Sunday, October 19, 2008


I went to a "Sheep and Wool" festival over the weekend. A friend of mine is really into spinning. Apparently, there are a lot of people like her, and they come from miles around to this fair-like affair. I saw more kinds of sheep than I ever knew existed: black, white, tan, gray, spotted, long-haired, miniature, etc. Not all were raised for wool; some varieties are bred for their milk or meat.

This magnificent ram took first place.

Ia! Ia! It's Shub-Niggurath, the Black Goat of the Woods with a Thousand Young! Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn!

Oops, sorry. Just an ordinary black goat.

It wasn't just sheep and wool. All kinds of fiber-producing animals were featured, including goats, llamas, alpacas, and rabbits. The animals were shown, and ribbons awarded. There were a lot of 4-H kids there, among the adult hobbyists and professional farmers.

Having lived in Peru, I know the ways of llamas, and kept my distance. They can spit, like camels. But this one was just curious.

Booths sold wool in many forms. My friend buys whole unwashed fleeces for her spinning, but others like wool that's washed, carded, and dyed, or raw wool in bulk.

There were a lot of people spinning and knitting there. This woman is using a simple drop spindle.

It is harder to spin with a drop spindle than with a spinning wheel, but in the old days, spinning was one of the first jobs children were given. They started as early as three years old, and would often spin with a drop spindle while walking to school.

There were a lot of booths selling antique spinning wheels and drop spindles, but most people these days prefer modern spinning wheels. They are more compact, and more easily portable than the antiques.

Most of the people I know who are into spinning are women, but some men like it, too. The spinning wheel is powered by pumping the pedals.

A lot of people were selling yarn. Most was machine-made, not hand-spun.

There were many knitted, crocheted, and woven garments for sale as well: hats, scarves, sweaters, gloves, socks, etc.

I almost bought a pair of handknit wool socks and a wool blanket, but in the end decided I really didn't need them. (I did buy some raw milk cheese and a bunch of organic spinach.)

Another strange fad: making clothing out of pet fur. Some people are so attached to their dog or cat that they save up their shed fur and have someone spin it into yarn and knit a sweater out of it for them. Sometimes it's to remember the pet when it dies; sometimes people just want to wear the same outfit as their pet, so to speak.

Well, if civilization comes crashing down, cutting off our supply of cheap clothing from China, there are some people who know how to make clothing from scratch.

The fried dough booth featured a gigantic pumpkin as a decoration.

Saturday, October 18, 2008


The apples on the tree outside my window are ripe. They are beautiful, and they taste pretty good, too, though they're a bit wormy, since nobody sprays the tree. (Extra protein, as my dad puts it.) They are Cortlands, which are a cross between the popular McIntosh (a cultivar originally from Canada) and the Ben Davis, a variety now rarely grown because its keeping and shipping qualities are no longer needed in the days of the 1,500 mile salad.

The old apple tree is left over from the apple farm which used to be here a few decades ago. The old farmhouse is a short walk away, and is now just one of many houses standing alongside a major thoroughfare. You can tell it's the old farmhouse, though, because its architecture is older than the other houses, and because of the apple cellar beside it.

The first time I saw the apple cellar, I had no idea what it was. It's just a door in the side of a grassy hill. Looks kind of like I always imagined a hobbit house would look, except the door isn't round. Eventually one of the apple farmers in the area explained it to me. (There are still plenty of apple farms around here, but nobody uses apple cellars any more.)

In the old days, farmers would store apples over the winter in apple cellars - storage rooms built into hillsides. The apples would be packed into barrels with straw, then stashed away underground. The ideal apple cellar was cool and humid, but not freezing.

Apples were often bred for their "keeping" qualities - how well they withstood winter storage. Unfortunately, keeping and taste are inversely related. It was a trade-off. Storage was harder in more southern areas, where it was warmer, and often, they would grow "keepers" that no farmer would consider growing further north (because they tasted awful).

