OIL: Conditions are Ripe for another Great Depression.

No matter which camp you fall into with respect to the Peak Oil issue, you must admit that the current high oil prices could spell economic doom for the west.

It has been reported here that the price of oil has reached yet another new high today of over $43 a barrel. The BBC reports the same story here and points out that there is little to no spare capacity to help ease prices. Even before Yukos? problems, the price of oil was hovering around $40 a barrel. (P.S. I also recommend you do some research on Matthew Simmons, a Key advisor to the Bush Administration, Vice President Cheney's 2001 Energy Task Force and the Council on Foreign Relations. An energy investment banker, Simmons is the CEO of Simmons and Co. International, handling an investment portfolio of approximately $56 billion.)

There is an excellent article titled "This Is As Good As It Gets" summing up the current economic situation in the US. Near the end of the article is a graph relating to DEBT. There are two very large peaks on the graph. One is right now. I'll give you one guess when the other one was (hint: look at thread title).

I believe that there is an end-game in play. The beginning of the peak oil crisis is keeping prices over $40 per barrel. That kind of price creates INFLATION and the FED is responding with interest rate hikes. I don't see the price of oil easing anytime soon, certainly not under $30 where it needs to be long-term to sustain our current economy.

So when inflation starts to take its toll and interest rates spike, there is going to be a major debt crisis.

With the cost of living going up, and interest rates preventing borrowing, cash strapped consumers cease to buy big ticket items. As the crisis deepens there will be massive defaults and bankruptcies leading to a banking crisis.

And for those who believe that China?s white-hot economy will help keep the world?s economy going know this:

China is also in trouble. Even though it is the fastest growing economy right now, they will not be able to maintain that for much longer.

An article discusses the pressure China is putting on world oil prices as it tries to increase reserves and avoid an acute energy shortage.

China's economic growth has become more and more dependent on crude oil in recent years, and its energy shortage is acute.

The economy is still growing but at a slower pace (7% projected) from last year's 9.7% (source). Despite this, the Chinese government is trying to slow growth even further since the economy is in serious danger of overheating (source)

China is also facing a large real estate bubble leading to distortions in the market (banking in particular). The speculative investment money flowing into the country is causing the bubble as well as a land grab for industrial space, forcing China to rent land from Vietnam to feed its people (source)

Finally, the call from the central government for a cooler economy is not being heeded (source).

What happened is that, with energy and transportation sectors already bursting at the seams under the deluge of investment in industries such as steel, cement and real estate, and with bad debts piling higher on banks' books, Beijing tried to rein in the runaway enthusiasm, issuing a moratorium on further investment in those key industries. The central state's decree fell on deaf ears. Local governments kept pouring money into these booming sectors.

It is doubtful that China can control its runaway growth that is causing distortions, a real estate bubble and a speculation bubble all about to meet up with an energy crunch.

The impending energy driven meltdown will be worldwide and no economy, no matter how seemingly strong at the moment, will escape it effects.

The emotion I feel in the face of all of this is despair with too many zombies in our society just going along for the ride, not questioning, and rampant anti-intellectualism. Nothing will be solved until we hit the wall (peak oil, climate change, collapse of economic system etc.).

The only thing to do is prepare yourself mentally for the outcome. Move beyond fear and towards acceptance/preparation.

Right now the economy is a revved up sports car heading for a brick wall, and the passengers are arguing about which radio station to listen to.

Heads up! There's trouble ahead. Get out of DEBT as FAST as you can!

What do you think? Can a new worldwide DEPRESSION caused by tight energy supplies be averted?

edit: title tweak

[edit on 10/20/2004 by Gools]

edit 2: fixed expired link

[edit on 10/20/2005 by Gools]

If OPEC decided to change their oil currency to the Euro the whole house of cards (US economy) would collapse. It would be far worse than the Great Depression.

I agree and it seems that the US is doing everything it can to prevent that from happening.

For people who are not in the know here is some excellent background focusing on the �big picture� of the world�s current geopolitical situation.

The following three articles are a collection of �Petro-Dollar� theories on war. All three take a global view of the current geopolitical pressures we see evidence of in Venezuela, the Middle East and North Africa (Sudan etc.). All three refer to the petro-dollar as the cause of many current conflicts. They are worth a good read in my opinion.

