- to find and extract. Oil discoveries plummeted to 5 billion barrels in 2005 from 90 billion barrels in 1964, according to Campbell.
``Discovery is in long-term decline, and spending more money won't increase it,'' says Chris Skrebowski, editor of the London- based Petroleum Review, an industry journal.

OPEC's Stash

Oil companies have to find enough crude to offset dwindling production at existing fields, which can decline by more than 8 percent a year, and to keep pace with rising demand. Most of that increase will have to come from members of the Organization of Petroleum Exporting Countries, which are often cauldrons of discontent, war and terror.

The cartel's members -- Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela -- together sit atop 75 percent of the world's reserves and account for about 42 percent of total production, according to BP.

OPEC countries are hardly paragons of economic and political stability. Most of the terrorists who attacked the U.S. on Sept. 11, 2001, came from Saudi Arabia. The war in Iraq has hurt that country's ability to pump oil. Bush says Iran is trying to develop nuclear weapons. In Venezuela, President Hugo Chavez has said he wants to diversify oil exports away from the U.S.

In its 2005 Energy Outlook, Exxon Mobil says the combined production of non-OPEC countries will peak sometime from 2010 to 2020. OPEC will be able to fill the gap, the report says. OPEC produced about 30 million barrels a day in 2005; by 2030, OPEC would have to churn out 47 million barrels a day -- almost 57 percent more than it did last year -- to satisfy the world's needs, the report says.

Meeting the Call

``We believe the resource base will support this increase, assuming that investments in development are made in a timely fashion,'' the report says.

OPEC countries will invest a combined $100 billion in the five years through 2010 so they can increase output, OPEC spokesman Omar Ibrahim says. ``We are set to meet the extra call on OPEC to 2030,'' Ibrahim says.

Yet even now, OPEC nations are struggling to keep up. Since 2000, OPEC has gradually lost the spare pumping capacity its members can use as an emergency reserve to moderate prices. The cushion has dwindled to about 1.5 million barrels a day from 6 million barrels a day, Takin says.

What's more, neither the peaksters nor oil industry executives know for sure how much oil OPEC has and how much it can actually produce. OPEC countries haven't been transparent about their reserves or production capacity, says Mike Rodgers, a partner at PFC Energy, a Washington-based oil industry consulting firm. ``OPEC is the big unknown,'' he says.
Overstated Reserves

Many energy analysts believe OPEC nations began overstating their resources in the 1980s, when the cartel linked members' production quotas to the size of their reserves, says Mamdouh Salameh, an independent oil economist. In the late '80s, cartel members raised their reserve estimates by a combined 300 billion barrels even though none of them had actually found much more oil.

In his 2005 book ``Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy'' (John Wiley & Sons, 448 pages, $24.95), Simmons says the Saudis have pumped so much oil so fast that the country's biggest oilfields face declining output.

``Saudi Arabia is keeping everything in the dark,'' Simmons, 63, says.
Saudi officials have dismissed peak-oil theorists and suggestions that their country is running on empty.

Saudi Assurances

``We currently manage approximately 260 billion barrels of oil,'' Abdallah Jum'ah, CEO of Saudi Aramco, the government-owned oil giant, said at an oil and gas conference in June. ``We continue to expand our reserve base, and conservatively estimate our additional potential of recoverable oil to be in the range of 200 billion barrels. At Saudi Aramco's present production levels, that means we will have well over a century's worth of oil to produce.''

Herman Franssen, former chief economist at the Paris-based International Energy Agency, says some OPEC members, such as Iran, Iraq, Kuwait and Venezuela, may be reluctant or unable to produce more oil even as prices soar, largely for political reasons.

``We may never see the volumes of conventional oil production that we see in official forecasts,'' says Franssen, who's now an oil industry consultant in Chevy Chase, Maryland.

Sadad al-Husseini, who spent 35 years working for Saudi Aramco, says Saudi Arabia's reserves are sound but that Kuwait, which says it has reserves of 101.5 billion barrels, probably has half that much. Iran, with official reserves of 132.5 billion barrels, has likewise overstated its reserves, says Husseini, who was an executive vice president at Saudi Aramco before retiring in 2004.

Assume the Worst

``Even with high prices, it will be very difficult for world production of conventional oil to exceed 90 million barrels per day within the next 10 years,'' he says. That's millions of barrels a day short of what the EIA says the world will need in 2015.

Political leaders, business executives and investors should assume OPEC won't be able to satisfy future demand, Rodgers says. ``From an energy-security point of view, if you believe in a non- OPEC peak and OPEC is not being transparent, we have to assume they don't have it,'' he says.

The precarious balance of supply and demand in the oil markets became even clearer in early August when London-based BP Plc announced it would temporarily shut down its Prudhoe Bay oil field on the North Slope of Alaska because of pipeline corrosion. The news drove already-high oil prices up more than $2 to almost $77.