I love the wide variety of apples you can get in the northeast. I grew up eating only Red Delicious, with occasional Golden Delicious. To this day, my dad will only eat Red Delicious. I even took him to a pick-your-own apple farm, where we picked dozens of different kinds of apples - and he only liked Red Delicious. I find Red Delicious very bland myself - though if eaten immediately after picking, even Red Delicious are very tasty.

Northern Spies are one of my favorite varieties. They were considered "dessert apples" - the kind you bake with. ("Spies for pies.") They are luscious when just picked. They were considered good keepers in the old days, though a bit prone to bruising. By modern standards, though, they don't store well. They don't shrivel or rot easily, but they get soggy pretty quickly after picking. Modern Americans expect their apples to be crisp.

I have a feeling what's happened in the world of apple farming is probably typical of farming in general: the varieties grown are designed for the world of air freight, refrigerated shipping, and controlled atmosphere storage. The apples we grow now are not the kind our great-grandparents grew - and are perhaps ill-suited for a low-energy world. Recently, there has been increased interest in heirloom varieties...but the ones people want to grow tend to be the ones that taste good but don't store well, not the ones that store well but don't taste very good.

The harvest season is winding down here. It's more or less over by Halloween. The farmer's market shuts down, the pick-your-own farms close, the farmstands pull down their shutters. The local farmer's market, jam-packed a couple of weeks ago, was pretty quiet yesterday. I spent less than $10, but got a nice haul:

That's a cannonball pumpkin, a mini squash, a spaghetti squash, a quarter pound of mixed organic greens, three baby bok choy, and a bunch of apples, including Empire, Gala, Northern Spy, Mutsu, Jonagold, and Winter Banana. I am probably not going to eat the mini squash. That's a Halloween decoration. The cannonball pumpkin will be a Halloween decoration...and then a pumpkin pie. :-)

Friday, October 17, 2008

Falling prices create havoc in the oil patch

Frank Sesno, who did that CNN special on peak oil, We Were Warned, was on CNN last night, talking about the down side to lower oil prices. From the transcript:

WOLF BLITZER: Call it, perhaps, the one bright spot in an otherwise bleak economy -- that would be the price of oil. Even after climbing $2 a barrel today, the price of a barrel of crude oil is still down some 50 percent from an all time high back in July.

Our special correspondent, Frank Sesno, is looking at this story for us.

What does it mean for businesses, for you and me, for all our viewers out there, if we see this price per barrel going down?

FRANK SESNO, CNN SPECIAL CORRESPONDENT: Well, Wolf, you're quite right. We commonly look at this as the silver lining in an otherwise lousy economic cloud, right?

And the price of oil has dropped dramatically, as we've seen, just in the last several months. Wolf, you got that.

So let's take a look at what's happened. In July, $145 a barrel. Look what it is now. We're down to $74 a barrel.

So if you were going to the pump, you'd be experiencing something like this -- the cost of gasoline by the gallon has gone from $4.15 -- $4.11 at the high, actually -- down, according to the AAA, $3.04 today.

If you had, Wolf, a three quarter ton Chevy Suburban and you went to fill it up -- 39 gallons -- it would have cost you $160 this summer.

Today, what would it cost you?

It would cost you about $118. That's a really big savings.

But Wolf, as you said, there's a downside to all of this. And the downside, believe it or not, is to those companies that have been making all this money because it's expensive to do the business they do. They say that they spend close to $200 billion a year in exploration. That's drilling, but it's also looking for the stuff out there. And deep water, for example, just by itself, one platform out in the deep water is about a billion dollars. If you want to look at alternatives and what things are costing, you need $65 a barrel to cover those oil sands. You need close to that for this cellulosic ethanol that we keep hearing about that's going to be the deliverance for the future.

These falling prices are creating havoc in the oil patch. Wolf, according to the people that I'm talking to, there's some anecdotal evidence that companies are starting to cut back on their exploration budgets, cut back on some of the purchases that they may make. It's happened before in '98, '99, when prices went way down, companies went bust, they merged and there were thousands of layoffs, and, in some cases, oil exploration went down 70 percent or more.

