EIA Short Term Energy Outlook

The EIA’s Short Term Energy Outlook is out. The data is in million barrels per day.

Non-OPEC Liquids

Not much has changed in the EIA’s projection since last month, however their projection for the remainder of this year and next year has increased slightly.

STEO Annual Bar

The EIA has Non-OPEC total liquids peaking, so far, in 2015. They have Non-OPEC liquids dropping .58 Mbd in 2016 and another .24 Mbd in 2017.

STEO US Liquids

The EIA has US C+C production dropping sharply through August then leveling out for the remainder of the next two years.


All gain in the next year and a half will come from the Gulf of Mexico, or that is what the EIA expects. The spikes lower in August, September and October are the EIA making their expectations of what the hurricane season will bring.

STEO Alaska

The EIA expects Alaska to continue to decline, though slowly.

STEO Lower 48

The EIA sees US lower 48 bottoming out around January but no recovery next year.

Canada has released its latest oil production data and outlook: Estimated Production of Canadian Crude Oil and Equivalent. This is “oil and equivalent”. I really don’t know what they mean by “equivalent” but this is 13o thousand barrels per day less than what the EIA has them producing in total liquids. The data is in thousand barrels per day.

Canada NEB

The big drop in May was caused by the massive wildfires in and around Fort McMurray. They expect to be about half recovered in June. But what they have projected for the fourth quarter of 2016 was, to me anyway, a real shocker. They expect to be producing at previous historical highs.

How Bad Is Canada’s Oil Bust? Try the Worst Spending Drop in 70 Years

Overall, oil and gas producers in Canada have cut a whopping $50 billion in capital investments over the past two years. That’s the biggest two-year decline since at least 1947, which is when the Canadian Association of Petroleum Producers started tracking investment spending.

In percentage terms, producers have now cut spending by 62% since it peaked at $81 billion in 2014, with spending in the oil sands being cut in half to just $17 billion. That’s the lowest investment rate for the region since just after the financial crisis.

However, spending in the oil sands region would likely be even lower if it wasn’t for the long lead time of these projects; the bulk of 2016’s investment dollars are being spent on projects that started construction prior to the downturn.

Well hell, if you can cut capex by 62% and continue to produce at record highs, then I say go for it.

The Baker Hughes International Rig Count is out with monthly rig count numbers for May, 2016. This count does not include any FSU countries or inland China.

Total World Rig Count

In November 2014 the count stood at 3,570 rigs. Last month the count was 1,405, a drop of 2,165 rigs or 61%.

Canada Total Rig CountCanada rigs stood at 42 in May, up 1 from April. This is both oil and gas rigs. Canada oil rigs, last week, stood at 13.

If my prediction of 2015 as the year crude oil peaked is to be proven wrong, it looks like those making that claim will have to wait a few years to make their case. I know, there is nothing about OPEC in this report but OPEC is looking pretty shaky right now.

EDIT: I just had to add this. I don’t know how I overlooked it. It is from the same Short Term Energy Outlook linked above. It was constructed from data found in table 3a.

Total World Supply

Are you kidding me?

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417 Responses to EIA Short Term Energy Outlook

  1. Caelan MacIntyre says:

    “Well hell, if you can cut capex by 62% and continue to produce at record highs, then I say go for it.” ~ Ron Patterson

    Looking forward to where the next price ceiling appears as well as the Seneca Cliff.

    • PonziWorld says:

      The Autonomous Quadcopter Drones powered by solar are going to install all the free solar cells for free.


      We’ll get rid of all the useless humans and their oil and coal addiction.

      Solar cells for the domestic use simply have a price problem.
      What solar needs:

      Perovskite or dye sensitized solar cells, at a cost of 50€/m²
      lightweight cells, sheets in plastic envelope
      ultra cheap and fast installation —> i envision a fast deployment system via autonomous quadcopters.
      Drones operating in duett like fashion like honeybees can carry 100m² of solar cells (100µm thickness/a few kilos/100 sheets) .One drone replaces, one installs new panel.
      A small truck drives along the street carrying 50,000m² sheets of solar cells ready to be fetched by the two drones. (they could replace this amount of cells every 4 days!)
      two drones can do the work of dozens and dozens of workers if they operate fast enough.
      MOunting rack for the cells should be as simple as possible. Maybe even a system that could unfold itself.
      Once deployed it wouldn’t even matter if the cells would only last up to 10 years.
      Drones could change them super quick, with a very convenient mounting system.
      Solar drones monitor quality of cells and decide themselves which one would need to be changed.

