All Roads Lead To Peak Oil

I follow the JODI World Oil Database primarily because it is now four months ahead of the EIA international data base. I make some adjustments however. I use the OPEC MOMR “secondary sources” for all OPEC data where JODI also uses the MOMR but uses their “direct communication” data instead. The OPEC portion of the JODI data is “crude only” and will therefore be somewhat less than the EIA reports.

I use the Canadian National Energy Base data for Canada instead of the strange numbers JODI has for Canada. And I use the EIA data for the few small producers that JODI does not report.

With these Changes I think I have composed an excellent World Oil Database from this composite data. And with the October data just released I have composed the below charts. The data is through October and is in thousand barrels per day.

JODI World C+C

World oil production peaked, so far, in July at 76,702,000 barrels per day and in October stood at 76,128,000 bpd or 574,000 bpd below the peak.


Non-OPEC peaked, so far, in December 2014 at 45,530,000 bpd and in October stood at 44,662,000, down 868,000 bpd or just under 2% in 10 months.

JODI Non-OPEC 4 years

For the first time in 4 years Non-OPEC production has dropped below the level it was the same month the previous year. This means the 12 month trailing average has turned negative, though just barely.

Jodi Non-OPEC less USA

Non-OPEC less the USA has been on a 12 year bumpy plateau. In fact it stood at 35,422,000 barrels per day in October, 214,000 bpd less than the level reached in December 2003.

JODI Russia

The data here, prior to 2012, is from the EIA. Russia and the USA are, by far, the two largest Non-OPEC producers. At best Russia has plateaued but most analysts predict she will begin to decline next year. I think that prognostication is correct. Russia, I believe, will slowly decline beginning in 2016.

Russia Change

The data for 2015 is the average for the first 10 months. Russia has increased production every year since 1999 except 2008 when we had the big crash. Some were expecting a similar crash in 2015. They were surprised: Siberian Surprise. I was not and I don’t expect a crash next year either. I just expect production in 2016 to be slightly less than this year.

Non-OPEC less US & Russia

Non-OPEC less USA and Russia is clearly in decline. Five years of oil prices above $100 could not prevent the decline. But $100 oil has brought a lot of Non-OPEC oil on line. What it did do was prevent this decline from being a lot steeper had oil been in the $60 or below range.

OPEC 5 Years

Of course if we are talking peak oil we must include OPEC. Above is OPEC crude only production through November. It is obvious, to me anyway, that OPEC is producing flat out. Only Iran has much potential to increase production. Most analysts think they can only increase production about half a million barrels per day. But that will only likely replace decline in other OPEC nations. OPEC production will likely hold steady for the next four or five years before starting a steady decline. OPEC production will not prevent peak oil.

Rockman, who posts now over on, recently posted the following which I though was so clear and to the point that it deserved a post here also.

Looker: “So in fact peak oil will really bite when it is not so economically viable to find and produce oil for the market.”

Rockman replied: Good point and there’s a great visual to emphasize that point: look at the US oil production curve. We peaked about 35 years ago. And during those decades the inflation adjusted price of oil was less the current prices…and considerably less then during the height of the shale boom.

And the shales boomed when oil price boomed. And not due to technology: horizontal drilling for unconventional reservoirs, like the Austin Chalk in Texas, was well established 15 years earlier. And fracking has changed very little for decades.

In other words US oil production peaked because oil prices essentially peaked decades ago. Yes: up and down but no great movement like we saw when the shales boomed. And US oil production almost reached a new peak because oil prices reached near peak levels once again. Which means that we may not only be at global PO but the longer it takes for oil prices to significantly increase we may never again approach current production levels as depletion continues to take its toll. The recent increase in global oil production actually is the result of low oil prices…not higher. The oil price collapse has forced some producers, like the KSA, to bring their reserve capacity into play so as to increase the revenue stream. Which also means the lower oil prices are also increasing the depletion rate of existing proven reserves as well as hampering the development of new reserves.

The recent oil price collapse may eventually be viewed as the ultimate “Oh shit” moment in the global energy dynamics.

The upsurge in OPEC production that began in March 2015 is what Rockman is talking about when he says: “The recent increase in global oil production actually is the result of low oil prices…not higher.” That point should not be taken lightly. While high oil prices drove most nations to invest heavily in infill drilling and a few new fields, now that prices have collapsed they must produce every barrel possible to maintain their budgets.

Bottom line, I am more convinced than ever that 2015 will be the year world crude oil peaked.

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546 Responses to All Roads Lead To Peak Oil

  1. Arceus says:

    So as the price of oil continues lower, oil production will continue to increase.

    And if the price of oil goes higher, oil production will continue to increase.

    But capex is decreasing across the board.

    Rig count, it must be assumed will continue to decrease.

    Strange world.

    • muppet says:

      Oil production will increase in those areas where it is cheap to produce oil and where maintaining public infrastructure relies on oil revenues. KSA can still profit from cheap oil. Oil production will decrease in areas where it is expensive to produce oil.

      • Arceus says:

        As long as drillers have access to funds, they will continue to drill – that is what they do. Price is not much of a factor as long as they have access to money. The drillers always assume the price of oil will go up. It is hardwired into their brain, despite any evidence to the contrary. At least half the time, they are right.

        • Not even tool pushers get to make those decisions.. I think it’s decided way upstairs by a little jerk with a Harvard degree, who likes playing with excel and decides to forecast higher prices to keep the gig alive.

    • So as the price of oil continues lower, oil production will continue to increase.

      Oh don’t be silly. Just because Saudi Arabia has increased production in order to meet their budget does not mean the world will increase production because of cheap oil. (Iraq would have increased production regardless.)

      No, upstream investment will, or has, dropped dramatically. This will cause production decline down the road.

      • Arceus says:

        Yes, I should have added “in the short term” to that, but then it wouldn’t have sounded as glib.

        • canabuck says:

          And what is “short term”?
          12 months, or maybe 3-4 years.

          If the world is 2 Mbbl/day oversupplied right now, and decline rates are 6%, and there is only minimal new oil wells. (so, overall decline rate is 2% ?). We should see the oversupply disappear in a year or so.

          • Looks closer to 10% in some cases. From previous thread.

            The low prices are taking their toll.

            Ecopetrol, the largest Colombian producer announced that it will produce 755,000 barrels a day in 2016 vs 760,000/day in third quarter of 2015.
            That does not sound like much a of drop, until you realize that Ecopetrol will be taking over the Rubiales field from a joint venture by not extending their partners contract.That will add 70,000 barrels a day to their production.Or about 35,000 barrels day annualized since it happens mid-year. So adjusted for this their production will decline from 795,000 barrels to 755,000 barrels per day, or a drop of 5%. And that is after spending 4.8 Billion USD. So I am guessing their base decline rate is closer to 10%

          • I don’t think the oversupply is 2 mm. My guess it’s less than 1.2 mm in December.

      • Stavros H says:

        @Ron Patterson

        You continue to ignore the role of geopolitics in setting the tone for the global oil market, and especially the current oil market.

        KSA have not been pumping oil at a record pace in order to cover their budget (which is simply impossible at current prices without a massive devaluation of their currency which will annihilate their trade position, since KSA cannot feed or clothe itself) KSA have been doing what they are doing because they are in a shooting war with Russia. The Syrian Arab Army, the Iraqi Shia militias, the Shia-dominated Iraqi government, Iran itself, as well as Hezbollah are Russia’s allies in a grand regional struggle against NATO-GCC across the Middle East. The battlefield includes Syria, Iraq and Yemen. East Ukraine is a derivative or diversionary front in what some people describe as the First Global Hybrid War.

        Russia, Iraq and Iran have massive oil (and gas) reserves that can be brought into production in the future. Something similar applies to Venezuela (but I reckon that Venezuela’s reserves will be more expensive in relative terms) This potentiality threatens the global balance of power, as western oil & gas output is destined to decline (as well as output by countries under western domination) and the potential oil production of Russia, Iran & Iraq becomes a necessity for the global economy.

        This is one of the two main reasons (the other being the potential routes of gas pipelines) why we now have an extremely dangerous (media and political leaders vastly understate the true extent of brinkmanship currently ongoing) process of escalation in the Middle East.

        What you fail to acknowledge in your articles, is that NATO-GCC have as a strategic imperative to strangle Russia, Iran & Iraq in any which way they can. This includes the imposition of sanctions, military pressure and all other kinds of sabotage one can think of. What we are now witnessing in the global oil (and gas) markets is that excess investment has been ongoing in places such as the US, Canada, the North Sea (as well as several offshore locations, performed by western majors) etc while there is an under-investment in places such as Russia, Iran and Iraq (also Libya & Venezuela) The latter group of countries is much less capital rich than the NATO-GCC countries (and their proxies) and less proficient technologically, hence my firm belief that their production is well below potential.

        NATO-GCC’s calculation once they embarked on their oil-price war more than a year ago, was that the combination of sanctions, a crushed oil price and loss of trade with Ukraine would have pummeled Russia into submission, hence ending that country’s support for the Syrian Arab Army, Iran and Iraq. Simply put, if Russia falls, then the Middle East will be at the mercy of the NATO-GCC-Israel alliance (the world’s dominant group of countries) One can also imagine what that would entail for China’s position on the world stage.

        As for Russia’s oil output in 2016, I cannot say very much. There are so many factors at play (price, sanctions, unknown Russian technological capabilities) but even if there is a considerable fall, then it will have nothing to do with Peak Oil (in the traditional sense) finally hitting Russia, but with NATO-GCC pressure bearing some fruit.

        In conclusion, my point is that several countries with vast oil & gas reserves, have been intentionally starved of investment due to geopolitical factors, NOT economic ones. As for Russia in particular, I am guessing you have been in the business of monitoring the global oil industry for many years now, how many times have you heard/read western “experts” claim that any minute now, Russian oil production will be entering terminal decline? I can attest that I have been coming across such claims since the day I started following such things, more than a decade ago.

        Iran & Iraq also have mythical reserves of oil still untapped. Libya, once stabilized (probably under a NATO-puppet government) can also boost its oil production significantly.

        • Jimmy says:

          NATO didn’t do so shit-hot in Afghanistan. The days of anybody being at the mercy of NATO are long over. If NATO learnt anything in Afghanistan it’s to stay out of land wars in Asia. This has been the case since Alexander the Great but great powers seem to need a reminder every century or so. I suggest USA is no longer a dominant power. Preeminent yes but not dominant. 25 years ago anybody who defied the USA was in trouble. They’d fly half way around the world and kick your ass. On a Tuesday if they wanted. For 5 billion dollars. Today we see that Russia, Iran and China have joined together to defy USA/NATO policy in Syria and they’re doing rather well. It’ll be along time until USA fights any winning battles anywhere in Asia.

          • Glenn Stehle says:

            The literature on perceptions suggests that, however they come to be formed, the beliefs of national leaders (including their beliefs about the relative power of states in the international system) are slow to change.

            Kenneth Boulding argues that such adjustments occur rarely, if at all, while John Stoessinger asserts that change is possible only as a consequence of some monumental disaster.

            The precise point at which the scales of power turn…is imperceptible to common observation…some progress must be made in the new direction, before the change is perceived. They who are in the sinking scale…do not easily come off from the habitual prejudices of superior wealth, or power, or skill, or courage, nor from the confidence that these prejudices inspire. They who are in the rising scale do not immediately feel their strength, nor assume that confidence in it which successful experience gives them afterwards. They who are the most concerned to watch the variations of this balance, midjudge often in the same manner, and from the same prejudices. They continue to dread a power no longer able to hurt them, or they continue to have no apprehension of a power that grows daily more formidable.

            –EDWARD VOSE GULICK, Europe’s Classical Balance of Power

        • Greenbub says:

          “the US, Canada, the North Sea” -those are very safe places for investing in oil production.

        • Glenn Stehle says:

          Stavros H,

          Thank you so much.

          Your narrative is at least as plausible as the narrative that KSA is pumping oil at a record pace in order to cover their budget.

          The narrative put forth by Ron and Rockman defies reality and common sense because, as Peter notes below, “Saudi Arabia is making half as much now producing 10 million than they were producing 8 million per day.”

          Saudi Arabia appears to have other motives besides maximizing its income from oil sales. Its motives are not stricly economic, and waging war is never without cost.

          Again, I don’t claim to know what Saudi Arabia’s motives are, but your explanation seems as plausible as any.

          One thing we can be sure of, however, is that the balance of power which attained after 1989 is now very much in flux, and is very much being challenged.

        • Ves says:


          The big picture that you describe is somewhat on the money but the devil is in the details. And when you look at these details from different frame of mind you will get different picture.
          1) If you use terms like NATO, GCC, EU, IMF you have to be aware that these are just labels that are representing cartels. In North America they like to talk about OPEC cartel but not so much about other cartels. If you don’t talk about them than we pretend they do not exist. Main purpose of NATO is not to fight the war with “enemies” but to collect a money racket from the “allies”. Country A is in the NATO, regardless if it likes it or not, has to have 3% of budget spent on military. That 3% is your racket. And that racket has to be collected every year. And you can only spend it on hardware from NATO catalogue. No free market there even if there are cheaper and better options. The more countries join the cartel the more money is in the pot. Small countries – no problem, they can join. Poor countries – no problem, they can join too. You can always extract something. In military sense these countries are useful as much as your Facebook friends (practically not friends at all) but what it does it keeps money trickling to the core.

          2) Second note is about the fine print of the notion how much some country can produce oil. There is misconception in the discussion that certain country has huge X amount reserves and it will produce huge X amount of oil in the future. Country A with supposedly huge reserves, if assume it has sovereign elite, will produce just enough that suits their economic development and no more. It is as simple as that. The notion that Russia or Iran or whoever will produce so much that European elite can entertain themselves with Formula 1 races every weekend is pretty much nonsense that is result of 50 year of propagandazition. If American elite wants to piss their remaining shale oil on NASCAR races or 20 miles drive to the nearest Wal-Mart for jug of milk, or to keep military bases around the world, well, that is their choice. But eventually it will come to the point where this way of life is not possible and you have to adapt to a new circumstance. This blip period where oil prices are very low are just consequences of geopolitical war that you describe where everybody produce maximum regardless of profit in order to undercut the competition. If you don’t have domestic source of oil then you can’t play empire games anymore. You have to be “normal” country again. And that is not that tragic because if you ask 99% that question if they would like to be a “normal” country again they would take that in a heartbeat.

        • Nick G says:

          This potentiality threatens the global balance of power, as western oil & gas output is destined to decline (as well as output by countries under western domination) and the potential oil production of Russia, Iran & Iraq becomes a necessity for the global economy.

          It’s certainly time to put the era of the “great prize” of oil behind us, and transition to new forms of transportation and energy.

          If that were to reduce the chances for this kind of senseless conflict, that would be enormously valuable.

        • Loz says:

          Perhaps a little ‘over read’.

          The simplest explanation:
          1. USA production increase from shale largely the result of a high appetite for ‘risk’ by USA financial banks and by stockholders – ‘the greater fool effect’. Partly fed by artificially low interest rates and poor returns from other instruments.

          2. Saudi increase because price is low and only volume can compensate – the irony of this feedback loop is obvious.

          3. Russia same. My recollection is that the Russian state takes all nett income over $30 a barrel anyway, so from the compamy viewpoint, it is BAU, but with unhappy but resigned shareholders.

          4. Yes the Muslim brotherhood would like to create a Sunni (at least), maybe Wahhabi (if some Saudi get their way) series of religious based states from Turkey through Syria, Iraq, then down the Gulf countries (at least). To this end, it is likely many or most sponsor terrorist factions, all with ‘plausible deniability’.

          5. Russia has had a base in Syria for many years. They are no more going to give it up then they are going to give up the Crimean sea base of long standing (contrast the number of bases in foreign countries Russia has vs USA -startling!). In addition, competence – or standard mark one viciousness of the of Middle East Govts everywhere – Govt. or not, Syria is (was) a secular, i.e. no state religion, country. Many sides got along, all sects are in the army, but the nation is being cracked open along sectarian (religous) lines by outsiders. Same happened in Iraq, where prior to USA invasion Sunni and Shite lived well mixed in Baghdad. Now Baghdad is divided into Sunni and Shite areas. Think North and Southern Ireland. Same consequences.

          Russia’s interest was (is) in pipeline access through Iraq, through Turkey. Iran same. Israel would also benefit.

          More than that, existentially, Russia is worried about terrorist coming up into Russia from the countries bordering itself and Turkey, and coming in via Afghanistan, once it too falls under Muslim Brotherhood/Gulf wahhabi influence. America, you must recall, has no such problem geographically (Mexico is Catholic).

          6. Yes, USA would like to wrest the oil and uranium resources from Russia via breakup of Russia in to client states. Tried once in the 90’s, failed. Probably, but not certainly, will fail again. Even with ‘success’, USA ‘success’ would come at the price of the Iraqisation of large parts of southeastern Russia – under terrorist influence.

          7. Expect a long grind to draw the line against religious extremists. Ironically, Europes greatest hope for secure oil supply in future is a strong Russia. With or without Putin, Russia, with their strong focus on trade and their apparent adherence to International norms and laws is Europes security. Not so much USA.

          8. Everything is domestic politics and short termism in USA and Western Europe. Certain other parties step back and take a longer view.

  2. Javier says:

    2005: Peak Conventional Oil
    2015: Peak Oil

    We should look not at the consequences of Peak Oil, but to Peak Oil as a consequence of the underlying economical and financial global situation. Peak Oil is going to make sure we never recover during the cyclical upswings. We have found the limits to growth, and those limits are going to be getting smaller with time.

    • Matt White says:

      So are you denying this:

      I know a lot of people in the peak oil scene keep clinging to that 2005 date, might be time to let it go.

      • Marcus says:

        As per your link Euan Mearns sites 73.2 Mbpd in 2005 vs 74.28 Mbpd in December 2014 according to the EIA. The problem is that the figures from JODI, IEA, EIA & BP etc are not all in perfect agreement and I don’t think we can definitively say that world production is “x’ amount with that degree of accuracy especially since the numbers are often revised up or down a year or two down the line. What we can do is look at the general trend over several years & its clear that 2005 marked a point where conventional oil production either peaked or at best grew very slowly within the context of a rather bumpy plateau. So the highest oil prices in history failed to significantly increase conventional production and low oil price environment is unlikely to be conducive to new sources of unconventional production. I would suggest on that basis that the future does not look too rosy.

        • Dennis Coyne says:

          Hi Matt,

          In 2015 C+C output will be about 79.4 Mb/d, the data is not perfect but output will not be revised down by 6 Mb/d.

          As far as 2005 being peak “cheap” oil, the lowest monthly oil price was about $46/b in Jan 2005 and for the year oil was $59/b (all prices in Dec 2015$).
          For 2015 the average oil price will be about $49/b and the lowest monthly price was about $42/b in Nov 2015. I would say 2015 has been peak “cheap” oil, though some may claim the condensate should not be counted, we do not have good international data on the condensate output so we can only speculate on that.

      • tahoe1780 says:

        So what are we calling “oil” nowadays? Can anyone provide a graph of the ratio change between crude and condensate over the years?

        • Dennis Coyne says:

          There is not good data on international condensate output, the only decent data we have is on crude plus condensate ( and that data is not great, but the best we have). Crude output has always included some condensate output in the data reported and few nations separate the crude and condensate data. OPEC, Canada, Russia, and the US do, and that is a lot of World output, we can assume the ratio of condensate to crude is the same for the rest of the World and make an estimate of the crude divided by C+C. I have not done so, but I believe others have.

      • Javier says:

        No. That in 10 years production has managed to temporarily increase by 1.5%, when in the previous 10 years it grew by 18% fits my concept of Peak Conventional Oil. Conventional oil got to a bumpy plateau in 2005. A bumpy plateau is by definition bumpy. We are in a bump. If production keeps increasing, it will negate the Conventional Peak Oil. If it falls back it will not.

      • DougT says:

        I refer to the 2005 plateau as “peak cheap oil”. Today’s current price certaintly does not reflect today’s marginal cost of supply already built into the production stream.

    • Nick G says:

      Peak Oil is going to make sure we never recover during the cyclical upswings. </i

      That will be true for the really stupid consumers and importers, who refuse to deal with reality and switch away from oil and fossil fuels. Like tobacco company ceo's smoking 3 packs a day…

  3. brainpimp says:

    Are any of you posters actually in the oil industry?

    So many things you are missing. All your predictions and wishcasting is based on a static world with no technological improvements.

    Much investment is and has gone into new recovery tech. Some coming online now. I’ve seen them.

    You are missing the boat. Peak oil available is still decades away.

    • Peak oil available is still decades away.

      What is “peak oil available”? I have never heard of that one. Sounds like bullshit to me. Peak oil production is the only thing that matters.

      And yes, several of our posters are actually in the oil industry. Are you?

    • Arceus says:

      Actually, I agree with that. My own feeling is that oil will peak sometime between 2020 and 2030, and that peak production will stay within a fairly tight range for five plus years during that decade.

      • Stilgar Wilcox says:

        I agree with that prediction too, Arceus.

        • SatansBestFriend says:

          Hey Stilgar, BrainChump, Arceus,

          Tell your “feelings” to NATO (missile shield, regime change in Syria), Russia (Syria, Ukraine, Turkey) and China (South China Sea resource grab, asserting itself in the oil exporting countries).

          I bet they will “feel” impressed with your “feelings” about oil production.

          The US Military predicted Peak Oil in 2015 using data, math and petroleum geology…..not “feelings”.

          ELM + Putin = Horrible News for NATO aligned countries (oil importers).

          Based on that equation “my feelings” are you are going to see very crazy geopoilitical movements…like we already are.

          Time to BRUSH MY TEETH. I want them nice and shiny for PEAK OIL.

          • Dave P says:

            Do you have a link to the US military’s report?

            • SatansBestFriend says:


              It was in their JOE 2010 ( I think report).

              I’ve noticed it hasn’t appeared in any others reports. Did they publish this document and change their opinion drastically a year later? I doubt it!

              It was signed off by General Mattias (commander of Joint Forces) which means he reviewed it, and put his name on the line.

              GOOGLE: JOE 2010 Report Peak Oil.

              It will pop up as the second link. It is a .pdf file.

              “By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day,” says the report, which has a foreword by a senior commander, General James N Mattis.

              They missed the shale boom. Like everyone else.

              But look at how the militaries around the world are acting provocatively. Must have similar forescasts IMO.

      • TechGuy says:

        Arceus Wrote:
        “My own feeling is that oil will peak sometime between 2020 and 2030, and that peak production will stay within a fairly tight range for five plus years during that decade.”

        CapEx has collapsed and a lot of new projects have been canceled. Most of the projects that were canceled take 3 to 7 years to bring new oil to the market. In the meantime, existing production continues to deplete. For the cancel projects to be restarted Oil prices will need to more than double and stay there for a considerable period before Oil drillers will restart CapEx increases. They aren’t going to restart them until Oil prices have stabilized for a considerable period.

        By the time Oil prices recover and stabilize, world production likely be losing production faster than newer projects can come on line because of the long development time. It the Red Queen is coming and staying for good.

        World economics is also likely to put a drag on Oil demand now that the Emerging Market has breached Peak credit/debt. Asia and Brazil are now in freefall and in recession. Thus consumption of Oil will be much lower as the credit/default cycle will take a decade or more (if ever) to recover. In the US/EU there still hasn’t been a real recovery, despite 7+ years of zero interest rates. The EU is still in recession and the US will be recession by the spring.

        FWIW: We would have already been in permanent decline if it wasn’t for the shale drillers drilling wall street for money (ie related to ZIRP – Zero Interest Rate Policy). Shale needs oil prices above $105 to be profiable (ie pay down debt and still make a profit). Shale drillers borrowed about $500 Billion (If I recall correctly) to pay for all the CapEx needed. If the shale drillers were unable to borrow hundreds of billion, there would never had been a shale drilling boom. Like the EM debt bubble there is also a Shale Drilling debt bubble that has popped. No one today is willing to throw money at the drillers and nor will the do so in th next 20 years. We are on the verge of a wave of shale driller defaults and lots of investors are going to lose their shirts.

        Perhaps if economics did not play into future production, Peak Oil could be deferred to the 2020-2030. Unfortunately economics do matter and its going to force peak sooner (very likely 2015).

        • Nick G says:

          They aren’t going to restart them until Oil prices have stabilized for a considerable period.

          Wouldn’t they restart them when the futures strip allows them to fully hedge their production?

          • TechGuy says:

            Nick Wrote:
            “Wouldn’t they restart them when the futures strip allows them to fully hedge their production?”

            In my opinion Oil companies and Investors will be skittish to jump back in when oil prices recover, on the chances that prices will drop again resulting in more losses. An investor that lost a lot of money investing in shale is not going to be too keen on investing in energy.

            Most of the money investing in shale was not based upon long term hedging contracts. I also doubt their will be very many business looking for long term price contracts (also gotten burned with them). At least not enough contracts to make much of a difference to affect the global production.

            • Nick G says:

              Most of the money investing in shale was not based upon long term hedging contracts.

              Well, sure – they got over confident. And, they got burned. Badly.

              I also doubt their will be very many business looking for long term price contracts (also gotten burned with them).

              Well, if that’s the case we’ll see that in the futures’ strip. But, a lot of businesses are deciding they need to hedge their consumption, in order to have price certainty.

              Have you seen any sign of the futures market contracting overall??

    • Jimmy says:

      “Some coming online now. I’ve seen them”.

      What have you seen? Any links to supporting data and documentation would be appreciated.

      It seems to me that it is you that is wishcasting. Share your inside info please.

    • IanH says:

      I guess this is the secret technology that makes (will make) Pioneer and EOG profitable at 30USD in the Permian?, if Art Berman knew of this technology he would not be so cynical. 🙂

    • Caelan MacIntyre says:

      ‘Peak brainpimp’ ^u^

      • Jimmy says:

        Can’t be that secret. The guy who drives the water truck seems to have been briefed.

    • I have been in the oil industry for 40 years. Please let us know about the technical improvements you have in mind, which will allow us to produce at 80 mmbopd c+c for decades. Once I see your response I can comment on whether you know as much as you think you know. 😊

  4. Ralph says:

    So Rockman’s post points to a ‘peak oil dynamic’ (his phrase) leading to a shark’s fin production profile. Rapid depletion of already drilled wells, and a collapse in the rate of drilling world wide, and abandonment of thousands of economically marginal stripper wells and a collapse of investment in longer lead time investments like deep water, arctic, and heavy oil/tar sands should all lead to a super spike in oil prices in a year or two as all those new Chinese and US SUV drivers discover that the global glut of stored oil is declining fast just as production falls off a cliff. That, if nothing else beforehand, will pop the next financial bubble, and trigger the next financial crisis.

    • Synapsid says:


      Rockman says nothing about a coming shark’s fin of decline. He has pointed out several times that that is just what will not happen.

      He posts at, if you want to follow his arguments.

    • TechGuy says:

      Ralph wrote:
      “should all lead to a super spike in oil prices in a year or two as all those new Chinese and US SUV drivers discover that the global glut”

      China is in a recession and on the verge of a debt crisis. Demand for vehicles has already collapsed. the US is close to another recession. I expect worldwide demand to shrink considerably in 2016. Thus putting a cap on Oil prices. That said if the Middle East breaks out into full blown war, than its likely to spike back up.

      FWIW: Its not just Oil is falling, so is everything else. Just about all commodities are in a state of freefall. Excess capacity everywhere and buyers are disappearing.

  5. Jef says:

    Rockman seems to be reiterating what others have been saying wrt the question of why do producers still produce at these low prices? Why don’t they just shut it down and wait for the price to go up?

    It is because while you make less money when prices are down you make even less when you don’t produce.

    So with low prices production will continue as long as possible until it can’t.

    With high prices demand is hampered and everyone is afraid of the economic impact.

    Peak Oil!

    • Synapsid says:


      Exactly. Low prices? You don’t earn much. Shut down? You earn nothing.

      You still have to keep the lights on.

      Rockman is a producer. What he’s talking about is what he does.

  6. John says:

    Iraqi production could face decline in 2016….they simply cannot pay their bills even with emergency loans from world bank….only OPEC increase 2015 was Iraq and SA….SA going full out and Iraq declining, Russia full out….Iran…who would invest there st $35 oil? US shale capex cuts will bite and declines will increase in 2016.

  7. dclonghorn says:

    Thanks for the post. I find it very informative. One question I have is why the JODI totals are around 75 million bopd, when world production is often discussed as being around 90 million bopd. I suspect the difference is in how condensate and bitumen are counted, but I would like to know what the differences are.

    • Watcher says:

      Ron’s actually on top of these little variances in oil stats from various sources. He juggles the secondary sources choice with gov’t reported and the issue of C+C vs just C. The choices always look rational to me.

      As to what leads to decline in output when, it’s pretty amazing to me that people still try to predict this stuff. I can find you distinguished analysts saying opposite things, and you can find them too, and without much effort. The odd part of this is the reluctance of people to recognize none of them know anything.

      One other thing worth thinking about. There is no long run. The long run is now, because now was the long run a year or five ago. No one is allowed to say such and such is true today “but in the long run” something else will be true. What’s true now is true in the long run.

    • DC, the difference is this is Crude + Condensate and does not include Natural Gas Liquids. The 90 million bpd you quoted does include natural gas liquids. That said however the JODI numbers are somewhat less than the EIA numbers because the EIA counts OPEC condensate while JODI does not. Also there may be a few very small producers that does not report to JODI.

      The EIA has world crude plus condensate at about 80 million barrels per day. The EIA has production of Crude Oil, NGPL, and Other Liquids at 93,770,000 barrels per day in June 2015. That was a jump of about one and one quarter million barrels per day from May. Somehow I just don’t really think that was the case.

      • Peter says:


        According to you Saudi Arabia were doing everything possible in Jan 2013 just to stop decline.

        Yet here we are 3 years on and they are producing 1mmbld more and flooding the market.
        Please explain. Why would a country drive down the price to maintain market share when they know they will lose market share due to declining production.

        • According to you Saudi Arabia were doing everything possible in Jan 2013 just to stop decline.

          And they did. In addition to dramatically increasing infill drilling in their old fields, they brought Khurais on line, then increased water injection in Khurais and in 2013 they brought Manifa on line ahead of schedule.

          Saudi Aramco Starts Pumping From Manifa Oil Field Ahead of Plan

          April 15, 2013
          Saudi Arabian Oil Co. started producing crude from Manifa, the world’s fifth-largest oil field, on April 10, three months ahead schedule.

          Saudi Aramco, as the state-owned producer is known, said today the field will produce 500,000 barrels a day of Arabian heavy crude by July and it will reach 900,000 barrels a day by end of next year.

          And they are still working desperately to stem the decline in their old giant fields.

          Saudi Aramco to expand Shaybah, Khurais oil output in 2016-17

          “This will bring it up to a million barrels (per day). We’re in the process of awarding the contract in the next few days,” he said, adding that an ongoing project at Shaybah will also add 250,000 bpd of natural gas liquids output in end-2014.

          The Khurais expansion project was at the front-end engineering stage and the expansion to increase the field’s output by 300,000 bpd to 1.5 million bpd should be completed by 2017, he said.

          Khurais, Shaybah and Manifa are all very old fields that, for various reasons, were mothballed years ago. But now they are called into service to to stem the decline in their other old giants.

          Saudi intends to hold production at current levels for several more years. How successful they will be remains to be seen. But they have not and will not dramatically increase production.

        • Glenn Stehle says:

          Peter said:

          Why would a country drive down the price to maintain market share when they know they will lose market share due to declining production.

          Peter, did the Saudis buy into the hype being peddled by Team Carbon (see graph below from ), and want to stop “the Great American Shale Revolution” in its tracks.

          Could the Saudis be that stupid, to believe the hype emanating from Team Carbon?

          I doubt it.

          I suspect that the Saudis and Russians have other reasons for wanting the price of oil low, reasons which folks like Rockman cannot even conceive of.

          We are wandering about in a wilderness of unknowns, but that doesn’t stop the speculation.

          • Peter says:


            I think you are right, their reasons are unknowable at the moment.

            Saudi Arabia are making half as much now producing 10 million than they were producing 8 million per day.
            The next few years will be interesting, that is for sure.

          • I suspect that the Saudis and Russians have other reasons for wanting the price of oil low, reasons which folks like Rockman cannot even conceive of.

            But apparently you can. Else you would not know this was the case. Please give us those reasons.

            • Arceus says:

              I’ll take a quick stab here. The U.S. has overplayed its hand for too long. For most of the world, the decline of the U.S. is an eagerly anticipated step in the evolution of a new world economic order. So it comes as no surprise that more than a few countries are actively working toward that outcome. First and foremost in achieving this is the removal of the dollar as the world reserve currency. Second, perhaps is to destroy the U.S. economy. And third, perhaps is to make the U.S. economy almost entirely dependent on foreign-supplied oil and funds.

              What joins men together is not the sharing of bread but the sharing of enemies.

              • Jimmy says:

                I thought you just said it was unknowable. Now you’re explaining it. Give it a rest dude.

                • Glenn Stehle says:


                  That was me that said we do not know the reasons why Saudi Arabia has decided to decimate the price of oil, not Arceus.

            • Glenn Stehle says:

            • Fred Magyar says:

              Typical Glen remark, implying that he knows what nobody else does but he never backs up his statements with anything substantive.
              I still think he has a really bad case of Dunning-Kruger. Rockman may not have a crystal ball but one always knows where he stands and where he is coming from.
              Furthermore there are plenty of people on this site and other sites that are more than capable of critical thought and putting 2 and 2 together and read the writing on the wall… Most peole here are pretty smart!

              • Glenn Stehle says:

                Fred Magyar,

                When it comes to the “one always knows where he stands and where he is coming from” and “putting 2 and 2 together and read[ing] the writing on the wall” department, you’re no slouch yourself.

                Words like doubt, uncertainty, and skepticism don’t seem to be part of your vocabulary.

            • oldfarmermac says:

              I am willing to bet the farm that Rockman has forgotten more about oil, including the politics of oil, than GS will ever know.

            • I think the Russians are siding with the shiah side in what seems to be a religious war. KSA is run by Sunni extremists, their blood brothers are ISIL, Al Qaida, the Taliban, and Boko Haram. Russia is siding with Iran, Iraq, and the Assad clan in Syria.

              Interesting fact: Christians usually sided with those in power. In Syria, the Christians were Assad backers.

              The ongoing war has the USA grinding itself down, bogged down because the American political system is an Israel lobby franchise. The Russians are much more independent, they will work with the Iranians to eventually overcome the wahabi menace. And I think the Israeli right wing, which orchestrated the current mess when they set up bush to invade Iraq, will have to backtrack.

          • TechGuy says:

            In my opinion KSA actions relate to geopolitics, mostly with Iran. KSA does not want Iran to gain an upperhand and helping to suppress Oil prices will have an impact on Iran’s economy.

            The Syria & Yemen civil are proxy wars between Iran and KSA. the US shale industry is just collateral damage.

            Peter Wrote:
            “Saudi Arabia are making half as much now producing 10 million than they were producing 8 million per day.”

            KSA wants to build a gas pipeline to supply the EU with NatGas and thats a driving force for the Syrian proxy war. Underneath KSA’s oil fields is a lot of NatGas. But to avoid damage to the Oil fields they won’t start tapping the gas until their fields are fully depleted. My guess is that they want to get the gas pipeline built soon. Iran and Russia don’t want KSA to build a pipeline into the EU which would undermine Russians market share, and Iran wants to collapse the house of saudi.

            If you go to Saudi Americo’s website, you and download their tech white papers, about all of the advance oil recovery techniques they are using to extract the oil now floating on a sea of water. They show graphs of data plots showing that their best fields are nearly depleted and that they now have to accurately target oil trapped in pockets to sweep up the remaining oil. I posted few links of selected articles a year ago. In some locations they are on the second and third horizontal drilling projects as the water level rose above the lateral drill run.

            I recall that at least one of the SA articles discussed plans about tapping the NatGas reserves below one of the large oil fields that is nearly completely depleted.

      • dclonghorn says:

        Thanks for the explanation.

      • Dennis Coyne says:

        Hi Ron,

        Why is the JODI C+C estimate 3 Mb/d less than the EIA’s estimate for peak monthly output (about 80 Mb/d), do you fill in the countries that do not report to JODI (using EIA data) or is that output left out of the JODI estimate?

        Chart with EIA estimate from Jan 2005 to June 2015 in chart below (scale is chosen to be somewhat similar to Ron’s chart (14,000 kb/d range on vertical axis and similar range on horizontal axis), there is a difference between the JODI and EIA estimates of about 3 Mb/d from about 2009 to 2015 for World C+C, possibly because the JODI data is incomplete.

        • Dennis, the JODI data does not include OPEC condensate. Also it is likely that there are a few very small producers that are not counted.

          The JODI data may be a little incomplete but not by enough that matters. The EIA data is also incomplete in that they must estimate a lot of production numbers. For instance, their estimate for Venezuela is totally incomplete as it seldom changes at all. I think that in many cases the JODI data is superior to the EIA data.

          • Dennis Coyne says:

            For a few countries such as Venezuela that may be the case, for the overall World estimate of C+C output, I think the EIA estimate is better, too much trouble for me to put several different estimates together, my past experience was that JODI had a lot of missing data. In June, the EIA OPEC estimate minus the OPEC data in your charts gives about 2 Mb/d for OPEC condensate, so it looks like only about 1 Mb/d of missing output from your JODI composite data. Possibly the EIA has overestimated C+C output. Hard to know.

  8. Watcher says:

    Stuff I missed the last few days.

    1) The US per capita consumption is blah blah blah and that’s more than any country in the world.

    Wrong. Saudi Arabia’s per capita oil consumption is quite a bit higher than the US number. They ain’t the only one. Kuwait is even higher. And with that error all the rest of the argument is rendered non credible.

    2) US oil consumption is GDP driven. Not passenger car driven. Those cars don’t get driven as much in recessions. Sunday afternoon drives aren’t family priorities anymore. mazama shows this little down tweak in 2008. So countries with less GDP should not be expected to consume as much oil per capita. Even Kuwait’s consumption graph had a slope tweak in 2008.

    3) And finally, again, what’s the point of this consumption hand wringing. Why would an American strive to cut consumption in order to save some for a Chinese housewife with a new SUV? Their consumption is growing and so is India’s and it ain’t gonna stop. You want to spout conservation, do it in Mandarin. Why inconvenience yourself when you can suppress other people’s consumption by force.

    • Peter says:


      1)US consumption is besides a couple of small countries the highest in the world.

      compared to other western industrial countries it’s consumption is totally unjustifiable.

      2) Driving a Ford F150 or an ampera to work has nothing to do with GDP and everything to do with needless oil consumption. So stop saying things which even an 8 year old would find obvious

      US consumers will not cut consumption out of the goodness of their hearts, they will be forced to do so when prices make cuts necessary.

      • Glenn Stehle says:


        • Arceus says:


          • Glenn Stehle says:


            It refers to Watcher’s point #3 in his above comment. To wit:

            3) And finally, again, what’s the point of this consumption hand wringing. Why would an American strive to cut consumption in order to save some for a Chinese housewife with a new SUV? Their consumption is growing and so is India’s and it ain’t gonna stop. You want to spout conservation, do it in Mandarin. Why inconvenience yourself when you can suppress other people’s consumption by force.

    • Javier says:

      That is perfectly compatible with Peak Oil. Indeed it would contribute to it, as an oil glut destroys oil production.

      • Dennis Coyne says:

        Hi Javier,

        Even if we assume there is a recession that continues forever, unless oil demand falls faster than oil supply forever, eventually oil prices stabilize at some number above zero.
        If the oil price is very low (say $10/b) wouldn’t you expect that demand might fall more slowly than supply would fall and lead to oil scarcity?

        If that sounds reasonable, then as a consequence oil prices will rise to some level where there is enough supply to satisfy demand at the prevailing oil price. That oil price is likely to be more than $60/b (no idea how far in the future this will occur).

        One has to make pretty unrealistic assumptions for the performance of the World economy and the ability to produce 79 Mb/d at under $35/b over the long term in order for the current glut to be maintained at current oil prices for more than 2 or three months imo.