Why does it matter?

Because this is what pays for the future oil supplies. And if you're Barack Obama, it's what may pay for your alternative energy programs and that thousand dollar per family tax that he wants.

So there could be some serious unintended consequences.

BLITZER: Yes. So it's interesting, I guess, though, for those of us who remember, a barrel of oil when it was $10 or $20 or $30 a barrel...

SESNO: Remember that?

BLITZER: ...$70 a barrel still sounds pretty high...


BLITZER: ...although it's not as high as $140 a barrel.

SESNO: I went by the gas station the other day and I'm saying oh my gosh, it's going to come under $3 a gallon for regular. That's incredible. It seems like a bargain. But not very long ago...

BLITZER: It seems like a bargain when it was $4 a barrel, but a lot of us remember $2 a gallon, too.

SESNO: That's right. It ripples through in jet fuel. It ripples through in home heating oil. It ripples through in all sorts of other things. That's good news for the consumer, but we need this stuff for the future.

Monday, October 13, 2008

Low-Hanging Fruit On Wheels

The MPG illusion has been in the news a lot recently. Basically, expressing fuel efficiency in MPG tends to mislead people about actual fuel savings. I think it also tends to mislead people with regard to the effectiveness of increasing vehicle efficiency as a peak oil mitigation strategy.

Last July, Neil King of the WSJ wrote an article about why it will be harder to cut back this time. We cut our oil use by 20% after the last oil crisis...but half of that was switching power plants from oil to coal or natural gas. There are very few oil-fired power plants left in the U.S. now, so that is not something we can repeat.

But what about cars? There are still big gains to be made there, surely.

Maybe not. The MPG illusion fools us because people think fuel consumption is decreased as efficiency improves. But that is not the case. Here's a concrete example:

In the '70s, my uncle traded in his Chevy Bel-Air (about 12 mpg) for a little Datsun (about 50 mpg). Assuming 1200 miles driven a month:

Chevy: 100 gallons
Datsun: 24 gallons
Gas saved: 76 gallons a month

So, if you have a Prius or an old Geo Metro today, assuming 50 mpg, you're using only 24 gallons to drive 1200 miles. You cannot actually get a 76 gallon savings via increased fuel efficiency, unless your car somehow creates gasoline while you drive.

If you double the MPG of the it 100 mpg. For 1200 miles, that's 12 gallons saved. Very small compared to, say, trading your Hummer (13 mpg) for a Prius (which would also be roughly 76 gallons saved).

This is why I don't expect Mooresian improvements in mileage. Assuming 1200 miles driven a month:

25 mpg 48 gal
50 mpg 24 gal 24 gal
100 mpg 12 gal 12 gal
200 mpg 6 gal 6 gal
400 mpg 3 gal 3 gal
800 mpg 1.5 gal 1.5 gal
1600 mpg 0.75 gal 0.75 gal

Each improvement is going to have a higher cost and lower benefit; eventually, it just won't be worth it any more. For me, the Prius is already past the point of diminishing returns. I considered it, but I don't drive that much, and it just wasn't worth the extra expense. I bought a Corolla.

Yes, trading in a Hummer for a Prius can make a big difference...but there really aren't that many Hummers on the road. In the early '70s, the average car got 13 mpg. For the past decade or so, the average new car in the US has gotten 21 mpg.

Again assuming 1200 miles driven a month:

13 mpg 92 gal
21 mpg 57 gal 35 gal
55 mpg 22 gal 35 gal

So to match the improvement we've made since the '70s, we would have to increase the fleet efficiency to 55 mpg. That sounds doable - the Prius is in the ballpark - but even Japan has not achieved it fleet-wide. They've been working on this fuel economy thing since the '70s. And their average fuel efficiency is about 30 mpg. Much better than our 21 mpg, certainly, but a far cry from 55 mpg. And any improvements over that would be even harder to achieve.

Tainter called this declining marginal returns. The low-hanging fruit is picked first. That is, the easy fixes with the largest benefits are done first. Further improvements will be more difficult and more expensive, until they are not worth doing at all.