Alaskan Decline

Prudhoe Bay, the largest oil field in the U.S., is part of the peak-oil story. The field was discovered in 1968 and came onstream in 1977. Since then, it has yielded more than 11 billion barrels of oil.

Yet even before the August mishap, this vast field had begun to die. Its output has fallen 73 percent to 400,000 barrels a day from a height of 1.5 million barrels a day in 1989.

Prudhoe Bay is following the life cycle of oil fields across the U.S. and around the world, a phenomenon known as the Hubbert Curve, which takes its name from M. King Hubbert.
Fifty years ago, Hubbert, then a geologist at Shell Oil Co.'s research lab in Houston, postulated that U.S. oil production would follow a bell-shaped curve.

At the 1956 meeting of the American Petroleum Institute in San Antonio, Hubbert predicted that total annual U.S. output would climb steadily, level off sometime between 1965 and '70 and then decline after about half of the country's reserves had been depleted.

Hubbert's Peak

The U.S. reached what geologists now refer to as Hubbert's Peak in 1970. Hubbert died in 1989 at the age of 86.

It wasn't until the late 1990s when Hubbert's ideas, which had percolated for decades in academia and oil circles, began to reach a wide audience via Campbell, the British geologist.
Now in his eighth decade, Campbell is a grandfatherly man with a shock of gray hair. He hardly comes across as a doom- monger. He works out of a two-story house in Ballydehob, a village on the western edge of Ireland.

Campbell spent 40 years exploring for oil for Amoco Corp. and other companies. He helped Amoco search for oil in Ecuador and then, during the 1980s, led its exploration in Norway. He later joined PetroFina SA, the oil exploration company now owned by Total.

After retiring from PetroFina in 1990, Campbell joined forces with Jean Laherrere, a retired French geophysicist who had spent 25 years working at Total, to analyze production profiles for the world's countries.

Campbell says he and Laherrere, now 75, looked at their data and concluded global oil production was approaching its zenith. In 1998, they co-wrote an article for Scientific American magazine titled ``The End of Cheap Oil'' that helped popularize their cause.

Coming Crunch

``The world is not running out of oil -- at least not yet,'' Campbell and Laherrere wrote. ``What our society does face, and soon, is the end of the abundant and cheap oil on which all industrial nations depend.''

In 2000, Campbell founded the Association for the Study of Peak Oil and Gas, an informal organization for fellow travelers. Now known as ASPO International, the group has sponsored five annual conferences, including the one in Pisa in July, which drew more than 230 people. It's now run by Kjell Aleklett, a physics professor at Uppsala University in Sweden. Twenty independent national ASPO groups have sprung up around the world, from Australia to France, to the U.S.

Many peaksters are driven by a moral imperative to spread the word. Campbell says he's a scientist, not a social or environmental crusader. Even so, he says he's worried that oil has harmed human society and the planet. Since the Oil Age dawned, nearly 150 years ago, the Earth's population has soared six-fold, he says.

Man Alone

``Man is the only animal that uses external energy,'' Campbell says.

Asked why he has championed the peak-oil theory, Laherrere quotes Antoine de Saint-Exupery, author of ``The Little Prince'': ``We don't inherit the Earth from our ancestors; we borrow it from our children.''

Activists have jumped on the peak-oil bandwagon and added their own, often strident, voices to the debate over the future of oil.

Jim Kunstler, a writer-activist who lives in Saratoga Springs, New York, says peak oil will ultimately destroy suburbia and plunge the U.S. into a violent dark age of feudalism.

``The question is, Can we run our shit the way we are running our shit?'' Kunstler, 57, says. In 2005, Kunstler wrote ``The Long Emergency: Surviving the Converging Catastrophes of the Twenty-First Century'' (Atlantic Monthly Press, 320 pages, $23), which warns of the havoc to come.

Dieoff.com

Lifeaftertheoilcrash.net, a Web site run by lawyer and peak- oil entrepreneur Matt Savinar, warns, ``Civilization as we know it is coming to an end soon.'' The site sells peak-inspired books and products, including an investor's guide to peak oil.

Another site, dieoff.com, says wars over oil and other natural resources will eventually erupt and millions of people will be wiped out.

Stephen Andrews, a Denver-based energy consultant who founded ASPO-USA in June 2005, says the alarmists have hurt the peak-oil movement.

``The peak-oil tent has different voices -- some shrill, some more sober -- reaching different conclusions from the same facts,'' Andrews, 59, says.

Andrews has attracted more-sober voices to the movement. Last November, Denver Mayor John Hickenlooper helped co-sponsor a two- day peak-oil conference organized by Andrews.

``I think the people most exuberant about peak oil underestimate how much unconventional sources of oil will help flatten the peak, but to say that there is no peak is shortsighted,'' Hickenlooper says.