        • Javier says:

          Hi Dennis,

          I am not saying that an oil price recovery or even that temporary high prices are not possible. I am just saying that the probabilities of them to contribute to a higher than present oil production are quite low. After all US oil demand never recovered pre-2008 levels at any oil price. If global demand behaves in the future as US demand, then regardless of oil prices, demand will not induce higher than present production ever.

          • Peter says:


            Are you really trying to make any comparison with the US and China and India?
            The one overwhelming difference, the United States car ownership is at saturation point. At over 800 vehicles per 1,000 population, so if more fuel efficient cars are bought then consumption goes down, simple.
            China has only around 100 vehicles per 1,000 and a population nearly 5 times that of the United States.
            China’s vehicles fleet in increasing at a phenomenal rate, they will Sell 23,000,000 vehicles this year. China’s consumption will continue to grow to fuel an ever increasing number of cars.
            India is far behind but vehicle sales are increasing also.


            The United States and OECD countries are the exception when it comes to vehicle numbers per capita, most of the world is catching up.

            • Javier says:

              They are latecomers when the party is about to end. You are just thinking within the box.

              The growth engine is broken. Too much debt, too much population, too few resources, excess of labor, low consumption, decreasing returns. It cannot be fixed. It will be a question of when it stops, but in the meantime it will require less energy.

              Most people, like you, only see an increasing number of problems. things no longer go as well as they used to go. Each one has a particular solution that will turn around the situation. EVs, increased fracking efficiency, thorium molten salt reactors, debt forgiveness, population control. It is the illusion of control.

              • Peter says:


                What do you mean people like me. You do not have a fucking clue what I know.
                You are really clever in pointing out the obvious problems. A really clever person comes up with solutions. Losers like you always say it can’t be done. No one ever remembers problem finding losers. They do remember problem solvers.
                I.E. Isambard Kingdom Brunel. Edison, Marconi, The Wright Brothers.

                • Javier says:


                  That’s because, as I said, you think we are facing a problem, when in reality we are in a predicament. Unlike problems, predicaments don’t have solutions.

                  Problem solvers, heroes, great politicians, big inventors, they all appear when things are on the upside. ¿How many great names can you cite from the decline of the Roman Empire between 200 and 475 AD? The best of the Romans of that time could only temporarily halt the decline.

                  • Glenn Stehle says:

                    Javier said:

                    ¿How many great names can you cite from the decline of the Roman Empire between 200 and 475 AD? The best of the Romans of that time could only temporarily halt the decline.

                    Javier, I don’t think history is quite as mechanically deterministic as what you believe it is. Take this example from Bryan Ward-Perkins’ The Fall of Rome, for instance:

                    By constrast with the West, the eastern empire was relatively untroubled by civil wars and internal unrest during the period of the invasions, and this greater stability was undoubtedly a very important factor in its survival…

                    There is no very obvious reason for this greater stability in the East, beyond good luck and good management. In particular, through the dangerous and difficult years after Hadrianopolis, the eastern empire had the good fortune to be ruled by a competent and well-tried military figure, Theodosius (emperor 379-95), who was specifically chosen and appointed from outside the ranks of the imperial family to deal with the crisis. By contrast, the ruler of the West during the years of crisis that followed the Gothic entry into Italy in 401 and the great crossing of the Rhine in 406 was the young Honorius, who came to the throne only through the chance of blood and succession, and who never earned any esteem as a military or a political leader. Whereas the figure of Theodosius encouraged a healthy respect for the imperial person, that of Honorius, dominated as he was by his military comarades, probably encouraged civil war….

                    Honorius himself never took the field; and his armies triumphed over very few enemies other than usurpers.

                  • Javier says:


                    I don’t believe for a moment that if Eastern and Western empires would have swapped emperors at 379 they would have swapped destinies. They were very different entities. Both have their share of good and bad emperors. The Western system ensured good emperors lasted as little as bad ones. By splitting the empire they got the less dysfunctional part to survive longer. The Eastern part still got a functioning commerce, the Western part relied only on rural income as its commerce collapsed. They had very little income to face the situation.

                    The right people can only appear if the right conditions are present.

                  • Glenn Stehle says:

                    Javier said:

                    The right people can only appear if the right conditions are present.

                    Well I suppose it depends on whether one believes in the “great man” theory of history or not.

                    Do the times make the man, or the man the times?

                    I don’t think the jury’s in on that one yet.

          • Dennis Coyne says:

            Hi Javier,

            I think the chances that demand will not increase in China, India, Brazil, and other rapidly developing economies is exceedingly low, so we will have to disagree. Demand has continued to grow for the World, it just has not grown as fast as the oil supply.

            So if your expectation is that World demand for oil priced at under $50/b will not increase over the next 5 years, then you are expecting a Worldwide recession. That is possible, but not that likely in my view.

            You should read the following report (and not just the headline and blurb), based on that report there are reasonable solutions to the debt problem and that problem is focused mostly on a few advanced economies. Read at least the executive summary to get a flavor of the research.


            • Glenn Stehle says:


              The debt problem is one of the big wild cards. It adds yet one more layer of complexity over phenomena which are already highly complex, making forecasting even more difficult.

              As I’m sure you know, the experts are all over the map when it comes to debt.

              And as I’m sure you also know, any discussion of debt is quintessentially poltical. Debt instruments are all but worthless without some authority to enforce their collection.

              I will print the paper out and look forward to reading it leisurely.

            • Javier says:

              Hi Dennis,

              I am quite sure that you would have thought in 2006 that the chances that oil demand would not increase in OECD, and other rapidly developing economies were exceedingly low.

              Debt is a human problem and thus amenable to human solutions, albeit without growth those solutions are bound to be painful to some parties involved. A lot of the other problems are physical in nature and thus not amenable to human solutions. Getting rid of debt would not buy us a lot of time.

              • Nick G says:

                A lot of the other problems are physical in nature and thus not amenable to human solutions.

                Repeating this does not make it true. Oil and fossil fuels are expensive, polluting and risky. EVs, wind, solar, nuclear, hydro, etc., are cheaper, more reliable, more abundant, healthier, etc., etc.

                • Javier says:

                  Yes, they are so full of advantages that we are investing less and less on them.

                  Looks to me that the transition is working backwards. And to me the most convincing argument is the evidence.

                  • Nick G says:

                    we are investing less and less on them.

                    What makes you say that? Solar and wind are still going strong. US sales of EVs and hybrids have plateaued due to dirt cheap oil, but…oil isn’t cheap due to supply limits, is it? And, when oil becomes expensive again, we can expect EV/hybrid sales to pick up again.

                    The obvious meaning of EV/hybrid sales is that prices still matter. That’s what the evidence shows.

                  • Javier says:

                    Nick G,

                    What makes you say that?

                    Are you so blinded by your bias towards renewable energy as to ignore the global trend in investments in clean energy for the last 5 years?

                    We have tried them and found them so fantastic that we don’t want to expend our money on them.

                  • Glenn Stehle says:



                    Knock-out punch.

                  • Nick G says:

                    A few thoughts:

                    There was a peak in German spending, because they were bringing the industry up to scale.

                    In part as a result, the cost of solar is plummeting: dollars today buy far more capacity than they did 5 or 10 years ago. That chart would show pretty decent growth if it was in actual capacity added.

                    Even that $ chart doesn’t show a decline in money invested, just a plateau.

                    Don’t forget: wind and solar investments are cumulative, unlike oil and FF: we don’t consume them, and they don’t deplete.

                    FInally, the fact that we’re not investing quite as much as we should is certainly not evidence of their usefulness or lack thereof: it’s evidence of fierce resistance to change from legacy FF industries. We see quite a bit of evidence for this resistance right here on this blog…

                  • Javier says:

                    Sure Nick,

                    Besides not being able to trace a trend it is clear that you know how to spread the blame around and make excuses. Renewable energy is so perfect that if we are spending less money it must be the evil Koch brothers fault.

                    I really wish renewable energies where the solution to the energy problem, alas they are not, and the evidence is pretty clear. The transition is only taking place in some people’s imagination. We are just adding a nice touch of renewable energy to our mix. And it makes the mix more expensive and less reliable. A pity.

                  • Nick G says:

                    it must be the evil Koch brothers fault.

                    Sadly, they do indeed get a lot of the blame.

                    “Poor Exxon. They used to be the oil company that everybody loved to hate. This spawn of the Standard Oil breakup had it all: Obscene profits, the Exxon Valdez, a mean CEO who sneered at clean energy, blatant funding for climate deniers.

                    But now, the new ExxonMobil is just not that special anymore.

                    It turns out that all the big oil companies are buying elections, paying front-groups to spread lies about climate change and dumping their tiny investments in clean energy while continuing to put out soft-focus ads touting how green and socially responsible they are. And they just don’t seem to care that much about preventing oil spills either.

                    In these days of peak greed, you have to drill pretty deep in the oil patch to find the worst of the worst.

                    A real gusher

                    Well, after coming up with a bunch of dry holes, the environmental and government-reform movements seem to have found the activist equivalent of Old Spindletop: Charles and David Koch.”


                  • Dennis Coyne says:

                    Hi Javier,

                    The level of investment will be related to economic growth. You are leaving that out of your analysis. Investment in everything decreases when economic growth slows. A proper analysis would look at investment in renewables as a percentage of total investment.

                    You clearly are cherry picking to make your argument.

                    Try again.

                  • Dennis Coyne says:

                    Growth Rate of GDP in the OECD from 2005 to 2014 where most of the alternative energy investment has taken place.

                  • Fred Magyar says:

                    Yes, they are so full of advantages that we are investing less and less on them.

                    Sure. but why do you look at the splinter in your brother’s eye, but not notice the beam in your own eye?

                    How come everywhere you look you see cuts in the oil patch?

                    (Bloomberg) — Crime is rising, home prices are falling and food banks are overwhelmed in Calgary as job losses spread. And the worst isn’t yet over in the heart of Canada’s oil patch. Some of the city’s largest employers are poised to cut more jobs in 2016 as they reduce spending for a second straight year, adding to an estimated 40,000 oil and natural gas positions lost across the nation since the crude price rout began 18 months ago.

                    And the story is pretty much the same in the oil industry everywhere around the globe. The global economy has systemic problems and to highlight a temporary plateau in renewables investment is to miss the big picture by mile!


                  • Javier says:


                    The graph that I put was global investments in renewable energy. The one that you put is OECD GDP. Is that your example of a proper analysis?

                  • Javier says:


                    Oil is dying and renewable energies are not rising to constitute a credible alternative. That is the big picture.

                  • Fred Magyar says:

                    That is the big picture.

                    Ok, Javier, I guess were’re all fucked then, may as well have one last big party for New Year’s!

                  • Javier says:

                    Not all, Fred.

                    I don’t think the Amish are going to notice.

                  • Fred Magyar says:

                    I don’t think the Amish are going to notice.

                    That’s ok, I’m not going to party with the Amish. I’m spending New Year’s in South Beach Miami with friends and family.

                    However it is worthwhile mentioning that the Amish have been using Solar PV for some time now.

                    Why the Amish are embracing solar

                    One reason why solar is becoming increasingly popular among Amish communities is the fire risk of their traditional lighting methods such as kerosene lamps and candles – especially for the elderly and younger members of their communities. It also gives their communities the ability to have cheaper, cleaner electricity with the perk of remaining off the grid. In a nutshell, solar is a win-win for the Amish – they remain off the grid, preserving their culture while reaping the benefits of clean renewable energy when needed.

                    I guess fossil fuel turned out to be too hazardous for them in light of better technology such as solar…

                  • Caelan MacIntyre says:

                    Fred, with regard to the Amish, I imagine that you’re also aware that many cultures have gone down certain techno-systemic paths and ‘sold themselves out’ to ‘dependencies’ that are then hard to back out of.
                    I also imagine that you’ve heard of David Korowicz who speaks about stuff like that.

                    I have concerns that this FFueled status-quo-fed fetish for renewables that many on here seem to have a real kinky fetish for may prove to be too S&M/B&D for what can be handled.

                    As for the Amish, well the concept has taken on a metaphor that seems a bit removed from the reality, and I’ll wrap this post with an interesting quote from CNN:

                    “The Amish are not at all a monolithic block. There is a patchwork of communities — and there so many of them which are so radically different from each other.

                    The community that I lived with… does not use cell phones, and would not allow people in their community who are actually members to use cell phones.

                    CNN: How do Amish communities decide which technologies to allow?

                    Brende: There are several overlapping factors but I think the most important one is the effect whatever given technology might have on the community and the relationships among the members — whether (the technology) strengthens the cohesion of the community or weakens those ties.

                    It’s quite clear that Amish groups that monitor technology in a discerning way — with an eye to its effects on the community in the long run — do last longer and have more cohesion in their community. The group I was with had almost zero attrition in their members. They were very watchful of technology. There are Amish groups that adopted the automobile early on and those groups either disappeared all together or became small and attenuated, because the automobile is very destructive to community relations that are based on face-to-face contact.”

                  • Nick G says:


                    You never responded to my comments on that renewables investment chart.

                  • farmboy says:

                    The majority of Amish churches decided a long time ago that they will not allow certain technologies since they would disrupt their way of life. When the Automobiles started to become available to the common folks such as the Model T etc. a number of Amish bought themselves cars, until the churches decided that they do not want the changes that this would bring to their society. So the Auto had to be demonized, and made anathema so that no one dared to cross that line. In order that nobody gets around this rule and to apply the same concept to other areas they banned the use of all air tires. So now the devil is to be found in the air inside a tire. Similar rulings were put in place to ban electricity from the grid, but with time many churches allowed generators for shops and farms and some of the more progressive churches, allowing household appliances etc to be run off these generators.
                    These more progressive churches are the ones that are allowing wind and solar electricity, and so we have a solar boom in some Amish communities, only because their religion does not allow the use of electricity off the grid.

                    Don’t think for a moment that the Amish are not affected by oil peaking. They rely on driver’s with autos for most of their transportation. Cheap grain and hay, from conventional farmers, to feed their livestock. Factories, and the construction industry for jobs. Walmart and Home Depot and China for cheap goods.

                    They are in the same predicament as all of us, with a few advantages and a couple disadvantages when it comes to the dynamics of Peak Oil.

                  • Nick G says:

                    “Predicament” isn’t the right word.

                    “Habit” is the right word. We have a bad oil habit, which we need to break.

        • Dennis Coyne says:

          Hi Javier,

          You are correct my “analysis” was intended to show that investment spending had slowed as I did not take the time to dig up the data, you provided no link and it was hard to determine where you got your chart (too small to read the fine print).

          I used IMF data for global investment spending (nominal)

          and used the following report to find global investment spending for renewables

          I found the percentage of total global investment spending on renewables since 2004. Your chart seems correct but cuts off the growth phase from 2004 to 2009. The slow down in investment is due to lower spending on renewables in Europe where spending ramped up very rapidly and poor economic performance has led to less European renewable investment since 2011 (in 2014 it was half the 2011 level). Eventual increases in the price of natural gas and coal will reverse this recent (2011-2013) downward trend. In 2014 the percentage investment in renewables was 1.4% and the peak in 2011 was 1.55%.

    • likbez says:

      That’s a very weak article. One thing is this persistent talking about oil glut. EIA figures for world production probably have margin of error well above 1%. That means plus/minus 1 Mb/d. So when they are talking about 1 Mb/d extra production this is within the margin of error of their measurements. So the glut might exist but it well might be not.

      I think redistribution of oil production facilities is what in play now. Which started with Iraq and Libya wars and continued with Syria war. Kind of “Disaster capitalism” translated into oil dimension ( Who do you think will own Venezuela fields in two or three years?

      How about predatory pricing with the effect deliberately multiplied via HFT and hedge funds mechanism? Right now Saudis are engaged in predatory pricing. That’s an established fact. Actually the hypothesis that Saudis want to hurt US shale industry is extremely weak: Saudis are the USA vassal state and are in principle incapable of such action without prior approval of the US government. So it looks like the USA shale industry is just a collateral damage of this bombing. Real target of this bombing lies elsewhere.

      It will be interesting to see how long prices below $40 persist. At this price level most producers have losses and somehow the situation continues. My impression is that the mechanism to force producers to endure such losses is Saudis + stock exchange HFT and futures.

      In any case current low prices is a sign how dysfunctional the international finance system has become.

  9. I don’t think we should be discussing peak oil anymore, it may get around as I try to buy stuff. Can’t we discuss something like miss world?

    • Caelan MacIntyre says:

      Miss Oil Country (2015) and Miss Lube Rack (1955).
      (That’s Mister Wheel Alignment [1951], upper-left I think.)

      • Glenn Stehle says:


        Where do you come up with this stuff?

        Anyway, not to be outdone by your little Zapatista you posted on the last thread…..

        • Caelan MacIntyre says:

          Ah the shameless innocence of children. ^u^
          (That one may shape up the immune system.)

  10. Amvet says:

    Ron, I suspect that the global oil production glut does not exist.
    Some of the reasons given to support the glut are interesting:
    The Saudis cut prices to protect market share.
    The price went down.
    US storage increased after imports surged.
    The Saudis, OPEC, Russia, refused to cut production.
    Industrialized countries storage increased.
    Tankers are lined up to unload.

    Are massive futures trades and a bit of theater causing the glut? What is your opinion?

    What is your opinion?

    • No, I do not think futures traders can cause a glut and certainly not the appearance of a glut if none exist. Glut may be too strong a word but there definitely was an oversupply as evidenced by the storage levels, not just in the US but all over the world.

      US storage increased after imports surged.
      The Saudis, OPEC, Russia, refused to cut production.
      Industrialized countries storage increased.
      Tankers are lined up to unload.

      That is the very definition of an oversupply, and perhaps even a glut.

    • Arceus says:

      There is something of a case to be made for that (no glut)…

      It goes something like this – oil production has been declining since the Sauds and Opec decided not to cut production. But in reality, only a few countries have actually increased production since then and it was not by a huge amount. At the same time as production has levelled off, demand for “cheap” oil has been increasing steadily. Moreover, most oil production is measured in boe or barrel of oil equivalents (not all of it is crude oil), and so crude oil production may have actually decreased more than many believe. At the same time, rig counts have fallen dramatically as have investments in new oil projects. It would seem, viewed in a certain light, that oil would be ready to rebound and fairly quickly.

      But not so fast. There are many more things to consider, and here are just a few. Look at natural gas and how it has declined for a very long time, and it is not hard to imagine oil doing the same thing. Also, the dollar has been strengthening (which is a negative for all commodities) and Yellen and company appear to want to keep it that way. The world is swimming in debt and this limits economic growth which in turn limits demand for oil. Also there are Iran, Iraq, Libya, Russia and Venezuela – all of which likely have the potential to increase oil production. Unemployment seems to be growing – this subdues demand for oil.

      Anyway, just a few things off the top of the head…

      • Also there are Iran, Iraq, Libya, Russia and Venezuela – all of which likely have the potential to increase oil production.

        None of these countries, quoting you: likely have the potential to increase oil production. Every one of these countries are currently producing every barrel of oil they possibly can. Libya and Iran will likely have that potential sometime in the future, but not today. By how much is just not known at this point.

        Venezuela has very serious political problems and their production is far more likely to go down than up. But if you think Russia has the ability to increase production you need to explain why your prognostications are better than just about everyone else in the world who are predicting Russia will decline.

        Iraq is a big question mark. I don’t think they have much ability to increase production. And their political problems are likely to get a lot worse instead of better.

        As for there being no glut, there is a very definite oversupply at the moment. Otherwise supply and demand is a myth. And it most definitely is not.

        • Arceus says:

          I was not saying that those countries had the immediate ability to increase oil production – I was looking out a little further than that. In fact, I agree near term that worldwide oil production will decrease for possibly several years, leading many to believe that peak oil arrived in 2015. But the world runs on oil as you are well aware and there is no replacement. Yet peak oil continues to insist upon itself.

          I suspect Schumpeter’s gale of creative destruction will play out over the next few years and the implosion of previous ineffective regimes will result in a new upsurge of production. I also suspect there are many changes in the coming years that will catch most of us by surprise, and the new economic order see some standing on a higher and others on a lower rung. Business as usual will not be available to everyone.

          • I also suspect there are many changes in the coming years that will catch most of us by surprise,

            I have no doubt that you are correct. However to assume that these changes will all allow higher oil production is more than a little absurd. It is far more likely that they will be economically very bad news.

            Oil production in most of the world is from very old fields that are in serious decline. To assume that all this will be turned around if only we can get oil to $80 a barrel again is truly absurd.

            • Arceus says:

              As you have mentioned, much of the remaining oil in the world is located in failed states. When the world needs oil that oil will be produced – by force if necessary. The new world order will not be as “kind” as in previous years.

              • farmboy says:

                It takes a lot less effort, to blow up Oil infrastructure, then to build, maintain, and defend it.

            • Dennis Coyne says:

              Hi Ron,

              If $80/b doesn’t do it, then the oil price will rise to $100/b, if that’s not enough, then $120/b, $150/b is about as high as is feasible and I think that would result in more oil output than some believe is possible. It will also not last long before causing either a recession or another oil glut (recession far more likely imo).

          • Nick G says:

            the world runs on oil as you are well aware and there is no replacement.

            That’s completely unrealistic. Oil doesn’t power the world, it powers transportation, and transportation can run on other things: gas, synthetic fuel, and most of all electricity (which in turn can come from many things).

        • Jimmy says:

          One of the things I find interesting about Venezuela is that they import natural gas. Canada, for example, uses plenty of natural gas to power its bitumen mining operations. Without natural gas Canada would either have to import NatGas to mine bitumen or alternately burn bitumen, or semisynthetic crude and its end products, to mine bitumen. I feel that Venezuela’s lack of sufficient natural gas will hamper its bitumen mining operations. Just a thought. I’m just spit-balling.

          • Doug Leighton says:

            Yes, EROI values for tar sands are bad. It takes a lot of energy to mine bitumen as well as to upgrade it to synthetic oil that can be put into a refinery. And, it also requires liquefied natural gas to turn it into dilbit (diluted bitumen) so it can flow through pipelines. Cost-wise, this may be the most expensive oil being produced today.

            What isn’t often mentioned is the rate at which this “oil” can feasibly be recovered. And, almost never mentioned is that Canada’s tar sands oil reserves remain at about 170 billion barrels which is enough to keep the world fueled for less than six years.

            • Dennis Coyne says:

              Hi Doug,

              The Canadian Association of Petroleum Producers forecasts future reserve development. The oil is expensive and it takes time to develop, at the right price these reserves will continue to be developed ($35/b is not the right price, but $80/b might be enough). It will help reduce decline rates, that is all.
              Clearly all World output will not be supplied by oil sands output alone. Also more reserves will be developed as the oil sands deplete so the eventual recovered oil sands will be more than current proved reserves as probable and possible reserves move into the proved category over time.

              • Doug Leighton says:

                “Also more reserves will be developed as the oil sands deplete so the eventual recovered oil sands will be more than current proved reserves as probable and possible reserves move into the proved category over time.”

                Totally wrong. Even the new Alberta government realizes increasing oil sands production is at odds with Canada’s greenhouse gas emission targets. And, if the Feds get their way (which they always do) most tar sand oil will NEVER see production. Some companies involved have already admitted this and stated “reserves” previously slated for development are now permanently stranded. The equation for this decision usually involves economics (especially access to NG) but more-and-more the greenhouse gas card comes into play. Our new (federal) government is decidedly on the green side.

                • Dennis Coyne says:

                  Hi Doug,

                  That would be good for the environment, but whether these resources remain in the ground, remains to be seen.

                  Often environmental promises are not followed through, at least in the US, perhaps Canada will do better.

                  It seems the better policy would be to put a hefty tax on carbon emissions at the well head or mine mouth and let the market decide what will be produced. The Carbon tax could be set at $30/tonne and rise at 5% per year plus the rate of inflation, perhaps the greens ruling Canada will put such a policy in place and let consumers and businesses decide how much to produce and consume at the new higher price.

                  Unfortunately the US government is not as enlightened so a carbon tax in the US is unlikely to become law as long as there is an ice sheet on Greenland.

                • Jimmy says:

                  Jacobs did a study that found Canadian Bitumen 12% more carbon intensive than European oil production. Or something to that or so. Wells to wheels I believe they call it.


                  I read somewhere that a guy from Sanford did a similar study and got 17%. So we can perhaps agree the carbon intensity is 12 to 17% higher for bitumen mining in Alberta.

                  Given that most of the pollution from a barrel of oil is generated when you burn it and not when you mine it I would think 12 to 17% isn’t gonna keep it in the ground.

                  I believe the 12 and 17% studies looked st open pit mining and not SAG-D.

            • Synapsid says:

              Jimmy, DougL,

              I’m not a cheerleader for these plays but I keep bringing them up because they seem to be off the radar for everyone:

              The Montney, and the Duvernay. They are in NE British Columbia / NW Alberta and they are big and they are rich in NG and there is lots of drilling by majors and little guys alike. If they, ah, fulfill their promise then they will be well placed to supply NG to the oil sands. They are right there in Canada.

              • Doug Leighton says:

                Synapsid ,

                You’re probably right BUT don’t these plays depend in large part on LNG facilities/pipelines neither or which seem to be going anywhere at the moment? I’m sure you know much more than I.

                • Synapsid says:

                  Doug L,

                  Sketching with a broad brush here: that region’s got pipelines like other people got mice.

                  Ahem. This is not really frontier territory, nor new, but it seems not to get much public notice. There is already a history of exploration and development of oil and NG in the region, and BC has been very willing to be supportive. Look at a map and you’ll see that the Duvernay is west of the oil sands; the Montney is west and north of the Duvernay; and the Horn River play is roughly north of the Montney. (The Horn River is what Petronas, the state oil company of Malaysia, has just agreed to go ahead developing via a pipeline to the BC coast–this is not the Northern Gateway–and Petronas has been taking its time evaluating political and economic difficulty so they must think it’s doable.) There’s lots of infrastructure in place.

                  I don’t think LNG would be involved.

                  I just think the region deserves attention because of high NG potential in the same part of the country as the oil sands, and (snif) no one talks about it.

                  Time for port, I think.

                  • JN2 says:

                    >> Time for port, I think. <<


                    = Wine Time Finally

                    Port works as well 🙂

        • oldfarmermac says:

          There is nothing wrong with supply and demand theory, but understanding it requires understanding that sometimes it takes a while to work it’s magic in balancing supply and consumption.

          It is now quite obvious that it takes more than a year for even the fastest moving players in the oil production industry to change from full speed ahead to full speed reverse, and it is going to take a good part of another year for the tight oil ship to actually start going backwards at a significant speed.

          Hell, it takes me four or five years to get peaches into full production, and eight to ten for apples. You can’t just write off your investment in new production because you are having a bad year or two, or fire all your long term employees and give up your long term customers, and sell all your assets at fire sale prices.

          You grit out the bad oversupplied market situation and hope you will be one of the survivors.

          The survivors are almost dead sure, according to the broad historical evidence, to do very well, for some substantial period of time, probably at least a decade or longer.

          Even if doing so would be the right thing to do, you as a top level manager could not do it, because you would be professionally LYNCHED.

          FURTHERMORE, there is nothing in supply and demand theory that says a big time player, or more than one big time player, cannot manipulate supply for purposes separate from making money.

          There are some pretty good reasons to believe the Saudis and maybe a couple of their best buddies are maintaining production so as to put a hurting on some of their enemies, real or perceived.

          And they may also be making the secondary point , to all the other OPEC members that cheated like hell when they cut previously, that they have not forgotten, and are rubbing the cheaters noses in it.

          If they do decide to cut, at some point, I am predicting that this time they will have in place mechanisms to GUARANTEE the rest of OPEC plays according to the rules.

  11. BC says:

    The Texas U rate is up 12% since the cyclical low in July-Aug, which similarly occurred in May-June 2008, Apr 2001, and Feb 1980.

    Employment, particularly the U rate, is a lagging indicator.

    There are notable similarities between today and 1985-86 during the previous energy bust. However, real GDP per capita was growing at more than twice today’s rate; peak Boomer demographic tailwinds were building; debt to wages and GDP was much lower; the price of oil fell to the $20s; interest rates were higher and setting up to decline, providing a once-in-a-lifetime, debt-induced, reflationary growth phase (that ended with the GFC); the US economy had not yet begun to deindustrialize; health care spending was one-half of today’s level as a share of GDP; and inequality had not yet become extreme.

    Texas entered recession in Q1-Q2 and the rest of the US economy is following behind.

    Prepare accordingly.

    • Clueless says:

      BC – I am too old and without enough energy [no pun intended, which always means pun] to research and respond to your points. Except with questions. In 1986, what was the US GDP as a % of world GDP? And what is that % today? What was the Texas GDP as a % of US GDP? And what is that % today? In 1986, how much money [billions of $] was the US just printing? And how much today?
      I turned 21 in 1962. For the next 40 years, every chart pattern with respect to stocks, bonds, real estate, etc for the next 40 years was compared to the Great Depression. Every comparison ended up being total nonsense.
      If I could give anyone some wisdom, it would be “Do not look at the past. It was totally different.” In the Great Depression the farmers were broke [and, about 1/3 of Americans were farmers]. Lately, they are the wealthiest group of Americans. Yes, greater, on average than lawyers, doctors, and even investment bankers. The elderly, were the most in dire need. Today, with Social Security, Medicare, free food, pensions, their own houses, etc., they are the most content of any age group [per AARP]. And, the future is changing faster now than it was back in 1962-2002.
      First, I want to thank Ron for having this blog. Merry Christmas, regardless of what you believe. And, I really do not know what your work experience was, but, it is of no matter. Other than to ask: Have you ever seen more opportunity staring you in the face? Years of lower new discoveries, especially with the “elephant” fields. Continuing, slow, but steady demand growth. I think that there is a big collision coming, especially with the 20-40 year olds that somehow believe that oil should be $20/barrel, gas under a 1$, and unlimited supply with the “new” technology. Some kind of disconnect. Their I-phones have kept going up in cost [the gold standard of technology], but oil will not. Some people are in for a rude awakening.
      Let me add a Merry Christmas and a Happy & Prosperous New Year’s wish to all.

      • Caelan MacIntyre says:

        Hi Clueless and BC…

        Clueless, I will assume that, with BC’s first graph, for example, indications (the different lines) suggest another (or amplification of the current) crash/recession (the gray area) about now or very soon.
        Given the economic/ecological/sociological differences this time around, this crash/recession may be more severe, and as per Peak Oil 101, too, where we learn of the stairstep down, where each crash is likely worse than the previous, and each recovery is less than the previous. Do I have that right? (Rockman mentions some production knock-on effects too.)

        I seem to recall that BC’s contentions with regard to renewables/EV’s buildout, is that it’s much too late. If so, I am tempted to agree, and, again, Musk’s coerced-taxpayer-supported Gigafactory may, along with the Chinese ghost towns, for examples, turn out to be among the notable ruins of this civilization. Or maybe it’s just hopium on my part.

        Incidentally, is ‘Looker’, as quoted in the article, ‘Watcher’ over here? ‘u’

        “The recent oil price collapse may eventually be viewed as the ultimate ‘Oh shit’ moment in the global energy dynamics.” ~ From POB’s Above Article

        • Clueless says:

          Financially speaking, the only way to be remembered, or to make any real money, is to be right, when almost everybody else is wrong. Being a member of a crowd is not of any significance.

          • Caelan MacIntyre says:

            I don’t want to be ‘remembered’ nor make any ‘real money’. I just want a good life and planet on which to live it.
            Who wants to be a part of a dystopic crowd of traitors, ego-maniacs and hucksters?

  12. Dennis Coyne says:

    Hi Ron,

    I doubt that the Saudis are pumping full out to increase their revenue, they could easily cut back production (along with the rest of OPEC) and make more revenue with lower output. Their aim is to hurt other oil producers such as the Russians and Americans (and perhaps the Iranians) with low prices. They are certainly having that effect on American oil producers, another 6 months and they won’t need to cut back as the US output may have fallen by then as the financing for drilling unprofitable wells will have dried up (if oil prices remain under $35/b).

    As to whether the peak is here in 2015, I think a rise in oil prices in 2017 will bring about higher output with a peak sometime after that (maybe 2018 to 2022), Watcher is correct that nobody knows how much oil will be produced, what the oil price will be or the eventual URR for oil will be. All of it is just guesses. Chart below is another wag, for a medium URR (2800 Gb C+C less extra heavy+600 Gb oil sands) which peaks in 2023 at 80.1 Mb/d after a 2016 decline of 700 kb/d. Chart below.

    • I think a rise in oil prices in 2017 will bring about higher output with a peak sometime after that (maybe 2018 to 2022),…

      Dennis, so higher prices will bring higher output. And just where is this higher output going to come from? That is higher output that overtakes all declines between now and then and continuing that decline even then? Where Dennis, just which countries are you talking about? Who will supply all this oil?

      Dennis, as the thug said to Dirty Harry, “Hey… I gots to know!”

       photo Non-OPEC less US amp Russia_zpsbsam9g3d.jpg

      • Dennis Coyne says:

        Hi Ron,

        Probably US, Canada, Brazil, Iran, Iraq, Libya,and Russia, in addition other OPEC nations might be able to increase output. I have not done a detailed bottom up analysis. There are many forecasts from the EIA, IEA, BP, Exxon-Mobil, and others that are far more optimistic than what I have presented. The question many would ask is why is this scenario so low.

        The USGS believes the technically recoverable C+C resources are about 4000 Gb total (including the C+C already produced to date). This is 600 Gb more C+C recoverable resources than my “medium scenario”.

        As oil becomes scarce and oil prices rise, more resources will be developed.

        I of course may well be wrong as I have been in the past, time answers these questions, we will see by 2022 if the 2015 peak has been surpassed. We are not talking about a big increase in output, 2015 will probably be between 79 and 79.5 Mb/d average output, the scenario presented is a small rise to 80 Mb/d, essentially a plateau from 2015 to 2023(with a dip in 2016 due to low oil prices).

        • I have not done a detailed bottom up analysis.

          Ohhh that is all too obvious Dennis. And you always resort to URR. As if that had something to do with actual crude oil production. On well, thanks for the effort anyway.

          Take care.

          • ChiefEngineer says:

            Hi Dennis and Ron,

            I’m sure with a little technology, engineering and capital you could add Mexico to Dennis list of potential for up to an additional 2mbd. Venezuela could supply an additional 2mbd of heavy. The gulf refineries could process the heavy and the American producers can ship the light out of the country with the new law. There’s lots of old simple refineries in the world that can process the light stuff.

            I’m with Dennis on this, except 2016 could be a increase in production. No one is backing down. This continued low price is going to increase demand over time. The US product supplied is up at least 2% for 2015 over the previous 5 year average.

            I think everyone under estimates the new efficiencies in the market place and coming in the future. This will be the reason for peak oil, not production limitations. Five years of $100 oil has had a huge effect on taming demand. Maybe more so than on production.

            We haven’t peaked yet

            • Dennis Coyne says:

              Hi Chief engineer,

              I am a little less optimistic especially about Venezuela in the short term. Technology can help a little, but I think this will be pretty limited in the oil industry as it is quite mature so not a lot of new technological breakthroughs are likely. High oil prices may lead to more intensive application of existing technology but there are diminishing returns so a peak will be reached by 2025 at the latest in my view, but I will leave it to Fernando, Shallow sands and others with practical oil field experience to judge if that is a good guess or not.

              • ChiefEngineer says:

                Dennis, I don’t think it’s going to happen either. But, the point is there are lots of means to increase production. Eight years ago, no one at The Oil Drum thought that the US production could increase to 9.6 mbd either.

                Capitalism is pretty dam good at supplying demand.

          • Dennis Coyne says:

            Hi Ron,

            Well there are others such as Jean Laherrere that think that the resources are relevant, resources are constantly being converted to reserves, at higher oil prices this tends to happen at a faster rate because it is more profitable.

            A lot of it comes down to the speed that reserves are developed and how fast those developed reserves are extracted. Neither of us knows how quickly this will occur as it depends on too many factors to predict. The scenario above simply shows that a decline is by no means certain beyond 2016, the increase in extraction rate in the scenario is consistent with the rate of increase in extraction rate (from proved producing reserves with API gravity greater than 10 degrees) from 2009 to 2014.

            The amount of reserves discovered matters and technically recoverable resources will likely be produced as oil prices rise. You assume both that oil will be scarce and that oil prices will not rise enough for the technically recoverable resources(TRR) to be produced, or that they will be produced more slowly than I believe so we have a different prediction about both the amount of TRR and the rate they will be developed and produced. Nobody knows either of these.

            A scenario below shows a slower rate of development and extraction of reserves with the same assumed URR=3400 Gb (600 Gb less than the USGS estimate), I think it unlikely that reserves will be produced this slowly because oil prices will rise and lead to more rapid development and production of oil reserves, but it is consistent with a 2015 peak. Note that the annual decline rate remains under 1% until 2039 and less than 1.5% until 2056.

        • Fred Magyar says:

          I don’t know about any of those other countries.
          But I do know that you can count Brazil out for economic reasons, socio political reasons, economic reasons and last but certainly not least geological reasons. Petrobras’ ties to president Dilma and the current political crisis would be reason enough to discount Brazil for the near future…

          • Dennis Coyne says:

            Hi Fred,

            So until 2023, you expect C+C output will fall in Brazil?

            Chart below uses EIA C+C data from Jan 2004 to June 2015 to calculate a 12 month trailing average for C+C output. Is there about to be a social break down in Brazil that I had not heard about?

            • Glenn Stehle says:


              The progressive governments of Brazil, Argentina and Venezuela are all in crisis.

              I don’t really follow current events that much in Brazil, but from what my friends tell me there was a move to usurp Dilma, which now appears to have backfired when the Supreme Court of Brazil thew out the impeachment proceedings against her.

              “La Corte de Brasil frena el inicio del juicio político contra Dilma”

              If the neoliberal usurpers are to be believed, then throwing out the progressives would only make foreign investment more attractive, not less attractive. The upshot of this is that oil production would climb even faster, not slower.

              • Dennis Coyne says:

                Hi Glenn,

                I really don’t follow the politics that closely, Venezuela seems to be a basket case. They are not going to see a lot of investment if they change the rules of the game on a whim.

                So I expect little output growth (and probably decline) from Venezuela until the political situation is resolved.

                For Brazil, I will trust that Fred knows what the situation there is much better than I do.

                Argentina is not a large oil producer afaik.

            • Fred Magyar says:

              Is there about to be a social break down in Brazil that I had not heard about?

              In a word, yes!

              I don’t think Dilma will be impeached but the damage to her presidency has been done and her ties to Petrobras and the ensuing corruption scandal will have long term repercussions.

              The Brazilian economy is pretty much on standby until these issues are resolved and the average José in the street is not a very patient man. Dilma can no longer provide the bread and circus to keep him happy and José feels he is more than entitled to all that.

              I won’t pretend to have a handle on future long term C+C output in Brazil but I do expect to see things stay on at least on a plateau for a few more years to come. I certainly don’t expect major increases…

    • Armitage Shanks says:

      Dennis – If the Saudi’s aren’t pumping full out why have they chosen the amount they have for production (i.e. why not higher to kill off the opposition a bit quicker, or why not less)? And why don’t they keep production level instead of letting it decay as it has over the last 6 months or so? Note for interest: the 5 or 6% decay rate that they’ve shown, if extended to full depletion, would only give 65 to 75 billion barrels total. To get up to 250 that they claim would require only about 1.5% decline rate. So either they have a lot to bring on line, the decline rate won’t remain like this (highly likely especially with horizontal water flood wells) or they have a lot less oil than they claim. Of course we have no real idea what they are doing, but they don’t appear to be promoting too much new oil developments (only a couple of NGL trains and extensions to Shaybah and maybe Kurais (although that might be on hold from the last I saw), have given up on Red Sea exploration and have been talking about solar and tight gas options.

      • Dennis Coyne says:

        Hi Armitage Shanks,

        The Saudis may be producing all they can from wells that have been drilled, but at these prices may not be developing reserves at the same rate as when oil was $110/b, when prices rise this changes, they drill more wells and either maintain or increase output. They would be smart to let output fall and maybe they are silently reducing output to balance the market. I agree they are producing all they can right now and perhaps they can never ramp up any higher, but I think they will maintain their recent peak level once oil prices rise again.

    • gwalke says:

      Not sure I agree with you 100% on your police work there, Dennis – in the first paragraph at least.