The "MPG illusion" is low-hanging fruit on wheels.

Sunday, October 12, 2008

Why conserving our way out of this won't be so easy

This article, from the July 22, 2008 Wall St. Journal, seems more relevant than every now.

A Difficult Road Awaits For Energy Conservation


Soaring gasoline prices, angst in Washington, economic malaise, fears of far worse to come -- the U.S. has been through the energy wringer before, and even managed to ease the pain through conservation.

The last time the country was clobbered, 1979-1983, Americans cut way back on driving, bought far fewer and smaller cars and dramatically reduced the use of oil. It's natural to assume that we can do it again.

But conserving our way out of this crunch won't be so easy. Here are five key reasons why.

1. The easy stuff is done.

The cuts in oil use made between 1979 and 1983 look impressive. In four years, the country weaned itself off of 3.3 million barrels a day, a drop of nearly 20%. Not until 1997 did the U.S. get back to the same level of oil consumption it had in 1979.

But half of that cut, in residual fuel oil for electricity generation, was relatively painless and can't be repeated. The U.S. by 1983 had slashed consumption by 1.4 million barrels of oil a day by switching power stations over to coal or natural gas. Today, the country consumes fewer than 700,000 barrels of residual fuel a day, almost entirely in ships. So any similar cuts this time will have to come on America's highways, not in its power plants.

2. We're bigger, busier and wealthier now.

Americans in 1979 embarked on a forced conservation kick unrivaled since World War II. By 1983, gasoline use had fallen almost 11%.

Today, the U.S. is a vastly more fuel-thirsty place. Yes, gasoline use is tapering off. But in April of this year, the U.S. consumed 9.1 million barrels of gasoline a day, two million more than in April 1979 -- partly because Americans are now driving almost twice as many miles a day as they did then.

Meanwhile, the economy is also nearly five times as large, so the impact of record-high fuel prices is still more muted.

3. And yet, globally, the U.S. matters less.

In 1979, of every 100 barrels of oil produced globally, 29 went into American cars, trucks, planes, ships, homes and power plants. Today, that figure has fallen to less than 24 of every 100 barrels. U.S. consumption has grown, but global use has grown much more -- and there's the rub.

Slashed demand in industrialized countries in the early 1980s came straight off the oil ledger, because that's where most of the demand was. Nearly half of the drop came from the U.S. alone.

This year, growth elsewhere will far outpace slumping demand in almost every Western developed country. In all, global demand is expected to rise by about one million barrels a day, despite the historic run-up in prices. It's what happens in China now that really counts.

4. This time, it's supply and demand.

The 1979 energy crisis was all about supply. Turmoil in the Middle East took millions of barrels off the market, so prices soared. But just as prices peaked, in the spring of 1981, huge new stashes of oil were coming onstream in Mexico, the North Sea and Alaska. Soon enough, the world was again awash in oil.

Today's forces are far more complex, and gloomier. Booming demand in the Middle East and Asia is colliding with rising fears of a long-term supply pinch. Unlike in 1979, there is no North Sea about to open up, while the Saudis are pumping almost full out.

5. Recessions help.

Getting whacked by gasoline prices prodded Americans to cut back in the early 1980s, but so did joblessness, stagflation and a horrible economy. Unemployment topped 7%, while mortgage rates hovered in the teens. Gasoline use and car sales plunged partly because people were working less for a dollar that also bought less. Economists note that nothing whittles down energy use quite as effectively as a recession. Today's less sluggish economy is less likely to force our hand on conservation.

On the bright side, efficiencies gained now appear much likelier to last. After the last shock, oil became abundant again, prices plummeted and Detroit found clever ways to bypass fuel-efficiency standards to give Americans the huge sport-utility vehicles they wanted. Now, car companies are scrambling to churn out a new generation of smaller, more efficient vehicles and investing in fuel-saving technology that was viewed as too expensive to bother with when oil was cheap.