      We need cheap solar cells that can be manufactured fast and mounting methods that are super easy fast to reduce costs.
      We need a bee hive of solar drones.
      Perovskite is our nectar.

      • Sydney Mike says:

        This is the kind of dream-cuckoo-land nonsense similar to what we heard about nuclear at the dawn of the atomic age. I happen to own a few flying camera drones. They spend more time on the workbench than anywhere else. They can barely lift a few hundred grams and fly for no more than 10 or 15 min.

        Anything that flies has severe weight limits. You are more likely to succeed with a herd of donkeys than with a swarm of drones.

      • Caelan MacIntyre says:

        Baby-delivery drones (Fly-By Gene Drives, Inc.) will be the next uberdisruptive quantum leap in human technology, achievement, experience and purpose; among the next forms BAU takes toward its never-ending virtuous quest to solve all our problems that we never thought needed solving.

        BAU: “Here’s your problem.”
        Guy: “What?”
        BAU: “And?”
        Guy: “And what?”
        BAU: “We will now solve it, for you. $9998 best price discount.”

        • Fred Magyar says:

          You know those recycled pallets you planning on using for your tree house? Well guess what, they are a product of BAU. You know that computer or smartphone you are using to post on this forum? Where do you think that came from?

          You don’t have a clue what a gene drive is or how it works or what the implications of using one might be.

          AS far as drones there are plenty of uses for them even in agriculture they do indeed work like bees. Or they can be used to gather data which might occasionally turn out to be useful for people who need to connect the dots.


          • Caelan MacIntyre says:

            I am thinking that you realize that pallets are ‘everywhere’, including littering the nature-wrecked BAU-created industrial landscapes.
            (Or maybe you are just interested in technology/industry/BAU from the front end?)
            So using industrial refuse is cleaning up some of the ‘garbage’, such as if it’s just going to rot away otherwise.
            I’d rather not use palettes nor a computer, incidentally.
            Unfortunately, there are those who think, maybe like you, that staring at a flat screen all day and communicating by typing out text on a keyboard is ‘advanced communication’. So here we are.

            From your video’s intro:

            “In this fascinating talk, Asner gives a clear message: To save our ecosystems, we need more data, gathered in new ways.”

            My response:
            To save our ecosystems is really to save us from ourselves and we need to simply use (un)common sense and stop meddling using yet more technology to survey the human-caused damage using other forms of technology, as well as stop the advocation of such, such as to advance one’s career.

            VICE: ‘You advocate for all of civilization to abandon technology and return to a hunter-gatherer lifestyle

            … How do you feel about the Skype call that we’re having right now?’

            John Zerzan: I was on the Art Bell show years ago and he kept saying that to be consistent with my philosophy, I should live in a cave. I said, ‘Yeah, you’re right, but then this conversation wouldn’t be possible.’ You have to try to connect with people. You have to be part of the conversation in society or else you’re not serious.

            ‘So, is that the only reason that you don’t go live in the wilderness?’

            Well, I guess so, although I would have to say that, like most people, I’m pretty damned domesticated…

            ‘How can you convince people to give up technology?’

            It won’t happen unless people get tired of more and more mediation. If you’re going to be content to be a zombie staring at your little screen, of course nothing will happen. I’m hopeful that people are going to find that pretty dull…

            I began to see that there is an intentionality to technology. It isn’t just some neutral thing. The Industrial Revolution wasn’t just about economics. As Foucault says, it was more about imposing discipline. It started to dawn on me, maybe technology has always been that way. People are not yet thinking too much about it, but Hollywood is thinking about it. Look at Her. Look at Transcendence. These are amazing movies that just put it right on the table. You want more technology? You want to be absolutely dehumanized and humiliated? This is what it looks like.”

            Domestication (and associated technologies), of course, lead(s) or can lead to various forms of disempowerment, vulnerability, reliance on the system, and lock-in. For some good info on lock-in, see David Korowicz’s work.

            “You don’t have a clue what a gene drive is or how it works or what the implications of using one might be.” ~ Fred Magyar

            The all-new self-driving, self-building, self-aware Gene Drive, by Tesla of course. Comes with a drone landing-pad on the electric solar panel roof and a couple of microwindmills that look like sunflowers on each side of the hood (which also spray windshield washer fluid automatically, so humans don’t have to.).