      KSA has to produce because we’re in a Prisoner’s Dilemma situation. If they cut, they probably don’t increase prices for any period longer than a few weeks. As in the 1980s, other producers will continue flat out – worst case, it emboldens Wall St to lend more funny money to Harold Hamm. The Prisoner’s Dilemma dynamic also currently precludes a negotiated cut – KSA can’t trust other oil producing countries to stick to any agreement (and those countries can’t trust KSA either). Their strategy is defensive not offensive – they couldn’t care less where the cuts come from, it just so happens that US roughnecks are likely first up to the guillotine. If it hurts Iran or Russia, that’s just a bonus. I know Western media love the idea that it’s a “war on shale” – RT thinks it’s a “war on Russian oil”, and no doubt PressTV thinks its a “war on the revolution”. All these ideas that they are ‘targeting’ anyone misapprehend the situation, imo – it’s just game theory, they are pursuing the optimal strategy. That doesn’t mean the optimal strategy doesn’t hurt, or even is positive, btw.

      In the ’80s, KSA were supporting Iraq vs Iran and were against the USSR through their USA alliance – but they still attempted a production cut strategy, and only gave up once it was obviously failing. The price fell a bit slower, but it still fell overall, and other producers just took the revenue. This time they’ve learned their game theory – they have the deepest pockets, so they know they can handle the pain.

      • Dennis Coyne says:

        Hi gwalke,

        The difference is we don’t have another Prudhoe Bay or North Sea that will flood the market as in the 1980s. So the situation is different.

        Nobody can determine why the Saudis are so determined to regain market share, perhaps they are worried about EVs and plugin hybrids and have been watching Tony Seba videos. From an economic perspective they would be making more money if they cut back production, so profits are clearly not the driving force behind their strategy.

        Their motives are unknown, but I agree they are producing every barrel they can right now, they also may be slowing down their level of investment as output has decreased slightly over the May to November period (OPEC reporting, secondary sources).

        • ChiefEngineer says:


          “The difference is we don’t have another Prudhoe Bay or North Sea that will flood the market as in the 1980s. So the situation is different.”

          I would call fracking and shale the Prudhoe Bay and North Sea of the 2010’s. The US has seen a 4 mbd increase because of it.

          • Dennis Coyne says:

            Hi Chief Engineer,

            I looked back to 1980 to 2002 and you are correct. The shale boom was bigger than the North Sea increase over that period, and Prudhoe bay was already near its maximum by 1980. The big difference in 1978 to 1981 was the big drop in Iran and Iraq output ( by 5.4 Mb/d.) This caused the 1980-1981 oil price spike and resulted in non-OPEC oil output increases and a fall in demand. The LTO was also brought on by high oil prices and that and falling demand due to high oil prices, has led to the current oil glut.

  13. BC says:

    Economics is politics. War is politics with other means. War is the business of empire. War is good business for imperialists.

    Therefore, economics is politics is the legal, moral/amoral, and intellectual rationalization for the business of empire, i.e., war, which is the use of state violence to expand business, expropriation of resources, exploitation of cheap labor, and the resulting ecocide and genocide in the process.

    Happy Xmas and New Year to all.

    • Jimmy says:

      To paraphrase Carl Von Clausewitz ‘war is politics by other means’. I’ll go two further. Politics is economics by other means, and economics is ecology by other means. Roughly speaking anyway.

  14. Richard says:

    HI: I look forward to the day oil will not be burned but will be used only to make great products like super strong polymers that can be used to build cars, boats, airplanes, houses, etc. Yes, peak production of oil may be upon us, but peak use of oil could be on us as well.

    • Fred Magyar says:

      Bio polymers, bio resins etc… are coming to many industries near you. Oil will be used less and less even for products like polymers and other products in the petrochemical industries. Google ‘Biomimicry’. Disruption is everywhere. The Age of Oil, is on it’s legs in more ways than one. May it RIP!

  15. People:…. All you prognosticators out there who are picking the peak somewhere in the distant future, please tell me where all this increase in oil production is going to come from?

    I have explained, in post after post, and especially this one, why I think the peak will be 2015. But some of you say My own feeling is that oil will peak sometime between 2020 and 2030,… and others say: “I agree with that prediction too,…”

    Well hell, that’s all well and good. But there must be a reason you think the peak will hold off for another ten years or so. Just who is going to produce all this oil. I have shown that Non-OPEC, less US and Russia, is clearly in decline in spite of oil prices being above $100 a barrel for five years. Okay… are you saying they are going to turn that around? That this time around $100 oil will do the trick where it clearly failed before, before they clearly declined for another ten years?

    Hey, if you have an opinion, there must be a reason for that opinion? Otherwise you are just blowing smoke.

    • Arceus says:

      Ron, first I would say that if oil remains below $40 per barrel, then I would agree with you that 2015 will likely be the year of peak oil. However, I believe that oil will rise to at least $80 in the coming years and may go as high as $150 depending on the strength/weakness of the dollar.

      I believe most of the oil in the coming years will continue to come from the Middle East and while Saudi seems to be peaking, Iran, Iraq, Libya are not. I do not believe Russia has peaked if oil reaches $80 plus per barrel. Even the U.S. may be able to coax more oil out of the Gulf, Alaska and shale plays if there is money to be made (finding capable, experienced oil field workers may be a problem though). There is oil in Brazil, Canada, Kazakstan, various spots in south america, off-shore africa, etc.

      Yes, it is getting more difficult to and expensive to get oil out of the ground, but these things play out longer than most people expect. Would you believe 15% of computers still use Windows XP or earlier as their operating system?

      • Jimmy says:

        I don’t believe any of the sources for future oil production increases will offset decline. Unless peace breaks out in Libya I’d suggest they’re a write off. Canada conventional peaked and now all they can ramp up on is Bitumen. Maybe we’ll get another million a day out of Canadian bitumen but it won’t be very soon or very cheap. I believe the infill drilling in KSA will lead to a steep decline before 2022. KSA is taking their last kick at the can as is evidenced by their current desperate policy manoeuvres.

      • Arceus, there is no doubt that a few countries will be able to increase production whether oil returnes to $80 or not. What you guys seem to be overlooking, or deliberately ignoring, is the fact that so many countries are in steep decline. You seem to ignore them and concentrate on the countries that have some slight potential to increase production. And you seem to think, if a few countries can increase production then we are not at peak oil.

        Well, it is my opinion that you need to back and reconsider your position.

        • Arceus says:

          With all due respect, the countries I mentioned are not second or third tier oil producers – they are seven of the top ten countries with the most proven oil reserves.

          • Glenn Stehle says:

            And then there’s “Cowboyistan”!!!!!


            Who knows?

            If oil prices rebound, it may not be down for the count after all.

            • Dennis Coyne says:

              The recoverable reserves estimate for “Cowboyland” of 250 Gb is too high by at least a factor of 5, but my best guess is about 40 Gb.

          • Glenn Stehle says:

          • Glenn Stehle says:

            And this from the Cowboyistan Ministry of Truth, from John’s link above:


            Saudi Arabia is likely afraid to find out how quickly U.S. shale output will rise when oil prices creep up. And now that U.S. exports are in play, everyone wonders how quickly American entrepreneurs will capture markets that, until now, have seen little competition. For OPEC, it’s better to put the day of reckoning off as long as possible.

            But the radically different characteristic of the new oil era is not so much that America has emerged as a big source of swing supply. That of course was a surprise to many, and the central fact animating Congressional action. The single difference that really frightens OPEC and Russia the most can be captured in a single word: velocity.

            Shale technology allows astonishingly fast increases in production and at volumes that can move global markets; furthermore, U.S. capital markets are inherently flexible, fast and have plenty of capacity to fuel shale expansion almost overnight if prices, and profits, creep back up.

            In addition, in the shale fields of America, drillers can get permits in weeks on private and state lands, as opposed to years for both U.S. federal lands and those of other nations. Then, shale wells can be drilled and completed in weeks not years.

            Every single metric associated with shale drilling and production has not only improved radically in the past half-dozen years, but continues to do so at stunning speeds. The combination of experience (it is, after all, a very new industry) and technology progress (which is propelled by pressures on profit margins) is yielding ever more efficiency gains.


            • SW says:

              Plus, they can do all of this with an unlimited supply of free money! It is a story that makes that hippie with the loaves and fishes look like an amateur.

            • wimbi says:

              As a mere dude sitting on the fence watching this oil-price rodeo, I keep wondering why none of you fancy rope slingers is giving any attention at all to some of the biggest bulls in the paddock.

              1) Paris says we WILL cut back on carbon
              2) Pope says we SHOULD cut back
              3) Science says we MUST cut back.
              4) Probability says we are gonna be FORCED to cut back.

              And each and all of these don’t have any effect on your thinking on the price of oil???

              • Dennis Coyne says:

                Hi Wimbi,

                I would think that over the short term oil prices will increase, both due to reduced supply and possibly due to increased carbon taxes. Eventually this may lead to lower prices as people reduce their demand for fossil fuels, but it will probably be 2050 or so before we get there, I would like it to be sooner, but I am not that much of an optimist.

              • likbez says:

                Saying is not doing. There are powerful forces that will prevent any significant progress in lowing carbon emissions.

                Even a minor change in oil consuming industries takes decades. Look at the pace of introduction of hybrid cars in the USA as an example. And you might better understand the future of cutting carbon emissions.

                Oil is irreplaceable commodity. And it is sad that with current low prices it will be burned at higher pace then it would otherwise for several years.

                IMHO the current lows in oil prices were caused more by algorithmic trading and hedge funds then fundamentals so predicting anything in this environment requires being an insider.

                But that does not change the total irrationality of the current situation (and international financial markets).

                So for the price of oil the best answer was given long ago by JP Morgan: When asked what the stock market will do: It will fluctuate. Now we probably are close to trend reversal but when it will come is anybody guess. But if it come there is a guarantee that it will overshoot.

                So there is no guarantee that the current irrationality with low oil prices will not reoccur in the future.

                All this deregulation under casino capitalism and financialization of everything (it would be nice to hang a couple of oil traders who try to short non-existent oil it like in good old times 😉 made the system unstable.

                • Nick G says:

                  Oil is irreplaceable commodity.

                  Fortunately, that’s not the case. I suspect 100 years from now our descendants’ children will be very puzzled at the idea that oil was a major commodity.

                  Let’s hope it gets replaced ASAP.

                  • likbez says:


                    As an input to chemical industry it is irreplaceable. As a fuel for transportation it is replaceable.

                  • wimbi says:

                    I think most here greatly underestimate the strength of influences on the situation I mentioned above.

                    EV’s, for example. I know a good number of people who are looking at them, not from the cost/benefit angle, but from view of wrong vs right.

                    They actually hear and are willing to act on the message, believe it or not, that carbon has got to go.

                    And it helps them to see me getting along just fine with an EV.

                    They never heard of POB.

                  • Nick G says:

                    As an input to chemical industry it is irreplaceable.

                    All you need are hydrocarbons: H2 and carbon. Chemical engineers will tell you that you can produce anything you need with those basic building blocks. If the form isn’t convenient it may be a bit more expensive, but it’s very doable.

                    Oil is cheap, but lots of things will do: biomass, coal, kerogen, atmospheric or seawater CO2, etc., etc.

                    Keep in mind that making plastic (and other chemicals) doesn’t necessarily emit CO2, like burning FF does. So, dealing with climate change will mean keeping enormous amounts of FF in the ground, which…can be used for feedstocks.

                • Grant G says:

                  “IMHO the current lows in oil prices were caused more by algorithmic trading and hedge funds then fundamentals so predicting anything in this environment requires being an insider.” -likbez

                  The CFTC publishes weekly data about speculator positions in the futures market in the Commitments of Traders report:


                  There is a strong inverse correlation between Managed Money (MM) short positions and the front month price of WTI. Short positions inverted below.


                  It seems to me that dumping waves of 100+ million bbl worth would be enough to cause the recent price swings. Shorting and covering cycles are pretty clearly visible…wash, rinse, repeat.

                  Not shown above, but the MM short position from a couple of weeks ago was at an all time high while WTI was at the 7ish year low.

                  A new report will be out tomorrow for the positions though last Tues. As prices have gone up through the last week, I think most can correctly predict which way the MM short positions shifted that week.

    • Jef says:

      Ron – I believe it is clear that all those prognosticators, including the “transition to renewables crowd, are also predicting a future where everyone is wealthy and can afford the much more expensive … EVERYTHING!

      • BC says:

        WRT to US oil consumption to final sales, oil is now approaching historically “cheap”. However, regarding the differential change rate of US final sales to oil consumption to final sales, oil is not “cheap” but instead at a price to final sales and its change rate since 2007 that remains effectively historically recessionary.

        With the average secular change rate of real final sales since 2007 decelerating to 1.3% (effectively near 0% per capita) vs. the historical average of 3.3%, the US cannot afford oil in excess of a sustained price of $35-$40 and maintain the post-2007 rate of real final sales per capita of no less than 0% or faster.

        In fact, during the similar period of decline of oil consumption to final sales that occurred in 1986 (the previous energy bust), real final sales were at a trend of 3.3% (2.3% per capita) vs. 1.3% today (and, again, near 0% per capita today).

        Therefore, if the US economy cannot achieve “escape velocity” back to the long-term average for real GDP per capita of 2.3% at $35-$40 oil, it goes without saying that $50-$80 to $150 oil hereafter will not permit acceleration of growth, and instead will result in further deceleration of the secular post-Peak Oil trend of real final sales per capita.

        To achieve the potential for a similar “cheap” oil-induced growth regime for real final sales as occurred in the 1980s-90s, given the trend rate of real final sales since 2007, the price of oil would have to fall to below $20 and remain there for 5-10 years.

        That we cannot achieve “escape velocity” above $35-$40 and might be lucky to maintain 0% real final sales per capita since 2007 at $30-$35, it follows that we can’t afford to continue to build out renewables AND maintain the fossil fuel infrastructure simultaneously indefinitely. Something has to give, and the result will be ongoing secular stagnation of real final sales per capita and decelerating growth of the build out of renewables as we resort to whatever it takes to sustain the fossil fuel infrastructure indefinitely hereafter during the post-Oil Age epoch, LTG, and EOG.

        But once US oil production begins to decline in earnest because of the lack of growth of demand, so will demand further decline as demand by the energy and energy-related transport sectors decelerate and eventually contract. This will further depress the secular trend of growth of (un)economic activity, demand, the price of oil, and oil production for years to come.

        • Jef says:

          BC – Are these your comments? If so then bravo, if not please point to links.

          Few if any understand deflation. Most simplistically believe it is just about money but it is way more involved than that.

      • Dennis Coyne says:

        Hi Jef,

        No the transition to renewables crowd thinks that energy will be needed and that as fossil fuels deplete and become more expensive that the relative cost of renewables will be cheap compared to fossil fuel energy. Less energy in general will be used per unit of output because all energy will be expensive.

        I certainly have never claimed that everyone would be wealthy, though potentially renewables will become less expensive as they are developed and scaled to higher output so in the long run energy costs may decrease after they reach a peak some time after the peak in fossil fuel output.

        The transition is not likely to be smooth and I expect we will see a depression in the interim as society attempts to adjust to the reality of peak fossil fuels.

        • Jef says:

          Dennis – “…though potentially renewables will become less expensive as they are developed and scaled to higher output so in the long run energy costs may decrease…”.

          This statement is just as erroneous as “everyone will be wealthy”. There is absolutely no reason to believe that as FFs become more expensive that somehow it won’t also effect the cost of a build-out of “renewables”. In fact everything I read shows the opposite is more likely.

          • Nick G says:

            everything I read shows the opposite is more likely.

            Got a source? Wind has an E-ROI of roughly 50:1, and much of that won’t be oil, but will be electricity, so it’s hard to see how rising FF prices will affect it.

            Not much sign of rising coal prices…

            • Dennis Coyne says:

              Hi Nick,

              Based on BP Data from 2000-2014 (leaving out the Japan coking coal price, which is higher) World Coal Prices are generally rising, when the Peak is reached in 2025 they will rise much faster unless alternatives are ramped up, natural gas will also likely peak before 2030, so that won’t save us, but would be better than coal from and environmental perspective.

              • Nick G says:


                That chart, IMO, suggests a peak of coal prices in 2008, and a decline from there, which is consistent with a significant slowdown in growth of coal consumption (especially in China), with a peak in the US. For better or worse, I don’t think we’ll ever see a supply limitation – rather, I think we’ll see policy-driven slowdowns and declines in coal consumption.

                Could you point me to the price data?

                • Dennis Coyne says:


                  Hi Nick,

                  In 2014 the price was higher than 2006, 2008 was a spike in price as all fossil fuel energy prices (oil, natural gas, and coal) were high that year.

                  I know you think that coal reserves are very high, but coal reserves data is not very good and they have tended to be revised downward over time despite increasing coal prices.

                  As with all energy coal price is affected by GDP growth, you have heard that World growth has not been robust since 2008, I assume.

                  • Nick G says:

                    Well, a few thoughts:

                    2008 was a spike in price as all fossil fuel energy prices (oil, natural gas, and coal) were high that year.

                    Pretty much all commodities spiked in price around that point, and have crashed since. This is moving fairly fast (2014 is out of date, as we see in oil prices!), and seems to be primarily due to a bubble in Chinese consumption.

                    coal reserves data is not very good

                    Yes, and one problem is that there’s a great deal not included, in places like Alaska, Canada and Australia.

                    and they have tended to be revised downward over time despite increasing coal prices.

                    Not really. What the various researchers you’ve looked have seen is a decline in economically recoverable coal reserves. That’s due to declining relative demand (vs the alternatives) over the last 100 years, despite the recent short term price bubble.

                    As with all energy coal price is affected by GDP growth, you have heard that World growth has not been robust since 2008, I assume.

                    Hmm. Your analysis a while ago suggested a 2.4% long term rate of world GDP growth. The IMF says it’s averaged 3.4% for 2013-15.

                  • Dennis Coyne says:

                    Hi Nick,

                    The rate of GDP growth has been decreasing, I expect that to continue. Generally higher GDP means higher energy use,so the higher the growth rate the more of a problem we would have with energy availability constraining growth.

                    You are incorrect on coal resources.

                    In 1938 the World reserve estimate was 16,000 Gt of coal and today the estimate is 1200 Gt, more than 10 times less.

                    With the price of onshore wind power comparable to new coal fired electricity do you expect that coal prices will rise very much? Or do you expect some technological breakthrough that will reduce the cost of producing coal?

                    It is economically recoverable resources that matter. It is doubtful that the price of coal will rise by very much, instead it will be replaced by wind, natural gas and eventually solar power.

                  • Nick G says:

                    The rate of GDP growth has been decreasing

                    Hmmm. I don’t see much sign of that in this World Bank data (which, oddly enough, is consistently about 1.4% below IMF data). I see a deceleration early on, probably due to a temporary post-WWII recovery, then pretty stable growth with modest slowdowns due to recessions, and maybe a modest deceleration due to maturing OECD economies:

                    There’s no sign of a lasting effect from the 2008 recession:


              • Jim Galasyn says:

                “If you only focused on the United States, you might think coal’s days were numbered. … But that’s not true globally. Far from it. According to data from BP’s Statistical Review of Energy, coal consumption has actually been accelerating worldwide since the end of the 1990s.”

                The global coal renaissance is the most important climate story today

              • Nick G says:

                Things are moving quickly in the energy world – you have to update to current data. For instance coal prices:

                • Dennis Coyne says:

                  Hi Nick,

                  The US is not the World, my chart shows the most recent data for the World (most coal is not consumed in the US so US prices are not that much of a factor.)

                  • Nick G says:

                    Have you updated any other indices for 2015 prices?

                    US coal markets are fairly tightly linked to world markets…

                  • Dennis Coyne says:

                    Hi Nick,

                    The only World coal price data I have access to is the BP statistical review. I don’t think the US coal price is linked very tightly to World coal prices as transport costs are significant and the US price of natural gas is a significant factor in demand for US coal. The 2015 World coal price data will be available to me in June 2016 when the next BP statistical review of world energy is published.

            • Dennis Coyne says:

              Hi Nick.

              Your chart using World bank data shows the GDP growth rate has indeed been slowing. The chart below shows GDP growth rates using market exchange rates (not all economists think the PPP measure is the best one to use) from the IMF’s most recent World Outlook database.


              The average annual GDP growth rate from 2012 to 2014 was 2.5%.

              • Nick G says:


                Here’s their summary: “IMF World Economic Outlook (WEO): Adjusting to Lower Commodity Prices, October 2015, Table of Contents

                Description: Global growth for 2015 is projected at 3.1 percent, 0.3 percentage point lower than in 2014.”


                That’s 3.4% for 2014. Why are we seeing different numbers?

                • Dennis Coyne says:

                  Hi Nick,

                  look at the World outlook database. There are two different versions of World GDP, one is based on purchasing power parity (PPP) and the other is based on market exchange rates.

                  Many economists (and the World Bank) think the World GDP based upon market exchange rates is a better measure of Gross World Product (GWP) than the PPP method (which is a bit of a black box as far as the method used to determine it.)


                  Chart below shows both World GDP growth rates, based on the PPP and market exchange rate (MER) measures.

                  • Nick G says:

                    But, but…if the World Bank thinks market exchange rates is a better measure, why do they highlight the PPP GDP numbers, like they do here?


                  • Nick G says:

                    Here’s what the World Bank provides, on their website, linked on their:


                    Take a look: the dramatic underweighting of the Chinese economy and it’s contribution to world growth seems like a fundamental problem with market rates.


                    In any case, with either measurement of GDP, it seems clear that the general trends of world GDP are the same as they were 10 years ago: perhaps a very gentle deceleration, but generally the growth rates are roughly the same.

                    IOW, the 2008 Great Recession has not changed world growth rates significantly. We’re not in a new world order, where things are getting worse, or even very close to stagnation.

          • Dennis Coyne says:

            Hi Jef.

            The key term you are missing is relative cost.

            I believe I said that energy will at first become more expensive.

            The most introductory understanding of business and economics suggests that as a technology is developed and becomes widespread, that the costs of the technology decrease as the technology improves and as manufacturing economies of scale reduce costs.

            You can choose to believe this is not the case but there are many examples of this effect one can point to.

            The levelized cost of electricity from new wind (onshore) is similar to the levelized cost of electricity from a new coal power plant in the US at present and the cost of solar, though expensive at present, has been falling at a rapid pace and may match the price of new wind power within 10 years.

            As oil prices rise the cost of ownership of hybrids, plug-in hybrids and EVs will become much lower than the conventional ice car.

            More expensive energy will also lead to improved energy efficiency in homes and businesses which will reduce pollution and the rate of depletion of resources.

            I agree the transition will be exceedingly difficult, and it will be expensive. If you propose that the problem can be solved only by using less energy, I disagree, I believe it will be a combination of using less and using different kinds of energy besides fossil fuels.

            I think where we disagree is whether a transition is possible without permanent societal collapse. I agree that a Great Depression 2 is entirely possible and perhaps likely, I think after a decade or so the World economy will recover as long as humanity is smart enough not to engage in a nuclear World War 3 as a result of the turmoil of another Great Depression.

            Hopefully a few economists will reread (or perhaps read for the first time) John Maynard Keynes brilliant work from 1936 The General Theory of Employment, Interest, and Money.


            • Jef says:

              Oh … if an economist said it it must be true.

              Btw that so called truism of “as the technology improves and as manufacturing economies of scale reduce costs” only applied when all inputs were cheap almost free. “Renewables” don’t get a pass on the laws of physics.

              • Nick G says:

                “Renewables” don’t get a pass on the laws of physics.

                Which laws of physics??

                If you’re thinking of thermodynamics, remember: the earth is an open system, with 100,000 terawatts of power continuously flowing into it.

              • Dennis Coyne says:


                No it is a simple fact with hundreds of examples that the cost to produce something tends to fall as the scale of production increases.

                If you don’t understand this, not much point in continuing.

                I agree that all energy will become more expensive, it is the relative cost of different types of energy that matters in what types of energy will be chosen by businesses and consumers.

                I am assuming that you realize that the economy will require some energy to function. More expensive energy will result in improvements in energy efficiency.

                Perhaps you don’t understand what I mean by relative costs.

                Basically as natural gas and coal increase in price as these resources deplete, the cost of electricity produced by natural gas or coal increases to the point where wind power is cheaper compared to any type of fossil fuel.

                Wind power costs have been coming down in the US with Power Purchase Agreements (PPA) for wind power falling from 7 cents per kWhr in 2009 to 2.35 cents per kWhr in 2014, see


    • Amvet says:

      Ron, Thanks for your comments. I have two examples to add to the discussion:
      (1) The 2014 IEA study of 1,600 oil fields that supply 70% of global oil showed a decline rate of 6.2%.
      If this is true, the globe needs, including demand growth, over 4 million bpd of new production per year to stay even. 100K bpd new production makes the news. Where is 4 million?
      (2) The classic example of “in the ground does not mean in the barrel”: Kazakstan´s Kashagan giant Oil Field. Discovered 2000, 45 API oil, 19% H2S, 11,168 psi. Shallow water in the Caspian. Stormy weather.
      So far less than one month production. Latest problem, pipe corrosion. Next year (or later) starting production of 180K bpd. Planned max production 370K bpd. Cost around $190 billion

      • Dennis Coyne says:

        Hi Amvet,


        where they estimate around 4.5% annual decline rate for World output in Nov 2008. It is possible this has increased since then, but assuming it has not, then at least that amount of output has been developed each year because output in 2015 will be about 6.5 Mb/d higher than in 2008. So roughly 4.2 Mb/d of new output was added each year on average from 2009 to 2015, if the decline rate was 4.5%/year on average each year from 2009 to 2015. Eventually a peak will be reached, when that will be is hard to say with confidence.

    • Dennis Coyne says:

      Hi Ron,

      It is just a numbers game. Some countries have declining output, others are on plateau, and still others have increased output. When oil prices have been high, there clearly has been more of an increase than a decrease. If we take some of the larger producers that have been increasing output and compare with the rest of the world(ROW) using EIA data from Jan 2004 to June 2015 (using the trailing 12 month average to focus on the trend) we see ROW decline has been relatively modest (1.4% based on the trailing 12 month output in June 2015). The eight increasing producing countries I have chosen are Brazil, Canada, China, Iran, Iraq, Russia, Saudi Arabia, and US and ROW=World minus the 8 countries just listed. In June 2015 these 8 countries produced 60% of World C+C output. Output was relatively flat for both of these groups from 2005 to 2007 so I will focus on Jan 2009 to Sept 2015, note the Jan 2009 trailing 12 month average is primarily 2008 output.

      For the ROW from 2009 to 2015 the decline was linear at about 484 kb/d each year, note on the chart that the ROW curve flattens from mid 2014 to 2015, but we will assume that the average rate of decline from 2009 to 2015 continues. If the eight countries (Big 8) listed can increase output by more than the decline of the ROW then the 2015 peak may be surpassed.

      One possible scenario is that output is flat for the Big 8 in 2016 so that World C+C output falls by 485 kb/d in 2016 (average output for the year compared to the 2015 average). Over the 2009 to Jun 2015 period the Big 8 increased output at about 1300 kb/d per year, if we assume this rate slows to half the previous rate to a 650 kb/d per year increase (1.4%/year), then the peak is surpassed in 4 years in 2019. On a per country basis this would be a little more than a 80 kb/d increase in average annual output for each of these countries, though I doubt it would be divided equally. Chart below with Big 8 and ROW.

      • Dennis, you present an interesting scenario. But it has problems. If you don’t mind I will use it as a subject for my next post, possibly an open thread if that is all I have. Is that okay with you?

        • Dennis Coyne says:

          Hi Ron,

          Yes that is fine. But see my comment below:

          A couple of charts using trailing 12 month averages and EIA data for the “Big 8” increasing oil producers from 2009 to 2015 (I include Iran in this group because although they actually decreased, I expect a future increase when sanctions are removed and oil prices increase.) The Big 8 countries are Brazil, Canada, China, Iran, Iraq, Russia, Saudi Arabia, and the United States. Together the Big 8 produced 59.6% of World C+C output from July 2014 to June 2015.

          The Chart below has output for those producing 12 month average output below 4500 kb/d from 2010 to 2015.

        • Dennis Coyne says:

          For the other 3 “Big 8” with 2010 to 2015 12 month output above 5000 kb/d trailing 12 month average output from 2010 to June 2015 is in the chart below.

          I can e-mail the charts to you if you wish.

          • Thanks Dennis, but I think the trailing 12 month average is pretty useless. They show you the turns in production almost one year later than it actually happens if you are looking at the EIA data. Non-OPEC production turned down in January 2015 but but your EIA 12 month trailing average will not show that until some time well into 2016.

            I will have a post coming out, likely Christmas day. I am working on it now. But it will not likely have anything to do with your Big 8 projections. That will be a later post. I have some interesting data for the post I am working on right now.

            • Dennis Coyne says:

              Hi Ron,

              I like the 12 month average because it gives a clearer picture of the trend, a centered average just shifts the curve back by 6 months, and yes one doesn’t get up to the month shifts, but these moves up and down are often temporary or seasonal, so I like the 12 month average and actually prefer a centered average, but you have tended to occasionally use the trailing average to show trends so I stuck with that.

              I was just trying to answer your question. Just a different guess from your guess.

        • Dennis Coyne says:

          Hi Ron,

          Below is Big 8 (rising trend) and ROW (decreasing trend) with no smoothing from Jan 2009 to June 2015.

          Pretty much a net increase of 1 Mb/d per year on average over that period.

          If oil prices rise to $80/b by Jan 2017, why do you expect that some increase in output is not possible? What has changed?

      • Dave P says:

        Nice work Dennis!

    • Dennis Coyne says:

      Hi Ron,

      The LTO plays in the US (Bakken, Eagle Ford, and Permian) will probably be able to ramp up to 750 kb/d above 2015 levels by 2021, Canadian oil sands will be able to increase by about 1 Mb/d, Brazil may be able to increase by 500 kb/d, China by 250 kb/d, Russia will hold steady, KSA steady, Iran 250 kb/d, and Iraq 500 kb/d, all above 2015 levels of output by 2021. If the rest of the world continues its linear decline of about 480 kb/d per year and all of these guesses for Brazil, Canada, China, Iran, Iraq, Russia, Saudi Arabia, and the US are correct then World output peaks in 2019 at 370 kb/d above 2015 output.

      Looking at the charts for Brazil, Canada, China, Iran, Iraq, Russia, Saudi Arabia, and the US, I am a little more optimistic. I will keep the 750 kb/d increase for the US and KSA remains flat, Russia and China I expect about a 250 kb/d increase over 5 years, Iran, Iraq, and Canada I expect about 1 Mb/d from each, and Brazil I expect 250 kb/d increase over 5 years. The Rest of the World(ROW) declines by 484 kb/d each year (2420 kb/d over 5 years) so we have a 4500 kb/d increase minus a 2420 kb/d decrease for a net of 2080 kb/d above 2015 C+C output in 2020. If the increasing countries are flat as a group in 2016 (due mostly to decreases in US output) and the increase is linear over the next 4 years, then the 2015 “peak” might be surpassed by 2017 (but barely, only 157 kb/d higher). For that reason my expectation is that 2015 output will be surpassed by 2018 with a final peak between 2020 and 2025.

  16. oldfarmermac says:

    My gut feeling is that Ron is likely correct in predicting the peak of oil production.

    It has taken a LOT longer for oil producers losing money to shut in their wells or just go broke than I would ever have guessed- which is why a year ago,I predicted prices would go back up quickly.

    If it takes two years or more for the industry to adjust to low prices by shutting in or abandoning unprofitable production, how long will it take to ramp up again-TO THE EXTENT ramping up is practical for any given producer?

    None of the smaller producers are apt to start investing in new production until AFTER the price goes up sharply, and the big ones are probably not going to spend much on new production either.

    In a couple more years depletion is going to have taken a big bite out of the reserves in the ground that are being CURRENTLY produced. So increasing production is most likely going to mean going into new fields to try to get back what is lost, plus any net gain.

    The new fields just don’t seem to be there, and if they ARE, they are certainly years away from being ready to actually begin production.

    It may be foolish of me to predict a very fast ramping up of the sale of electric vehicles, I think there is a real likelihood that there will be a sharp spike in the price of oil, even as the car dealerships of the world actually start stocking a few electric cars.

    If you know somebody who owns a Volt, and has been bragging about it being a trouble free, dirt cheap to drive car, and gasoline spikes back to four bucks or MORE, and you can only buy gasoline every other day, you might just opt for a Volt.

    There will be electric cars on the lots, a few at least, at all the major manufacturer’s dealerships in a couple of years.

    Almost everybody I know these days could get by with a new VOLT without buying gasoline more than once a month or so, excluding tradesmen of course. Widespread acceptance of electric vehicles may be a lot closer than most of us think.

    • Amvet says:

      A problem is the big surge in oil use is in developing countries. Animals are being replaced by tractors, motor bikes are being replaced by autos or small trucks, etc. In China the increase in auto numbers and in auto size is amazing.
      So, my guess is any reduction in oil use in industrialized countries will be buried in the increase from developing countries.

      Electric cars in many developing countries have little chance because of the shortage of electricity there. Will they get new electricity from, hydro, coal, NG, or nuclear?

      • Nick G says:

        It helps to look at specific examples. China, for instance, has a decent grid.

        Many developing countries have power for limited hours of the day, which works pretty well for EVs, as they can charge when the power is on.

        Solar (and wind) has a nice synergy with EVs, for the same reason. Some PV panels and a Tesla Powerwall would pay for themselves very quickly. In a lot of countries they justify themselves just as a backup to the grid, and the large cost savings over oil would be a bonus.

        • Jonathan Madden says:

          The current required to charge an EV is WAY above what most small homesteads can draw from their power sockets. Most current, PV, grid or otherwise in the poorer parts of the world is just used for low wattage lighting.

          • Nick G says:

            The average vehicle km per day in the US is about 50. That requires about 10kWhs. If you charge over 10 hours that only needs 1,000 watts.

            In many countries the average vehicle km per day is much lower, and vehicles (and their power needs, if they’re EVs) are also smaller.

            • wimbi says:

              EV has great advantage – any electricity will do.

              And don’t forget biomass pyrolyzer, that is a simple thing that cooks wood or any other stuff made of carbon and hydrogen at high temp, producing a gas that can drive any old heat engine, like a diesel generator set starved of diesel, charging the EV when no sun or wind.

              These things run fine on any kind of plastic.

              Awful lot of plastic burned in Africa when I was there a couple of decades ago.

              So, EV in africa bumper sticker–RUNS ON STINKS.

              PS, my pyrolyzer project keeps amazing me with its simplicity and effectiveness. Can’t see why it wasn’t the standard wood stove design long ago. No secrets anywhere in it.

              • oldfarmermac says:

                Hi Wimbi, and EVERYBODY,

                Merry Christmas to one and all, including the heathens and heretics and the damned and the good nonbelievers and atheists and everybody, LOL

                In this case it is truly the thought that counts, and even though it has been honored as much in the breach as in the observance, one fundamental tenet of Christianity is to be nice and get along.

                Wimbi, I sure would like to see a rough sketch of your pyrolyzer, with approximate dimensions.

                I have drawings of a dozen or more, but yours is probably better all around and might be easier to recreate.

                By next winter, if everything goes well, I will most likely be working a few hours here and there on a large one of my own, big enough to drive a good sized engine, thirty horsepower or larger.

                My goal for the first one is to be able to feed the gas into a tractor engine, using it to drive a generator big enough to run the house and farm a few hours a day.

                Incidentally PTO driven industrial quality generators that produce nice clean 120 and 240 ac in the thirty to fifty kilowatt range are actually easy to come by, if you keep your eyes open in farm country. When old farmers die, and their equipment is auctioned off, these generators sell for peanuts, compared to new ones. And they are still functionally new, because they are normally only used for back up when the grid is down.

                It would be a relatively simple job to drive one with a compact car engine, maybe directly off one of the wheel hubs, if you could rig a good governer to hold the engine speed steady. Farm tractor engines come with EXCELLENT governors built right in, and old tractors with sound engines but worn out tires and bad hydraulics can be had for peanuts too. Any body thinking doomstead take note.

                The second one will most likely be mounted on the older four by four Ford truck I set aside some years ago for this precise purpose.

                It is rather unlikely I will ever actually NEED either one of these projects, but I expect to have a lot of fun building them anyway.

                • wimbi says:

                  Mea Culpa. As a member of the largest religious group in USA, lapsed Catholic, I still am vulnerable to the childhood indoctrination of SIN.

                  Almost anything was a sin. Especially anything fun. That’s why I lapsed early on, having the insight that god was a lousy designer if his work, me, was such a sinner against his will.

                  Goddamit, god shoulda felt GUILTY about such a screwup as I turned out to be.

                  I digress. I confess guilt about not yet getting
                  the widget page up for the good folks at

                  Community Solutions

                  Briefly, the present version is a vertical SS stove pipe about foot in dia, with cap on top and bottom open for hoe to scoop out carbon but not let air in. Middle part is lined with ceramic holding gas burner that cooks wood put in the top.

                  Gas comes out bottom in a pipe and goes either to storage or to burner to cook wood.

                  Detail on sketch not yet.

                  Have a guilty holiday, y’all.

  17. Arceus says:

    >>>Widespread acceptance of electric vehicles may be a lot closer than most of us think.

    If you are right about that (and you may be) then peak oil will be 2015 and Ron will be right. However, I do not believe it will be possible to ramp up EV car production to the extent you seem to imply (say 35% of all new U.S. vehicle car sales in ten years).

    • Glenn Stehle says:


      In fact, it seems like the world is moving in exactly the opposite direction.

      Los Amigos de la Tierra called the COP21 conference in Paris a “farse,” and Vía Campesina, the worldwide coordinator of campesino movements , was equally as severe.

      The New Internationalist blasted the Paris deal as an “epic fail on a planetary scale.”

      And back home, due to consumer behavior, the push is underway to roll back the CAFE mandates:

      Surging demand for trucks and SUVs fueled by cheap gasoline is holding back improvements in U.S. fuel economy and greenhouse gas emissions, a government report due out on Wednesday is expected to show.

      The disconnect between consumer demand for larger, less efficient vehicles and the Obama administration’s climate goals sets up a clash between the auto industry and federal regulators.

      Mark Rosekind, who heads the National Highway Traffic Safety Administration, said in a Reuters interview last week the administration will consider automakers’ arguments that the shift away from cars makes it harder to hit the 2025 fleet average fuel economy target of 54.5 miles (87.7 km) per gallon….

      Consumers are responding to signals from gas pumps, where a combination of relatively low taxes – federal gasoline taxes have not gone up since 1993 – and oil unleashed by hydraulic fracturing or fracking have pushed U.S. gasoline prices to an average of just over $2 a gallon – the lowest level in six years.

      In November, fuel efficiency of vehicles purchased fell sharply to 25 mpg – down 0.8 mpg from a peak in August 2014, said University of Michigan researcher Michael Sivak, who tracks fuel efficiency.

      Nearly 59 percent of U.S. vehicle sales this year have been of sport-utility vehicles, pickup trucks or other larger vehicles, up from 54 percent last year, according to industry consultant Autodata Corp.

      Toyota Motor Corp says within two years its RAV4 SUV will displace the Camry mid-size car as its top-selling model in the United States….

      “There is a huge gap looming between government projections and consumer purchases of highly fuel-efficient vehicles,” said Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers – the trade association representing major automakers.

      So mark one up for Team Carbon, because the public has tuned out the warnings of peak oil and global warming prognosticators.

      • Arceus says:

        Yes, but that is because oil is so cheap right now. I do not think it can remain this inexpensive. When gas hits $4 per gallon, you will see more people getting interested in EVs (assuming they continue making them as a severe recession might entail some big cutbacks to EV model lineups.)

        • Glenn Stehle says:

          So who do you reckon presents the greatest threat to Saudi Arabia’s long-term economic wellbeing, the shale oil guys or the renewables guys?

          It seems like both shale oil and renewables prosper when the price of oil is high, and vice versa. Neither can compete with cheap oil.

          • Dennis Coyne says:

            Hi Glenn,

            The Saudis may believe that both are a threat, but in the long run are probably more worried about high oil prices leading to widespread adoption of more fuel efficient vehicles (hybrids and plug in hybrids as well as small vehicles). Renewables don’t really affect oil demand that much, but may reduce demand for natural gas.