This first is titled America�s war against Europe and gives an excellent analysis of the reasons for the war on Iraq.

Whenever a nation decides to go to war, there are plans made for who is going to win and who is going to lose; no one goes to war expecting to lose but it isn't always the obvious target of the aggression that is the real thrust behind the war. Sometimes, it isn't a case of what you expect to win from a war but rather a case of what you hope someone else loses; and it doesn't have to be your stated enemy who you hope will sustain the losses. In this case, Bush's hoped-for victim is the European economy.

The article explains the Bretton-Woods deal with respect to setting up the petro-dollar and explains how dollar hegemony works. The article goes on to state:

So what happens if OPEC as a group decides to follow Iraq's lead and suddenly begins trading oil on the euro standard? Economic meltdown. Oil-consuming nations would have to flush dollars out of their central bank reserves and replace them with euros. The dollar would crash in value and the consequences would be those one could expect from any currency collapse and massive inflation (think of Argentina for an easy example). Foreign funds would stream out of U.S. stock markets and dollar denominated assets, there would be a run on the banks much like the 1930s, the current account deficit would become unserviceable, the budget deficit would go into default, and so on.

And that's just in the United States.
�
A more gradual shift might be manageable but even that would change the financial and political balance of the world. Given the size of the European market, its population, its need for oil (it actually imports more oil than the U.S.), it may be rapidly approaching that the euro will become the de facto monetary standard for the world.

The second article is titled Oil, Petrodollars and the OPEC/EURO Question and examines the same questions with more emphasis on the players in the Bush administration. It also goes into more of the financial details especially in light of the current debt situation. From the article:

US economy's net foreign indebtedness--the accumulation of two decades of running larger and larger trade deficits--will reach nearly 25 percent of US GDP this year, or roughly $2.5 trillion. Fifteen years ago, it was zero. Before America's net balance of foreign assets turned negative, in 1988, the United States was a creditor nation itself, investing and lending vast capital to others, always more than it borrowed. Now the trend line looks most alarming. If the deficits persist around the current level of $400 billion a year or grow larger, the total US indebtedness should reach $3.5 trillion in three years or so. Within a decade, it would total 50 percent of GDP.

The article then goes on to examine the pressures for replacing the petro dollar with the Euro.

Other countries have gradually been climbing on to the euro bandwagon. An article in the Iran Financial News, 8/25/02, revealed that more than half of Iran's Forex Reserve Fund assets had been converted from dollars to euros. In 2002 China began diversifying its currency reserves away from dollars into euros. According to Business Week (2/17/03) Russia's Central Bank in the past year has doubled its euro holdings to 20 percent of its $48 billion foreign exchange reserves. And for a very good reason, according to its First Deputy Chairman Oleg Vyugin: "Returns on dollar instruments are very low now. Other currency instruments pay more."

Business Week continues:
`The story is the same across the globe. Money traders say that institutions as diverse as Bank of Canada, People's Bank of China, and Central Bank of Taiwan are giving more weight to the European currency. By the end of this year, they predict, the euro could account for 20% of global foreign currency reserves, which today amount to a cool $2.4 trillion. Little more than a year ago, the euro made up just 10%. "No one is saying that the euro's going to replace the dollar as the premier reserve currency," says Michael Klawitter, a currency strategist at WestLB Research in London. "But it will increase in importance for many central banks."...
If not deterred, OPEC could follow suit. Libya has been urging for some time that oil be priced in euros rather than dollars. Javad Yarjani, an Iranian senior OPEC official, told a European Union seminar in April 2002 that, despite the problems raised by such a conversion, "I believe that OPEC will not discount entirely the possibility of adopting euro pricing and payments in the future."

Meanwhile Hugo Chavez has been taking Venezuelan oil out of the petrodollar economy by bartering oil directly for commodities from thirteen other third world countries. Although this has not yet qualified Venezuela for official membership in Bush's "axis of evil," the heavy hand of the Bush Administration in the recent coup attempt against Chavez was only too obvious. (See "Venezuela Coup Linked to Bush Team," London Observer, 4/21/02, for details about the roles of US officials Elliot Abrams, Otto Reich, and John Negroponte.)