Crash Program

The world would have to embark on a crash mitigation program 20 years in advance to prevent peak oil from hobbling the global economy, says Robert Hirsch, a senior energy program adviser at San Diego-based research and engineering firm Science Applications International Corp.

``And I consider myself an optimist,'' says Hirsch, 71, who included his findings in a 2005 study on peak oil for the U.S. Department of Energy and estimates such a program would cost the world $1 trillion a year.

Some investors and analysts see lots of opportunities in a post-peak world.

Charles Maxwell, senior energy analyst at Weeden & Co., an independent research firm based in Greenwich, Connecticut, says high oil prices will spur companies to invest in unconventional sources. Few people, however, realize how much such projects will cost or how long they will take to come onstream, he says.

Take the Canadian oil sands. This region in Alberta holds 175 billion barrels of oil, according to the Canadian Association of Petroleum Producers (CAPP), the world's second-largest reserves.

`Really Big'

``It's big. It's really big,'' Neil Camarta, senior vice president for oil sands at Calgary-based Petro-Canada, says of the region. ``It can keep America going for 25 years.''

The oil sands hold vast stores of bitumen, a tarlike substance that is mined, rather than pumped, and then processed into oil that can be refined. The process is expensive -- and getting more so. Rising operating and capital costs have driven the price of mining and upgrading bitumen to as much as $40 a barrel, Camarta says.

By 2020, Canada's oil sands will yield 4 million barrels a day, almost four times what they do now, according to CAPP. That sounds like a lot until you realize that 4 million barrels is just over a third of what Saudi Arabia produced per day in 2005.

Pickens, who built Mesa Petroleum Co. into one of the world's largest independent oil and gas producers, says he sees trouble -- and opportunity -- in peak oil. Pickens, who collected a degree in geology from Oklahoma State University in 1951, has called for the construction of more nuclear power plants and the promotion of alternative energy. He says he's invested in the Canadian oil sands.

Pickens's Picks

``I'm a disciple of Hubbert,'' Pickens, 77, says. ``I think we've peaked and we are going to see an undersupply of oil.''

Clarium Capital's Thiel says he began thinking about peak oil in 1999. As the Internet bubble grew that year, Thiel, 38, says he started to wonder about other risks that investors might be ignoring and seized on the uncertain future of oil.

``Energy will be systematically undervalued until peak oil is priced in,'' Thiel says. He's bought shares of Calgary-based EnCana Corp., which has invested in exploration and new production, and of oil services companies like New York-based Schlumberger Ltd. and Houston-based Weatherford International Ltd., which stand to profit as explorers hunt for oil and drill wells. Thiel says he's leery of U.S. oil majors, such as Exxon Mobil, because they may become targets of new taxes once the government wakes up to peak oil.

Thiel himself says the peak will come by 2008 -- if it hasn't already. ``Geology will trump technology,'' he says.

Coal, Uranium

Eric Sprott, CEO of Toronto-based Sprott Asset Management Inc., says he became a peak-oil convert after hearing Campbell speak in 2004. Sprott, who helps manage 3.6 billion Canadian dollars (US$3.2 billion), says the bull market in energy has only just begun. He's invested 36 percent of his firm's assets in a variety of areas that could benefit from peak oil. His flagship hedge fund returned 41 percent in 12 months ended July 31, he says.

Sprott's investments include St. Louis-based Arch Coal Inc. and Brisbane, Australia-based Macarthur Coal Ltd. His oil and gas picks include Halifax, Nova Scotia-based Corridor Resources Inc.; Denver- based Delta Petroleum Corp.; and Houston-based Ultra Petroleum Corp. He has also invested in Australian uranium companies Energy Resources of Australia Ltd. and Paladin Resources Ltd.

Midnight Ride

Meanwhile, the peaksters aren't about to let up. They'll convene in Boston on Oct. 25-27 to sound their alarm at a conference called ``Time for Action: A Midnight Ride for Peak Oil.'' The title is a reference to the American patriot Paul Revere, whose horse ride in 1775 warned Massachusetts colonists that British soldiers were advancing. The battle that followed, at Lexington and Concord, marked the beginning of the American Revolution.

It was just 84 years after Revere took his ride, on Aug. 27, 1859, that Edwin Drake struck oil in Titusville, ushering in the Oil Age. Exxon Mobil says the era of oil isn't about to end. In one of its ads, the company says, ``Oil is a finite resource, but because it is so incredibly large, a peak will not occur this year, next year or for decades to come.'' The ad depicts a man looking through binoculars at a snowcapped mountain whose summit is hidden by clouds.

Campbell says the illustration actually drives home the point Exxon Mobil is trying to avoid. ``Even though it is obscured by clouds, we know there is a peak,'' Campbell says. His investor followers are betting he's right.

To contact the reporter on this story: Deepak Gopinath in New York at dgopinath@bloomberg.net .