            Eventually oil prices will rise, because it will take a few decades for a more efficient vehicle fleet to be put in place and it will not happen without either high oil prices or high fuel taxes or some combination of those two.

            • RDG says:

              Its the Upside Down Economy…

              Worthless shit like Facebook and Apple Gadgets Priceless…

              Oil and Coal worthless…

              Then all of a sudden the tech billionaires go “Gotcha!!!” and buy up those “worthless” assets like the kingdom of saud, oil sands, coal deposits…

              while Morons Inc (Society) is left holding the bag with todays equivalent of Costume Jewelry.

    • oldfarmermac says:

      For all intents and purposes, the ramping up of electric car production depends almost solely on ramping up BATTERY production.

      There is no real reason at all that any automobile assembly line, or entire auto factory, cannot be converted to producing electric cars about as easily as it is to convert from one model of conventional car to another.

      I doubt we will get to thirty five percent in ten years, but even ten percent would be enough to noticeably reduce gasoline consumption and help keep the price of oil down.

      There is a possibility that a supersized battery and electric motor will cost LESS in ten years than a conventional engine, transmission , and all the related engine accessories such as gasoline tank, exhaust system, etc.

      • ChiefEngineer says:

        I agree with you Mac,

        It’s about getting the costs down and getting it right. It’s just a matter of time.

        • wimbi says:

          The time is now. Problem – nobody notices.

          Another big barrier. Nobody notices something else important. Difference between kW and kW-hr.

          Yet another guy came to me just today with totally nutty conclusion from that little mistake.

          When he did it right, he decided that, yeah, a used leaf looked pretty good when you figure miles/dollar. And when the juice is coming from his oversized PV setup.

      • Dennis Coyne says:

        Hi Old Farmer Mac,

        In this case I think you may be saying that peak oil will result because of a lack of demand. Now it is likely that at some point this will be true, but I believe that it is a little too optimistic to think that this will occur before 2023. Oil consumed will be reduced by higher prices (relative to lower prices) as supply grows more slowly than demand, the question is whether oil consumed will be higher or lower than the 2015 peak when we reach the point that people move to substitutes fast enough that no further increase in output of oil is needed.

        I just don’t see that happening in less than 10 years and 20 seems more realistic to me.

        The intervening 10 year gap will be a major recession or depression (maybe 2030 to 2040).

        • Nick G says:

          The intervening 10 year gap will be a major recession or depression (maybe 2030 to 2040).

          Oil shocks have typically caused recession either because of inflation/Fed response; falling capex; or international imbalances.

          But, the Fed is much less worried about oil-shock induced inflation than they used to be (they pay much more attention to the “core” inflation rate, which excludes energy), and such inflation tends to be pretty temporary; falling capex is also temporary – e.g., consumers stop buying SUVs, but pretty soon they start buying smaller cars, hybrids and EVs; and international imbalances are temporary: pretty quickly Dubai starts building resort islands, Russians buy big cars, and Saudis import more stuff to bribe their citizens.

          Don’t forget, per Jeffrey Brown, the 2008 recession was not caused by oil prices: recent oil prices, as a practical matter, were much higher in the last several years and the economy didn’t crash.

          Monthly Brent prices were only over $100 for six months in 2008, whereas starting in February, 2011, monthly Brent prices were over $100 for 42 months, seven times longer than the six month $100 period in 2008.

          And the annual Brent price in 2008 was $97, versus an average Brent price of $110 for 2011 to 2013 inclusive.

          Now, is even a short recession a good thing? No. People hate them. Politicians hate being kicked out of office because of them, and are willing to start oil wars to avoid them. So, we should start kicking the oil habit ASAP.

          • Dennis Coyne says:

            Hi Nick,

            At some point high oil prices start to affect the economy, my guess is at about 5% spending on oil of total GDP.

            If we assume the World economy grows at 3.4%/year in real terms from now until 2020 and that C+C output is 80 Mb/d in 2020, than 5% of Gross World Product(GWP) would be equal to an oil price of $161/b in 2020.

            Oil prices much higher than $160/b in 2015$ in 2020 could lead to a recession. If we assume growth continues at 3.4% per year until 2025 and oil output remains at 80 Mb/d, then 5% of GWP would be an oil price of $191/b in 2015$, and oil prices higher than that level are likely to lead to a recession.

            An optimist would suggest that at high oil prices the World will quickly switch to plugin hybrids, EVs, public transportation, rail, etc. and that this will keep oil prices from rising so fast that a recession results.

            I think the chance that the World could balance on this knife’s edge is quite remote. A severe recession has about a 66% chance or higher within 7 years of peak oil, I am thinking 20% unemployment or higher World wide.

            • Nick G says:

              At some point high oil prices start to affect the economy, my guess is at about 5% spending on oil of total GDP.

              If my memory serves me, this is a rule of thumb based on historical experience in the US. It’s caused primarily by the effect of expanding trade deficits, and doesn’t apply to the whole world.

              An optimist would suggest that at high oil prices the World will quickly switch to plugin hybrids, EVs, public transportation, rail, etc. and that this will keep oil prices from rising so fast that a recession results.

              The things you mentioned have a long lead time. On the other hand, if oil prices were to rise above roughly $150 there would be a wide range of responses, and many of them would be much, much faster: ships and trucks would slow down: fuel consumption is the cube of speed, so a relatively small speed reduction gives large savings; people would drive less, and go online more; drivers would shift to more efficient vehicles within families; etc, etc.

              The US has a much larger passenger vehicle fleet than is necessary, and more efficient vehicles can move to the highest mileage drivers: the average period of ownership is only 4 years, so the mix can change pretty quickly.

              Carpooling is larger than mass transit in the US: 11% of commuters. Carpooling can expand overnight, and smart phones make it very easy to implement.

              US consumption fell by 19% from 1978-1982, and by 10% from 2005 to 2009. It can happen pretty quickly.

              • ChiefEngineer says:

                “fuel consumption is the cube of speed, so a relatively small speed reduction gives large savings”

                Nick, I don’t think that statement holds up.

                “Drag force is proportional to the velocity for a laminar flow and the squared velocity for a turbulent flow.”


                • Nick G says:

                  hhmm. I think turbulent flow is more applicable – I think most vehicles & boats don’t come very close to achieving laminar flows.

                  So, maybe my memory is wrong, and it’s the square of the velocity. It’s a complex question:

                  “Wave resistance at low speeds is proportional to the square of the speed, but increases much faster at higher speeds. In principle, this means that a speed barrier is imposed, so that a further increase of the ship’s propulsion power will not result in a higher speed as all the power will be converted into wave energy. The residual resistance normally represents 8-25% of the total resistance for low-speed ships, and up to 40-60% for high-speed ships, Ref. [1].”


                  Note that the chart is misleading, because land vehicle fuel consumption is a function of several things: aerodynamics (including coefficient of drag and the cross sectional area presented by the vehicle); power train friction; suspension & tire flexing; house power consumption, and optimization of the power train for certain speeds. Aerodynamics only dominate at higher speeds, so you expect to see that kind of curve. But, if you remove all but aerodynamics you’ll see at least a quadratic kind of power curve.

                  And, with freight, traditionally aerodynamics haven’t gotten as much attention, so both the drag coefficient and the cross-sectional area are proportionately larger than for passenger vehicles.

                  The net effect: freight starts to slow down when fuel prices rise.

                  • ChiefEngineer says:

                    I think it’s square of the velocity also.

                    The chart represents ICE vehicles that are less efficient at lower speeds. EV’s wouldn’t have this kind of curve. Your right, there are other factors than just wind resistance.

                    Road and driveline resistance are pretty much linear.

                  • islandboy says:

                    Don’t you mean EVs would not have this kind of curve? The slower EVs go, the less losses there are, except for heating or cooling.

                  • ChiefEngineer says:


                    I believe the drag coefficient of a turbulent flow is 1 and the drag coefficient of a laminar flows would be 0. Correct me if you know other wise. Most modern vehicles are about .25 to .3

                    Yes Island, I corrected it.

                  • Nick G says:

                    EV’s wouldn’t have this kind of curve.

                    Yeah, I forgot one of the major components: braking. EVs (and anything with regen braking) greatly reduce braking losses.

                    Tesla has a very nice chart showing the various components over the speed continuum.

                  • Ralph says:

                    I’ve been interested in this for cars a long time, but can find little hard data on the web. I think overall most cars have reduced drag coefficients in recent decades, which has resulted in a flatter
                    speed/efficiency curve. Near optimal mpg for most cars is anywhere from 45-60 mph. (hybrids have less smooth responses due to interaction between different power units, very narrow peaks in the curve).

                    One interesting point is that head/tail winds need to be considered too, driving at 70mph into a 20mph headwind will give much worse mpg than with a 20 mph tailwind. (I use weather forecasts when planning long journeys and allow more time if I will be facing mostly headwinds).

                  • Nick G says:


                    Keep in mind the difference between freight and passenger vehicles: freight has much higher drag levels.

                    I agree that passenger vehicle drive trains have been optimized for between 45-60 MPH.

                    I don’t expect a big speed reduction from rising fuel prices for passenger vehicles: people’s time is generally worth more than fuel savings.

                  • clifman says:

                    “Tesla has a very nice chart showing the various components over the speed continuum.”

                    Link? I’ve searched on the terms and find various blogs and charts, but not precisely what you describe…

                  • Nick G says:

                    Here are several. I think the second one is the one I had in mind, unfortunately the chart doesn’t seem to load properly:




              • Dennis Coyne says:

                Hi Nick,

                If I remember correctly, the decrease in oil consumption in the early eighties was due to a major recession. If one looks at the data for the World, around 5 or possibly 6% of World spending on oil results in a World wide recession (based on the experience from 1960 to 2014, before that oil was not as big a factor because it was a smaller part of the World economy.)

                There are a range of responses which might be taken, but many of them increase costs and reduce profits relative to an economy with lower energy prices.

                Sorry, but thinking the World can skate through that crisis with little effect strikes me as naïve.

                • Nick G says:

                  the decrease in oil consumption in the early eighties was due to a major recession.

                  This is complex.

                  First, from 1978-1982 the US certainly had a recession (or 2, depending on how you count). But, overall, GDP rose slightly from during that period. So, falling economic output was not the cause: the primary cause was a classic demand response to high prices. The same thing is true for the 10% decline in the period of 2005-2009.

                  2nd, the US was undergoing a major policy shift: inflation had risen over a period of about 15 years due to bad fiscal and monetary policy, and Paul Volcker’s Fed raised interest rates to 18%!! Oil inflation was a factor, certainly, but this policy shift was the primary cause of the recession.

                  If one looks at the data for the World, around 5 or possibly 6% of World spending on oil results in a World wide recession

                  Again, I believe you’re remembering the US, not the world. Now, during that period the US was by far the largest economy in the world, and so if the US sneezed many other countries caught a cold. But, the point remains: rising oil prices hurt oil importers and help oil exporters. To a great extent, it’s a zero sum game.

                  If you want to think about it further, you might want to look at the breakdown I provided above for the various possible drivers of a oil-shock recession, then look at Prof. James Hamilton’s work on this at

                  • Nick G says:

                    I think oil prices were not the primary cause, but I don’t think high oil prices helped very much.

                    If oil prices were not the primary cause, then the 2008 recession isn’t good evidence for the idea that high oil prices cause recessions, right?

                    Do you disagree that high oil prices might effect the economy negatively?

                    Not at all. The question: how much, and for how long?

                    You would agree that lower GDP would tend to reduce oil use, yes?

                    Sure. But that’s less important than prices and public policy (efficiency, taxes, etc).

                    The lower oil use in the early eighties was forced by lower oil availability.

                    hmmm…kind’ve. The overall availability of oil didn’t change that much. Some of the decline in production we saw in the 1980’s was KSA trying to put a bottom under prices. Finally, oil availability didn’t decline by 19% from 1978 to 82.

                    Oil use correlates much better with GDP than oil price

                    Yes, but the arrow of causality goes from GDP to oil use: as the economy grows, and people use transport more, oil consumption rises.

                    The average GDP growth rate from 1980-83 (assuming 1 year lag) was under 2%

                    And that, as you note, is the period which appears to support this thesis the best. But, what about my arguments above about the dramatic change in Fed policy?

                    Again, the US was undergoing a major policy shift: inflation had risen over a period of about 15 years due to bad fiscal and monetary policy, and Paul Volcker’s Fed raised interest rates to 18%!! Oil inflation was a factor, certainly, but this policy shift was the primary cause of the recession.

                  • Dennis Coyne says:

                    Hi Nick,

                    I am familiar with Hamilton’s work which is only for the US, not the World.

                    At some point very high spending on oil may have a negative effect on the economy, in the past it has been around 5% or higher of World spending on oil where the economy experienced slow growth for several years.

                  • Nick G says:

                    very high spending on oil may have a negative effect on the economy, in the past it has been around 5% or higher of World spending on oil

                    Could you point me to an analysis of that? I really think you’re thinking of analyses of the US economy.

                    Hamilton’s work is very careful. IIRC, most analyses of world GDP vs oil prices is pretty simple: charts which show correlations, and not much else.

              • Dennis Coyne says:

                Hi Nick,

                Actually looking at the data 5% is probably too high, more than 4% of World income spent on oil has often lead to slow growth (less than 2.5%) though there have been exceptions as there are many factors determining World real GWP (not only the price of oil). Probably 4.5% is a good guess for where the risk of recession increases.

                Chart below is for the World % of income spent on crude oil and World % growth rate of Real GWP (Gross World Product).

                • Nick G says:

                  We see two oil shocks here, roughly.

                  I’ve discussed the 1970’s above.

                  We agree that the 2008 recession was not due primarily to an oil shock, right??

                  • Dennis Coyne says:

                    Hi Nick,

                    I think oil prices were not the primary cause, but I don’t think high oil prices helped very much. Do you disagree that high oil prices might effect the economy negatively? Note that in 2008 World oil spending was well below 5%, rarely does the World as a whole enter a recession (2009 was the first time since the Great Depression). You would agree that lower GDP would tend to reduce oil use, yes?

                    And lower growth rates means lower GDP than at higher growth rates.

                    The lower oil use in the early eighties was forced by lower oil availability. The economy grew much less rapidly as a result of the disruption of lower oil availability.

                    Oil use correlates much better with GDP than oil price. Oil price has only a minor effect on GDP generally, but above a certain level (roughly 5 or 6%) of oil spending lower GDP growth tends to result.
                    Since 1960 we have only been above 5% from 1979 to 1982. The average GDP growth rate from 1980-83 (assuming 1 year lag) was under 2%, other episodes of 4 year growth less than 2% occurred from 1990-95 and 2008-2011. In the 1990-1995 case oil spending was low, so was not likely a factor and in 2008 to 2011 oil spending was only 3.7% and possibly a minor factor (the housing bubble and aftermath were the primary cause). The 1979-1982 period had average oil spending of 6.8%, so this level would pretty clearly be a problem unless the World economy has become more resilient to high oil prices.

        • oldfarmermac says:

          HI Dennis,

          I would put it this way, peak oil will or might come about as the result of geology and substitution of electricity for gasoline and diesel , rather than just substitution.

          Personally I believe the price of oil will go up sharply before long, in historical terms,and stay up, long term, with occasional periods of decreasing prices of course.

          But I am convinced the long term trend must be UP for the easily foreseeable future, for sure.

          The hopes I have for electric cars is that, one, they will allow people who must drive a good distance, maybe up to seventy five miles or so daily, or give up their homes and lifestyles, to continue to drive.

          Two, that they will become numerous enough to significantly reduce consumption of oil, and thus help keep the price of oil down.

          For what it is worth, I believe that a major oil supply crisis within the next decade or two is a very real possibility, and that such a crisis would lead at the minimum to a really bad recession, world wide. At the worst, it could lead to a near permanent economic depression, or even to WWIII, depending on the way the cards of history fall.

          Bad luck is something we can never rule out.

          • Dennis Coyne says:

            Hi Old Farmer Mac,

            I agree on every point.

            I don’t think it will be only geology (supply) or only substitution and efficiency (demand) that will determine both peak output and the oil price at that peak, it will be both. As the old adage goes, both price and consumption are determined by both supply and demand, just as it takes both blades of the scissors to cut the piece of cloth.

      • islandboy says:

        I doubt we will get to thirty five percent in ten years, but even ten percent would be enough to noticeably reduce gasoline consumption and help keep the price of oil down.

        Meh! Tony Seba says 100% in less than fifteen years! You can hear a very recent (Nov 19, 2015) explanation of how he thinks the EV disruption will proceed at 15 min 20 sec into his latest youtube upload (California Transit Association’s 50th Annual Fall Conference & Expo, held November 18-20, 2015 in Pasadena).

        Now I’m not saying that this guy is right for sure but, who knows? He claims that things are actually progressing faster than he projected when he wrote his book. Suppose the US market gets to 100% by 2028? Impossible? Suppose the US market shrinks to 25% or 10% of it’s current size by 2028? Impossible? Who wants to bet?

        Just might be that market disruptions galore are just around the corner.

        • Dennis Coyne says:

          Hi Islandboy,

          I would love to believe that Tony Seba is correct, but I must be getting old,the realist in me says 100% in 15 years is ridiculous, I think reducing consumption by 10% in 15 years in the OECD is pretty doable maybe a 50% probability and 25% in 15 years remotely possible (maybe a 5% chance).

          Hopefully I am too pessimistic. When I look at things like laptops and smartphones and look back 15 years ago, I am sure I didn’t have a smart phine then and I may not have gotten my first laptop, I didn’t have internet access at home until 1996, no broadband until 2001.

          The point, the future is hard to predict and things often change more quickly than I foresee.

          So perhaps you are correct after all, though 100% in 15 years still looks like a bad bet to me.

          • islandboy says:

            In a response to OFM, Arceus said:

            However, I do not believe it will be possible to ramp up EV car production to the extent you seem to imply (say 35% of all new U.S. vehicle car sales in ten years).

            Be careful how you interpret what is being said. Tony Seba is making the case that by 2030 all (100%) new cars will be electric as opposed to Arceus’ speculating that EVs will make up “say 35% of all new U.S. vehicle car sales in ten years.“. Note that Seba is not saying that the US fleet is going to be 100% EV in fifteen years.

            Seba says that the auto industry is going to experience a top down disruption, starting from the more expensive end of the market and moving down, typical of high tech products. At the upper end of the market, the disruption is well underway with a single model from a single new automaker taking a sizable chunk out of the sales of premium sedans from traditional automakers.

            According to the Monthly Plug-In Sales Scorecard at Tesla has sold 22,100 units of their car that costs between $74,000 and $140,000 up to the end of November. Now according to this web page, The 10 Most Popular Cars Americans Are Buying Over $70,000, the most popular car selling for over $70,000 in the US is the Mercedes S Class having “already sold an impressive 10,580 versions of its flagship model this year.” So. unless that 10,580 figure is for the first 6 months of 2015 (unlikely since the article is dated October 28, 2015), Tesla is selling more units of it’s Model S than Mercedes is selling S Class sedans! As for the other cars on the list, the Tesla is outselling them handsomely. That is over 22,000 sedans that Audi, Porsche, BMW and Mercedes did not sell in the over $70,000 category. Over 22,000 Americans who have voted with their wallets that, this is the best car for their money. Disruption? You think?

            edit: Just to remind the skeptical what is so disruptive about EVs and the Tesla in particular:

            Refuelling while you sleep at home.
            Free charging for long distance driving included in cost of the car.
            Eight year unlimited mile warranty on the drive train.
            0-60 mph in under three seconds for the top performance option.

            • oldfarmermac says:

              Unless I forget to insert my weasel word qualifiers, I never say never.

              There is a possibility Seba might be right. Fifteen years is long enough that the costs of batteries can fall well below the cost of an equally powerful ice engine and transmission.

              On the other hand……… fifteen years is also long enough for the ice to evolve into a more reliable, more fuel efficient, cleaner, lighter source of motive power.Hardly anybody I know would have believed IC engines could be improved as much as they have over the last couple of decades.

              Serious improvements in fuel efficiency,and further improvements in power to weight ratio, are still possible, especially if some new materials such as ceramic cylinder liners become practical.
              Fifteen years is also long enough that there might be a political crisis of one sort or another that results in our political leadership going whole hog in an effort to “DO SOMETHING” so as to prove to the people that incumbents deserve to win reelection.

              In the past we have outlawed booze, and legalized it again, and outlawed pot, and we are now in the process of legalizing it again.

              A really bad oil crisis could come about for any of several various reasons, and the response in Washington could be to MANDATE that every new car be a plug in hybrid or pure electric.

              It is not inconceivable that we might even have a “religious” level environmental movement take over politically in that time frame. Suppose we experience an industrial accident that kills a few hundred thousand people……………. Or we get two or three years in a row where we have killer hurricanes.

              Anybody who does not GET IT should reflect on the price we have paid in response to losing just three thousand people on nine eleven.

              I am not PREDICTING this stuff, but merely pointing out that any of it could come to pass.

            • Dennis Coyne says:

              Thanks Islandboy,

              I had missed the “new” car distinction. It still seems 100% is too high, but 75% of new cars seems possible especially if oil prices rise to $100/b and remain above that level within 5 years, which I believe likely (though caveat emptor my oil price predictions have been atrocious in the past so a teaspoon of salt is needed).

              I can’t wait for the Tesla Model 3, the S and X are a bit 🙂 too expensive for my wallet.

              • Glenn Stehle says:


                If you dedicated 1% of the time studying peak lithium as you do to studying peak oil, you could not help but be gobsmacked by Tony Seba’s remoteness from reality.

                But maybe not, as you don’t seem to exhibit any special immunities to the private automobile fetish.

                • Dennis Coyne says:

                  Hi Glenn,

                  I live in a place where public transportation is almost non-existent and life without a private vehicle would be very difficult. If we run out of lithium it will be recycled and nickle metal hydride batteries are a possible substitute for lithium.

                  Recycling will be a key to useable batteries, lithium prices will rise to the point where recycling becomes profitable.

                  I agree that public transportation is a better solution, if batteries are not viable over the long term due to inadequate supply.



                  Note that the paper assumes Nissan leaf size batteries for half of the World’s population (3.4 billion batteries in 2010), which would use 82% of 2010 reserves. Clearly this is not very viable, though potentially higher prices would increase reserves (resources are about 2.6 times reserves, but clearly not all resources can be extracted economically).

                  Other studies have suggested that the constraint will not be reached until 2100. See


                  • Glenn Stehle says:


                    Trust me, I’ve been hanging around the oil patch for long enough to know how magical thinking works.

                    There’s always some groundbreaking technological breakthrough, or the discovery of some huge new oil or gas field, that’s going to let the good times roll on.

                    The Green Utopians are quick studies in how the game is played, at least how it’s been played after the upstream oil and gas business became financialized in the 1980s.

                  • Nick G says:

                    Trust me, I’ve been hanging around the oil patch (and many other industries) for long enough to know how resistance to change works.

                    Think Kodak, Polaroid, Peabody Coal, etc., etc.

      • likbez says:

        “There is a possibility that a supersized battery and electric motor will cost LESS in ten years than a conventional engine, transmission , and all the related engine accessories such as gasoline tank, exhaust system, etc.”

        I am all for electrical cars, but neither technology nor infrastructure (charging stations) are present. And probably you need not $4 per gallon gas but much higher for the switch to materialize. Probably close to $8 per gallon (European price before oil price slump)

        Right now they are limited to home owners who can install special charging sockets. For apartment dwellers they are out of reach. And the most attractive use is as the second car for short commutes (for example daily commute to to work or train) when you own regular car, or SUV, or truck for other needs.

        With the current cost of rare metals and copper you might be right as far the gap between the costs or regular drivetrain and electrical drivetrain, but costs of rare metals and copper can increase dramatically in 10 years.

        The EV battery is a very expensive proposition. The cost of replacing batteries in Prius is $3,000. Leaf battery is around $5,500. Also some cells are dying during normal exploitation period (10 years I think for Prius). Regular gas engine and transmission last longer. Assuming 10K miles per year they can probably last 20 years (200K total).

        If we assume $5000, then most probably for next decade small car drivetrain complete rebuild costs less. Actually for $6000 you can buy a decent three years old Chevy Spark with, say, less then 50K mileage now.

        • Nick G says:

          So many unrealistic things, so little time:

          neither technology nor infrastructure (charging stations) are present.

          The tech is here. There are more than 10,000 in the US.

          probably you need …close to $8 per gallon

          A Leaf is already cheaper, at $3 gas. At $3, gas costs $20k over the life of the average US car. At $6, you’ll save $20k.

          they are limited to home owners who can install special charging sockets.

          Standard 110V outlets do just fine.

          costs of rare metals…can increase dramatically in 10 years.

          Rare metals are not essential to EVs, though they are often used.

          costs of rare metals and copper can increase dramatically in 10 years.

          It’s far more likely that oil will increase dramatically.

          Leaf battery is around $5,500.

          That’s not expensive. Most EV batteries will likely last the life of the car.

          Also some cells are dying during normal exploitation period (10 years I think for Prius).

          Prius batteries are famous for lasting the life of the car.

          • oldfarmermac says:

            Hi Nick,

            I will add that when and if electrics pure or plug in hybrid get to be just a little more common, the number of business establishments that install chargers for their customers will rise sharply. The business may charge for charging, think Walmart, or provide complimentary charging, think high end restaurant or clothing store.

            Ditto owners of apartment buildings and landlords who rent single family housing.

            I do my own electrical work, so I know what it actually costs to install a 240 volt weather proof outlet, near a driveway or curbside. Excluding labor, which can be outrageous in some unionized localities, five hundred dollars is more than generous. Labor would typically be two men for a day, occasionally two days.

            I would be very happy to provide a charging plug for a tenant willing to pay an extra forty a month in rent, plus his consumption of course. I would achieve break even in twenty four months or less on average.

            A lot of landlords are mean spirited, but most understand making money occasionally requires spending some money.

            Of course labor is considerably cheaper here in Va than in a place such as Connecticut.

            Otoh, the typical tenant in Connecticut could easily afford to pay a much larger rent premium. 😉

            Most electric vehicles have their own on board charge controllers, and if you charge at home, you really don’t need a FAST charge. Overnight is FINE.

            You are maybe a little optimistic about an ordinary 120 volt circuit being adequate as a general rule, but most commuters could plug in for at least eight to ten hours a day no problem at all, and a lot of people (retirees, stay at home house husbands or wives, home based business people, owners of small businesses who own their own premises )could stay plugged in more or less continuously, except when actually driving and shopping. Most modern houses have at least one dedicated twenty amp 120 volt circuit. Extend that circuit outside, and you have 2.4 kilowatts – enough to drive forty or fifty miles easily after charging overnight.

        • clifman says:

          Prius battery replacement, $2175 installed:

          Re: Leaf – “It’s true, EV batteries aren’t cheap; a replacement pack for the Nissan LEAF costs $5,500 plus the old battery. But do LEAF batteries fail frequently? New data show that out of 35,000 Nissan LEAF sales in Europe, just 0.01%, or 3 units total, have failed.”

          What this sounds like to me is similar to the early days of Prius battery anxiety, when it was claimed that replacement need would come early, and cost $5-6K. But they lasted longer (ours still healthy @ 200,000K miles) and wound up costing far less than anticipated to replace, once a market developed for that. I’m no free-market hypster, but I do expect that Leaf replacments will wind up costing less than expected, once more than a few replacments are needed.

  18. Jef says:

    “Fall Meeting of the American Geophysical Union”

    “This is the world’s largest gathering of Earth-related scientists, with more than 20,000 researchers, journalists, and others in attendance.”

    All of whom Javier can go toe to toe with and tell them whats what.

    “The polar year running from October 2014 to September 2015 was the warmest in more than a century of recordkeeping, with the region now 3°C (5.4°F) warmer than it was at the start of the 20th century.”

    But I’m sure that was cause by the heat emanating from friction of Stridulation performed by a wide variety of fauna in the region.

    • Caelan MacIntyre says:

      I am increasingly-dubious about (the political desire for) renewables buildout also because it would likely spell the end of large-scale centralized (un)government-as-we-know-it. They seem damned if they do and damned if they don’t, post peak.

      Some ‘billionaires’ may have set up a coalition to throw money at renewables for example, but it may not only be too late but will be like throwing money at their own demise (which nevertheless might be ok to them), a demise of a business and financial model that was built on cheap oil and debt-based growth-based uneconomics. If they get anywhere, there may be a point where they, too, discover an ‘Oh shit!’ kind of moment to their industries, which could be sooner than some think in a shark-fin/chaotic sort of decline and right at the peak.

      2008 looks like merely a trial run, and we never did quite recover, did we?

      • SW says:

        Things change. 2010 is history. That is the whole point of not giving up. And yes, this does make me feel good. Is it THE SOLUTION. Of course not. But it beats scratching your ass in your mother’s basement eating cheetos and waiting for the end of the world.

        • Caelan MacIntyre says:

          I say fractal collapse and John Michael Greer, for example, apparently calls the same thing, catabolic collapse. Maybe this is because he may have a cat. He has used a cat example with Futilitist on The Oil Drum before too. (Hi John, if you are lurking.)

          Myself, I prefer the idea of more local resilience such as passive solar, natural buildings, hand-tools and some adaptations that are a kind of ‘natural-high-tech’ like this idea of strangler-fig bridges, and in a small (eco)village/(Transition)town setting.

          I am unsure some sorts of batteries or solar systems can be manufactured (or reused and/or disposed of) in a small-scale local resilient sense, but, like perhaps Wimbi, for example, may think, it may be possible to use local materials, such as from local scrapyards and whatnot, to improvise higher-tech systems, such as car alternators for windmills and reflective/black-colored materials for solar augmentation.

          • ChiefEngineer says:

            “But it beats scratching your ass in your mother’s basement eating cheetos and waiting for the end of the world.”

            Exactly !!

            “Myself, I prefer the idea of more local resilience such as passive solar, natural buildings, hand-tools and some adaptations that are a kind of ‘natural-high-tech”

            That’s code for I can’t afford to turn on the heater

      • Fred Magyar says:

        I am increasingly-dubious about (the political desire for) renewables buildout also because it would likely spell the end of large-scale centralized (un)government-as-we-know-it. They seem damned if they do and damned if they don’t, post peak.

        You are 100% correct there is no political desire for renewables build out for precisely the reasons you mention. But it doesn’t matter because disruptive technologies bring about change in non traditional ways. So whether or not the political desire is there or not renewables will be built out regardless. It’s happening at the local level in communities and is being driven the Wimbis of the world. If you’re looking for disruption as a top down phenomenon from governments, the fossil fuel industry and utility companies you are looking in the wrong places. They will fight renewables to the end of their own bitter demises!

        “I think there is a world market for maybe five computers.”

        Thomas Watson, president of IBM, 1943

        Do you think he could have imagined this?

        The number of smartphone users worldwide will surpass 2 billion in 2016, according to new figures from eMarketer—after nearly getting there in 2015. Next year, there will be over 1.91 billion smartphone users across the globe, a figure that will increase another 12.6% to near 2.16 billion in 2016. – See more at:

        Don’t forget that smartphones those ubiquitous little computers in our pockets allow the likes of the Ubers of the world to cause even more disruption in areas such as transportation further undermining the old business models. When those models collapse then the governments and corporations they support run out of cash and collapse as well. We are living in a world of dramatic change. This time it really is different! BTW Uber was founded in 2009, just 7 years ago, who woulda thunk it?.

        • Doug Leighton says:

          I recall being with a class of fellow engineering students and we all agreed that electronic calculators would never replace our slide rules. So, I suppose I’m not right about everything. 🙂

          • Fred Magyar says:

            we all agreed that electronic calculators would never replace our slide rules.

            Well you were right, electronic calculators didn’t replace slide rules any more than ICE powered cars replaced horses… What they did, was completely disrupt the old paradigm and help create a completely different reality. BTW just so we are clear, I’m thinking of the early programmable graphing scientific calculators like the Casio FX-7000G…

            • Doug Leighton says:

              So, does that mean I’m actually right about everything? I’ll assume it does. 🙂 Thanks Fred. (PS: The new Mathematica 10 Software is pretty cool too.)

        • Nick G says:

          the Ubers of the world to cause even more disruption in areas such as transportation further undermining the old business models. When those models collapse then the governments and corporations they support run out of cash and collapse as well.

          Hmm. Why would Uber cause gov & co’s to run out of cash? Both Uber and it’s drivers pay taxes – they actually account for tips (and report them to the IRS) far more carefully than taxi’s.

          • Fred Magyar says:

            Hmm. Why would Uber cause gov & co’s to run out of cash?

            Hey Nick, I could explain my point in minute detail but I’m really not in the mood! I’m sort of in a vacation holiday relaxation mode.

            Suffice it to say that I’m not in any way shape or form, suggesting that Uber is causing any government or corporation to run out of cash in the near term and therefore causing their collapse.

            I’m just using Uber as a symbol of disruption in a general sense. Disruption of all kinds across the board is what is displacing the old guard and will eventually cause their demise if they don’t also go with the flow and change themselves.

            To talk about Uber and it’s drivers paying taxes and mentioning the IRS in the same breath is to miss my point by about a million light years… That’s just not relevant.

            I’m finding that expressing my thoughts in a comprehensible manner is taking more effort than I find worth the effort and time that it would apparently take.

            I’m with OFM when it comes to explaining things in sound bites, it just doesn’t work and it takes a huge amount of time to do it right and the audience probably won’t take the time to read it anyway… assuming they even understand the explanation. Note: that’s not their fault it’s mine and I’m actually in the communications business… should of stayed in the beach bum business, and I would have, if I hadn’t noticed that BAU was killing my beaches!

            So after the holidays I’ll be back on track trying to raise awareness. For the moment I’ll just raise a glass of something with an alcoholic content and just say Happy Holidays!


            • Nick G says:

              Ah, you’re thinking of stuff like utilities being bankrupted by distributed solar. Ok.

              Happy Holidays!

            • Ralph says:

              The UK government is losing £10B’s of tax income from corporations like Amazon who offshore profits and intellectual property to keep the tax bills down. The major technology that allows this business model is the internet.

              The primary losers are small UK companies who cannot offshore profits and bypass taxes and are killed in the market.

        • Don Stewart says:

          I took a look at cell phones in 1970 for the company I worked for. My analysis was pretty good, with one glaring mistake. I thought that computers would become steadily smaller and faster, that cell phones would become widespread, and that costs would fall. Where my crystal ball failed was in batteries. The engineers convinced me that battery technology would never support hand-held devices (like Dick Tracy’s wrist watch video phone). So I predicted that cell phones would be ubiquitous in vehicles by the year 2000, but there would be very few cell phones carried around (such as cops walking a bat). What changed was not the expected trajectory of computers, but the technological innovations in batteries which were not expected.

          The second mistake, which was enabled by the battery revolution, was to anticipate that cell phones in 2015 (which was beyond my horizon in 1970) would only secondarily be about doing useful work. Instead, they would be described by the MIT psychologist Sherry Turkle in 2015 as:
          *You will be heard
          *You can put your attention wherever you want it to be
          *You will never be alone
          *You need never be bored

          Don Stewart

        • Caelan MacIntyre says:

          That’s fine, Fred, and I am good, for the most part, with technology, as long as our systems by which we derive it are ethical ones– care of Earth, care of People and all that.
          This involves a fundamental, perhaps even simple, retrofit of so-called government into a real government, into one that actually serves the people and how and when they want to be served, and completely transparently– a ‘FLOSSing’ of government, so that our culture can pass through puberty and into adulthood to govern its own affairs, rather than have them ‘governed’ by some nefarious clique.

          We are not children anymore, are we? Then we can govern ourselves.

        • Jef says:

          “I think there is a world market for maybe five computers.”
          Thomas Watson, president of IBM, 1943

          Ridiculous example.

          Turns out that in the 1940’s he was absolutely correct and obviously as things progressed IBM did too.

          Disruptive doesn’t mean nearly as much as you think it does. All your examples only became widespread after the political desire, albeit pressed by corporate desire, took an interest and piled on with both fists.

          My point is that top down or bottom up there is simply no disruptive tech in the pipeline that is going to plug in and take off in the way that you keep wishing for. Maybe passengerless cars will catch on.

          • Nick G says:

            Well, depends on what he’s wishing for.

            If he’s wishing for EVs, wind, solar, etc to replace fossil fuels…it’s happening. And, there are plenty of historical examples.

            If you were selling kerosene lamps in the US in the 1880’s, you were in trouble very soon thereafter…

          • Fred Magyar says:

            My point is that top down or bottom up there is simply no disruptive tech in the pipeline that is going to plug in and take off in the way that you keep wishing for. Maybe passengerless cars will catch on.

            First I’m not into wishing. Second you are fractally wrong!

            There are plenty of disruptive technologies in the pipeline that are already taking off. Disclaimer I’m not saying they are all good or bad or even that they won’t have unintended unknowable consequences at our present juncture. All I’m saying is disruption is real and happening everywhere right now. I could spend hours talking about all the different areas being affected.

            In his talks about disruption Tony Seba has a picture of a street in New York circa 1900 where there is one single ICE automobile on the street, followed by a picture of the very same street just a mere 13 years later where there are only horseless carriages. That is what disruption looks like. Nobody on that New York street would have predicted the demise of the horse drawn carriage only 13 years later.

            You should have stopped by at the Disruptive Innovation Festival held last month
            Maybe you can catch the next on in October 2016.
            BTW disruption isn’t just about EVs and alternative energy, that’s not even the tip of the iceberg.

            If you really think disruptive technologies are just my wishful thinking you are just completely clueless and ignorant of the realities happening all around you.

            The biggest disruptions of all are happening because of a fundamental shift in systems and design thinking in business. This is about transitioning from a linear consumptive economic model to a circular regenerative economic model.

            Check out the Ellen MacArthur Foundation.

            Cisco, Google, Phillips, Renault, Unilever are but a few of the major corporations already on board. There is support from governments and NGOs from all around the world. You should check out what is happening in places like Denmark.

            I could list dozens of other organizations and major Universities around the world that are also aware and participating in these transitions.
            Basically the economic power held by the old guard of the fossil fuel based military industrial complexes is shifting into the hands of a very different digital economy.

            The likes of Google, Apple, Tesla etc… are the new economic kings of the hill the Exxons Shell Oils and Petrobrases of the world are in their waning days. Of course they will try to fight their loss of power to the bitter end but they and the system they are part of are dead men walking.

            All the governments of the world that still depend exclusively on oil and other fossil fuels to keep their economies and societies afloat are in for a major world of hurt.

            Even military power built on cheap oil and big expensive hardware can’t continue to compete with small groups of determined digitally savvy individuals with cheap drones.

            So anyone who still says there are no disruptive technologies in the pipeline or that all of the above is wishful thinking I say are you living under some rock in a cave? How is it possible to be so completely oblivious to the world around you?!

            • Jef says:

              Oh there will be plenty of disruption but in any magical way that you talk about.

              All the fancy gadgets you list are here or being developed because we are at peak prosperity. Again you wave a magic wand and pretend to reverse the global biophysical deflationary oneway trip we are on.

              ICEs went from one on the street to all of them because EVEARYTHING that it takes to do that, all the resources were cheap almost free and getting cheaper and more abundant all the time. Growth was not even a question back then there was simply no limits. Its way different this time.

              You must have grown up watching too much Disney.

              • Glenn Stehle says:


                It looks like it’s not only going to be a hard candy Christmas in Cowboyistan, but in the Green Utopia as well.

                • Dennis Coyne says:

                  Hi Glenn,

                  Not very meaningful without a link or explanation.

                  • Glenn Stehle says:

                    So let me get this straight.

                    The fact that Europe saw investment of just $5.8bn in the latest three months in clean energy, down 48% from the third quarter of last year and its weakest performance since Q4 2004, is “Not very meaningful without a link or explanation”?

                    Me thinks the lady doth protest too much.

                  • Dennis Coyne says:

                    Hi Glenn,

                    Couldn’t really read the chart, not at all obvious it was Europe, or what was on the chart, still no link for the source, interesting, I guess.

                • Techsan says:

                  It should be pointed out that measuring clean energy investment in dollars is not necessarily the best measure: renewable energy keeps getting cheaper, so that even if dollars decrease slightly, the amount of clean energy added increases.