All in all, a good article. Though I think he's wrong on a couple of points. One, it looks like we're heading toward a recession that will rival or even dwarf those of 30 years ago. And two, I don't think fuel efficiency will be as helpful as he assumes, for reasons I detail later.

Saturday, October 4, 2008

Bank Freeze Leaves Hundreds of Colleges Cut Off From Short-Term Funds

From The Chronicle of Higher Education:

Wachovia bank has frozen the accounts of nearly 1,000 colleges, leaving institutions unable to access billions of dollars they depend on for salaries, campus construction, and debt payments.

The freeze, which affects most institutions that invest their endowment income and other assets through Commonfund, has some colleges worried that they won’t be able to make payroll this period, said Verne O. Sedlacek, president and chief executive of Commonfund, which manages investments for nonprofit institutions. Many colleges use the organization's short-term investment fund for operating expenses, “almost as a checking account,” he said.

As of last Friday, the Common Fund for Short Term Investments managed approximately $9.3-billion in assets for 900 colleges and roughly 100 private schools.

Wachovia, which agreed to sell its banking operations to Citigroup this week, announced on Monday that it was resigning as trustee of the fund and would allow plan participants to withdraw only 10 percent of their assets—the value of the securities that had reached maturity. That percentage grew to 26 percent on Tuesday as additional securities reached maturity, and is expected to reach 57 percent by the end of this year and 74 percent by the end of 2009.

But unless the credit markets thaw, enabling a new trustee to sell more of the short-term securities in the fund, colleges won’t be able to access all their money until at least 2010.

Conveying Bad News

Yesterday, representatives of Commonfund held a two-hour conference call with rattled college investors. John S. Griswold, Jr., executive director of the Commonfund Institute, Commonfund's research arm, said the organization empathized with the colleges but had no control over Wachovia's decision.

“Obviously, it couldn’t come at a worse time, at the end of the month and the end of the quarter,” he said in an interview. “So we can understand why people are upset.”

The freeze could have the biggest effect on smaller institutions like Bethany College, in Kansas, which has $700,000 invested in the fund. President Edward F. Leonard III said his institution has enough money to cover costs for now because students just paid tuition, but he’s worried about the second semester, when the college typically dips into its short-term funds to pay for a variety of operating expenses.

“All colleges ride a cash roller coaster,” he said. “But the smaller colleges, like Bethany, we feel those bumps more than others do.”

On Tuesday, Mr. Leonard wrote to his congressman, Rep. Jerry Moran, a Republican, to urge him to support federal legislation intended to rescue the financial sector. Mr. Moran voted against the $700-billion bailout bill, which had been backed by the Bush administration, on Monday.

“I just e-mailed his legislative assistant saying, ‘Hey, its starting to hit home,’” he said. “If you think this is something confined to New York City and Washington, D.C., its already hit one of your campuses in Kansas.”

Concerns About Making Payroll

Minnesota’s private colleges are worried as well. On Monday, the state’s independent-college association sent a letter to its Congressional delegation, warning that some colleges would be unable to make their payroll obligations this week.

“The failure of the House to adopt the recovery plan this afternoon has immediate implications for private colleges in Minnesota,” the letter reads. “As a result of the frozen capital markets and the failure of Congress to adopt a reasonable recovery plan, many of the members of our association are at the edge of their abilities to adapt. Any further delay by Congress or the administration will have immediate devastating effects on these institutions and the families they serve.”

Colleges with larger endowments, like the University of Vermont, may find it easier to adapt. Daniel M. Fogel, the university's president, said his institution has “tens of millions of dollars” invested in the short-term funds, but he expects that it will be able to make do.

“We may need to rely on some other liquidity sources, but if so, very briefly, because then we’ll be collecting the spring tuition,” he said.

Russell K. Osgood, the president of Grinnell College, in Iowa, said his institution has a “modest amount” invested in the fund and did “not foresee any impact.” But he said he feared for some of his colleagues.

“I’m scared thinking about others who are more dependent on it,” he said.

Reeves Wiedeman contributed to this article.