The third article is titled It�s Not About Oil or Iraq: It�s About the US and Europe Going Head-to-Head On World Economic Dominance and describes the situation in great detail. From the article:

America's response to the euro threat was predictable. It has come out fighting.
...
President Bush did promise to protect the American way of life. This is what he meant

My conclusion on reading all of this material is that the Iraq war was a gamble to prevent the loss of dollar-hegemony. An essential ingredient in making this gamble pay off is forcing the price of oil down after establishing control. It�s been over a year and there is no sign of this strategy paying off.

Furthermore, in light of the tight supply (and Peak Oil concerns) even if this strategy were successful (without creating resentment throughout the oil-producing world) the market realities of a more populous Europe with a larger economy than the US, as well as an oil-hungr world, will make the conversion to the higher valued Euro inevitable.

So not only are we facing a debt crisis we are also facing a global shift in economic power.

We could only believe that was one of the reasons if they stopped Iraq from selling oil in Euros after the invasion.

Oh..wait, they did:

middleeastinfo.org...
Soon after the invasion it was announced that payment for Iraqi oil would be in dollars only.

More information supporting this hypothesis is reported at From The Wilderness here.

Three articles on 1- the energy crisis in China, 2- the first deliberate brow-out to control the situation and 3- Venezuela's threat to cut off oil if the US does not keep out of domestic politics.

Sorry I forgot to link to this thread started by Smirkley on the recent run on the banks in Russia.

A good look at an unstable situation as well.

All of these problems seem to be creating a sort of economic "Perfect Storm".

Well Gools, I've read through you're reasearch and links that you supplied, and don't get me wrong I KNOW that there will be an Oil Crisis in the near future, but there are some things you have to consider as well. I'll Bullet Point them since there will be alot of wildcards that could mess up/delay you're 'perfect economic storm' theory.

1. Impending Nanotech Boom
   Which invariably means stronger and lighter materials for use in vehicles, better ways to store hydrogen, more efficient and much cheaper solar-cells and who knows what, allthough the Nanotech Sector is still in the Speculative Stages of development the next stage after Speculation is FRENZY....
   
   
2. Discovery of a new vast Oil Field
   Well this one is obvious but is becoming much less likely as time goes on...
   
   
3. Much more reliance on Natural Gas for fuel and energy in the near future
   Well as gas goes up alot of middle-class people are gonna consider switching thier cars over to Natural Gas which is much cheaper and cleaner burning as well. Cost's about 2,000 cnd to convert an 87 octane unleaded engine to burn natural gas.
   
   
4. New Breakthrough Fuel/Energy Source Discovered
   See these links.
   jlnlabs.imars.com...
   jlnlabs.imars.com...
   www.blazelabs.com...
   I have also completed my own primitive AquaFuel demonstrator and all I need to get now is a suitable power supply to make it work...
   
   

So anyway, I do agree with you that this is a precarious situation but the Markets are inherently self correcting and if we're going down the rout to a depression, it won't last forever, it won't be the last, and we have much more to worry about Economically in the middle of this Century. Basically my theory(that was influenced by Why Stock Markets Crash by Didier Sornette) is that as our technology developes the pace of Creative Destruction through Technological Innovation increases, so do the risk's of Crashs, Bubbles and Deflations happeneing more regularly, leading up to the point where all our markets will just collapse and the Age of Growth will be over maybe forever.. And this is my optimistic view of the future....there are alot of trends going on now that will not be felt in there fullest affect for another 10-20 years and trying to analyze them is almost futile be we all still gotta try, but I believe more and more now that ALL of us and I mean all of humanity is gonna get a huge shock soon. What that shock is, well its up for analysis and speculation still up until it actually happens.

Thanks for the input Sardion. Much appreciated.

I agree that there are many wildcards, but I do believe that the energy crunch is real and it is upon us. Of the four points you raise only the last one seems plausible to me with all of the research going on in physics.

Impending Nanotech Boom?

I wish I could believe, but I simply don't see the real value. Maybe I don't know enough about it. From what I understand it will lead to new materials to be used in high tech gadgets. The problem is all those electronic high tech toys are a waste of resources. (think obsolescense of cell phone models from last year for example). Besides I'm seeing this as simply the next dot-com tech bubble everyone is getting excited about. We are a long way from 7of9's nanoprobes!

Discovery of a vast new oil field? Highly unlikely and would only postpone the inevitable by a few years.