                  • Caelan MacIntyre says:

                    I question the terms ‘clean energy’ and ‘renewable energy’ in certain contexts and suspect much of it to be greenwash.
                    If we want to talk price, it, too, derives from an elite game.
                    We only think we want some things because our needs have been manufactured for us. Think about that one for a bit, take a look in the mirror and ask yourself how real your life actually is– whether it truly emanates from your head or someone else’s head for what they think should emanate from your head.

                    The only real clean energy seems to be about natural photosynthesis than what anything the (undemocratically-derived) human industrial processes might puke out, including your so-called clean energy.

              • Glenn Stehle says:

                • Glenn Stehle says:

                  And the decreased plug-in car sales in spite of the fact that overall car sales are booming.

              • Dennis Coyne says:

                Hi Glenn,

                Perhaps there is a simple explanation for falling EV and plugin hybrid sales. Chart below is trailing 12 month average monthly price of gasoline.


                • Glenn Stehle says:


                  Just like I said above, it looks like it’s not only going to be a hard candy Christmas in Cowboyistan, but in the Green Utopia as well.

                • Caelan MacIntyre says:

                  Looking at all kinds of will-they/won’t-they graphs and indicators with beads of sweat on our brows, such as within a kind of buildout red queen of opportunity, we may be far better off in the long run eschewing much in the way of so-called renewables and assorted all-sorts from the clusterfuck that is industry for a more organic, democratic, local, real community-driven life.

                  • Dennis Coyne says:

                    Hi Caelan,

                    What kind of energy will your ideal society use? I am assuming that you do not believe that society will consume no energy.

                    Using less is an excellent idea, I believe society should use as few resouces as possible. If we are shooting for no resources, then we would be aiming for no humans, I also assume that is not your preferred solution.

              • Fred Magyar says:

                All the fancy gadgets you list are here or being developed because we are at peak prosperity. Again you wave a magic wand and pretend to reverse the global biophysical deflationary oneway trip we are on.

                No, gadgets are not what I’m talking about. I’m talking about fundamental change at a systems level. Precisely because the global biophysical deflationary trip we are on is obviously a dead end in a very literal sense.

                BTW disruption is not the same as growth, we are now in a phase where we will see degrowth being designed into systems from the ground up but I guess what I’m saying is falling on deaf ears.

                Suffice it to say, Economic Growth is a relatively recent phenomenon. I will be recorded as a very minor blip on the stage of world history… as will Disney et al!

                • Jef says:

                  Not deaf ears I just have a better understanding of what degrowth means than you. For you it is just something to work around. In the real world it means THE END.

            • Glenn Stehle says:

              Fred Magyar says:

              There are plenty of disruptive technologies in the pipeline that are already taking off. Disclaimer I’m not saying they are all good or bad or even that they won’t have unintended unknowable consequences at our present juncture. All I’m saying is disruption is real and happening everywhere right now. I could spend hours talking about all the different areas being affected….

              BTW disruption isn’t just about EVs and alternative energy, that’s not even the tip of the iceberg.

              Where have we heard all this before?

              Oh, I remember now:

              • Fred Magyar says:

                Really?! Communism? Is that the best card you have?

                Do you really think that corporations such as Google, Cisco, Unilever, Philips and Renault are all part of some grand communist plot?!

                I’m sure that would be news to those corporations.


                The online Disruptive Innovation Festival brings together thought leaders, entrepreneurs, businesses, designers, makers, learners and doers to catalyse system level change for a circular economy.

                • Glenn Stehle says:

                  Fred Magyar,

                  I lifted the Gramsci thing off of a Bloomberg presentation for one of the pie-in-the-sky futurist orgies like you are so enamored of.

                  All I can say is that capitalism sure ain’t what it used to be.

                  • Fred Magyar says:

                    How exactly is Antonio Gramsci even remotely relevant to the things I’m talking about?

                  • Glenn Stehle says:

                    Fred Magyar,

                    What you and Gramsci have in common is not just the conviction that you can build a glorious future, but that the old must die first before you can do this. This ideology has a name. It’s called nihilism. It became part of orthodox economic thinking due to the work of Joseph Schumpeter, and subsequently gained popularity within neoliberal or free-market economics.

                    In your case it is the oil industry which must die first. To wit:

                    The likes of Google, Apple, Tesla etc… are the new economic kings of the hill the Exxons Shell Oils and Petrobrases of the world are in their waning days. Of course they will try to fight their loss of power to the bitter end but they and the system they are part of are dead men walking.

                    Of course this is pure fantasy.

                    The reality is that when the oil industry dies, all hope of building your glorious future dies with it.

                    The evidence of this is everywhere.

                    For instance, if the mousetrap you are peddling was actually better, the world world would be beating a path to your door. But this has not happened. Instead the world has turned its back on you, and this in spite of all the subsidies and other inducements the state has intervened with to make your mousetrap appear more attractive.

  19. Watcher says:

    Oops. Singapore, population 5.5 million, outburns KSA per capita. 0.27 bpd/person . So that’s 3 way above the US.

    Ain’t done looking yet.

  20. oldfarmermac says:

    It looks as if Ford and Google are planning on teaming up to build cars.

  21. Guys, I will be out all day today, not back on line until late this evening, if then. Traveling.


  22. Watcher says:

    Recapping reality.

    1) China and India have oil consumption growth that is exploding. US conservation just pours more oil in their tanks.

    2) Price is not compelling. This is why God gave us subsidies. No candidate who says “it’s good price rose to crush your oil consumption and degrade your life” is going to win vs a candidate who says “this oil spike must be stopped and it is the role of government and its central bank to stop it and reduce the burden on the citizenry”.

    3) Y’all left wing folks don’t really care about people driving F150s, with which they can carry things around. You want to command people how to live, but you’re not willing to take up arms to mow them down if they don’t obey.

    4) China has a moral responsibility to continue their growth of oil consumption to AT LEAST the US levels of per capita consumption. China has no Social Security. No other pension plan. No other array of safety nets funded in the US by GDP. They have to get their consumption up RIGHT NOW in order to fulfill responsibility to their people. Not gradually and drawn out. Not waiting for imaginary replacements for oil. RIGHT NOW. And if they do, global supply has to be something like 130 million bpd. It can’t get there. China HAS to take it from someone else, the first being those 4+ million bpd in tankers heading north along the Shanghai coast to Japan. Just confiscate that.

    5) India is burning over 4 mbpd now. sashay over to to see the black consumption line for each country. 45 degree slope for India, just a few degrees less than China’s slope. KSA’s slope looks early exponential. No reason why it shouldn’t be. It’s their oil.

    6) This stuff about giving up . . . why do you want to give up. Fund weapons to prepare to TAKE what you must have.

    • Nick G says:

      China and India have oil consumption growth that is exploding. US conservation just pours more oil in their tanks.

      US conservation reduces the US trade deficit, reduces US pollution, and increases the economic and military security of the US.

      Exploding Chinese and Indian oil consumption harms their countries.

      Fund weapons to prepare to TAKE what you must have.

      I hope you’re joking. It’s far, far cheaper and more effective to reduce fuel consumption with efficiency and substitution.

      • Watcher says:

        Cheaper has no meaning when you have central banks with a capacity for whimsy.

    • Jimmy says:

      “but you’re not willing to take up arms to mow them down if they don’t obey.”

      I think some of them are and more of them soon will be. Give it a decade.

    • Glenn Stehle says:

      Watcher said:

      Y’all left wing folks don’t really care about people driving F150s, with which they can carry things around. You want to command people how to live, but you’re not willing to take up arms to mow them down if they don’t obey.

      I actually agree with the first part of that statement, the part about “You want to command people how to live.”

      What I disagree with is the part about “you’re not willing to take up arms to mow them down if they don’t obey.”

      While they may not be personally willing to get their hands dirty with “taking up arms to mow them down if they don’t obey,” they nevertheless have no problem anointing what they consider to be lesser human beings to perform this dirty work for them. Here’s how George Orwell explains it in “Rudyard Kipling”:

      We all live by robbing Asian coolies, and those of us who are “enlightened” all maintain that those coolies ought to be set free; but our standard of living, and hence our “enlightenment,” demands that the robbery shall continue. A humanitarian is always a hypocrite, and Kipling’s understanding of this is perhaps the central sercret of his power to create telling phrases. It would be difficult to hit off the one-eyed pacifism of the English in fewer words than in the phrase, “making mock of uniforms that guard you while you sleep.” It is true that Kipling does not understand the economic aspect of the relationship between the highbrow and the blimp. He does not see that the map is painted red chiefly in order that the coolie may be exploited. Instead of the coolie he sees the Indian Civil Servant; but even on that plane his grasp of function, of who protects whom, is very sound. He sees clearly that men can only be highly civilized while other men, inevitably less civilized, are there to guard and feed them.

      • Nick G says:

        I actually agree with the first part of that statement, the part about “You want to command people how to live.”

        I would guess that you’ve been watching too much Fox News. This whole “climate change is a front for communism” thing is unrealistic disinformation (even if you can find a few idiots who claim that capitalism has to go to solve CC).

        In fact, it’s just a question of asking everyone to pay their fair share of the cost of pollution, military security, etc.. If people are willing to pay the full cost of driving alone to work in an F-150, more power to them (they won’t be numerous).

        • Glenn Stehle says:

          Nick G said:

          If people are willing to pay the full cost of driving alone to work in an F-150, more power to them (they won’t be numerous).

          And what about those folks driving to work alone in their $100,000 Telsas and $40,000 Bolts?

          Should they not be “willing to pay the full cost of driving alone to work” too?

          Why are they missing from your bowdlerized version of truth?

          • ChiefEngineer says:

            “Should they not be “willing to pay the full cost of driving alone to work” too?”

            Glenn, I think your missing the point that most our wars originate from our need for oil.

          • Nick G says:

            Should they not be “willing to pay the full cost of driving alone to work” too?


            Of course, they don’t pollute directly: grid power that is polluting should also be properly taxed for it’s total costs, which will incentivize wind, solar, nuclear, hydro, etc. Electricity supplies are securely domestic, thus they don’t incur military costs.

            They should also pay the cost of road construction & maintenance, the cost of rubber tire-wear particulates, etc. As long as oil/FF pays it’s own way, may the best energy source win!

      • oldfarmermac says:

        I have read most of Orwell, and just about all of Kipling.

        If the two are to be compared, then the fact that Orwell is from a later generation has to be taken into account.

        It is possible to get an idea about what a writer actually believes, especially one who writes in certain genre. Orwell was a writer who wanted to change things, and he made it fairly clear by what he wrote that change was one of his goals.

        Kipling was not especially concerned with changing things. He wrote extremely well, and did a very good, and exceptional , job of describing the times and places he wrote about.

        If you read his work for comprehension, it is clear he understood and sympathized with the troubles of the lower classes.

        It is a mistake however to assume the work of a novelist or poet reflects all or most of the deeper beliefs he or she may hold.

        I think Kipling, if he were around, would have something uncomplimentary to say about this Orwell quote:

        ”It is true that Kipling does not understand the economic aspect of the relationship between the highbrow and the blimp. He does not see that the map is painted red chiefly in order that the coolie may be exploited. ”

        It does not follow that he believed otherwise because of his writing. Writers have to make a living. He wrote what would sell.

        I used to read Louis Amour novels to get to sleep, they worked great.( His novels also display a keen sense of the way men come to bond together in small groups in the face of opportunity and adversity , and some not insignificant understanding of American frontier culture. )

        When asked why he did not turn out serious work, simply said he wrote in order to make a living, and that meant he wrote what would sell.

      • Watcher says:

        Take up the White Man’s Burden.

    • Glenn Stehle says:

      Watcher said:

      This stuff about giving up . . . why do you want to give up. Fund weapons to prepare to TAKE what you must have.

      But, as John Mearsheimer explains in this article, the neocon’s abiding faith in the so-called revolution in military affairs (RMA) has proved to be a collossal failure:

      In particular, they believed that the United States could rely on stealth technology, air-delivered precision-guided weapons, and small but highly mobile ground forces to win quick and decisive victories. They believed that the RMA gave the Bush administration a nimble military instrument which, to put it in Muhammad Ali’s terminology, could “float like a butterfly and sting like a bee.” ….

      The real trouble comes once the United States owns the country it has overrun, and the Americans are seen as occupiers and face an insurgency. The RMA is largely useless in combatting an insurgency, against which a large army is needed, as the Bush administration has discovered in Iraq. But once the United States commits huge numbers of soldiers in a country like Iraq, it is no longer free to invade other countries because it is effectively stuck in a quagmire.

      So in light of that collossal failure of the RMA in Afghanistan and Iraq, what now?

      The chest thumping rings a little bit hollow, to say the least.

      • Watcher says:

        Rest assured if the Air Force had won its preference, there would have been no US Army involvement nor anyone particularly on the ground. There is no proof that the boots on the ground are required to hold territory makes any sense when you can dictate policy with precision strikes. And you can. “Do this, or die.” After all, how many US Army or UK Army boots on the ground were required to remove Gadaffi?

        Nobody “found out” that you had to have troops on site to do things. The Army lobbied for that to be sure they didn’t lose funding. As did all the Congress critters with Army bases in their districts. As opposed to Air Force bases.

        Think about it. Do you really think carrier based bombing is necessary? If you needed more sorties, you could send more Air Force aircraft. But the Navy has to defend its own funding, too.

        • Jimmy says:

          “There is no proof that the boots on the ground are required to hold territory makes any sense when you can dictate policy with precision strikes. And you can. “Do this, or die.”………”

          Where have you been since 2001? If all it takes is air power to dictate policy then please explain to my why USA isn’t dictating policy in Afghanistan, Iraq, Syria and Libya and seeing enthusiastic compliance with said policy by those on the ground. Removing Gaddafi is not difficult with air power however it took guys with AKs on the ground to put a bullet in his head.

          If you suggest launching multimillion dollar air campaigns every time a handful of kids with RPGs and AKs get uppity you’ll quickly find yourself on the losing side of the balance sheet of war. Keep it up for too long and you’ll be broke. Your rivals will make sure of it with a very small expenditure.

          You’ve obviously never served in the military. Dream on.

          • Fred Magyar says:

            If you suggest launching multimillion dollar air campaigns every time a handful of kids with RPGs and AKs get uppity you’ll quickly find yourself on the losing side of the balance sheet of war. Keep it up for too long and you’ll be broke. Your rivals will make sure of it with a very small expenditure.



            The entire concept of ‘GROUND’ and ‘TERRITORY’ is so last century…
            What matters today is digital control and governments just don’t get it.

          • Amvet says:

            NATO used the UN no-fly resolution to launch 9,658 airstrikes over seven months against Lybian government forces. A lot of money spent to lower the standard of living for the population.

        • oldfarmermac says:

          While I generally disagree with Watcher on economics, I have to agree that he has a point regarding the efficacy of air power and infighting among the various branches of the armed services for status, resources, and political clout.

          It is nowadays obviously possible to literally bomb any country with any significant industrial infrastructure back into the stone age using conventional, meaning non nuclear, bombs, and to do it at far less cost in men than putting troops on the ground.

          One modern bomber, flying out of reach of anybody on the ground equipped with less than the latest and hardest to get anti air technology, can take out a dozen bridges, or a tank farm, or a water treatment plant, or a dozen office buildings- or for that matter a dozen hospitals. One or two ” sorties” is enough to wipe out almost any kind of major industrial installation, or damage it past operation for many months on end.

          In WWII, most of the bombs dropped landed hundreds of yards to miles away from the intended targets. Modern bombs can literally be aimed at a given WINDOW in a large building, with a very high probability of not missing that window more than a few feet, and actually hitting it quite often.

          It is not a question of ” can’t be done” but rather whether the aggressor is willing to pay the price in the court of public opinion at home and world wide, and deal with the political repercussions.

          So far no nation with the capability of bombing this way on the grand scale has been willing to actually do it.

          But this does not prove that it will never be done.

          All the major powers in WWII would have done it, if they had possessed the ability to do so at that time, if the leadership had concluded it would save the lives of countless men of their own and brought the war to a faster conclusion.

          The US for instance firebombed some German cities with results that were ac quite comparable to the destruction of Hiroshima and Nagasaki with atom bombs.

          And for what it is worth, we seldom hear much about nuclear weapons, except the scare stories involving mutant creatures and radioactivity levels being so high people will not be able to live where the bombs fall for centuries.

          In actual fact, if only a few bombs are used, and they are designed so as to minimize fallout, people will be able to live where they are dropped within a decade, no problem, in terms of the big picture.Sure a few kids, maybe a lot of kids, would get cancer, but that would be a minor problem compared to lack of water , food, shelter,employment, etc.

          One “MIRV” ICBM loaded with neutron bombs, or a couple of flights of heavy bombers protected by fighter air craft, could just about wipe out the entire urban population of a fair sized country in a matter of minutes or hours at the most.

          There wouldn’t be enough people LEFT to seriously dispute possession of the country with an occupying ground force.

          I PRAY such a grand scale genocidal air war will never come to pass, but anybody who has bothered to look into the TECHNICAL possibility of such a war understands that it COULD HAPPEN.

          At one time I read a book about the history of WWII once a week or so for a couple of years. It got to be a personal quest to understand how it started, and how it played out, and why.

          The folks who argue that bombing the hell out of the Germans did not prevent them from increasing production of some armaments deliberately miss the point, for partisan reasons. The question should be rephrased, how much MORE would the GERMANS have been able to produce, and how many MORE men, and how many MORE planes and guns etc, they would have been able to put on OFFENSIVE rather than DEFENSIVE assignments.

          The bombing nay sayers also avoid discussing the obvious fact that ninety percent of bombs hit their targets these days, where as in WWII more than ninety percent missed by a substantial margin.

          Modern bombers will come home nearly every sortie. Any country initiating an air war is apt to have overwhelming air superiority,meaning plenty of fighter escorts, and modern bombers are stealthy and fly way too high for ordinary anti aircraft guns to reach them.

          For now, nobody except the USA, Russia, and a couple of larger NATO countries could manage it.

          But in a couple of decades, there might be other countries able to do it, and DESPERATE ENOUGH to do it.

          One thing about military tech that people often fail to appreciate is that it often gets exponentially cheaper as time passes. The computers and guidance systems etc needed for a smart bomb were state of the art top secret stuff couple of decades ago. A decade from today, a good team of engineers will probably be able to design and BUILD smart bombs using readily available commercial technology.

          A sharp kid could probably build a workable guidance system today hacking it together out of security camera and drone parts, with a smart phone sized computer programmed for just this one job. He might even be able to hack and reprogram a smart phone to serve as both the camera and the computer.

          Suppose Iran and Iraq have another go a decade down the road. Either or both countries may have large arsenals of smart bombs, and planes to deliver them.

          • likbez says:

            “It is nowadays obviously possible to literally bomb any country with any significant industrial infrastructure back into the stone age using conventional, meaning non nuclear, bombs, and to do it at far less cost in men than putting troops on the ground. ”

            First of all bombers that are not reachable by modern air defense systems do not exist.

            Also your implicit assumption is that attacked country does not have nuclear weapons (or at least dirty bombs) and means to deliver them to the aggressor. Or allies with such weapons.

            And that such an attack will never lead to global thermonuclear war. In case nuclear winder materialize that’s a postponed death sentence for the majority of population of the winner of such conflict.

            So your statement is not true about China, Russia, EU, Israel, India, Pakistan, North Korea and several other countries with significant industrial infrastructure.

            Also after Iraq war air defense systems developed at huge speed and now systems like S400 represent a huge obstacle to bombing without losing your own aircraft. Even older S300 systems are dangerous as Russians discovered during Georgia conflict.

            If colonel Gaddafi was wiser and bought a dozen of S300 systems he might well be still alive as the idea of losing of half of aircraft would be a deterrent for French.


            === quote ===
            Maximum targeting range (detection radius is wider).

            For a ballistic target (speed of 4800 m/s and a radar cross-section of 0.4 square meters): 230 km.

            For a target with RCS of 4 square meters: 390 km.

            For targeting of strategic – bomber sized types: 570 km.

            • oldfarmermac says:

              I pointed out that bombing an industrialized country back to the stone age is possible, NOT that it can necessarily be accomplished by any particular aggressor country against any particular country defending itself.

              “First of all bombers that are not reachable by modern air defense systems do not exist. ” That is an arguable proposition. Nobody knows for sure that the best stealthy bombers can be hit by missiles yet, our best and the Russian best have not been tried in actual combat by any country possessing the very best anti air defenses.

              More to the POINT, the country defending itself may not and most likely WILL NOT possess state of the art anti air defenses.

              The countries that possess such tech are extremely reluctant to pass it around, and when it does get passed around, the quantity is generally pretty skimpy.

              “Also your implicit assumption is that attacked country does not have nuclear weapons (or at least dirty bombs) and means to deliver them to the aggressor. Or allies with such weapons.”

              Most countries do not possess nuclear weapons, and the ones that do , do not necessarily have means of delivering them to enemy territory.

              Nor is it actually very likely that any nuclear armed country will start nuking a third country because it is waging conventional war on an ally. The countries that DO have state of the art stealth bombers and precision guided bombs etc are also mostly members of the nuclear club themselves.

              “And that such an attack will never lead to global thermonuclear war. In case nuclear winder materialize that’s a postponed death sentence for the majority of population of the winner of such conflict.

              So your statement is not true about China, Russia, EU, Israel, India, Pakistan, North Korea and several other countries with significant industrial infrastructure. ”

              I have not said that such a bombing campaign would not lead to a wider war that might morph into a nuclear WWIII. That is possible. But that possibility still does not mean that any major power could at least potentially get away with waging such a bombing campaign.

              If for instance the Russians decided to do so, and we Yankees along with NATO allies stood aside, not sending in our own air forces, who do you think would nuke Russia?

              China for now does not have an air force big enough and capable enough to pull of such a campaign, but she may , in ten or twenty years. Who do you think would risk nuking China if she decides to swallow a smaller neighbor WHOLE?

              The countries at risk for invasion are the smaller regional powers with resources desperately needed by their bigger neighbors. This takes Isreal, western Europe, the USA, Russia, China, etc off the victim list, because they are either capable of defending themselves, or not WORTH the price of an invasion.

              North Korea is a paper tiger, dangerous only to South Korea. NK is a country is barely able to feed itself.True the dough boy has a handful of nukes, and Seoul zeroed in under a thousand heavy guns , but unless China were to come to her aid, the country doesn’t have enough oil and gas , or food, or anything else, to wage an aggressive war.

              I doubt anybody other than INDIA would be much interested in Pakistan, and neither country has a state of the art full grown military establishment.

              “Also after Iraq war air defense systems developed at huge speed and now systems like S400 represent a huge obstacle to bombing without losing your own aircraft. Even older S300 systems are dangerous as Russians discovered during Georgia conflict. ”

              So have the counter measures available. A country with a fleet of stealth bombers is also going to have a fleet of stealthy fighter aircraft as well, designed specifically to take out air defense systems. The fighters will go in with the bombers, and any given anti air installation is apt to have a life expectancy of five minutes or so.

              And as I think I pointed out before, noboby will ever really know how good the stealth features of stealth bombers actually are, until tried in actual combat. They will most definitely have the ability to jam and decoy any missile the aggressor has been able to examine. Basically this means that if the CIA etc, or any other intelligence agency, can obtain even a crashed missile of any particular type, engineers will be able to figure out its guidance and come up with countermeasures to decoy it.

              And the Russians are not necessarily going to sell their top of the line stuff to ANYBODY in particular. The people who they do share with may be getting less than the full tool box. In the event they do, the Russians will have installed back doors into the systems so as to disable them, in case the old buddies become the new enemies.

              I am not arguing that back to the stone age air war is a practical option in every case or most cases , but rather that it is TECHNICALLY POSSIBLE and might eventually be employed in some particular case, when circumstances are favorable.

              Let’s hope it never happens. But if it does, it would still be less disruptive to the environment than a nuclear war.

        • Ves says:

          The ground troops are always required. You have 2 options:

          1) Use your own ground troops but you can only hold foreign territory for short period of time before you start suffering self destructive economical and military losses. It never worked in the history. You can’t go against nature.

          2) Second option is to use proxy forces on the ground. But like the case in Syria, with proxy forces you never know who is using whom. You end up being a used party.

          Any decent military personnel with any integrity and clear mind should tell the bankers just to “Let it go”. You can’t go against nature.

          • oldfarmermac says:

            “It never worked in the history. You can’t go against nature.”

            It is obvious you have never read very much history.

            In historical terms, tribes, kingdoms, countries, and empires have invaded each other successfully, for the long term, countless times. The question is what is the GOAL of the invasion?

            I agree it generally does not work out to the satisfaction of the aggressor if he wishes to control the other country from afar, using the minimum amount of his own resources and manpower.

            But if the aggressor WANTS the territory, it’s a different ballgame altogether.

            In the future, the aggressor who next decides to invade a country with lots of oil may decide that the way to make a go of it is to move in lots of his own people PERMANENTLY, getting rid of as many locals as necessary.

            • Ves says:

              Don’t fantasies about any wars. Wars are not video games. If it is that simple US wouldn’t do a war sequel every 10 years: “Gulf War I”, “Gulf War II”, and now you have proxy “Gulf War III” ..well let me ask you how many times you will bang your head in the wall before you realize that it does not work? It’s just does not work.

              Mac, you are too much consumed with garbage news that does not allow you to connect the dots. The Gulf War I was in the 90’s and the world oil supply was relatively plentiful to absorb the shocks. Forward 2003 and Gulf War II and during and after the conflict the price of oil quadrupled and world economy pretty much got suffocated by 2008. This time around the Gulf War III that is ongoing but obviously your favorite TV channel has not informed you, has to be proxy and relatively low intensity war otherwise with the hot war we would have a high price of oil beyond any imagination. If you think you can run modern wars during prolonged period with high oil prices and having somewhat functioning economy then you have read wrong history books. It doesn’t mean that they will not have another “go”. But if they do you will be walking and not driving 20 miles to the closest grocery store.

              • Fred Magyar says:

                But if they do you will be walking and not driving 20 miles to the closest grocery store.


                Perhaps, but bicycles were invented quite sometime ago and they probably still beat walking… I just can’t quite understand this binary vision of the future in which we either return to the stone age to live in caves or we continue with some dystopian version of BAU where we completely cook the planet.

                There are plenty of alternative paths into the future, granted, I certainly don’t see the continuation of BAU as being one of them.

                • Ves says:

                  Nothing is wrong with bicycles. But I think odds are not very high that US can economically compete where 350 million of people driving around in bicycles in this “Hunger Games” type of world economy that we have right now, with other economies having high -speed, bullet trains, and extensive network of subways, trams and trolleys. Don’t you think?

                  When are you going to start to build public transportation network? I think it is about time right now with $35 barrel. The price could change in a heartbeat.

              • oldfarmermac says:

                Hi Ves,

                I gave away my last tv thirty or forty years ago, even though we have satellite tv and a big screen in the house for my old mostly bedridden Dad. I might watch it ten minutes in an average month, occasionally somebody calls and says check out the live news.

                The history books I read are real ones, written by real real historians, going ALL the way back as far as books go.

                The wars we Yankees have gotten involved in since the early nineties have actually gotten us pretty much what we wanted, for a while, each time.

                When we quit getting it “our way” , we went out to fight again. So far we have pretty much gotten it our way , although next time we may not. Our political leaders have been playing kick the can down the road, keep the oil flowing past election time has been the name of the game, while avoiding pissing off the people of the country, to the extent possible, about the kids coming home in body bags.

                Now here is something you perhaps do not understand, or wish to AVOID understanding.

                With the exception of the little war with Saddam H. we have been recently basically playing around like a little old maid schoolteacher trying to control a bunch of rambunctious teenagers.

                THE GOAL has been to do AS LITTLE actual fighting as possible, consistent with keeping the oil flowing our way, with our government wanting to keep the country happy by keeping the expense in lives and treasure down in the short term.

                Americans do not WANT or LIKE war, right wing, left wing, dead center or any sort.

                Anybody who thinks otherwise is a fool.

                So- we have been engaging in what amounts to band aid type fighting, compared to what ACTUAL WARFARE is truly all about.

                In a REAL war, it is not all that unusual for as many troops to get killed in a DAY as we have lost in the Middle East in a couple of DECADES.

                I repeat, I am not advocating war for any reason. I strongly advocate the fastest possible build out of renewables, etc, to reduce the LIKELIHOOD of war.


                Some people seem to be making the argument that we should never contemplate fighting another “war” because we cannot win it, hoping to avoid getting involved.

                The argument that wars can no longer be won is BULLSHIT.

                I am not a soldier myself, but I know a BUNCH, including many vets, including a couple from as far back as WWII, a good portion of them officers.

                Friends of mine who served in the front lines in Desert Storm tell me that they could have killed well over ninety percent of the people they encountered start to finish as easily as falling off a log. The other ten percent might have succeeded in running away.

                You see the goal was NOT to destroy Iraq but rather to destroy the SADDAM H regime.

                If it had been Hitler invading Iraq for the purposes of securing Iraqi oil, he would not have hesitated to kill as many civilians as suited his purposes.

                As Stalin put it, you got a man, you got a problem. No man, no problem.

                Fortunately in very recent times no COUNTRY has displayed the DESIRE and WILL to utterly destroy an opponent.

                This does not prove it cannot be done.

                Some ethnic or religious factions within some smaller countries however have recently displayed a real desire to totally wipe out their enemies, but to the best of my knowledge none of them have managed a total victory.


                Now as far as a full scale hot war driving the price of oil thru the roof is concerned, I agree it would do so FOR A WHILE. This is one of the reasons oil importing countries pussy foot around playing kick the can down the road.

                That is the best short term option for any western politician.

                In five more years, we will probably have three or four times as many electric vehicles on the road here in the USA as we do today, setting the stage for further future exponential growth in electrics.

                We will likely also have twice the installed capacity and total generation of renewable electricity by way of wind and solar power in five more years.

                The question is not WHETHER we can break our oil addiction, at least not from the technical pov, but whether we can break it SOON ENOUGH to prevent the shit hitting the fan on the grand scale.

                • Ves says:

                  ” The wars we Yankees have gotten involved in since the early nineties have actually gotten us pretty much what we wanted,”

                  That is a big time delusion that is fed to the masses just to get their support. Unless you are lockheed, boeing or reyteon shareholder or director/main lead actor of the war movies that had sell-out at the box office you did not get diddle squat from the wars. You only got debt from the wars that will eventually have to be repaid. It is that simple.

            • Nick G says:

              Yes, in theory the US could commit mass genocide of oil exporters to get oil supplies. But, leaving aside questions like whether oil importers (and their allies) would be willing to do such an unimaginably immoral thing in order to postpone the inevitable transition away from oil for only a few years, or whether the US could also handle the various countries that would instantly become our committed enemies, some of them nuclear armed, there’s a practical question:

              I don’t believe the US has a vast inventory of neutron bombs, which could in theory kill people while leaving infrastructure intact. That means that the US would have to employ bombs which would both destroy infrastructure and people. That would be enormously expensive and slow to rebuild.

              It would be far, far cheaper and faster to just build EVs.

              Realpolitik, PO geology, climate change and moral politics all dictate the same thing: just kick the oil habit, already.

              • oldfarmermac says:

                “I don’t believe the US has a vast inventory of neutron bombs”

                Neither do I, and I do not believe any country in the world TODAY is willing to actually commit genocide on the grand scale, totally wiping out the people of another country, with the possible exception of a couple of weaker countries that do not have the power to actually do so.

                I do NOT believe the USA will ever engage in this sort of war, at least not for the foreseeable future.I doubt ANY country capable of doing so will but doubting and knowing are two different things.

                But in a decade or two, China for instance might just move in on a smaller neighbor, and kill or imprison or drive out as many locals as necessary to make the invasion stick. How many ? Who knows? Half or less would probably be enough, even a quarter would might be enough.

                The invasion WOULD stick, barring outside interference, because the Chinese would move in ethnic Chinese by the millions, in effect turning the victim country into a genuine part of China, within a decade or two.

                I will repeat myself once more. I am only making the point that it is now possible for a large country with a large modern military establishment to utterly destroy a smaller opponent country – under favorable circumstances.

                It is not good to ASSUME something is impossible for personal or partisan political reasons, or due to ignorance.

                Some people in this forum are arguing for instance that a transition to renewable energy is impossible, for various reasons.

                • woodsy_gardener says:

                  “But in a decade or two, China for instance might just move in on a smaller neighbor, and kill or imprison or drive out as many locals as necessary to make the invasion stick. How many ? Who knows? Half or less would probably be enough, even a quarter would might be enough.”


    • Caelan MacIntyre says:

      Current World Energy Demand, Ethical World Energy Demand, Depleted Uranium and the Centuries to Come

      The reason that energy conservation as an energy strategy has failed is obvious, even divorced from population growth. According to the 2013 UN Millennium Goals Report, as shown in the following graphic from it, the percentage of the Chinese population that lived on less than $1.25 (US) per day fell from 60% of the population in 1990 to 16% in 2005 and further to 12% in 2010. From our knowledge of history, we would be fair to assume that the situation in China was even worse in 1976 than it was in 1990.

      By the way, it ought to weigh on the moral imagination…that figure…less than $1.25 a day…less than $500 per year…for all a human being’s needs…food, shelter, transportation, child care, education, health, care for the elderly…

      Seen from this perspective, Lovins’ writings are all marked by myopic bourgeois provincialism. The huge flaw in his 1976 conceit, and his conceits forever thereafter, was that for him, people living in the United States, and maybe Western Europe, represented the only human life that mattered. Chinese and Indians, for two examples, may as well have not existed if one reads his 1976 fantasy; he blithely assumed that they would agree to remain unimaginably impoverished while Americans pursued hydrogen HYPErcars in every suburban garage and solar heated molten salt tanks in every suburban backyard. Apparently, from his high perch in the überrich suburb of Aspen – Snowmass, Colorado – where he lives today in a super-efficient McMansion, he continues to issue rhetoric equally oblivious to the status of the larger fraction of humanity, this while collecting ‘consulting fees’ from companies that among other things, mine and refine oil sands. Consideration of the two to three billion people defined by the IEA today as living in ‘energy poverty’ – 1.3 billion of whom lack access to electricity for any purpose, never mind for the purpose of charging up their swell Tesla electric cars…

      Out of sight, out of mind…

      Let me say this about thorium: In… New York there is a ‘superfund site’ described… as ‘The Most Radioactive Place in New York City‘… the site, for most of its historical operations, was a site for the refining on lanthanides (aka ‘rare earths’) – the same lanthanides now used to make wind turbines and electric cars – most ores of which are, in fact, mildly radioactive owing to the presence of thorium in them

    • BC says:

      Good points, Watcher.

      However, India is importing 100% of oil consumption in a world where trade is no longer growing and available world net exports of oil has declined significantly since 2005-08 and will continue declining hereafter. India is 40-45 to 80-100 years too late to industrialization.

      Moreover, the US cannot permit China’s oil imports to persist at a level at, or above, that of the US with available global net oil exports falling and peak global oil production per capita. The condition, should it persist, poses a regional geopolitical threat to US hegemony, which is among many reasons why trade, diplomatic, and geopolitical tensions are increasing between the US and China, and why there has been the “Pivot to Asia” and expansion of Africom by the Anglo-American imperial military.

  23. oldfarmermac says:

    We should not be too quick to count out our political leadership, collectively, when it comes to dealing with discrete problems such as peak oil.

    Gasoline is taxed at a very high rate in many countries already, and there is a distinct possibility that such high taxes will be put into effect in other countries, depending on the price of oil, and the state of domestic economies.

    A country with little or no oil of its own, and not much in the way of goods and services to export, is going to be forced to cut back on imports such as oil. The simplest and most effective way is probably to tax the hell out of it.

    But legislating efficiency of use works quite well too, as evidenced even here in the land o’ happy motoring. We are probably using at least a full third less gasoline here in the USA as the result of mandated fuel economy standards.

    There is a third way very effective option, just now becoming possible, for countries that want to control the hemorrhaging of scarce foreign exchange, namely subsidizing the adoption of electric vehicles.

    Given the right tax incentives, huge numbers of people would be very glad to buy this year’s model LEAF and VOLT and similar autos.

    The incentives we have now don’t really do a hell of a lot for sales because they apply only to people who are making enough money to get a DISCOUNT on taxes they owe. Such people mostly don’t care about either their money or the environment all that much, and don’t even LOOK at electric vehicles.

    Change that incentive system so that somebody making a third or half as much can get a TAX PAID DISCOUNT on the CAR ITSELF, and sales would skyrocket.

    The effect on oil consumption could be quite substantial within a decade or so, in any country that imports most of it’s oil, if the government supports a switch to electrified vehicles.

    • Nick G says:

      We are probably using at least a full third less gasoline here in the USA as the result of mandated fuel economy standards.

      The reduction is about 50%! Imagine what oil prices would be if US passenger fuel consumption were twice as high…

      Change that incentive system so that somebody making a third or half as much can get a TAX PAID DISCOUNT on the CAR ITSELF, and sales would skyrocket.

      I think that buyers can do that by leasing: the dealer takes the tax credit, and reduces the monthly payment accordingly. If the buyer wants to own the vehicle, they can buy it at the end of the lease period.

      I’m not sure why EV leases haven’t taken off – they’re mighty cheap. One problem: companies like GM are internally at odds about their EV’s – some insiders like them, but many don’t – when was the last time you saw a TV ad for a Volt?? And, of course, dealers hate their lack of maintenance costs, so they un-sell them (dealers are very good at incentivizing their salespeople, one way or another).

      • oldfarmermac says:

        (dealers are very good at incentivizing their salespeople, one way or another).

        Yes, dealership management controls sales staff earnings by manipulating commissions. If the dealer pays you four times as much to sell a conventional car, you will not try very hard to sell a VOLT.

        But it seems some people in management at GM have finally figured out a way to thread the corporate maze, and take the Volt directly to the public.

        There is no indication of how extensive this program might be, but it could have a hefty impact on Volt sales if corporate management supports it, rather than smothers it.

      • oldfarmermac says:

        Thanks Nick , this is the first time I have seen this particular experimental car. But I have seen lots of others, since I spend a good bit of time reading up on the history of motor vehicles.

        I don’t expect super streamlined , low, lightweight, extremely narrow cars to become popular within the next few years.

        BUT IF , one, the overall economy holds up, so that working class people can continue to own cars, and two, the price of oil spikes sharply up, and stays up, as I expect it to, barring a permanent world wide recession, THEN

        Such cars are going to become extremely popular, because they will be the only sort of car most people will be able to drive- assuming that battery technology does not advance to the point that we can afford cars as big as the ones we drive today.

        Charging up electric cars is not apt to be a problem in my opinion. The utilities will be MORE than happy to have the opportunity to sell lots of off peak juice for that purpose, and install extra capacity, if needed, to meet the demand.

        And the utilities will be able to sell wind and solar power that is sometimes in excess supply for a decent price, once there are lots of electric cars on the road.

        Drivers will learn to plug in their cars any time they can, so as to automatically get charged up whenever cheap wind or solar power is available.

        With a smart grid, and smart cars, this will be a piece of cake as far as implementation is concerned.

        Countries with good sized wind and solar industries that have to import oil, coal, and gas will be able to significantly cut back on imports, keeping the money at home, and helping keep the prices of fossil fuels down for every body, by reducing consumption of them.

        Let’s face up to reality folks. Fossil fuels deplete. Oil and gas will not STAY cheap, not over the long run, unless the world wide economy sinks into permanent depression.

        Coal is far more plentiful, but coal will be going up too, as some countries deplete their domestic reserves and are forced into importing it.

        It also seems reasonably certain now that political considerations mean higher taxes on all fossil fuels, although it is hard to guess how high these taxes will be.

        But even here in the land of god given cheap gasoline as an ( unnumerated ) constitutional right, there may come a day when most of us cannot afford a car, and thus be ready to stick it to the rest of us, who can.

        Any thinking person who lives in a really big city and seldom leaves town in a car is apt to EVENTUALLY get the idea, and vote for higher motor fuel taxes, with the proceeds dedicated to improving mass transit in his town.

        Even if such city dweller continues to drive almost every day, he would be better off to pay another dollar for gasoline in order to save time stuck in traffic and or rearranging his day and his driving to avoid rush hour traffic. A dollar or two a day could easily save him an hour or more, and reduce the amount of wear and tear he puts on his car.

        Now here is another thing about automobiles that very very few people, excepting gearheads, understand.

        Cars do NOT WEAR OUT, in the sense that commercial machinery such as trucks eventually wears out. A heavy duty truck can be economically kept in service for a million miles or more, because such trucks are made to be easily repaired, and the component parts are made to last. When a part does fail, it can be easily replaced in a very short time, and almost every time, the owner has the option of going with the original equipment part, or any of up to half a dozen equally well made after market parts, because interchangeability extends across makes and models to an amazing extent.

        Cars are basically sold as throw away consumer goods, with little thought given to REAL long term durability, meaning from oh say two hundred thousand miles and ten years on out to half a million miles and thirty years or so.

        Some people even go so far as to insist that obsolescence is deliberately built in. I won’t go QUITE that far, because long term reliability IS a major selling point. People tend to avoid cars known as lemons having low trade in value.

        Take my ninety nine ESCORT for instance. I will scrap it whenever it has a major failure, meaning it needs a new engine or transmission. The remainder of the car, excepting the driver’s seat and carpet and paint, are still in excellent condition, and would easily last another twenty years or LONGER with few or no problems, except for the possibility of rusting out.So far it shows near zero rust.

        But if it were built like a truck, I could put in a new engine and transmission in less than a day for HALF what a new engine and transmission would ordinarily cost. First off, a compatible brand new bolt in engine is not even AVAILABLE, ditto a brand new bolt in compatible transmission is not available,and will never be, due to a lack of volume necessary to support making them available. Reconditioned used engines and transmissions are available, but the cost of them is much higher than it would be otherwise, because they do not sell very well.

        But I could buy any of half a dozen different brand new engines from at least four different manufacturers or transmissions for the last large truck I owned, which was a LOT older than the Escort. And I could have installed them , even though they would have been four times as large and heavy, in half the time.

        Every one of them would have bolted right in.

        When the time comes that people cannot afford throw away cars, then manufacturers will build cars that are made to LAST, assuming they can still afford cars at all.

        Convenience, status, and affordability mean the conventional car will continue to rule the market place for the next few years.

        But when and if it becomes a choice between giving up the conventionally sized car, or giving up the suburban Mc Mansion, I have no doubt whatsoever that the owner of the Mc Mansion will buy the micro mini car instead of eating a loss of a couple of hundred thousand or more on his house and moving into substantially inferior housing, if he can find any, where he can take a subway or bus to work and to the store.

    • Caelan MacIntyre says:

      This is an electric Monotracer (at least the one on the left)– essentially a fully-enclosed motorcycle whose ‘training-wheels’ pop out at low speeds, such as at stops. It appears that a new model features a side-by-side seating arrangement, rather than just single or two in tandem. The price for it is likely more than most Teslas, though. (But with some voluntary tax subsidies, who knows.)
      Some of us might be aware that enclosed recumbent bike/bicycle designs are among the fastest, if not the fastest, designs going.
      Who cares about anthropogenic climate change, environmental degradation and a general lack of equality or democracy when one has a Monotracer and the open road?

    • islandboy says:

      A country with little or no oil of its own, and not much in the way of goods and services to export, is going to be forced to cut back on imports such as oil. The simplest and most effective way is probably to tax the hell out of it.

      I hear ya loud n clear!

      But legislating efficiency of use works quite well too, as evidenced even here in the land o’ happy motoring. We are probably using at least a full third less gasoline here in the USA as the result of mandated fuel economy standards.

      "Sin" taxes on gas guzzlers has been used here before with something like 100% customs duty on cars with engine sizes over 2L and 200% on cars with engines larger than 3L. The numbers might be off but you get the idea. The problem is that the trend over the past couple of decades has been towards larger displacement motors with high tech fuel management systems keeping fuel consumption in check. This meant that cars like Honda Accords and Toyota Camrys which once maxed out at 2L motors were falling int the "sin" tax bracket and that wasn't very popular. Added to that, the local new car dealerships were not very happy trying to sell cars that attracted these exorbitant duties and have been quite successful, lobbying the government to lower the duties. According to this rate sheet, the aggregate duties and taxes now range from 46% for a hybrid or a car with a motor size of 1L or less, to 75%. Maybe in the future they could index duties to fuel consumption rather than engines size or whether a vehicle is a hybrid or not. Under the current regime, a Chevy Tahoe Hybrid which consumes more than a 2.5L Audi A6, would end up with a lower sticker price. Wrong signal.

      There is a third way very effective option, just now becoming possible, for countries that want to control the hemorrhaging of scarce foreign exchange, namely subsidizing the adoption of electric vehicles.

      Here’s where I am trying to influence things by providing information to an old classmate of mine who has some access to policymakers. I recently pointed out to him how absurd it was that, pure EVs attract higher aggregate duties than hybrids when EVs can be powered by locally sourced renewables, while hybrids absolutely require imported petroleum (unless you think that growing crops to produce ethanol is just fine and dandy!). Just eliminating the import duty on EVs, leaving an aggregate charge (including sales tax) of say 20%, would help.

  24. WeekendPeak says:

    Regarding the Rockman comment in the main article:
    It’s crucial to remember that (oil) companies are in the business of making money, and that oil is just a means to an end. It’s dollars they’re looking to produce, and oil is just the vehicle.

  25. Toolpush says:

    It has been many months since we have seen rigs on the North Dakota rig page as “stacking”. Last week we saw the first, today we have another. I believe this will be the beginning of the response to the decreasing oil price, and the restricted 2016 capex budgets of the oil companies.

    Strangely enough, one is from XTO, and the other from EOG, both strong players. I would have expected the weaker player to cut back first, but then again, maybe they can’t afford to!

    • BC says:

      Economic indices imply a worst recession in ND than in 2007-09, and the worst in 25 years.

      Mass out-migration as typically occurs and an aging population will tend to prevent the U rate from spiking, however.

      • Nick G says:

        It’s very risky and costly to make your economy reliant on oil.

        • BC says:

          True, and increasingly so hereafter for the world.

          But those making the decisions about energy and war have yet to figure out how to expand empire and execute imperial wars using solar and wind-generated electricity.

          • Caelan MacIntyre says:


          • Nick G says:

            Well, 2 thoughts:

            1st, it’s economic dependence on oil that primarily causes the harm, like in ND now, the US in 1973 and 1979, etc.

            2nd, the US military has been aggressively deploying renewables and nuclear for quite some time now. They’re beginning to understand that it costs about $70 per gallon to deliver fuel to the front (not to mention the deaths and casualties caused by attacks of fuel convoys): they’re moving to hybrid propulsion, PV for mobile power generation, etc.

            Really, it’s hard to find find an organization more committed to, and actually implementing EVs, biofuels and renewables.

            • Caelan MacIntyre says:

              “Climate change’s enormous elephant in the room, the global Military Industrial Complex (MIC), is next to the power industry in its GHG emissions. The $1.75-trillion MIC is not included in the sectors that must urgently comply for carbon cuts, and is in fact not mentioned at all throughout the draft agreement.

              Most COP21 negotiators and campaigners have failed to see the inextricable links between the fossil-fuels industry and the MIC. Fossil fuel firms, petro-oil companies and military industrial corporations have common areas of interest and clear financial stakes in fossil fuel-rich regions of the world like Middle East Asia and Africa.

              The biggest state military spenders like US, China, Russia, and the European Union are ecstatic. US and European wars of aggression and military interventionism in Iraq, Afghanistan, Libya, and Syria operate in the guise of the war on terrorism, but is actually a war to grab fossil fuels and other natural resources, as well as trade routes in the conflict regions

              Expect the rampant promotion of ‘clean coal’, nuclear power, mega dam, and carbon capture and storage technologies as part of the climate mitigation efforts. These ‘repackaged’ dirty and destructive technologies are part and parcel of the corporate greenwash that allows for a ‘more business than usual’ approach.” ~ New Internationalist

            • thrig says:

              Fluffy optimism easily grounded by noting the BAU monetary and Carbon burn detailed in e.g. SIGAR 16-2-SP.

              • Nick G says:

                You’re talking about the CNG filling station that cost 100x what it should have?

                I never said the DOD wasn’t capable of wasting money…

        • robert wilson says:

          Nick G. So true. Saudi Arabia must have a shortage of sunlight.

          • Nick G says:

            What’s your point?

            That article says KSA is planning to develop solar. It’s neighbors are doing so, at a far lower cost than burning oil for power generation. KSA has been saying that it needs to replace oil with solar for years, but we can only guess that internal cultural and management problems (especially perverse incentives towards the status quo) are preventing it.

            Do you really disagree that it’s incredibly stupid for KSA to burn oil for power, when they could use much cheaper sources (especially solar) and export the oil??

    • shallow sand says:

      Toolpush I see Continental has a rig to stack also. Further, I have read they intend to release all but 3 rigs in ND at end of current contract.

      • Toolpush says:

        Hello shallow,

        Yeah, I just saw the same and was about to post it as well.
        In a months time, I can see a total different landscape than we have today, where the rig count is concerned.

  26. Toolpush says:

    Oil in New York at Premium to Brent for First Time Since January

  27. aws. says:

    Scarred Riverbeds and Dead Pistachio Trees in a Parched Iran

    By THOMAS ERDBRINK, NY Times, DEC. 18, 2015

    Iran is in the grip of a seven-year drought that shows no sign of breaking and that, many experts believe, may be the new normal. Even a return to past rainfall levels might not be enough to head off a nationwide water crisis, since the country has already consumed 70 percent of its groundwater supplies over the past 50 years.

    In Tehran, officials barely managed to keep the water running this summer as reservoirs shrank to dangerously low levels. Subsidies for water and electricity encourage overconsumption in urban areas. Isa Kalantari, a former minister of agriculture, warns that more than half of Iran’s provinces could become uninhabitable within 15 years, displacing millions of people.

    He blamed the government for keeping energy and water prices low, saying that he paid only $270 a month for his electricity bill, covering his huge pump and 20 employees. “It’s ridiculous,” he said. “And while we have no water, its price is also dirt cheap.”

    Hat Tip: Tom Whipple

  28. aws. says:

    Canadian regulator: 4.6 magnitude quake caused by fracking

    By Kesavan Unnikrishnan, Digital Journal, Dec 20, 2015

    British Columbia’s energy regulator has confirmed that a 4.6 magnitude earthquake in northeast British Columbia in August was caused by fracking and is likely to be the largest fracking-induced seismic event ever recorded.

    The earthquake struck on August 17, 2015 about 110 kilometers northwest of Fort St. John in British Columbia. Its epicenter was close to a fracking site operated by Progress Energy Canada Ltd. Workers at the drill site reported their pick-up trucks shook and power poles swayed by the quake prompting the natural gas production company to temporarily halt operations.

    British Columbia Oil and Gas Commission, which regulates the fracking industry, had launched an investigation into the cause of the quake. It released a report last week stating that the 4.6-magnitude earthquake was caused by fluid injection during hydraulic fracturing from an operator in the area.

  29. Luís says:

    Hi there Ron. Just taking the opportunity to wish you a merry Christmas and an happy 2016. I hope we can keep counting on your graphs.

    Between Iran, Iraq and Libya, there is a relevant potential that may adjourn the much sought for “peak oil” moment a while longer. But with US, Russia and China all entering a decline phase, one can definitely sense something in the air.

    Finally, I would note the EIA had petroleum extraction still growing through August, totaling 80.7 Mb/d, about 4 Mb/d above your estimate.


    • I would note the EIA had petroleum extraction still growing through August, totaling 80.7 Mb/d, about 4 Mb/d above your estimate.

      No, no, no Luis, that is not my estimate. That is JODI’s estimate which does not include OPEC condensate and some other small producers. To my knowledge I have not estimated monthly oil production… ever. I just chart other people’s estimates.

      I do estimate that world C+C production will be down next year but I will not give any monthly estimates or even venture to guess just how much annual production will be down.

  30. oldfarmermac says:

    Anybody interested in knowing what is going on in Venezuela can find more apparently solid information at Fernando’s personal blog than anywhere else.

    It is a mystery to me why the msm does such a poor job of covering the country.

    • Glenn Stehle says:

      Well I suppose it’s always a lot more comforting to think about other people’s problems than one’s own, especially if they’re 4,000 miles away across the Atlantic.

      Nevertheless, what’s going on in Spain has the potential to shift the tectonic plates of geopolitics and geofinance.

      Spain risks months of political paralysis and a corrosive showdown with Germany over fiscal austerity after insurgent movements smashed the traditional two-party system, leaving the country almost ungovernable.

      The electoral earthquake over the weekend in one of the eurozone’s ‘big four’ states has echoes of the shock upsets in Greece and Portugal this year, a reminder that the delayed political fuse from years of economic depression and mass unemployment can detonate even once the worst seems to be over….

      If a Socialist-Podemos coalition takes charge at the head of a Left alliance, it will not be singing the IMF tune.

      It would also be foreign policy disaster for German Chancellor Angela Merkel, who has already lost Italy, Greece, and Portugal to the Left, and faces the growing risk of anti-austerity ‘Latin bloc’ led by the Socialists in France.

      A swing to the Left in Spain would change the balance of power in the European Council and spell the end of Mrs Merkel’s control over the EMU policy machinery.

      • Frugal says:

        A swing to the Left in Spain would change the balance of power in the European Council and spell the end of Mrs Merkel’s control over the EMU policy machinery.

        I think the electorate is grasping at straws and is going to deeply disappointed whoever they elect. The only big thing the struggling Latin economies can do is default, and how much better are things going to be afterward?

        • Glenn Stehle says:

          Frugal says:

          The only big thing the struggling Latin economies can do is default….

          I agree, because these countries are now caught in an inexorable, deflationary death spiral, and as Michael Hudson famously said: “Debt which cannot be repaid, will not be repaid.”

          But when the dominoes begin to fall, where will they stop? Greece? Portugal? Spain? Ireland? Italy? France?

          Taken all together, it’s a tremendous amount of debt that might (and in my opinion will) have to be written off.

          And Merkel placed the German taxpayer squarely under this debt, buying up the non-performing debt from the private banks at 100 cents on the dollar, so many of these massive losses will fall squarely on the backs of the German rank and file.

          I doubt the German people are going to take these losses lying down. The backlash against the German political class, and the transnational banking class that owns it, could be substantial. It very well could spell the end of German mercantilism, as well as Germany’s membership in NATO and its participation in the Anglo-American banking cartel.

          • oldfarmermac says:

            Miracles never cease!
            “…., it’s a tremendous amount of debt that might (and in my opinion will) have to be written off.”

            I am in complete agreement. Almost all of these debts will have to be written off.

            The consequences are not easily predictable, at least not in detail, but it is safe to assume they will be unpleasant for everybody involved, excepting perhaps some lawyers , accountants, and currency speculators etc .

            Many many peoples lives will change dramatically for the worse.

  31. Longtimber says:

    Time says the Top Story of the Year is ISIS.. Sells Ads I guess.
    Perhaps should be the implosion of US E&P Firms. ??
    Predictions anyone ?
    A Going out of Business Sale for 50% of US E&P firms if WTI stays under $50 by mid 2016.

  32. Doug Leighton says:

    Hi Ron,


    And, the same to all your loyal followers.

    I decided at last second to spend the holiday in Bergen (Norway) with wife’s sister’s family. Lots of happy noise: kids, grandchildren and dogs around the fire.

  33. AlexS says:

    OPEC’s long-term world oil and other liquids production forecast to 2040
    Source: World Oil Outlook 2015 (published today)

    Crude oil production is expected to increase from 72.7 mb/d in 2014 to 80.2 mb/d in 2040 (by 7.5 mb/d, or 10%). Liquids supply from other sources (such as NGLs, biofuels, oil sands, CTLs and GTLs) rise by 10.1 mb/d over the same period, from 19.7 mb/d to 29.8 mb/d, an increase of 51%.
    Total liquids supply is projected to rise by 17.6 mb/d, or 19%, from 92.4 mb/d in 2014 to 110.0 mb/d in 2040.

    For comparison, the EIA, in the Annual Energy Outlook 2015, projects world C+C production to increase from 78.95 mb/d in 2014 to 99.09 mb/d in 2040 (+20.1 mb/d, or 25.5%). Other liquids supply is expected to increase from 13.84 mb/d to 21.97 mb/d in 2040 (+8.1 mb/d, or 58.7%).
    Total liquids supply, according to the EIA, is expected to rise from 92.80 mb/d in 2014 to 121.06 mb/d in 2040 (by 28.3 mb/d, or 30.5%).

    Note that:
    1) Total world liquids supply estimates for 2014 from OPEC and the EIA are very close.
    But there is a difference between OPEC’s definition of “crude oil” and EIA’s C+C (which is higher by 6.25 mb/d in 2014). Apparently, OPEC classifies all or large part of condensates as “other liquids”, most probably as NGLs.
    2) OPEC’s forecast of world liquids production is much more conservative (and realistic, in my view).

    OPEC world liquids production forecast to 2040 vs. EIA’s AEO projections (mb/d)

    • AlexS says:

      OPEC has increased its estimate of the U.S. LTO production compared with last year’s WOO.
      OPEC now expects U.S. LTO production to increase from 3.8 mb/d in 2014 to 4.3 in 2015 and 2016. It then gradually rises to 4.9 mb/d in 2021 and remains at these levels until the end of next decade. Although the updated forecast for the 2015 Outlook shows that US tight crude will decline gradually over the long-term to 4.2 mb/d in 2040, in the 2014 Outlook, it was projected at only 2.8 mb/d in 2040.

      For comparison, the EIA AEO 2015 estimates U.S. LTO production at 4.2 mb/d in 2014, the peak at 5.6 mb/d in 2020, followed by a gradual decline to 4.3 mb/d in 2040.

      U.S. LTO production forecasts: OPEC WOO vs. EIA AEO (mb/d)

      • AlexS says:

        OPEC’s world crude oil production forecast indeed excludes condensates.
        Global C+C production, according to OPEC, will increase from 77.4 mb/d in 2014 to 88.1 mb/d in 2040 (+10.7 mb/d, or 13.8%. Still, this is well below the EIA AEO projections.

        According to OPEC estimate, global condensate production increased from 3.7 mb/d in 2010 to 4.5 mb/d in 2014 and is expected to rise further to 5.0 mb/d in 2019. It is expected to remain at these levels until mid-30s, before slightly declining thereafter. The share of condensates in global C+C output peaks at 6.2% in 2018-2022 (up from 5.0% in 2010) and then declines to 5.4% by 2040. It is clear that this mainly reflects increasing share of condensate in the U.S. C+C output, while there is no similar trend outside the U.S. The share of light crudes (>33 API) remains within the 44 – 44.7% range between 2014 and 2040.

        Interestingly, the EIA AEO estimate of global C+C output in 2012-2014 is 1.1-1.7 mb/d higher than in the EIA’s international energy statistics.

        Global crude + condensate supply by category, 2010–2040 (mb/d), OPEC WOO 2015 vs. EIA.

    • AlexS says:

      OPEC also expects slightly higher U.S. production of unconventional NGLs (from shale/tight plays) (mb/d)

    • AlexS says:

      OPEC estimate of WTI breakeven prices by play ($/boe)

      • coffeeguyzz says:


        Platts is running a story that a 600,000 barrel shipment of US oil is due to leave a Texas port in two weeks’ time … the first US crude export since the new law was signed.
        Should be interesting to see how much impact this new environment will have on US oil industry.

      • shallow sand says:

        AlexS. Is BOE using WTI and HH or well head?

        Also, do you have the oil, gas and NGL mix assumed for each?

        Again, many thanks for your posts.

        • AlexS says:

          shallow sand,

          OPEC is using Rystad Energy estimates. This is WTI breakevens, I guess, for the mix of crude, condensate, and NGLs.

          • shallow sand says:

            AlexS. After trying for months to figure a break even, I gave up.

            Ratio of oil, gas and NGL varies so much. Also Rockies area in particular has variable spreads to WTI and Henry Hub.

            With most LTO companies having BOE in low 20s, quite far from break even from the numbers in your post, despite costs having come down.

            Will be glad to see further oil price rebound from here in this corner. $65 WTI would be great. $65 WTI unthinkable on the low side in early 2014. Now it is unthinkable on the high side.

            • AlexS says:

              shallow sand,

              I agree, it is impossible to calculate exactly a breakeven for shale plays:

              1) There are different methodologies: which cost items to include (some even use half-cycle costs), which IRR to assume (I have seen 15%, 12%, 10%, 8% and even 0%). etc.

              2) Breakevens vary in a very wide range even within one subplay, not to mention the entire shale plays. What is the $46 breakeven for the Bakken: a median, a weighted average or something else? How many wells were included in the calculation?

              3) breakeven is not a constant, but a moving target. Costs are permanently changing due to changes in technology, cost deflation/inflation, etc.

              One thing is clear: at today’s prices, close to 100% of LTO production is loss-making

    • That, the OPEC 2015 World Oil Outlook will be the subject of my next post, likely Christmas Day. Lots of charts.

    • likbez says:

      Implicit in such forecasts is the level of oil prices that would guarantee such output. If we assume that prices will remain at the current level their forecast is highly suspect.

      But they do not provide this information. And this is one skeleton in the closet.

      A good thing is that they provide only three significant digits in their forecasts, unlike EIA guys who probably skipped the course about error margins of measurements during their university studies 😉

      But without forecast of oil prices all they say is that they consider theoretically possible to maintain and slightly expand the current level of production for another 25 years, if prices are right.

      The fact that they predict the increase the US LTO production instead of decimation suggests that they based their forecast on significant rise in prices above $50 per barrel (see the table of their estimated shale extraction price below)

  34. Enno says:

    BH rig count is out.
    Canada has a drop of 27 oil rigs (they like X-mas!), US -3.

    • Thanks Enno, I had not expected the rig count out today.
      Baker Hughes Rig Count

      Looks like Canadian rigs is the really big story this week.

       photo Baker Hughes.gif_zps8w62trj5.jpeg

      • Frugal says:

        Hard to believe that half of all operating rigs in the US are in Texas.

      • Toolpush says:


        Remember last year when everyone started watching the rig count. The Canadian count went down at Christmas, and up again after new Year. I believe they are suppose to peak in February, but last year they didn’t. It is very hard to get a good feel on what is going on in Canada, with out have some real good local knowledge!
        The Bakken count in down 3 to 62, on the ND govt page, with still three rigs to stack.

      • Don Wharton says:

        I don’t think the big drop in Canadian rigs mean anything other than people taking a long break for the holidays. Last year the oil rig count in Canada dropped from 215 on 12/12/14 to 52 on 1/02/15. It went back up to 243 just two weeks later. There was a drop of over 100 oil rigs in a similar period at the end of 2013 to the first rig count in January of 2014. Again there were more rigs in operation just two weeks later.

  35. R Walter says:

    The world is burning almost one billion barrels of oil every ten days. Gettin’ to be deep ruts in those roads leading to Peak Oil.

    The Appian Way had an eighteen inch road bed and two foot curbs, it was a nice road, you didn’t get in a rut, no mud, just smooth sailing in your horse-drawn chariot, a sweet ride if there ever was one.

    Not a limo to Memphis, but you could make your way to the next pasta dish.

    You didn’t need no stinkin’ oil. A chariot wasn’t some ox cart slogging along the Oregon Trail. Lincoln should have mandated that the trail be paved before the migration across the American continent began, all those wagon wheels caused a lot of damage to the precious tender land that supported those carts and Studebaker Conestoga covered wagons. An REO Speedwagon would have been the first choice for the mode of transport. The ruts are still there some 125 years later from wagons and carts, a paved road would have prevented all those ruts. The Oregonians need to do some remediation from Iowa to Nebraska, through Wyoming, Nevada and Idaho all the way to Oregon. Oregonians are not that environmental friendly, if you ask me.. The pioneers could have waited another sevety-five years. They could beat a path to Mother Nature’s doorway.

    Roads lead to Rome, Oregon, lots of places, and the Silk Road has had plenty of camels traversing the long distance to the Great Wall. Been going on a lot longer than oil has been powering modern civilization. After oil is gone, the Silk Road will still be there. Its road city out there these days.

    America should build more highways and freeways to make room for more cars and gas stations. It’s such a waste to not have more. Shame on you for not burning as much oil and gas as you can.

    Now we’re on the Peak Oil Road. Not exactly the Appian Way, there’s a cliff up ahead.

    Don’t know what you’ve got ’til it’s gone. The earth has only so much oil.

    Perihelion is on January 2, 2016. Happy Perihelion Day!

  36. Frugal says:

    Repo firms work flat out amid oil slump in Alberta

    “This reminds me more of ’82 and ’83. It was bad and it was long… My view is this is going to be a long haul,” Shortridge said.

  37. Ovi says:

    Great post Ron.

    The U.S. oil production miracle continues today. According to today’s EIA inventory report, U.S. production was up another 1 kb/d this week. Added September US production from the EIA monthly International Stats to the attached chart. From September 4 (8,683 kb/d) to Dec 18 (8,653 kb/d) lower 48 production has only dropped by 30 kb/d.

    Merry Xmas to all.

    • Heinrich Leopold says:


      However the standoff with Saudi-Arabia has also its cost. Trillions in equity and bond losses, hundred thousands of ruined retirement accounts and there is a severe recession knocking on the door for the US economy (see below chart). The US are selling their last drops of oil at discount prices and below production cost at a huge loss. In my opinion it would be wiser to save the oil and produce and sell it when prices are much higher. Ego is never a good financial adviser, it is more a good story for a Phyrric victory.

      • Glenn Stehle says:


        And Yellen is raising interest rates?

        Can anyone explain that little present from the Fed, and just in time for Christmas?

        • Glenn Stehle says:

          Here’s Yellen’s Christmas card to the American people.

          This gal is a real Paul Volcker wannabe, but times have changed since the 1980s.

      • Glenn Stehle says:

        “US banks hit by cheap oil as Opec warns of long-term low”

        US banks face the prospect of tougher stress tests next year because of their exposure to oil in a sign of how the falling price of crude is transforming the outlook not just for energy companies but the financial sector….

        Banks including Wells Fargo have recently spoken about the dangers of low oil prices that could make exploration companies and oil producers unable to pay their loans. There are now five times as many oil and gas loans in danger of default to the oil and gas sector as there were a year ago, a trio of US regulators warned in November….

        “It’s the fact that they have 28 negative things hitting you at once that makes them challenging,” said Mr Goldberg.

      • Glenn Stehle says:

        Heinrich Leopold says:

        However the standoff with Saudi-Arabia has also its cost.

        Try telling that to Team Obama:

        “Obama’s foreign policy goals get a boost from plunging oil prices”

        After two years of falling prices, the effects have reverberated across the globe, fueling economic discontent in Venezuela, changing Russia’s economic and political calculations, and dampening Iranian leaders’ hopes of a financial windfall when sanctions linked to its nuclear program will be lifted next year.

        At a time of tension for U.S. international relations, cheap oil has dovetailed with some of the Obama administration’s foreign policy goals: pressuring Russian President Vladi­mir Putin, undermining the popularity of Venezuelan President Nicolás Maduro and tempering the prospects for Iranian oil revenue. At the same time, it is pouring cash into the hands of consumers, boosting tepid economic recoveries in Europe, Japan and the United States.

      • Ovi says:

        Heinrich, I am not sure which position is the correct one today. A few years back it made a lot of sense to me for a company to maintain oil production at a steady level. The oil would last longer and fetch a better price in the future, as peak oil got closer. Then came the US tight oil boom. Maybe getting it out faster back then was a better idea. I am sure it is not the best idea today.

        Today there is lot of discussion regarding stranded oil, especially after COP21 and all of the promises. I wonder if this consideration is also in the back of the SA mind. Might as well get my money while I can.

        I really do not understand all of the reasons for pumping oil at this breakneck speed. For SA, the question relates to trying to sort out how much their decision is driven by political/strategic considerations and how much by business. For the US producers, it is strictly a business question.

        Unrelated, but in the same vain, why are the US producers killing themselves in the NG market? This is a home market and they are all outdoing themselves to drive the price of NG down. Where does this mentality of driving prices below cost come from?

        Hopefully one year from now when we will have had a better chance to asses Ron’s prediction, hopefully it will all be a bit clearer.

  38. Ezrydermike says:

    and in Nevada….

    The Nevada Public Utility Commission voted unanimously in favor of a new solar tariff structure on Tuesday that industry groups say will destroy the Nevada solar market, one of the fastest-growing markets in the country.

    Update: On Wednesday, SolarCity announced it would halt operations in Nevada.

    “This is a very difficult decision but Governor Sandoval and his PUC leave us no choice. The people of Nevada have consistently chosen solar, but yesterday their state government decided to end customer choice, damage the state’s economy, and jeopardize thousands of jobs,” said SolarCity CEO Lyndon Rive. “The PUC has protected NV Energy’s monopoly, and everyone else will lose. We have no alternative but to cease Nevada sales and installations, but we will fight this flawed decision on behalf of our Nevada customers and employees.”

    • Glenn Stehle says:


      The “Green Transformation” is on government life support.

      Pull the plug by ending the government subsidies and other forms of state intervention, and the revolution dies of natural causes immediately.

      The same thing happened in Georgia earlier in the year:

      The Georgia General Assembly earlier this year pulled the plug on one of the nation’s most generous state tax credits for electric cars.

      At the same time, state lawmakers voted to impose a $200 annual registration fee on owners of some plug-in hybrids and all zero-emissions vehicles to make up for the gas taxes those motorists don’t pay and to help fund a backlog of road projects.

      Both changes took effect July 1, and already, preliminary numbers show sales of the Nissan Leaf and other electric cars are plummeting, Don Francis, coordinator of the Clean Cities-Georgia Coalition, said in an interview published Oct. 28 at

      New electric car registrations in Georgia fell 89 percent from 1,338 in June, the last month that the tax credit was available, to 148 in August, Francis said.

      • Fred Magyar says:

        Hey Glen,

        Sounds like you take great personal pleasure in posting anti renewables soundbites from the MSM. Your recent post on Spain was quite telling. Though when reading between the lines of that article it actually tells a much more nuanced story and despite your scare mongering The European Union isn’t exactly collapsing because Podemos captured a small slice of the political pie in Spain. If anything that article says that they have had to tone down much of their rhetoric in order to become more palatable to the public. Getting elected and actually governing are two very different things.

        Of course you yourself still offer nothing positive and every time someone asks what you think might be positive solutions all you can do is denigrate an imaginary ‘Team Green’ and equate them with irrelevant early 20th century communists such as Antonio Gramsci.

        Somehow you just don’t come across as a very contented happy individual you always sound angry, frustrated and miserable. Staying angry at the world and all the changes which are happening must take an awful lot of energy…

        Maybe you need to reassess your life at a fundamental level, get some therapy, take some anger management classes or something. You sound like you need to learn to be happy!

        What keeps us happy and healthy as we go through life? If you think it’s fame and money, you’re not alone – but, according to psychiatrist Robert Waldinger, you’re mistaken. As the director of 75-year-old study on adult development, Waldinger has unprecedented access to data on true happiness and satisfaction. In this talk, he shares three important lessons learned from the study as well as some practical, old-as-the-hills wisdom on how to build a fulfilling, long life.

        Wishing you and yours Happy Holidays and a Wonderful New Year!
        From lovely South Florida

        • Jef says:

          Sticks finger down throat KaaaKKKkaAAAAKKKK!

          Fred – I am all for solutions in fact I would bet I am doing more than most here to realize that which is why I can’t stand mindless happy talk and magical wishful thinking. You might think you are helping but you are in fact doing quite the opposite. People need to know the realities which are harsh but thats the only way to get to the point where we do what is actually needed instead of simply hoping things will get better.

          • Fred Magyar says:

            People need to know the realities which are harsh but thats the only way to get to the point where we do what is actually needed instead of simply hoping things will get better.

            Awww, I’m getting your goat Jef? I’m so sorry to bother you with my mindless happy talk!

            Ok, Jef, I’ll bite, what EXACTLY is that you propose is ACTUALLY needed?! And since you said that you were probably doing more than most here please put your cards on the table face up and share with us what you are doing!

            For the record Jef, you don’t have a fucking clue as to what kinds of realities I’m embedded in. I’m going to bet you’d roll up in the fetal position and start bawling your eyes out if you did. I very highly doubt you can handle the truth! But please go ahead and prove me wrong by telling all of us what YOU are doing that is MORE than most here.

            Reality? yeah, right!

        • Glenn Stehle says:

          Fred Magyar,

          You really don’t do reality, do you? It’s all blue sky and clear sailing ahead.

          “Just do it!” as the Nike slogan implores us.

          Others, however, are not so sanguine, and share my concerns over Spain.

          These include the editorial board of the NY Times:

          They also include prominent think tanks like the Brooking Institution, which believes Berlin’s plan to resolve Europe’s debt problems could very well backfire:

          A German plan for revamping the euro-area proposes an automatic mechanism for sovereign debt-restructuring. This mechanism, designed by Berlin’s Ministry of Finance, is designed to prevent any form of risk-sharing between euro-area countries and to confine the costs of fiscal and financial instability primarily within the more fragile countries. From the perspective of debt defaults, the plan could enforce more discipline, but it also risks dramatizing any future episode of financial instability.

          And your take on Spain is just the beginning of your magical thinking.

          The ease with which you believe our energy problems can be solved with the renewable silver bullet goes way beyond the pale. It flies in the face of all reality and all common sense.

          And yes, I don’t offer the facile solutions that you and other members of Team Green do. And the reason for that is that I’m not into spouting demagoguery, offering up painless solutions for very difficult, intractable problems.

          Instead, what I advocate is to get people out of their private automobiles and into public transport. But of course that would entail some sacrifice, wouldn’t it? And that’s not nearly so appealing for people as telling them that they can have their cake and eat it too, tooling around in their $100,000 Telsas.

          “All you have to do is believe!” the Green catechism goes. “Salvation and redemption are yours to be had! Only believe in the renewable transformation, and all your problems will be washed away!”

          • Glenn Stehle says:

            • Fred Magyar says:

              Yeah, I can feel the tremors and aftershocks all the way over here in Miami, Oh wait, those are because of Donald Trump’s campaign speeches… all those people who are ROTFLing are causing the ground to shake!

              I guess things could be worse we might all be running from Russian and American bomb strikes in Syria, now that might make the ground shake a bit.

              In Syria it isn’t ‘Podemos’, it’s more like ‘Jodemos’ and the Syrian people are definitely jodidos!

          • Fred Magyar says:

            Instead, what I advocate is to get people out of their private automobiles and into public transport.

            But of course that would entail some sacrifice, wouldn’t it? And that’s not nearly so appealing to people as telling them that they can have their cake and eat it too.

            Really? Glen have you ever stopped for a moment to actually read and understand what I actually write?! LOL! Glen, you are the perfect little curmudgeon, aren’t you! To your great surprise you might find that I wholeheartedly concur with your statement.

            I have been vehemently advocating for the end of private automobile ownership for a long long time. I’m for prohibiting the use of private cars in urban centers! I personally walk, ride a bike, use public transport whenever I can. In Brazil the cost of using buses is very similar to what you have described from your personal experience in Mexico. I’m a huge fan on intercity bus travel in Brazil!

            I have never promoted private automobile ownership in the current BAU sense. Which is why I talk favorably about companies such as Uber and Zip Car.

            I work daily with small to medium sized startup companies and entrepreneurs in Brazil. These are people and businesses who are creating disruption to BAU in hundreds of different areas. To be fair I do work with a few major corporations as well but they also happen to understand disruption. But you keep tarring me with a brush that simply has no relevance to who I really am and what I do. I am not nor have I ever been a member of any imaginary ‘Green Team’ and I find communism to be a completely irrelevant ideology in the 21st century!
            If anything I might be a member of ‘Team Blue’ because of my 35 plus years of diving on coral reefs. Trust me on this, only serious drugs can keep you happy after seeing what I have seen there…

            Here’s a small sample of what kinds of companies and businesses I’m talking about. Sure there is a lot of chaff in there among a little wheat here and there.

            Be Happy, Glen! life is way too short to spend it as a nattering nob of negativity. And please spare us your ever present paternalistic lecturing tone of how much more you know as opposed to most everyone else.
            In future feel free to skip by any post with my name on it as you obviously have deliberately chosen to misunderstand everything I say.


            • R Walter says:

              You are a subversive subverting the dominant paradigm. A rabblerouser, an outside agitator, and quit being so positive, you are too upbeat, good news is always ignored, Glen is the editor and publisher of The Bad News Gazette, hear and heed the words. Fall in line! lol

            • Caelan MacIntyre says:



              Put On A Happy Face
              Smile or Die: The Tyranny of Positive Thinking


              (With qualification that I haven’t the whole back-and-forth.)

              Happy Holly Daze you two.
              From cloudy, rainy, windy, damp, cool Nova Scotia. (So fine) ^u^

            • Glenn Stehle says:

              Fred Magyar,

              Well yes, I very much take the time to read and understand what you write, which brings us back to this comment you made back up the thread:


              To which I responded as follows:

              Fred Magyar,

              What you and Gramsci have in common is not just the conviction that you can build a glorious future, but that the old must die first before you can do this. This ideology has a name. It’s called nihilism. It became part of orthodox economic thinking due to the work of Joseph Schumpeter, and subsequently gained popularity within neoliberal or free-market economics.

              In your case it is the oil industry which must die first. To wit:

              The likes of Google, Apple, Tesla etc… are the new economic kings of the hill the Exxons Shell Oils and Petrobrases of the world are in their waning days. Of course they will try to fight their loss of power to the bitter end but they and the system they are part of are dead men walking.

              Of course this is pure fantasy.

              The reality is that when the oil industry dies, all hope of building your glorious future dies with it.

              The evidence of this is everywhere.

              For instance, if the mousetrap you are peddling was actually better, the world world would be beating a path to your door. But this has not happened. Instead the world has turned its back on you, and this in spite of all the subsidies and other inducements the state has intervened with to make your mousetrap appear more attractive.


              Fred, if you want to “create disruption to BAU,” then the way to do it is to invent a better mousetrap, and then it will happen. And it will happen naturally, without the intervention of the state.

              And if you’re going to ask people to sacrifice because, for instance, peak oil disrupts BAU, then the sacrifice should be shared by all. These reverse Robin Hood schemes the Greens have cooked up whereby the government robs from the poor to give to the rich have no long-term future, at least not in a democracy.

              • Caelan MacIntyre says:

                You and Fred could each get Skype going and do a weekly podcast… Call it ‘Two Peas In a Podcast’. 😀
                Debate peak oil, disruptive behavior and collapse and stuff.
                I’d listen! ^u^

        • Glenn Stehle says:

          And Fred,

          As to your claim, “Somehow you just don’t come across as a very contented happy individual you always sound angry, frustrated and miserable.”

          That is pure projection, for it is not I who is out to change the world, to destroy what others have built and created so that I can impose a new political and economic order upon them.

          • Fred Magyar says:

            That is pure projection, for it is not I who is out to change the world, to destroy what others have built and created so that I can impose a new political and economic order upon them.

            WOW! You really believe that’s what I’m trying to do? Destroy the world others have created? WTF?! Have you taken a good hard look at the world recently? I must have immense power if all the existing destruction can be attributed to me. As for wanting to impose a new political and economic order, really now? I have a hard time getting my condo association members to resolve minor disputes about parking space allocation for our residents…

            All I’m doing is talking about changes that I see happening, I’m just the messenger, apparently you don’t like the message.

            BTW if you are serious about being for the ending of private automobile ownership than you are attempting to destroy an entire way of life, aren’t you? Seems to me that would put you on ‘Team Green’, wouldn’t it?

            • Glenn Stehle says:

              Fred Magyar said:

              All I’m doing is talking about changes that I see happening, I’m just the messenger, apparently you don’t like the message.

              You mean “changes” like this?

              Europe saw investment of just $5.8bn in the latest three months in clean energy, down 48% from the third quarter of last year and its weakest performance since Q4 2004.

              • Fred Magyar says:

                Glen I talk about disruption in hundreds of different areas. I’m not particularly focused on any one specific area. You are the one who seems obsessed exclusively with alternative energy investments. I don’t see the current slowdown in that area as more or less significant than say reduction of CAPEX in the oil industry. Just yesterday I heard a news comment on NPR that new housing starts in the US are way down. Who knows maybe there is a correlation with reduced housing starts and investment in rooftop solar. We are in a global economic recession so it doesn’t surprise me in the least that all kinds of investments are down, so what? But for some reason you seem to want to use the info in that chart as proof positive that alternative energy has finally been killed. And that just ain’t so! All sectors of the economy go through cycles, guess what, even alternative energy investments.