Natural Gas is also in crisis. Perhaps worse that the oil crisis! Here is a recent analysis with many references incorporated. Natural Gas Crisis

New Breakthrough Energy Technology? Perhaps this is what will get us out of the depression. Personally I see that as a long way off.

Thank you for reminding me of the Creative Destruction paradigm. I wish that is what we were facing at this point in time but the problems seem more fundamental to me and I'm not even an economist! I also agree that we may be facing the end of the Age of Growth which means a total rethink of our economic system which is now based on expansion and yearly profit increases.

Interesting times to be alive!

I wish I could believe, but I simply don't see the real value. Maybe I don't know enough about it. From what I understand it will lead to new materials to be used in high tech gadgets. The problem is all those electronic high tech toys are a waste of resources. (think obsolescense of cell phone models from last year for example). Besides I'm seeing this as simply the next dot-com tech bubble everyone is getting excited about. We are a long way from 7of9's nanoprobes!

Well from your comment about Nantech being the next Dot Coms well you're partially right, but look at how much the world has changed just from the .coms? Nanotech is many-faceted as it is a GENERAL PURPOSE TECHNOLOGY. Remember that term? Like Electricity, the Internal Combustion Engine, it will change the world and 20 years from now it will be alot more apparent but now as I said above it's still in the Speculative Phase. As for the Many Facets of nanotech I'll bullet-point them for you to make them easier to understand the sheer size and scope of the next Boom which IMO is gonna be alot like the Tronics,Biotech,Plastic booms that happend so long ago just this time it will feel like they are happening again and all at once.

1. Energy
   
   
   
   1. Fuel Catalysts
      
   2. Photovoltaics
      Well how about Dirt-Cheap Solar Cells, made out of....dirt! And they will be here within a couple of year at the very least...
      
   3. Fuel Storage
      How important would a cheap,safe and efficent method of storing Hydrogen be to the world? Very important although this will take longer than the Solar Cells.
      
   4. Room temp superconductors
      
   
   
2. Healthcare
   
   
   
   1. Drug Delivery
      
   2. Drug Discovery
      
   3. Biomedical Devices
      
   
   
3. Materials
   The Nano-Materials sector is selling consumer items right now
   
   
   
   1. Composites
      Cheaper, lighter and much stronger these composites are in the process of gaining wide acceptance by Car Manufactuers(Most notable is GM and Ford in this area). Seen that commercial of the dent resistant side paneling, I think it was a GM commercial. That is a Nano-Composite material and its only 1st generation they will get ALOT better. Toyota is now using Nano-Composites to reduce the weight of some of their concepts. Some of the most basic modification reduce weight by 20%. When you get below 100nm the rules change, and down at the Nanoscale the Predominant force is Quantum Mechanics whose rules are totally different than what we're used too, and alot of people will use that to argue that we are in uncharted territory so any killer appz are far into the future, but just from watching this industry grow from when I first heard about it just 5 years ago in '99 I am just astounded by the progress under tough economic conditions.
      
   2. Nanotubes/Balls
      Nanotubes are the DREAM material being 100 times stronger than steel, at 1/6th the weight. And Buckyballs may be very usfull in Targeted Drug Treatments as well as being a very good medium in which to store Hydrogen safely and cheaply.
      
   3. Powders
      Used in alot of products right now, like sunscreen for instance.
      
   4. Clays
      Used in Car Tires and Tennis balls so they don't lose thier air as fast and last much longer. They are also talking about using NanoClays in composite materials to give the 'Self Repairing Capabilities'
      
   5. Textiles
      Stain-Proof Pants nuff said
      
      
   
   
4. Nanotech Tools
   They have Microscopes that use a single Carbon atom as the scanning tip, it can reach resolutions down to 10 picometers
   
   
5. Nano-Robotics
   Not NanoBots but Nanotech enhanced Macro Robotics to add durability, reduced weight and power consumtion.
   
6. Nanotech enhanced MEMS applications
   

As you can see Nanotechnology has applications in almost every sector imaginable, and its still IMO the Biggest wildcard out there right now. I'll be dealing with your other concerns with other posts. And don't be so sure about how far away we are from 7of9 type Nanobots. In the early 90s everyone believed that cloning was impossible, yet here we are years after Dolly shocked the world, now it's yesturdays news(so to speak).