                • Glenn Stehle says:

                  Fred Magyar,

                  I don’t think “We are in a global economic recession,” at least not in the way the experts define and measure these things.

                  But even if we were, the decline in investment in clean energy began well before this putative recession began.

                  For instance, below is a graph prepared by researchers from the Frankfurt School of Management and Finance.

                  The decline in global investment in renewable energy began in 2012. This was well before the rout in oil prices occurred, which didn’t begin until 2014.

            • Glenn Stehle says:

              Or changes like this?

              • Glenn Stehle says:

                And the declining sales of plug-in cars can’t be blamed on a soft car market either, because sales of other vehicles are booming.

            • Glenn Stehle says:

              Fred Magyar said:

              BTW if you are serious about being for the ending of private automobile ownership than you are attempting to destroy an entire way of life, aren’t you?


              I think peak oil will do plenty to “create disruptions to BAU” without any help from me.

              My perspective is totally different from that of the “small to medium sized startup companies and entrepreneurs” you work with, “people and businesses who are creating disruption to BAU in hundreds of different areas,” as you put it. I feel no compulsion whatsoever to “create disruption,” even though I believe it is inevitable.

              And public transportation is what has the greatest chance of success for prolonging anything close to BAU for the greatest number of people, and not just a privileged few like the EV schemes do.

              Team Green reminds me of a bunch of spoiled kids who spend their lives waiting around town for the old man to kick the bucket, so they can inherit the spread.

              Except they’re not content to wait until pops dies of natural causes. They want to slip him a little something in his toddy to quicken his demise.

              What they don’t realize is that there is no spread to inherit. When pops croaks, BAU is over.

              • Fred Magyar says:


                I think peak oil will do plenty to “create disruptions to BAU” without any help from me.


                Ok, now you are lying through your teeth or you are suffering from early onset dementia you tell me which?!

                Here is what you said, direct quote:

                Instead, what I advocate is to get people out of their private automobiles and into public transport.
                Glen Stehle

                Looks to me like you are advocating or telling people to get out of their private automobiles, that is tantamount to being an advocate of radical change and it would certainly disrupt BAU in a very major way. It is the equivalent of DESTROYING the American Dream that so many people worked so hard for.

                Not that I disagree, I think that is something actually worth advocating for. However you can’t have your cake and eat it too. Either you advocate for something or you say your are an innocent bystander standing on the sidelines watching the consequences of Peak Oil unfold.

                I think you speak with a forked tongue, at the very least you prevaricate when the situation suits you! When someone tries to pin you down and asks you what you stand for you just slither away, now we see you, now we don’t.

                • Glenn Stehle says:

                  Well Fred, you’ve found me out and outed me.

                  That’s almost as good of a Christmas present as Janet Yellen’s to the American people, as I don’t like to brag or call attention to these things.

                  Nevertheless, one only has to look about to see the vast disruptions to BAU that I and the small to medium sized companies and entrepreneurs I work with have created.

                  World automobile sales are in freefall as people abandon their private automobiles and opt instead for public transportation.

                  And in the United States the changes one can see happening around them are nothing short of breathtaking!

                  Investment in public transportation in the US is going through the roof. An elaborate web of bus routes will soon cover the nation, completely eliminating the need for private car ownership and providing a low energy-intensive form of transportation for all Americans. And the buses that already exist are filled to capacity! Now that’s what I call creating disruption to BAU.

                  At this time of the year one likes to look back over the past year and take note of one’s own accomplishments. And when I do this and see how unbelievably well I’ve done in creating disruption over the past year, I can’t help but patting myself on the back and saying to myself, “Man, you’re good!”

              • Caelan MacIntyre says:

                Glenn, do I hear right? Are you slithering away? Don’t slither away!

                • Glenn Stehle says:

                  Ha! Ha!

                  Some of the empirical facts which I point out cause the more devout adherents of the new Green puritanism to go ballistic, so I hardly believe I’m “slithering away.”

          • Fred Magyar says:

            I love your illustrated quotes, Glen. That gentleman looks especially happy and fulfilled! Maybe next time you can find a picture of Ebeneezer Scrooge and an appropriate quote to go with it.

    • Fred Magyar says:

      I’m going to bet this will backfire on NV Energy in a big way. If you look at what has happened elsewhere when these kinds of protective policies to maintain Utility company monopolies have been tried it has caused many customers to just go off grid entirely as in Australia. Customer do get pissed off upon occasion when they feel they are getting screwed. Apparently the Utilities need to take a closer look at what is happening in their own backyard. I’m quite sure Elon Musk with his Giga factory is looking on all this with a bemused countenance… The Utilities incorrectly assume that their customers have no other option but to stay connected to the grid. They would be wrong!

      Australian Networks Concede One Third Of Consumers Could Go Off Grid

      • oldfarmermac says:

        I wonder how long it will be before some company looking for a place to locate their multi hundred million dollar manufacturing plant will mention this decision in favor of the Nevada utility as one of the reasons they choose to locate ELSEWHERE.

        I even wonder if folks like Elon Musk and the investors in Solar City might just decide to create a little super pac or something of that nature between breakfast and lunch some day when there is nothing much really PRESSING at the moment, and help a few Nevada politicians come to understand the joys of early retirement.

        The green team does not believe in monopolies. The carbon team does, but otoh, anybody who is a current big winner is almost always in favor of the stopping the game and going with the status quo.

        I am not anxious myself to see the demise of the personal automobile. I have lived in the heart of a really big city,for a little while, and a medium sized city for a good while. I find the experience deadening to my soul.

        There is every reason, NOW, to believe we CAN continue to have our automobile cake, and continue to eat it too, with a little luck on the technology and political fronts.

        If we can get thru the next few decades, the population explosion issue will be in the rear view mirror and receding fast.

        Modern manufacturing tech means automobiles can be very close to one hundred percent recyclable.

        Modern battery tech means we can keep the auto and ditch the infernal combustion engine, so far as the personal auto is concerned.

        Recycling means we can probably quit worrying about the materials that go into building autos.

        Wind and solar farms mean we can ditch the oil industry, insofar as personal transportation is concerned.

        Now putting these things together, bringing them all together , all grown up, is not going to be easy, no siree.

        But many an old chicken has managed to bring a whole clutch of eggs to full fledged chickenhood.

        The challenge is more on the level of a decent football team,with good players, finding the magic ingredient, call it team spirit, or belief in destiny, or whatever, and winning the league championship.Maybe not this year, but next year, or two years after that.

        The naysayers are not going to stop big business from going whole hog from here on out on research and development in lightweight corrosion resistant materials, long lasting, powerful, affordable batteries, recycling, or any other aspect of technology that is important to electrifying the personal automobile.

        The reason why this is so should be perfectly clear at a glance to anybody who understands competition, but I will spell it out for those too dense to get it.

        All the tech needed to successfully electrify cars on the grand scale is now recognized as being WORTH PURSUING in it’s own right.

        The money that can be made, potentially, selling durable, affordable high powered batteries to various businesses and industries that need reliable back up power, and to people in places where there is no grid, is more than ample to guarantee continued investment in battery tech.

        The size of the world’s garbage heaps, and the price of feed stock commodities when times are good, together, are more than ample to keep plenty of research and development money focused on recycling.

        The amount of money that can be saved by END USE CUSTOMERS by buying light weight, corrosion proof or highly corrosion resistant portable machinery is such that industry will NECESSARILY continue to focus on bringing such machinery to market. Any given company might not want to do away with rust bucket products, but the COMPETITION will eliminate the rust bucket option , like it or not.

        (Being an old gearhead, I am utterly convinced that the reason Ford owns the pickup truck market, rather than Chevy, is summed up in the message of the now legendary bumper sticker that reads ” This is FORD country. On a quiet night, you can hear the Chevy’s rust. ” I am noticing a lot of NOT YET ELDERLY Dodges with gaping holes in them. Chrysler is going to pay a BIG price for this rust, is paying it already, because people who care about durability NOTICE such things.Chevy seems to have solved the rust problem, but the current generation of tradesmen , farmers, and skinflints aren’t taking any chances. )

        If our politicians pull the plug on renewables subsidies, and laws that guarantee access to otherwise monopolized markets, noboby with a brain doubts that this will SLOW DOWN the green tech revolution.

        But kill it?

        Not a prayer.

        Today’s kids will with a little luck still have cars. They will likely be very low, very small, slow by today’s standards, most likely most of them will be two seaters, fore and aft arrangement. They will run on batteries, most of them, just about all the time. But some of them will get a hundred mpg or better on the little infernal combustion engine tucked in the back someplace.

        Somebody will be selling home owner sized ethanol stills, stills that you can feed with table scraps and garden leftovers, or the fruit from few dozen untended fruit trees,or your share of a communal corn crop raised on a nearby farm.You can feed the mash to your pet chickens, and drink a little of the raw alcohol you make mixed with a little fruit juice, all the while enjoying getting high on your own home grown wacky baccy.

        ”The times they are a’ changing, my friend.”

        Society will rearrange itself to accommodate itself to the electric range limitations of the AFFORDABLE electric car. Parking spaces will have universal charging plugs, put in a few quarters, or swipe your thumb, and get juiced while getting your errands run.
        Landlords will find they MUST install charging stations to attract desirable tenants.

        Now all this is going to require a certain measure of good luck and good management, and all hell could break loose in the meantime and prevent this vision from ever coming to pass.

        But there is nothing new in history about all hell breaking loose.

        All hell is going to break loose for most of humanity, imo before this century is out, and for ALL humanity, sooner or later.

        But SOME of us are more than likely to live quite well, for the foreseeable future, with a LITTLE LUCK.

  39. Kellyb says:

    I have a few questions about Iran for any of you’ll:

    1. How fast can Iran realistically increase production & exports this year? Is 400k per day realistic?

    2. About when will the first reports come out on Irans production & exports?

    I’ve heard they’re not even taking bids for foreign investment until late February. But all I hear from Goldman etc is how they’ll be putting a minimum of 400k per day back on the market as soon as the export ban is lifted.

  40. Silicon Valley Observer says:

    I live in an area that could be considered ground zero for renewable energy activism. Electric vehicles are commonplace in Silicon Valley — especially in the Whole Foods parking lot. Solar panels are also found many places — on homes, on office buildings, on the structures that shade the parking lot at my son’s high school. Just a short drive up the road Tesla is cranking out electric status symbols that herald a new era.

    Even so, electric vehicles are still a tiny minority of all vehicles and the solar panels that exist are not close to being sufficient to meet the electrical needs of residents and businesses. There are those on this forum who are more than happy to point out that all of this probably wouldn’t be happening without government subsidies. And that is largely true. And some of the subsidies are truly silly. For example, I had a solar powered skylight installed in my house and, just because it had a solar panel, it qualified for a generous tax subsidy — even though the electricity it saves is minuscule.

    The subsidies were insufficient to create widespread adoption when energy prices were high; today it’s an even tougher sell. There would always be enthusiasts who would ignore the economics because they can afford to and it does buy a certain cache in Cupertino. But there aren’t enough Apple and Google engineers to make a difference. The cashier at my local Walmart isn’t going to spend an extra $10K to $20K on a Nissan Leaf over an economical ICE vehicle; and there are a lot more people like her than like the Apple/Google engineers.

    To me, the bottom line is that it’s really hard to compete with an energy source as energy-dense, portable, and cheap as oil — especially at today’s prices. But whereas some people, even on this forum, would take some pleasure in pointing out the inadequacies of electric vehicles and their associated subsidies and, I assume, argue for their elimination, I do not.

    Unless one believes that inexpensive oil will last forever, a transition must take place. In my opinion, that transition will fall somewhere on a continuum from immediate economic collapse to a slower economic collapse. Collapse is inevitable because no energy source can replace oil and oil underlies our entire economy. In this viewpoint, whether or not we have electric vehicles will make little difference. We won’t have jobs to drive to. We won’t have products in the stores to buy even if we can drive to them. Yes, there will be a small portion of the population who will do better than most — Silicon Valley will probably be one of those places for quite a while — and for them electric vehicles will provide some value. But not for the vast majority.

    So hooray for government subsidies. They do very little harm and create some small measure of good. They cost a lot less than bombs and bank bailouts. Will they make a meaningful difference in the broad arc of history? I think not. But I have been wrong before. To those who would criticize them I ask you to take the longer view and tell me, what is your vision of the future?

    Merry Christmas

    • Glenn Stehle says:

      Silicon Valley Observer asks:

      What is your vision of the future?

      Mine is to get people out of private automobiles and into public transportation.

      That, and not lavishing subsidies onto upper middle class and rich folks so they can buy $40,000 to $130,000 EVs, is the low hanging fruit.

      • Nick G says:

        The best selling EV is the Leaf, which even without the tax credit is cheaper than the average new car, and has a Total Cost of Ownership (per that is at or below any other car on the market, even at current gas prices. The tax credit is available to low income folks, by getting a lease (the dealer applies the credit).

        Trains are very good. So are EVs. Both trains and EVs are better than conventional oil-fueled cars.

    • Nick G says:

      Collapse is inevitable because no energy source can replace oil and oil underlies our entire economy.

      Oil doesn’t underlie our economy. It certainly powers cars and trucks, but electricity can do that, as it already does for trains*.

      * Trains are driven by electric motors, because they are more powerful than infernal combustion engines. The electricity comes from onboard diesel generators. That electricity can come from the grid.

  41. Longtimber says:

    End of 2015 could go down in the history books, Manifestation of a decade of Low Interest Rates causing wicked global financial events. 11 Minutes in.

  42. Jimmy says:

    An interesting post from Matt Mushalik

    Egypt appears to need 25 billion USD in external funding soon’ish. KSA promised 8 billion USD over 5 years. So I guess they have that going for them. I just don’t see how they’re going to survive much longer.

    Egypt and Jordan may both soon go the way of Syria, Iraq, Yemen and Libya.

  43. Nick G says:

    Things are moving quickly in the energy world, so you have to update to current data. For instance, we can see the relatively recent crash in US coal consumption, and the general decline of coal around the world, in recent prices:

    • Synapsid says:

      Nick G,

      A US coal price conceals the two parts: Appalachian coal costs three to five times as much to mine and transport as does the Powder River Basin stuff, and the Appalachian coal industry is heading for final shutdown, but we’re exporting lots of the Powder River Basin stuff–it rolls north through western Washington from the Columbia River up to Vancouver BC in long unit trains of open coal cars–with the main export terminals on the Gulf Coast (and I believe around Norfolk VA?) The largest amount goes to Europe, well over twice as much as goes to all of Asia, China included, according to the EIA. Brazil takes a lot, too.

      What with China building 92 coal-fired power plants outside China, and Midwest power plants, the ones with the scrubbers so as to be able to burn coal under the new regs, just waiting for the price of NG to go up before diving into that high-sulfur coal in the Illinois Basin, I expect to see coal do fairly well for some time even at a low price. South Asia and what is called Asia-Pacific will determine what comes about.

  44. islandboy says:

    Thinking about the subject of Ron’s top post got me wondering how people in my neck of the woods could relate to Peak Oil? What real world experiences could we draw upon to give us a sense of how resource extraction works, with all the implications for national economies?

    Turns out this island has one particular mineral resource that has been exploited since 1952 according to the Jamaica Bauxite Institute’s “Industry” web page:

    The commercial production of aluminium began only in the last decade of the nineteenth century, although the exist­ence of the metal in certain kinds of ores was known by scientists from the begin­ning of that century. However, until World War II greatly increased the demand for aluminium, little attention was paid to the deposits of bauxite outside Europe and the United States of America, including Jamaica, where geologists had noted the “red ferruginous earth” as far back as 1869, without recognizing its significance.

    During the 1940s exploration and development work was carried out in Jamaica, mainly by Alcan, Reynolds and Kaiser.

    Jamaican bauxite was not used during the war, but these three North American companies (Alcan, Kaiser and Reynolds) came to the island to survey, acquire reserve lands, and set up operations. Reynolds began ex­porting bauxite from Ocho Rios in June 1952, and Kaiser followed a year later from Port Kaiser on the south coast. Alcan built the first alumina processing plant near its mines at Kirkvine, Manchester, and in early 1952 began shipping alumina from Port Esquivel. This was the beginning of the industry in Jamaica.

    By 1970 Jamaica had become the largest bauxite producer in the world but,

    In 1971 Australia overtook Jamaica as the world’s leading producer of bauxite.. At the end of the 1970s, Guinea in West Africa, which had the world’s highest- grade bauxite, also drew ahead of Jamaica, and was then followed by Brazil in the early 1980’s and China and India in the first decade of this century.

    Now, it turns out that politics also played a role in the fortunes of the Jamaican bauxite/alumina industry. This article in local newspaper outlines the political history of the industry quite well.

    The bauxite levy 40 years on: Who let the puss out of the bag?

    THE imposition of the bauxite levy in 1974 was one of the most far-reaching and pivotal decisions ever taken by any Jamaican Government since the formalities commenced on September 25, 1961 to move Jamaica forward into Independence.

    It was a bold move taken by a small Third World country in the face of a line-up of powerful foreign investors with immense global, political and economic backing.

    Prior to the announcement of the levy on May 15, 1974, the bauxite industry had been owned lock, stock, and barrel by six multinationals — Reynolds Metals and Kaiser Aluminum (bauxite producers), and Alcoa, Alcan, Revere and Anaconda (alumina producers).

    But the Government of Michael Manley, which had assumed national leadership in 1972, had already determined while in Opposition that Jamaica was being short-changed by the terms of the reigning industry contracts, and had vowed to correct the one-sided balance of power and payments on attaining office.

    The short term effect was a marked increase in revenues to the government but the long term result has been a gradual decline in the industry as the article continues:

    The increased earnings from the levy propelled the revenue from US$19.2 million in 1973 to a whopping US$180 million in 1974. But the levy also moved the cost of Jamaican bauxite from being the cheapest to the most expensive worldwide.

    The companies began increasing their investments in other bauxite-producing countries, and Jamaica consequently lost its position near the top of the ratings as a world-leading producer.

    Forty years on, note the comments made by Dr Davis and economist Dennis Morrison quoted in The Gleaner of May 14 that Jamaica has little to show from the bauxite levy, and that the country suffered through ill-fated projects and misspending of the bauxite levy funds which were lodged to the Capital Development Fund (CDF).

    Another document of interest I found was The Global Aluminium Industry, 40 years from 1972. On page 4 there are pie charts showing Jamaica at 18% of world bauxite production behind Australia at 20% and 4th behind the US(25%), Australia(13%) and the USSR(12%), at 9% of world alumina production. On page 19 the pie charts show that by 2010 Jamaica had slipped to 7th place producing only 4% of world bauxite production and was tied for 7th place in alumina production with Ireland at 2%.

    It all reminds me very much of the changing fortunes of oil producing countries and I’m sure if I looked hard enough, I might find a country whose oil fortunes mirror Jamaica’s bauxite fortunes. The current state of affairs is that the government literally has to be begging foreign investors not to leave and and is offering all sorts of incentives including dramatic reductions in the levy. The mining industry can no longer be viewed as a cash cow but, is seen as a source of good, high paying jobs. Sound familiar?

    I am a little surprised that, I was unable to find charts of Jamaican bauxite/alumina production since 1952 anywhere on line. Wherever that data resides, there is no on-line access to it. I strongly suspect that, Jamaica’s best days of bauxite/alumina production are far behind us with the larger, higher grade, more accessible deposits having been exploited first, the lower hanging fruit so to speak.

    Peak Oil should not be too difficult for Jamaicans from all walks of life to grasp. The bauxite/alumina industry shows how geology, economics and politics ultimately define mineral resource extraction with geology having the final say. Any body who believes Peak Oil is not a reality needs to have their head examined. We can continue to argue about the timing but, the peak is inevitable.

    • Nick G says:

      Your JBI source does have the data from 1974 forward – does that help at all?

      • islandboy says:

        I was sort of looking for something that would show the rising trend in production since as the quoted newspaper article said, Jamaican bauxite changed from being the least expensive to the most expensive in the world when the levy was applied in 1974. I expect that production would not have increased much under those circumstances, if at all. Clearly Jamaica has lost market share since increasing the cost of it’s bauxite. It would be interesting to see how production increased between 1952 and 1974.

    • Fred Magyar says:

      Found this:

      Production Figures

      Total bauxite production figures released by the Jamaica Bauxite Institute are measured as crude bauxite plus bauxite converted into alumina and in 1997 reached 3 million tonnes for the first quarter. This compared with a 11.7 million for 1996 and 11 million tonnes in 1995.
      The alumina plants were said to be working at 96% capacity for the first time in many years and for the first quarter (1997) produced 816,999 tonnes.

      However when trying to access the link to the Jamaica Bauxite Institute

      I get a: 403 Forbidden Error Page

      Looks like the Jamaican government might not be overly keen on giving access to that data…

      Interesting PDF:
      The Global Aluminium Industry
      40 years from 1972

    • Synapsid says:


      There is a neat little connection waiting in the wings between declining oil production and producing aluminum. Electrolysis gets aluminum out of bauxite and the cathodes (or is it the anodes?) are made from petcoke. Petcoke is a byproduct of oil refining; less oil produced leads to less refining leads to…

      I wouldn’t expect this to cause aluminum production to grind to a halt down the line, but it might cause some localized hiccups, I dunno. There are other ways to get the needed carbon.

  45. islandboy says:

    As a follow up to Nick’s post just above, the EIA’s Electric Power Monthly, with data for October came out this morning. Below is the graph for Monthly Electricity Production as a percentage of total by source. Maybe by next year this time we will see whether a tipping point has been reached in that wind and solar have become competitive enough (OK I’ll grant the caveat “with subsidies” to the naysayers) that coal never recovers it’s share of electricity generation. Gas might also eventually face some decline as well. Just speculating.

    • likbez says:

      It’s difficult to increase wind and solar generation above single digits as they tend to destabilize the grid.

      • islandboy says:


        Germany: Renewables reach 30%, solar 6%

        Overall energy consumption in Germany has increased around 1.3% year on year (Y/Y), due to cooler weather, a positive economic trend and population growth of over one million. As a result, CO2 emissions are expected to “slightly increase” on last year, according to the Working Group on Energy Balances, AB Energiebilanzen, which did not provide actual figures.

        A greater increase in emissions is said to have been avoided due to gains in energy efficiency and growth in renewables – around 11% Y/Y – which covered a “substantial” part of the increased consumption. Representing growth of 50%, on- and off-shore wind played a significant role, although solar thermal and PV also grew around 6% on 2014.

        Overall, renewable energy is now said to account for over 30% of the country’s gross electricity production – a tenfold increase from 1991 – and 12.6% of primary energy consumption; and is thus, the most important energy source in Germany. In gross energy production, wind is the leading clean energy, at 12%, followed by biomass at 6.8%. Solar PV, meanwhile, accounts for 5.9%.

        All this and Germany has one of the most reliable grids in the world, despite getting more electricity from solar than they get from hydro!

        Are you sure you’re not just repeating something that somebody badly wants to have repeated. The late Hermann Scheer predicted that the entrenched interest would push this sort of line rather than try to solve the technical issues. After all he said “They cannot go from being sellers of coal, gas and oil to being sellers of solar and wind.”

        Just as some people on this site are highly suspicious of claims from “team green”, I am highly suspicious of criticisms of renewables coming from “team carbon” (sometimes through shadow organizations, in an attempt to obscure the source of the criticism).

        Show me a study done by a pro renewables group that states they will destabilise the grid. That should be just about as easy as a study coming from traditional utilities that, shows they can handle huge amounts of renewables just fine!

        • likbez says:

          “All this and Germany has one of the most reliable grids in the world, despite getting more electricity from solar than they get from hydro!”

          You are right. Looks like they manager to fix the problems (at huge additional cost) and now it is resonably stable. But since approximately 2010 to 2013 they did have a lot of problems. To the extent that power interruptions forced manufactures to buy expensive reserve generation equipment to stabilize power supply to their plants. So those were high cost expenditures directly caused not well thought out political decision by Merkel — introduction of solar and wind power into Germany grid without infrastructure upgrades to compensate for inherent instability of those sources of energy.
          === quote ===
          Upgrades are, however, proceeding at the transmission level. Germany’s transmission operators are planning a set of internal high-voltage direct current (HVDC) lines that are expected to help distribute wind power generated in the North to consumers in the South, and to help push excess solar generation in the opposite direction.

          The controllability of those HVDC lines should also be a boon for Germany’s neighbors. North-South power flows regularly loop out of Germany’s grid and hitch a ride over neighboring transmission grids instead. That’s an added burden that Poland, in particular, doesn’t need. While German consumers enjoy the highest levels of reliability, those in neighboring Poland suffered through an average of 254 minutes of unplanned outages in 2012. In other words, Poland’s grid operators have all the work they need just managing their internal system challenges.
          === end of quote ===
          German press used to write about it rather regularly (my sources are dated):

          • likbez says:

            BTW Germany’s average electric energy price is 35 cents per kWh; the US, 12 cents. That gives you approximation of the costs. So all those “hot standing” power generation plants and high voltage North-South lines that are now needed have a cost. Since wind is an uncontrollable variable, intermittency will always be a huge problem and no cheap solution for this problem exists.

            It is either long distance North-South high voltage line (to balance with solar, but face high initial capex and losses in transmission 10% or more ) or network of reserve power generator facilities (hydro accumulating or “instant powered” natural gas based.) So you need to burn a lot of hydrocarbons to enjoy solar and wind power on large scale. You need probably both solutions as soon as you are over single digits. You chose your poison.

            Green crowd just tries to ignore those unpleasant details.

            • oldfarmermac says:

              “Green crowd just tries to ignore those unpleasant details.”

              It is the fossil fuel crowd that manages to ignore the unpleasant details to the far greater extent.

              First off, Germany has a fairly decent domestic supply of ” brown mud” very low quality coal but it is good only for burning in power plants, and even then the heat content per ton is lousy.

              Otherwise Germany has to import her fossil fuels,and although you may not actually yet realize it, if you are still young, you will get old and DIE. LIKEWISE, Fossil fuels are not going to last forever, and although no German likes to mention it in public, most of them have not forgotten that the RUSSIANS have not forgotten the siege of Stalingrad and all that sort of not so ancient history.


              Transitions are often costly affairs, but Germany is well on the way to insulating the German economy from the eventual consequences of fossil fuel depletion, and just about every dime spent on subsidizing renewables in Germany is returned to the domestic economy in terms of property and payroll taxes and employment of GERMANS, rather than EXPORTED for the enjoyment of jet setting chips off the old “House of Saud” block, Russian oligarchs, Venezuelan commies, etc.

              The long distance power lines will eventually be paid for, and when they are, they will still BE THERE. Forever, if needed, with some periodic maintenance.

              In the meantime, you ought to think about it a minute before you say things like this:

              “So you need to burn a lot of hydrocarbons to enjoy solar and wind power on large scale”

              While this is nominally true, it would be FAR more accurate, and far more intellectually honest to say “So you STILL need to burn a lot of hydrocarbons to enjoy solar and wind power on large scale”.

              Good figures are actually very hard to come by, but I am reasonably confident that everything else held equal, for every one percent of electrical generation that is offloaded from coal and gas to wind and solar, the utility or country SAVES the cost of coal and gas purchased to the tune of eight or nine tenths of a percent.

              ON a good windy sunny day, the Germans can already idle back a HELL of a lot of gas and coal fired generation to standby status.

              That oil and gas purchase money stays at home in Germany, providing employment for Germans.

              These savings are not going away. The life of a wind farm is basically forever, once built, although the turbines will have to be periodically overhauled or replaced, on a roughly twenty to thirty year schedule.

              You get one HELL of a lot of juice out of a big turbine in twenty years, and replacing one in an existing wind farm probably costs less than half what installing one costs in a “brand new from scratch ” wind farm.The transmission lines, engineering work, permitting, access roads, switching equipment, etc are all still good to go, and replacing one turbine at a time can be paid out of current revenues, no long term loans needed.

              Refurbing a solar farm is even easier, you don’t need a giant crane.;-)

              Another thing – Germany decided to keep electricity costs down for her heavy industries by keeping them HIGHER for other customers. What a German loses, on average, by paying a high rate at home, enable him or her to have a job, in German industry, which is mostly dependent on exports.

              • Ves says:

                Just to correct your glaring mistake that you made in terms of historical facts. The battle that you are talking about is called Battle of Stalingrad and has nothing to do with the link that you have provided and has to do with Siege of Leningrad. And these are two different cities and two different battles. Stalingrad is today’s Volgograd and Leningrad is today’s St. Petersburg. Anyway I wouldn’t be bothered to write this on Christmas Eve but since you are boasting that you are history buff I thought you would appreciate the correction since we are talking about single largest and bloodiest battle in the history of warfare and turning point in the European theatre of World War II. Not a small potatoes.

              • Glenn Stehle says:

                oldfarmermac said:

                ….just about every dime spent on subsidizing renewables in Germany is returned to the domestic economy in terms of property and payroll taxes and employment of GERMANS….

                For someone who claims to not have much money, you sure do think a lot like the privileged ownership class.

              • Glenn Stehle says:

                oldfarmermac said:

                That oil and gas purchase money stays at home in Germany, providing employment for Germans.

                This is a regurtation of the famous debate between Malthus and Ricardo, with you coming down on the side of Malthus.

                Nevertheless, it is important to remember this was and is a debate between elites, that had to do solely with the interests of those elites, and nothing to do with advocating for the interests of the working class.

            • Glenn Stehle says:


              The greatest innovations Team Green has come up with are those that have to do with using OPM (other people’s money). I think that in this department they’ve even surpassed the inhabitants of Cowboyistan.

              The total tab for Germany’s Energywende this year will be more than $20 billion. And it goes without saying that Team Green, just like the denizens of Cowboyistan, don’t like to talk about “unpleasant details” such as this. It’s for that reason that any talk of things like cost of production is stricly taboo, and this is just as true on Planet Green as it is in Cowboyistan.

              Team Green’s greatest new twist, however, was to get Germany’s poor and working-class households to pick up almost the entire $20 billion tab for Energiewende.

              There’s a large and growing list of large corporations which are exempted from paying the surcharge that is levied to pay for Energiewende.

              And more affluent, home-owner households in Germany can invest in their own renewables systems, thus avoiding the exorbitant electricity rates, and even taking part in the surcharge booty leveled on the less fortunate.

              So that leaves Germany’s large renting class, the less affluent, to pick up the bulk of this year’s $20 billion price tag for Energiewende.

              But maybe oldfarmermac is right. Maybe the folks who have to work for a living ought to feel lucky just to have a job. The German oligarchs seem to have done a pretty good job of selling German workers on that idea.

              MERRY CHRISTMAS! from Team Green.

            • Glenn Stehle says:

    • robert wilson says:

      Electric Power Generation 2014: Petroleum liquids exceeded solar. Can that be?

    • robert wilson says:

      Natural gas consumption in the US

  46. On EVs, renewables and other oil substitutes… Robert Rapier doesn’t think much progress is being made.

    The Fallacy Of Peak Oil Demand

    What about biofuels? The world currently consumes about 92 million barrels of oil per day. The world produces about 1.5 million barrels of oil equivalent (BOE) of biofuels per day. Since 2005, biofuel production in the world has grown by 1 million barrels a day, while crude oil production has grown by nearly 7 million barrels a day. Biofuels are certainly not growing at a fast enough rate to meet world demand – much less cut into petroleum’s dominance. Further, there isn’t enough available arable land in the world for biofuels to ever make more than a tiny contribution to the world’s oil supply. Advanced biofuels which many advocates assured us could deliver us from our oil dependence have failed to deliver.

    That brings me to the other primary contender often mentioned as a crude oil killer: the electric vehicle (EV). In theory, as the world switches to EVs, our crude oil consumption will peak and fall. But what is actually happening? ……

    It may very well be that the twilight of the coal age is upon us, because scalable replacements are available. But there is still nothing on the horizon that signals even the beginning of the end of the oil age.

    He quotes a lot of other stats that seem to say, “The age of EVs is not upon us.” But all EV fans should read the article and give us your opinion.

    • likbez says:

      I am a huge EV fan, but the battery technology is not here yet. As well as price level and safety (lithium battery is like a bomb in your car).

      At the current battery technology level hybrids will eat “pure” electrical cars for lunch, except for luxury brands, where “price does not matter”, “Pure” cars simply do not have any chance against them no matter how you calculate efficiency (best hybrid give you around 50 miles per gallon).

      Also it will take many years to build infrastructure to recharge such cars in supermarkets and such. CA is ahead of other states in this regard and might be the first state were electric cars have a chance for a certain category of customers if gas price goes above $4.

      I have one question here: why not natural gas? Personal cars can run on natural gas and taxies, small delivery trucks and town buses that are running on natural gas are common in Europe. Why “green crowd” is so stubbornly and stupidly push electrical cars ? Are they a new modern cult like Seventh Day Aventists ?

      But unlike the technology for “pure” electrical cars, the technology of hybrid cars is pretty solid “as is”. We just need return to above $4 price of gas and some of newest models are “good enough” with the current tax incentives (I think $3.5K) if you a want midsize sedan.

      This category might continue to advance after the slump of 2015, although low gas prices and mass switch to SUVs significantly slow down the trend. I remember that those people in the suburbs who commuted 50 miles or more one way started to switch to Prius when gas price had been above $4 per gallon. This situation might repeat.

      See Chevrolet’s 2016 Malibu hybrid priced from $29,520

      If gas price return to above $4 per gallon, this type of cars might have a chance with its 45 mpg highway, 48 mpg city and a combined fuel efficiency of 47 mpg for a midsize sedan.
      === quote ===
      December 15, 2015

      Chevrolet announced pricing for its 2016 Malibu Hybrid — $29,520, including an $875 destination charge. With the base model available for less than $30K, the new Malibu costs less than the Volt — even though it uses a lot of modified Volt hardware.

      The powertrain from the Volt is adapted to the Malibu chassis – the electric motors and drive unit are massaged into submission in the new body. However, the internal-combustion side of things is left to a slightly larger 1.8-liter I4, over the Volt’s 1.5-liter.

      The new hybrid Chevy boasts solid numbers for a midsize sedan: 45 mpg highway, 48 mpg city and a combined fuel efficiency of 47 mpg. Range on battery alone is 55 miles.

      The combined effort of the gas engine and electric motors net 182 hp — not quite in the realm of hybrid supercars, but a significant leap over the smaller Volt.

      • islandboy says:

        I have one question here: why not natural gas?

        Natural Gas is not a liquid fuel at any temperature living organisms can tolerate or even close to the lowest naturally occurring temperatures on earth. This means that to deal with NG we must deal with a cryogenically cooled liquid (LNG) or an extremely high pressure gas (CNG). Building a refueling infrastructure for either, is not as simple as adding a tank and a pump for E85. Building out a EV charging infrastructure looks a whole lot easier to me. Heck, Tesla is financing the build out of their own high speed charging network for long distance travel, without any subsidies for that aspect of their business as far as I am aware.

        At the current battery technology level hybrids will eat “pure” electrical cars for lunch, except for luxury brands, where “price does not matter”

        There is only one manufacturer making “luxury” cars and they are having the luxury brands lunch, at least in the US. As a product development strategy starting where “price does not matter” seems extremely sound. They are improving their technology and economies of scale with expensive products, a la laptops, cell phones and digital cameras. Do you think anything is going to stop them from selling a more reasonably priced offering in a couple years time?
        ( I know, I know a lot of stuff could happen to derail the4ir plans but, failing that)

        I am a huge EV fan, but the battery technology is not here yet. As well as price level and safety (lithium battery is like a bomb in your car).

        On Monday night (Dec. 21) there was an accident in Winnipeg which it turns out , is the first case of an occupant of a Tesla being killed in an accident where the Tesla collided with another vehicle. The other vehicle was a dump truck and the picture below shows the Tesla after the accident with the tail lights still on and no fire. The following link the news article that the picture below was taken from. Another article has a picture of the car and the truck that T-boned it. Some bomb. (note, the Teslas have the highest capacity battery packs of any production EVs out there.

        • likbez says:

          I would still prefer Prius nickel-metal hydride battery even after those pictures.

      • oldfarmermac says:

        “(lithium battery is like a bomb in your car). ”
        I have yet to hear about an ev battery exploding like a bomb. I have however seen quite a few cars that have burnt to the ground due to gasoline leaks, usually after accidents, but sometimes just due to the failure of a rusted or rotted fuel line.

        Most people don’t realize how common car fires are, but I am an old gearhead, and used to spend my days around body shops, garages, and wrecking yards.

      • islandboy says:

        The picture referred to in my post above and the link to the story containing the picture below.

        • oldfarmermac says:

          Sleepless and bored, I went a googlin’ and the indications are that the Tesla was tboned by the dump truck in the drivers side doors, square on, with the dump truck going probably about forty five mph.

          (Gearhead speaking here. ) Heavy duty trucks do not have crumple zones, and they simply do not give up at all, except maybe a little in the front bumper, when they hit a car this way. Think battering ram, pure and simple. The truck almost for sure weighed at LEAST six tons, and most likely seven or eight, even if it was empty.

          That truck could almost for dead certain be legally driven away from the scene of the crash, with a bent front bumper, maybe a little damage to the front fenders, maybe a broken light. Any repairs it needs will basically be trivial, just bolting on a new bumper and fixing scratches etc.

          The local rescue squad had to spend a substantial period of time cutting the roof off the car in order to get the driver out.

          Now as to the taillights- I am not sure, but I THINK a Tesla actually has a small conventional 12 volt battery, which is used to power the lights, radio, window motors, etc, so as to isolate these components from the main battery, and thus make it possible to use industry standard wiring and industry standardized parts for every thing except the drive unit. The BIG battery charges the little one.

    • Fred Magyar says:

      He quotes a lot of other stats that seem to say, “The age of EVs is not upon us.” But all EV fans should read the article and give us your opinion.

      I haven’t read the article yet but I think is missing a very important detail. The age of the EV is here and the age of the driverless car is just around the corner. The combination of those two technologies alone will allow the transition away from private automobile ownership and put a huge dent in the consumption of fossil fuels for transportation. I realize that most people even on this site can’t yet wrap their minds around this idea. Once we get away from that model there will be drastic reductions in the number of vehicles on all roads all over the world and also in fossil fuel consuption.

      BTW this disruption is not going to be limited to cars…

      Self-Driving Trucks Are Going to Hit Us Like a Human-Driven Truck
      The imminent need for basic income in recognition of our machine-driven future

      On another note, deep learning algorithms now allow computers to see, read, write, and speak with native human fluency, which means that 75% of all jobs done by humans in the service sector can now be very cheaply eliminated. If anyone thought that off shoring of jobs was causing massive unemployment, what’s coming next is going to make that look like a stroll in the park. The fossil fuel era is definitely kaput and BAU along with it. Of course I don’t expect anyone to take my word for it but just keep watching events unfold, things should really start to become interesting in a relatively short time.

      • I haven’t read the article yet but I think is missing a very important detail.

        Really now? You haven’t read the article but you are ready to tell us where it is in error. I am a little shocked Fred. It is just not like you to pass judgement upon something that you have not even bothered to read. And it is a very short article. Not much longer than your post. You could have read it in half the time it took you to write your post, even if you are not a hunt-n-pecker.

        • Fred Magyar says:

          Hey, Ron, I have now read the article. Generally speaking you would be right in that if I didn’t read something it would be presumptuous of me to comment on it. However I have followed him for many years and read a lot of what RR has to say and he hasn’t changed his position recently. I have lot’s of respect for him especially when he is talking chemistry and thermodynamics.

          To be clear I wasn’t making a comment specifically about this article but about his position regarding bio fuels, alternative energy and EVs in general. I agree with him whole heartedly with regards biofuels not being able to scale, that’s one example where the laws of thermodynamics rule. As to his views about PV and Evs I do disagree with him because I think he doesn’t understand or consider the effects of disruption. I think those effects will be huge and will happen in a very short time frame.

          He and most people seem to think of alternative energy and EVs will just come in and be substitutes in continuation of BAU, and there I also think that is impossible!

          Obviously I could be completely wrong but the way I see it we are experiencing the early stages of a perfect storm of factors combining technologies that are causing profound and disruptive changes at every level. BAU is history. May I suggest you read the article I linked and that is just the tip of iceberg.