BTW One other thing I didn't mention was that as our control at the Atomic scale improves all the waste we now incinerate or dump it will be usfull to Nanotechnology because when we master it all the barriers and problems that we now experience with recycling will disappear. The only true waste in a suffiencently advanced country that has embraced Nano is RadioActive waste, and even that will be easily dealt with.

Discovery of a vast new oil field? Highly unlikely and would only postpone the inevitable by a few years.

Yeah but it could buy us time, even a few years could avert a recession let alone a depression.

Natural Gas is also in crisis. Perhaps worse that the oil crisis! Here is a recent analysis with many references incorporated.

Well if its dire as that link paints it out to be maybe i shoulda used Propane instead of Natural Gas. The only reason I even said Natural gas is because running a car off of the stuff is much cheaper than regular unleaded. Propane would be cheaper i think.

Thank you for reminding me of the Creative Destruction paradigm. I wish that is what we were facing at this point in time but the problems seem more fundamental to me and I'm not even an economist!

We are ALWAYS facing Creative Destruction, and we always wll for the forseeable future(ie next 20-30 years). This whole process started in the 1600s and is going on strong(and getting stronger) to this very day. IT IS ONE OF THE FUNDAMENTALS of our economy because its this process that has been blamed for every Crash, Recession and Depression for the last 300 years. It all started with Tulips....and it will all end when the Singularity hits...

You certainly seem enthusiastic about nanotech. I hope you are right.

I'm glad you acknowledge the hype aspect of it. Take if from someone who participated in and witnessed the biotech boom and crash from inside the industry, hype happens and it�s not a positive thing. Science has been taken over by business and investment speculators in my opinion. Which is why I am a bit skeptical on this.

I hope the energy crunch is not as acute as seems to be apparent and that we have the time to reach that new economic paradigm you envision.


[edit on 10/20/2004 by Gools]

Well Sardion those are great posts.

Thanks Gools, I also enjoyed you're posts on this subject as well. It's the very reason why I'm here at ATS, to get a diversity of opinions on important subjects and frankly I'm surprised no one else has jumped in yet...

You certainly seem enthusiastic about nanotech. I hope you are right.

Well I'm not enthusiastic yet..but I'm optimistic since I have tried out some 1st gen Nano Products and they are very good IMO. Im really anticipating IBM's release of it's Millipede Flash Technology which can hold GBs per square inch. Man just imangine how much MP3 players will be able to hold

Science has been taken over by business and investment speculators in my opinion. Which is why I am a bit skeptical on this.

Well hasn't it always been that way? Am BTW I'm GLAD you're skeptical and I wish more investors are as skeptical as you because that would push out the next Crash somewhat.

I hope the energy crunch is not as acute as seems to be apparent and that we have the time to reach that new economic paradigm you envision.

The only way I see a depression scenario will happen is if Saudi Gov't falls and a Taliban type Gov't takes control. Allthough if that happens then we could be looking at WW3 and we all know how fast technology and science progesses during War. Remember Europe has to deal with Gas Prices 2x what we currently pay because they don't have Domestic sources of Oil. Are they in a depression right now? I don't really think they are, maybe recession, but certainly not depression. I see Economic Stagnation as the most likely scenario. You know what Japan had to endure in the 90s, and what North America had to suffer through in the 80s.

A collection of 27 articles on the looming energy crisis can be found at this link: Energy Crisis Coming Sooner Than Expected.

The articles discuss everything from the Saudi supply, the Yukos crisis, the natural gas crisis, terrorism concerns, the situation in Venezuela etc.

Lots of reading but well worth it IMHO.

Thanks for the link, alot of usable info

Here is some info on some of the Counter-Trends.
Germany looks to outsource solar panels

Quote Source Europe Eclipses U.S. Solar Shift

The cost of installing solar energy is finally within reach for many Americans, but people who have waited for this seemingly opportune time are being told to move to the back of the line. U.S. manufacturers of solar panels are sending products to the lucrative German and Japanese markets, casting a shadow over the domestic solar industry.

After years of escalating electricity prices, power failures and concerns about energy independence, states including California, New Jersey and Maryland recently passed laws to make it more affordable for businesses and homeowners to go solar. The states will pay up to 70 percent of the cost of installing photovoltaic solar panels, prompting many people who were interested in solar for environmental reasons to make the investment.

European wind energy growth rate achieves 40% growth rate(.PDF FILE)





Graphs from archive.greenpeace.org... even though they are old charts they are pretty revealing nonetheless.

EDIT: Does anyone know where to find updated charts, I've been trying to re-locate them to no success...

[edit on 4-8-2004 by sardion2000]

Excellent information!

Sounds like things are finally moving, especially in Europe.

Could be a good sector to get into (invest, job, carreer etc.). I'll have to start looking around my area and see what is going on.

I think I will use a few of those links for a post I'm working on in the Campaign2004 Issues forum. Hope you don't mind

I think I will use a few of those links for a post I'm working on in the Campaign2004 Issues forum. Hope you don't mind

Sure that's what I've been sorta hoping cuz no one has really tackled anything like this yet though it is still very early. Here's some more links for ya use them well

www.homepower.com...
www.nwes.com...
www.energyalternative.ca...
www.sierrasolar.com...

I have enjoyed reading your enlightening posts on the subject.

Here is my 2 cents for what its worth. The only way I can see oil being the cause of a great depression by its self is if there is a huge spike in price due to geo- political or military consequences. For instance what if Al Qaeda actually got their hands on a nuke and managed to nuke Saudi Arabia�s largest oil field.

It appears we have hit or will soon experience peak oil. When peak oil hits us there will not be a dramatic plunge in oil production but will be a decline never less causing a steady rise in prices which will help to facilitate investment in development of alternative energy sources. At that point the demand for oil in developed countries will start to decline. Developing countries will continue to use more oil due to the fact that they will most likely have to make upgrades or capital expenditures to use the new energy sources. It will be like the use of coal, which is used more by developing countries than developed countries.

Has anyone developed a method to use the Tesla coil for energy needs? Is that what UFO�s are using? They way they move makes me think they are using the earths magnetic field or an energy source such as the Tesla coil. Sorry I got of post but I couldn�t resist.

The US and the global economy is currently held aloft on a foundation of cheap money, borrowed at nearly 0% interest as leverage to support asset prices of dubious value.

If the cost of borrowing this money increases the whole thing falls apart.
An oil shock, inflation a USD crisis, increasing budget deficits etc etc pulls the foundations from this highly leveraged economy. IT IS NOT A MATTER OF "IF" but a matter of WHEN. Hedge funds, property funds, retail stockmarket players will all rush for the door.

Timing is always difficult. I've been playing this game for many years and no way is a nanotech boom or similar going to make this a soft landing.
maybe this year, maybe next. Personally my current model has it happening just prior to the "proposed" US presidential election a/w a conflict with NK. I think Bush will try and deal with it before he's removed from office and may even use the conflict to delay/suspend the election.

Either way, the last bit aside, the deck of cards will fall and YOU DO NOT WANT TO BE IN DEBT AND YOU NEED TO HAVE AN INCOME> GET ON WITH IT!!!!!
Cheers. Romeo, the happy gambler.

Originally posted by sardion2000
Sure that's what I've been sorta hoping cuz no one has really tackled anything like this yet though it is still very early.

Thanks Sardion!
I agree the Campaign Issues board is just getting rolling.

Originally posted by cryptorsa1001
It appears we have hit or will soon experience peak oil. When peak oil hits us there will not be a dramatic plunge in oil production but will be a decline never less causing a steady rise in prices which will help to facilitate investment in development of alternative energy sources.

I agree with your assessment cryptorsa1001 we will also have to upgrade and capitalise our infrastructure.

FYI on both these points I have started this thread for some feedback on the current political scene:

ENERGY: Reducing Oil Dependency

Has anyone developed a method to use the Tesla coil for energy needs? Is that what UFO�s are using? They way they move makes me think they are using the earths magnetic field or an energy source such as the Tesla coil. Sorry I got of post but I couldn�t resist.

Edit: fixed link

[edit on 10/21/2004 by Gools]

Quote source www.wired.com...
California sunshine: California officials are proposing that half of all new homes in the state be running on solar energy in 10 years, an effort spurred by $100 million in annual incentives paid for by electricity consumers.

The move comes three years after the state suffered through an energy crisis that left utility customers paying off billions in debts incurred when wholesales electricity rates hit record-high levels.

The plan proposes that the state give rebates to home builders who install solar panels on new homes, and incentives for installing panels on existing homes, according to a copy of the California Environmental Protection Agency draft.