          I still think that the age of oil is coming to an end and BAU is being disrupted in ways unimaginable even a decade ago. My comments stand even after reading Roberts piece. As I had suspected he hasn’t changed his position with regards any of the points I mentioned.

          • oldfarmermac says:

            HI Fred, and Merry Christmas to you, and all your friends enjoying the tropics.

            It is almost seventy F here in the mountains of Virginia, and I have not lit a fire for the last WEEK, preferring to burn a quart or so of black stinky a night as a matter of convenience. Passive solar means open windows during the day.

            Now about RR:

            “As to his views about PV and Evs I do disagree with him because I think he doesn’t understand or consider the effects of disruption. I think those effects will be huge and will happen in a very short time frame.”

            RR is a VERY bright guy, and technologically literate, by anybody’s standards. He has no doubt forgotten several times more physics than I have ever known.

            I will be a little more blunt. I think he makes damned sure to tell it exactly like it is, in terms of hard discrete facts, but CHOOSES TO IGNORE the possibilities involved with disruption, when speaking to his chosen audience these days.

            It is just not possible for me to believe he does not UNDERSTAND the potential.

            Here is a bit of well distilled and well aged wisdom, well seasoned with humor, that comes from a man who FORGOT more about the nature of naked apes than the combined so called social sciences faculties of most universities know COLLECTIVELY.

            Mark Twain: Corn-pone Opinions

            FIFTY YEARS AGO, when I was a boy of fifteen and helping to inhabit a Missourian village on the banks of the Mississippi, I had a friend whose society was very dear to me because I was forbidden by my mother to partake of it. He was a gay and impudent and satirical and delightful young black man -a slave -who daily preached sermons from the top of his master’s woodpile, with me for sole audience. He imitated the pulpit style of the several clergymen of the village, and did it well, and with fine passion and energy. To me he was a wonder. I believed he was the greatest orator in the United States and would some day be heard from. But it did not happen; in the distribution of rewards he was overlooked. It is the way, in this world.

            He interrupted his preaching, now and then, to saw a stick of wood; but the sawing was a pretense -he did it with his mouth; exactly imitating the sound the bucksaw makes in shrieking its way through the wood. But it served its purpose; it kept his master from coming out to see how the work was getting along. I listened to the sermons from the open window of a lumber room at the back of the house. One of his texts was this:

            “You tell me whar a man gits his corn pone, en I’ll tell you what his ‘pinions is.”

            I can never forget it. It was deeply impressed upon me. By my mother. Not upon my memory, but elsewhere. She had slipped in upon me while I was absorbed and not watching. The black philosopher’s idea was that a man is not independent, and cannot afford views which might interfere with his bread and butter. If he would prosper, he must train with the majority; in matters of large moment, like politics and religion, he must think and feel with the bulk of his neighbors, or suffer damage in his social standing and in his business prosperities. He must restrict himself to corn-pone opinions — at least on the surface. He must get his opinions from other people; he must reason out none for himself; he must have no first-hand views.

            I think Jerry was right, in the main, but I think he did not go far enough.

            1. It was his idea that a man conforms to the majority view of his locality by calculation and intention. This happens, but I think it is not the rule.

            2. It was his idea that there is such a thing as a first-hand opinion; an original opinion; an opinion which is coldly reasoned out in a man’s head, by a searching analysis of the facts involved, with the heart unconsulted, and the jury room closed against outside influences. It may be that such an opinion has been born somewhere, at some time or other, but I suppose it got away before they could catch it and stuff it and put it in the museum.

            I am persuaded that a coldly-thought-out and independent verdict upon a fashion in clothes, or manners, or literature, or politics, or religion, or any other matter that is projected into the field of our notice and interest, is a most rare thing — if it has indeed ever existed.

            A new thing in costume appears — the flaring hoopskirt, for example — and the passers-by are shocked, and the irreverent laugh. Six months later everybody is reconciled; the fashion has established itself; it is admired, now, and no one laughs. Public opinion resented it before, public opinion accepts it now, and is happy in it. Why? Was the resentment reasoned out? Was the acceptance reasoned out? No. The instinct that moves to conformity did the work. It is our nature to conform; it is a force which not many can successfully resist. What is its seat? The inborn requirement of self-approval. We all have to bow to that; there are no exceptions. Even the woman who refuses from first to last to wear the hoop skirt comes under that law and is its slave; she could not wear the skirt and have her own approval; and that she must have, she cannot help herself. But as a rule our self-approval has its source in but one place and not elsewhere — the approval of other people. A person of vast consequences can introduce any kind of novelty in dress and the general world will presently adopt it — moved to do it, in the first place, by the natural instinct to passively yield to that vague something recognized as authority, and in the second place by the human instinct to train with the multitude and have its approval. An empress introduced the hoopskirt, and we know the result. A nobody introduced the bloomer, and we know the result. If Eve should come again, in her ripe renown, and reintroduce her quaint styles — well, we know what would happen. And we should be cruelly embarrassed, along at first.

            The hoopskirt runs its course and disappears. Nobody reasons about it. One woman abandons the fashion; her neighbor notices this and follows her lead; this influences the next woman; and so on and so on, and presently the skirt has vanished out of the world, no one knows how nor why, nor cares, for that matter. It will come again, by and by and in due course will go again.

            Twenty-five years ago, in England, six or eight wine glasses stood grouped by each person’s plate at a dinner party, and they were used, not left idle and empty; to-day there are but three or four in the group, and the average guest sparingly uses about two of them. We have not adopted this new fashion yet, but we shall do it presently. We shall not think it out; we shall merely conform, and let it go at that. We get our notions and habits and opinions from outside influences; we do not have to study them out.

            Our table manners, and company manners, and street manners change from time to time, but the changes are not reasoned out; we merely notice and conform. We are creatures of outside influences; as a rule we do not think, we only imitate. We cannot invent standards that will stick; what we mistake for standards are only fashions, and perishable. We may continue to admire them, but we drop the use of them. We notice this in literature. Shakespeare is a standard, and fifty years ago we used to write tragedies which we couldn’t tell from — from somebody else’s; but we don’t do it any more, now. Our prose standard, three quarters of a century ago, was ornate and diffuse; some authority or other changed it in the direction of compactness and simplicity, and conformity followed, without argument. The historical novel starts up suddenly, and sweeps the land. Everybody writes one, and the nation is glad. We had historical novels before; but nobody read them, and the rest of us conformed — without reasoning it out. We are conforming in the other way, now, because it is another case of everybody.

            The outside influences are always pouring in upon us, and we are always obeying their orders and accepting their verdicts. The Smiths like the new play; the Joneses go to see it, and they copy the Smith verdict. Morals, religions, politics, get their following from surrounding influences and atmospheres, almost entirely; not from study, not from thinking. A man must and will have his own approval first of all, in each and every moment and circumstance of his life — even if he must repent of a self-approved act the moment after its commission, in order to get his self-approval again: but, speaking in general terms, a man’s self-approval in the large concerns of life has its source in the approval of the peoples about him, and not in a searching personal examination of the matter. Mohammedans are Mohammedans because they are born and reared among that sect, not because they have thought it out and can furnish sound reasons for being Mohammedans; we know why Catholics are Catholics; why Presbyterians are Presbyterians; why Baptists are Baptists; why Mormons are Mormons; why thieves are thieves; why monarchists are monarchists; why Republicans are Republicans and Democrats, Democrats. We know it is a matter of association and sympathy, not reasoning and examination; that hardly a man in the world has an opinion upon morals, politics, or religion which he got otherwise than through his associations and sympathies. Broadly speaking, there are none but corn-pone opinions. And broadly speaking, corn-pone stands for self-approval. Self-approval is acquired mainly from the approval of other people. The result is conformity. Sometimes conformity has a sordid business interest — the bread-and-butter interest — but not in most cases, I think. I think that in the majority of cases it is unconscious and not calculated; that it is born of the human being’s natural yearning to stand well with his fellows and have their inspiring approval and praise — a yearning which is commonly so strong and so insistent that it cannot be effectually resisted, and must have its way. A political emergency brings out the corn-pone opinion in fine force in its two chief varieties — the pocketbook variety, which has its origin in self-interest, and the bigger variety, the sentimental variety — the one which can’t bear to be outside the pale; can’t bear to be in disfavor; can’t endure the averted face and the cold shoulder; wants to stand well with his friends, wants to be smiled upon, wants to be welcome, wants to hear the precious words, “He’s on the right track!” Uttered, perhaps by an ass, but still an ass of high degree, an ass whose approval is gold and diamonds to a smaller ass, and confers glory and honor and happiness, and membership in the herd. For these gauds many a man will dump his life-long principles into the street, and his conscience along with them. We have seen it happen. In some millions of instances.

            Men think they think upon great political questions, and they do; but they think with their party, not independently; they read its literature, but not that of the other side; they arrive at convictions, but they are drawn from a partial view of the matter in hand and are of no particular value. They swarm with their party, they feel with their party, they are happy in their party’s approval; and where the party leads they will follow, whether for right and honor, or through blood and dirt and a mush of mutilated morals.

            In our late canvass half of the nation passionately believed that in silver lay salvation, the other half as passionately believed that that way lay destruction. Do you believe that a tenth part of the people, on either side, had any rational excuse for having an opinion about the matter at all? I studied that mighty question to the bottom — came out empty. Half of our people passionately believe in high tariff, the other half believe otherwise. Does this mean study and examination, or only feeling? The latter, I think. I have deeply studied that question, too — and didn’t arrive. We all do no end of feeling, and we mistake it for thinking. And out of it we get an aggregation which we consider a boon. Its name is Public Opinion. It is held in reverence. It settles everything. Some think it the Voice of God.

          • clifman says:

            Fascinating article at that link, Fred. Definitely landscape altering stuff. Challenging to contemplate integrating that line of thought with declining FF, including declining EROEI, which seems to have lost some of the attention it was gaining in the waning days of TOD. Will we even have over the road trucking in 10+ years?

            • Fred Magyar says:

              HI Fred, and Merry Christmas to you, and all your friends enjoying the tropics.

              Tks OFM Merry Christmas to you as well! I’m in Miami for the holidays and it sure feels warm enough day time temps have been in the 80’s so kinda tropical 🙂

            • Fred Magyar says:

              It’s becoming more aware of things like that that keep me up at night nowadays. The new world will be nothing like the world we have come to accept as normal. Suffice it to say ‘Greens’ and communists are pretty much irrelevant in this new world… 🙂


          • Glenn Stehle says:

            Fred Magyar said:

            As to his views about PV and Evs I do disagree with him because I think he doesn’t understand or consider the effects of disruption. I think those effects will be huge and will happen in a very short time frame….

            BAU is history.

            But if one takes an objective look at reality, not filtered through green-colored glasses and the promise of some glorious future, one can only conclude that BAU is still very much alive and kicking.

            Furthermore, an examination of the hard, cold facts reveals your hallowed EV and renewables “disruption” has shifted into reverse, as this graph from the Frankfurt School of Management and Finance shows:

            • Glenn Stehle says:

              Or this graph from Inside EVs:

            • Fred Magyar says:

              But if one takes an objective look at reality, not filtered through green-colored glasses and the promise of some glorious future, one can only conclude that BAU is still very much alive and kicking.

              Glen, I have obviously have failed miserably in communicating what I think, or you just block it out for some reason. Whatever, dude!

              For the record I have never said that any of the disruptions I have talked about will usher in a glorious future, that is you trying to put words in my mouth. I’m totally agnostic about the long term consequences but the disruptions are very real. And let’s get something straight once and for all alternative energy and EVs are not my main focus they actually play a minor part of the big picture.

              I will however, unequivocably state, that in my opinion, BAU is a dead man walking right now. He may still have a heartbeat but he’s a goner! Granted I agree that very few people who look out at the world see things as I see them. And again I might be off by a couple of years but I’m pretty sure he is terminal. If he somehow recovers I most certainly will eat humble pie. Time will tell!

              I realize you think of me as some idealistic greenie with socialist or communist tendencies. Or perhaps you just want to tar me with that brush. You couldn’t be more wrong about me. I’m with Groucho Marx, I don’t want to belong to clubs that would accept me as a member.


    • ChiefEngineer says:

      As huge believer in the future of EV’s. Robert’s metric for judging EV’s by sales volume, shows that he doesn’t understand there potential and the process of there development by the manufacturers. Today’s EV’s can’t meet the cost and convenience of todays ICE. Current auto manufactures(except Tesla and Nissan) aren’t interested in flooding the market with EV’s until they have perfected the technology and reduced the cost. No manufacturer wants to put a million mistakes out in the market place. Clearly if Robert experienced a viable EV (Tesla S 85), he would know and understand there potential. The day of mass EV sales is still 10 years out. It’s a process just like your cell phone. No one would have imagined walking around with a computer in their pocket 10 years ago. EV’s have advantages ICE will never have. I also wouldn’t expect a 6th grader to hold down a job either. It is premature to be evaluating by sales volume.

      Again, my experience from last week-

      Earlier this week I got an opportunity as a passenger in a 14 month old Tesla S 85 with 14K on the odometer. The owner keep saying “I wish everyone could have one of these”. The 77 year old traded in her Mustang and the fuel cost went from $200 of gasoline to $50 electric. But since last month with the new Tesla chargers next to Costco. She does almost all her charging for free. It can be charged 80% in less than a half hour. The standard price was 89K but she added another 13K in options for a total of 102K. The car is a lot bigger than a Camry type and weighs in at almost 4700 pounds. The center of gravity is very low and unbelievable handling. In the center of the dash sets about a 15 inch touch screen that controls nearly everything.

      Traffic was light and we made a 6 1/2 mile figure 8 though town with traffic signals every half mile. She was always in total control of the vehicle. We must have gone from 0 to the 90 miles per hour range 7 or 8 times. The most amazing thing to me was no engine noise. Nothing. You could feel and see the acceleration, but not hear it. You would only hear the tire road noise starting to be noticeable in the mid 40’s. She hardly ever needed to touch the brake pedal. As soon as she pulled her foot off the accelerator the car would slow fast as it recharged the batteries. I can’t say I have ever been in a quicker car. Our little road trip started with a 43% charge on the battery and ended with 38%. It was truly impressive.

      • likbez says:

        “Traffic was light and we made a 6 1/2 mile figure 8 though town with traffic signals every half mile. She was always in total control of the vehicle. We must have gone from 0 to the 90 miles per hour range 7 or 8 times.”

        With 90 miles per hour in town traffic how you managed to avoid tickets ?

        • oldfarmermac says:

          Unless you make a HABIT of speeding, the odds are excellent you will get away with it for a good while, maybe years, without getting a ticket, assuming you keep your eyes open and know where the local cops habitually set up speed traps.

          I have driven half a million miles at LEAST, lifetime, on well patrolled highways in a state with plenty of cops, with mobile radar, frequently over the speed limit, by just keeping my eye peeled, knowing where the cops usually park, and talking to other drivers, mostly truckers, on cb radio. I have NEVER gotten a speeding ticket.

          If you spend a lot of time on American highways, learning some trucker lingo and paying a few bucks for a cb are no brainer bargains. I have saved half a day or more , three or four times at least, within the last ten years, by getting OFF the interstate, or just not getting ON it, due to traffic tied up by bad accidents. You just can’t count on your cell phone or local radio to save you from sitting stationary for hours and hours.That dirt cheap cb will let you know just about every time, IN TIME.

          By way of example, a newly arrived “damn yankee” of my acquaintance managed to get a ticket in the local four traffic light county seat within a week.

          I told him his first day here about the most notorious speed trap within a hundred miles, at the edge of town, but he managed to forget my advice within his first week. The town can pay the cop who wrote the ticket a whole day out of the proceeds. Tickets aren’t cheap anymore.

          The town cops catch very few locals, but they don’t need to, because there are plenty of people dropping in off the interstate, enough for them to help out with balancing the local budget.

      • robert wilson says:

        Questionable creative accounting by Nissan CEO Ghosn. Does Nissan subsidize Leaf drivers with profits from ICE sales?

    • oldfarmermac says:

      I have a great deal of respect for RR, but he IS apparently making a living selling advice these days.His facts are rock solid, but his conclusions may be a little suspect.

      “But there is still nothing on the horizon that signals even the beginning of the end of the oil age.”

      I would argue that depletion of oil is clearly visible on the horizon, and not just the tips of the top sails, in sailor’s terms.That means moving away from oil, like it or not., but not within the time frame that matters to current day stock market investors- his current audience.

      Nuance and time frames are everything.

      I posted a question, whether he would ever reconsider his views, published in his blog, in respect to the prospects of renewable energy, some years ago now. Posted it three or four times IIRC. No answer.

      But the cost of renewables has fallen at least by half in those same few years.

      Now a lot of people simply CANNOT deal with any sort of NUANCED position, they have to have things one way or another, black and white, grey not allowed. But I will continue to insist, because the evidence warrants it, that humanity as a whole is headed for a very hard crash, due to overshoot.

      But this does NOT mean that ALL of humanity will necessarily crash, at least not within the next couple of centuries. The odds are at least fair that some of us will continue to live the industrial life style, for several generations, because resources and POWER are NOT equally distributed in this old DARWINIAN world.

      He is basically dead on about biofuels. There is a slight possibility that we can MANUFACTURE biofuels in an industrial plant type of setting, as opposed to conventional crops raised and harvested in the field, but the odds are high against this technology working out and scaling up enough to really matter. But never say never, engineers and entrepreneurs have fooled us before.

      We are absolutely NEVER going to produce enough biofuel via what is thought of as farming and forestry to REALLY matter in terms of the global BAU economy.

      The land to do it on does not exist, the water needed is not where it would be needed, converting our remaining forests and wetlands etc to cropland would be a sure path to ecological disaster, etc etc. I am speaking in terms of my own pro background in this respect.

      Shipping does not NECESSARILY depend on oil, except for the last few miles on trucks, anywhere from ten to a hundred miles or so. Rail can be expanded as needed and rail can run on electricity, as necessary. Costly to implement, but dirt cheap once implemented. Even heavy trucks can be electrified if they are running pick up and delivery over relatively short routes, maybe ten miles or so, using current day tech, because they can be charged while loading and unloading and over night etc.

      There is NO real reason ocean going ships cannot be built to run on coal. They ran on coal for a long time, and while I have no data concerning how much it would cost to build a modern coal burning ship, as opposed to an oil burner, it would not be a hell of a lot more, and there is little doubt coal fired boiler tech, and steam turbine tech, have both advanced ENORMOUSLY over the last century.

      Ships are so BIG these days that the space needed for the propulsion machinery, and fuel bunkers, hardly even matters.A favorite joke among ship builders is that when they finally manage to build one a mile long, it will run on a couple of outboards. ( The power requirement falls off in respect to tonnage as ships get bigger, and they can SLOW DOWN as well. )

      As for aircraft, well , air freight and air travel are serious building blocks of the current version of bau, but we will survive without them once fuel is too scarce to burn it jetsetting around or delivering winter produce to London and New York.

      I do not BELIEVE that electrified automobiles WILL result in lowering oil demand enough to cut sharply into the sale of oil, or at least to result in the PRICE of oil falling off sharply, because as ev’s scale up, depletion will almost certainly be reducing production more than enough,imo, to keep the price of oil high.

      BUT ev’s COULD be built in large enough numbers to cut seriously into oil demand, enough to cut consumption millions of barrels a day. If the typical new car in ten or fifteen years is a plug in hybrid, which is a real possibility, and not a fantasy, this would cut the usage of gasoline in NEW model cars by eighty percent or more, IMMEDIATELY.

      Suppose for some reason UNCLE SAM MANDATES that every new car and light duty truck be a plug in hybrid, starting with the 2025 model year, and does not back down. Stranger things have happened. We occasionally strip search little old ladies at airports these days for instance.Any politician that advocated such an indignity be visited on an elderly woman, or any woman, thirty years ago, would have been laughed out of office.

      Now here is a little thought experiment.

      Suppose one, the USA goes isolationist. TWO, we try to become self sufficient in oil, and forbid any net export, etc. Three, the price of a plug in hybrid car such as a VOLT declines by seven or eight thousand bucks, compared to the comparable ice only car, as the battery tech improves, and production scales up.

      Four, now suppose that the buyer of every new CONVENTIONAL car, or light duty truck, has to pay a five thousand dollar premium, because his gar is going to use about four times as much, maybe even FIVE times or more , oil over the life of the car. The premium can be used to subsidize the buyers of pure electrics or plug in hybrids, capable of not less than forty miles of battery only operation. The VOLT would then be CHEAPER than the comparable ICE car.

      Within five years, the amount of oil we use for personal transportation in the USA would start falling like a rock as older cars are junked. Let’s not forget that this selective purchase tax would discourage the purchase of oversized vehicles such as the infamous F250 Ford four by four which in most cases these days is nothing more than a ego gratification toy.

      The people who CHOOSE to pay the extra five grand would SAVE IT BACK , with a generous return, due to lower gasoline prices, not right away, but eventually. Twenty bucks a week saved on gasoline due to a cheaper price would put break even at five years.

      I have a LOT of respect for RR.

      But what he DOES NOT talk about is at least as important as what he DOES talk about.

      • oldfarmermac says:

        By MANUFACTURING biofuels in this sense I mean something like a thousand acres of troughs filled with water, enriched with filtered and diluted pee pee and doo doo, covered with glass, in desert sun, everything automated.

        You could get rid of a lot of sewage this way, and harvest a hell of a lot of methane and bio oils, as well as salvaging the phosphorus and potassium in the sewage etc, plus some or most of the fixed nitrogen.

        The problem is nobody has made it work yet, and even if it works on a demo scale, it may not be practical at the utility scale.

        It might work, EVENTUALLY, and a rich society might be able to afford it.

  47. Longtimber says:

    Draft Horses, Chuckwagon Teams, Horseless Carriages, ICE’s, now EV’s .. BAH Humbug.. … NOW we have the Ultimate Solution allowing focus on endless pursuit of horsepower .. Ahh What Relief for True Muscle Power. Model S owners Eat ya heart out. The Equine Pro is the only massager capable of improving your horse’s overall performance.

  48. Longtimber says:

    Draft-Chuckwagon Teams, Tin Lizzies, Horseless Carriages, ICE’s, EV’s .. B A H Humbug ..
    For now Santa presents the Ultimate device for Endless Horsepower. Perfection of True Muscle Power
    Model S owners eat you heart out.

  49. islandboy says:

    For what it’s worth, below is the graph of monthly Solar Thermal and Solar PV output from the EIA’s Electric Power Monthly. No surprises here, two months before the winter solstice it should be downhill all the way to the end of December


  50. R Walter says:

    Week 50 carloads have petroleum approximately 2700 fewer carloads than from week 50 of 2014.

    The surprise is the drop in coal carloads, about 11,000. El Nino must be having an effect on how much coal is burned. With temperatures this year at close to all time highs for early fall and winter, coal seems to be in less demand for this time of year. 2014 had 48,000 plus coal carloads, week 50 of 2015 stands at 37,000 plus.

    Those fossil fuels keep on keeping on through the tired old slog that has to happen so humans can have abundant electricity.

    Please visit this page and read it all:

  51. oldfarmermac says:

    My chest swelled out so much I popped the buttons off my comment oligarch three piece suit reading this HIGH ( satirical ) praise. 😉

    I’m stuck in the house these days, playing nurse. Got nothing else to do except play games. 🙁

    Sound bites are for people too lazy to do any real thinking.

    Refuting a sound bite generally takes a good bit of explanation. I could have said for instance simply “BULLSHIT” to the argument that marginal costs DO NOT determine production levels.

    I have an intro level econ text around here someplace that devotes five pages to explaining the concept of marginal costs. I challenge anybody to explain the concept, in a meaningful way, in much less than a full page.

    Examples help a lot.

  52. oldfarmermac says:

    This comment is in response to one by GS, and here so as not to clog up the current main post.

    shallow sand,

    “I do not take issue with what you say.

    However, I do take issue with the grotesque double standard operative on this forum.

    Those who are overly optimistic about technological breakthroughs in the oil business get crucified on this forum.”

    If you cannot stand the heat, get out of the kitchen.IT IS after all a “peak oil” blog and the person who runs it is a confirmed peak oiler, lol.

    Grotesque double standard ?

    If such existed, you would be banned, this is after all a PEAK OIL forum, lol.

    I have NOT noticed that YOU are particularly careful to avoid making light of those who disagree with you.

    So far as I can see, the oil pessimists are holding the all the trump cards. The planet is finite, most of it has been combed over several times already and all the cheap easy oil fields have certainly been found and cherry picked for going on over a century now. The population is still growing.

    Whatever comes about in terms of increased oil recovery will be welcome, to me at least, but the resource in the ground grows ever more scanty with every barrel produced, and then there is that little problem they call the “law of diminishing returns” in freshman econ class in cow colleges such as the one I attended.

    I will not argue that there is a ZERO possibility oil will stay plentiful and cheap. I am however prepared to bet my farm that it WILL NOT stay cheap, over the long run, barring the world economy going to hell in a hand basket, one way ticket.

    “But those who are overly optimistic about technological breakthroughs in the renewables business get a free pass. Not a voice, or a hand, or even an eye is raised to some of the most outrageously nonsensical and outlandish claims made by the advocates of renewables”.

    Bullshit. I myself have posted many many times that most of the human race is going to live hard and die hard, and before time, sometime probably within this century, as the result of overshoot and the depletion of one time thru natural resources. Ron and the other hard core pessimists make this point quite often as well.

    As a matter of fact, our gracious host is apparently convinced I am way the hell too optimistic in believing that some pockets of industrial civilization MIGHT survive peak resources for a long time. I

    “And to top it off, anyone who dares to question the glorious future of renewables is met with a hail of viscious personal attacks.”

    You are good at dishing it out, but apparently your skin is too thin to take it, incoming.

    You are apparently an oil man yourself,or used to be, anyway, as best I can judge from your comments.

    If you had been a horse breeder in 1880 or 1890, you would more than likely have laughed your ass off at anybody who said locomotives were going to be downsized to the point farmers could use them as tractors, but this was happening already. I well remember conversations with my great grand parents, who readily laughed at the fact they laughed at the idea tractors would ever replace horses on the farm, even after they started seeing an occasional automobile on the road.

    “So why doesn’t coffeeguyzz get a get-out-of-jail-free card like the advocates of renewables do? Isn’t what’s good for the goose good for the gander?”

    Coffee guy appears to be a grown up, and able to handle criticism, and willing and able to hang in there and defend his out of the mainstream beliefs. He doesn’t NEED a get out of jail card. Fernando doesn’t need one, Javier doesn’t need one. I contradict the environmental establishment status quo myself from time to time. I don’t need one. Criticism doesn’t bother me, it strengthens me, and allows me to refine my thinking and arguments.

    You are free to criticize renewables optimists in this forum to your hearts content, as Ron is exceptionally tolerant in this respect and just about all respects, excepting a few no no’s such as racism etc. . I question their optimism myself quite often.

    You see, or maybe you don’t, that Ron picked up the peak oil ball where it was left when the old The Oil Drum crew decided it was time to go on to new things. Oil pessimism is built into the foundations of this forum, where as the TOD site attracted many environmentalists and other forward thinking individuals, including renewables advocates.

    Some of us are still hanging together here, thanks to Ron Patterson. We owe him a hell of a hearty debt of gratitude.

    Maybe you can recruit a few friends to help you out if you are feeling lonely.

    Methinks you would feel more at home at some site such as wattsupwiththat.

    Those of us who truly UNDERSTAND the sciences UNDERSTAND what the depletion of oil and gas and coal and iron ore and fossil water ad infinitium actually MEANS. We also understand that renewable technologies MIGHT save our sorry species from going back to hunting and gathering, after dieoff.

    As the poets say, hope springs eternal in the human heart.

    Renewables may save SOME of us, if we believe in them, and so work to advance the tech and scale up the infrastructure.

    I SELDOM hear anybody who opposes renewables, on the basis of their being subsidized, criticize the subsidies that the MIC gets, or the subsidies that the owners of professional sports teams get, etc.

  53. oldfarmermac says:

    HI Fred, and anybody else interested,

    I am putting this comment here so as keep from putting too many on the World Oil Output current lead post. .

    I hope you will add any thoughts to it, anybody else welcome too of course.

    I am working on a book, using this forum as a major fact checking resource, as well as a gold mine of useful data and relevant opinion. Best not to overlook anything, if possible, because rewriting is already taking forever, and knowledgeable editors don’t come cheap to amatuers with no track record.

    YA THINK it might be just a tad on the hypocritical side for GS to talk about lithium depletion while consistently AVOIDING oil depletion?

    Lithium can be recycled, he should know, or maybe he doesn’t , and the same old argument that oil true believers keep on trotting out- that better technology and higher prices turns potential resources into economic reserves- applies to lithium just as it does to any other mineral.

    And even a little can go a long way. As oil depletes,and mass transit expands,and cars shrink, an electrified auto with a rather SMALL lithium battery will meet the needs of a growing number of people on a day to day basis.

    When I last lived in the city, a car with a twenty mile range would have met my needs every single day,excepting days I had a yen to get out of town. Ten or twelve miles would have sufficed, but at the price of some inconvenience.

    His arguments ” don’t hold water any better than a sifter bottom ” as my dear departed old country woman Mom used to say.

    We do not pretend ( nor does any renewables advocate who does any real thinking) that renewables are going to support the current day life as we know it business as usual status quo.

    You know that, and anybody paying any attention knows that, but his strategy seems to be to snow anybody he can among those who are not be paying much attention.

    Renewables are a viable way to stretch out our depleting fossil fuel endowment, and to slow down the environmental degradation associated with extracting and burning them.

    Renewables are also a viable way to increase the national security of any country that adopts them on a useful scale, thus reducing the pressure for resource wars.

    The more optimistic but sober minded advocates of renewables, as a general rule, believe that with a great deal of hard work, and some lucky breaks, we can transition to a sustainable low energy but safe, dignified, and satisfying way of life, as our one time endowment of fossil fuels is used up.

    If I live another twenty years ( possible not too likely ) I will cut my own personal fossil fuel use in half, while living just as well. I will be using two to three times as much renewable energy as I do now. My nieces and nephews will be using a quarter or a fifth as much gasoline to live the same lifestyles they do today, because they WILL BE driving pure electric or plug in hybrid cars, if they drive at all.

    These cars WILL be charged to a substantial extent with renewable electricity, because the long distance HVDC lines needed to transport wind power from the mid west WILL be built, and PV panels on houses and in back yards will be so commonplace as to be remarked upon only if absent in a given neighborhood. All this assumes the economy remains on its feet of course.

    Solar farms are getting cheaper to build from year to year, and within a decade, or maybe a little longer, pv juice will be cheaper than wind juice, which will be cheaper than gas fired juice if the gas industry gets its way and is able to export gas to Asia and Europe. I am talking plain old cash money juice, without taking into account off the books pollution.

    Heat pumps will get to be a little more efficient, new houses will be much better insulated, led or even more efficient lighting will be mandated, ad infinitium.

    Will all these changes for the better save us ? They MIGHT. Peeing and moaning about the shortcomings of renewable technology is worse than a waste of time, it is a recipe for an even worse disaster, sooner, than is headed our way anyway, due to overshoot.

    Most of humanity will live hard and die hard, imo, before this century is out. But quite a few of our luckier descendants might live pretty decent low energy low impact lives based on sustainable economics two three or more generations down the road.

    The population is going to crash of its own weight, unless the cards fall favorably and birth rates decline to such an extent that population peaks without a hard crash.

    It is perfectly understandable that renewables advocates refrain from talking about social, economic, and ecological collapse to the extent they can, because such messages tend to turn off the potential middle of the road citizen, who unfortunately would rather not think unless FORCED to do so. And anyway, the hard core environmentalists are doing a pretty good job of telling anybody who is willing to listen what is in store for us due to overshoot.

    Now about driverless cars eventually reducing the total number of cars on the road-I expect that if they become so popular as to render conventional cars scarce or non existent, they WILL result in there being many fewer cars on the road, but maybe not for reasons that are clearly expressed by autonomous car advocates. About the same number of people will for instance most likely PREFER to go to work at the same time as usual, which indicates there will still be a need for about as many commuter cars on the road at rush hour.

    BUT if such cars can be summonsed ( by phone or internet, etc) and the cost of using one is LOW enough to tempt the user to forgo car ownership, then he the former driver potential av passenger will have a POWERFUL incentive to rearrange his affairs so as to use an AV during off peak hours- because peak hour use is surely going to be more expensive.

    It is for sure that the car that takes somebody to work, and that will take him home, will be available eight or more hours in the meantime to take retirees, househusbands, etc out to run errands, and cost conscious folk will be willing to forgo rush hour use in order to save money when they can.

    There will be FAR fewer accidents, traffic will flow faster, and cars will be MUCH smaller, and able to travel closer together, etc. thereby reducing congestion considerably.

    Additionally, since the car will be HIRED, most of the incentive to drive (or ride in ) a large flashy one will be history, for the most part.

    And because they will be operated by people interested in making money, you can bet those people will be paying very close atttention to durability, reliability, and variable operating costs- whereas the individual buyer of a car pays relatively little attention to such matters.So – they will last a lot longer, maybe even almost indefinitely, because they can be highly standardized and pulled into a maintenance facility for an overhaul and a new coat of paint etc, for a LOT less than a new one.

    But I do not think much over half of the people in a country such as the USA will give up owning a car of their own, so long as they can afford one, for a long time to come. People LIKE to own things, and make them their own, and leave evidence in them of their bad habits, etc, and display them as status symbols, etc..

    Hardly anybody is eager to buy and OWN a two seater, never mind a SINGLE seater car, everybody wants to be able to take along friends and family occasionally, even though he is riding alone eighty percent or more of the time. When hiring a car, hiring a smaller one will be cheaper, so smaller cars, two seaters, will be the preferred car for av companies to put on the road. This will reduce fuel consumption, improve the flow of traffic, lower overall costs etc.

    ALL thoughts welcome.Thanks in advance, anybody and everybody.

    Any links to SERIOUS articles, that go into some depth about av’s are especially welcome.

    • Fred Magyar says:

      Hey OFM, maybe I just need to go out to your neck of the woods one of these days and we could discuss all these topics in person over some good bourbon or a few cold ones 🙂

      Tell ya what, since there is a lot to talk about and neither of us is content with soundbites. Why don’t you send me this post as an email to fred dot magyar at g m a i l dot com and we can discuss it at our leisure when we have the time or the inclination to do so.

      As for GS, I’m not quite sure what his problem is but while he certainly has the right to his opinion he has really pissed me off recently by falsely claiming that I’m saying things or that I believe things that I absolutely haven’t said nor do I hold as beliefs. I’m still not sure if it is a reading comprehension problem on his part or a case of deliberately trying to promote some ideological agenda.

      • wimbi says:

        Fred. Long ago and far away I was forced by a wise administration to take, along with all the standard science, etc, a series of lectures of advice from experts on handling the chaotic world of human irrationality we were about to get dropped into.

        Their advice re the GS types. Just turn around and walk away, and don’t waste a single neuron on any kind of response at all. The sane people who might witness would certainly understand, and might even be impressed.

        It has worked for me.

        • oldfarmermac says:

          Hi Wimbi,

          Great advice, and in day to day life I usually react the same way.

          But in a blog type situation, I really hate to let such people get away with misleading folks who are all too often less than scientifically literate, and poorly enough educated to be impressed by hifalutin’ stuffed shirt quotes delivered in commanding tones that remind me of the wizard behind the curtain in the Wizard of Oz story.

          • Nick G says:

            I really hate to let such people get away with misleading folks


            The answer, IMO, is to relax, don’t worry about the person who seems to be trying to get under your skin, and provide real information to other readers.

    • Caelan MacIntyre says:

      There is no sense in going along with BAU unless you still have your thumb in your mouth. At your ages. Rush hour? What’s the rush?! Self-driving electric cars? That’s for kids.

      You want a challenge? You want to really use your cerebral cortex? Then wriggle out of your diapers and deal with politics and poverty.

      Electric cars and Space X are glorified Tonkas. For sandboxes. For Musk and his asinine adolescent fantasies– cars and moon rockets. While overseas people have their simple, wholesome lives poisoned by, often foreign, industry. Do you know or do you care what industry actually does, beyond its front-end, what it wants you to see only? I doubt it.

      If we remove the current status-quo-modus-operandi-cum-mental-model, then everything can change (and make real transition a walk in the park, rather than some half-assed kludge that prolongs the agony). If we don’t then we just continue to suck at the teet of BAU while we foul our nest (crap our diapers) and continue the burning.

      The whole rush-hour-going-to-work premise is completely whacked.

      Some of you don’t really want disruption. You want a greewashed BAU. If you wanted disruption, you’d be talking real social change.

      So you want to stay infantile? Then you will cling tenaciously to ‘technology’ and drool and babble on with its details to the exclusion of what really matters in your miserable existence here on the only home you have. And the little monsters will (continue to) be us.

      Synchronicity 2

      • Glenn Stehle says:

        Caelan MacIntyre says:

        Some of you don’t really want disruption. You want a greewashed BAU.


        You’ve hit the nail squarely on the head.

    • Dennis Coyne says:

      Hi OFM,

      It all sounds pretty reasonable to me. Mostly we are on the same page, I am a tad more optimistic than you.

  54. oldfarmermac says:

    A few thoughts about lithium recycling

    For what it is worth……I just spent a couple of hours looking into the problems associated with recycling lithium batteries of the sort used in EV’s .

    The bottom line SEEMS to be that reprocessing these batteries is very much a borderline proposition, in terms of dollars and cents……….. at current prices for lithium, cobalt, nickel, etc.

    I did not find anything that indicates recycling will not be practical later on, when prices are virtually certain to be higher, maybe a LOT higher. The tech is there , it is just not profitable at this time.

    At current prices, the lithium in even the biggest Tesla battery is worth only a few hundred bucks, probably less than four hundred.

    Furthermore, there is a very real possibility, maybe even a high probability, that so called “worn out” ev batteries will just STAY IN EV’s until the vehicle is worn SLAM OUT, which if it is well maintained, could easily be thirty years or longer.

    Consider an new model Leaf, with a hundred mile range. The battery will supposedly be worn out when it will propel the car reliably for only eighty miles.There must be tens of millions of hard up folks who HAVE to drive to get to work and shopping who would be glad to own a Leaf that runs dirt cheap- even if it will go only FORTY miles reliably.My dear old Daddy could have driven an electric with a forty mile range to work his ENTIRE LIFE, with enough to spare to stop off at the supermarket etc, no problem AT ALL.

    If these batteries are taken out of automobile service, then a hell of a lot of them, maybe nearly all of them, will STILL be very useful as they can be used to store off peak wind and solar juice for later use, and to reduce peak loads on the grid.

    Pv and wind are going to eventually be a lot cheaper than coal and gas, both of which deplete.

    Life is all about NOW, and the next few days, and the next few years and decades. It is true that we may NEVER achieve a truly sustainable , low impact, ecologically stable economic system, but otoh, it is not given to us to solve the problems of future generations.

    ” Sufficient unto the day are the problems thereof.”

    We must do what we can, as we can, and hope for the best. At the worst, ev technology will allow us to kick the sustainability can down the road some years, maybe a lot of years, and we can use those years to adapt as best we can to a lower energy, lower impact lifestyle.

    “All we have to decide is what to do with the time that is given to us.” – Gandalf the Grey

    • Dennis Coyne says:

      Hi OFM,

      One of my favorite parts of the entire trilogy is that conversation between Gandalf and Frodo, he also says,

      ‘Deserves it! I daresay he does. Many that live deserve death. And some that die deserve life. Can you give it to them? Then do not be too eager to deal out death in judgement. For even the very wise cannot see all ends.’

      • oldfarmermac says:

        Hi Dennis,

        “For even the very wise cannot see all ends.”

        This might be the money quote of all the quotes in the entire history of literature.

        For my money, the Tolkien will go down as the greatest single author of the last century, but I can’t read everything.

        Do you know of any body else who might knock him off that throne?

        • Dennis Coyne says:

          Hi OFM,

          One of my favorites as well, but I have not read very widely.

          I think Shakespeare may have him beat (in English). I only know one language.

          The translations of Hermann Hesse’s work I also enjoyed.

          Definitely not my area of expertise though.

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