      • SW says:

        Have you ever worked on Perovskites?

        • “Have you ever worked on Perovskites?”

          I did my PhD on research results from molecular beam epitaxy experiments. The guys next door were sputtering guys and they created some perovskite High-Tc superconductors when that material was first discovered. I remember they had it hovering in mid-air.

  2. clueless says:

    From the previous thread, it is curious that Devon is selling some nat gas weighted properties. WPX was able to do a secondary and their stock rose in price. I think that Heinrich Leopold should be a consultant to these guys. I think that they are okay even with the stricter lending rules now in place [thank you Shallow Sand, Eno and others]. If Heinrich is right, they may be selling their best stuff.

    • AlexS says:

      I don’t think that U.S. nat gas prices can rise much above $4/kcf.
      This is only $24/boe, while oil is already at $50/bbl. By the time nat gas rises to $4, oil price will be significantly higher than today.

      Devon needs cash to repair its balance sheet

      • Nathanael says:

        I worked out that if natgas goes as high as $4.50, we will see some utility companies which are currently generating electricty with natgas decide to build solar or wind farms instead of running their *existing* nat gas plants. (The LCOE of the new solar or wind project is lower than the *variable costs* of the gas plant.) As the natgas price goes higher, more will (depending on region, since solar and wind are cheaper in some regions than others). As the solar and wind prices drop, this cap will drop, until nat gas is removed from the electricity market.

        I think we’re going to continue to see increasing supply gluts of natgas, because so much of it is produced as a ‘waste product’ from oil wells — and the percentage of gas coming out of wells is increasing as all the good oil wells have already been drilled. So the natgas price may remain quite low for a long time.

        Drilling “for gas” is going to be a terrible idea from now on (and arguably it already was a terrible idea).

        However, the low gas prices will discourage people from switching from gas to electric heating.

        • You forgot the battery

          • Nick G says:

            Nah. That includes storage costs, which won’t be much until solar/wind penetration rates are much higher than now.

            Didn’t you notice AlexS saying that solar is only .5% of all primary energy?

            • I thought you intended to replace natural gas, that means you need lots of batteries. I can see using wind and solar coupled to natural gas turbines, but they do have a limit. Once in a while I do ah estimate on a napkin and I conclude its better to wait 5-10 years before investing in wind and solar, one factor being the lower prices we should see.

              • Nick G says:

                Utilities understand natural gas, so they’re very comfortable with using NG to balance wind.

                Demand Side Management (DSM) is far cheaper and more effective, but it reduces sales and isn’t under the direct control of utilities, so it’s badly under used. Secondarily, long distance transmission is also very cost effective.

                Through DSM and TOU metering, EVs in particular give the utility very low cost access to quite a lot of battery buffering capacity.

                • Really. So the utilities use eléctric vehicle batteries to back dead wind periods. And the EV owners ride horses?

                  • Nick G says:

                    There are two EV-based strategies:

                    The primary strategy is to automatically time charging based on either direct signals from the utility, or TOU pricing. EVs charge at the lowest price point during the day, consistent with their owner’s programmed needs and priorities. The standard battery size is now about 100 miles, or 3 days of driving for the average light vehicle. That gives quite a bit of leeway for choosing when to charge to minimize costs. That leeway will only grow as batteries grow to 200 miles capacity.

                    The secondary strategy is V2G: vehicles sending power to the grid. As that depletes the battery, and uses up battery life, that would probably require the utility to pay a premium for the power, perhaps 25-50 cents per kWh. That, of course, would be very cheap if used only occasionally, or if it were used for the relatively small amounts of power needed for occasional frequency maintenance.

                    A vehicle fleet that was fully electric would have an enormous capacity. 230M vehicles at 60kWh each would have capacity of 14 terawatt hours, which could provide 50% of the grid’s power for about 60 hours.

                    If a society were to decide to, it could plan to have it’s citizens rely on Extended Range EVs, like the Volt, which have a backup generator. That would make the full EV battery capacity available to the grid, and even allow those generators to power the grid. For very occasional seasonal use (that one 2-week period in January that’s a big planning problem) that would be very cheap.

              • Nick G says:

                It’s worth mentioning that coal is the primary target for replacement, if you want to reduce CO2 and other pollution.

                If utilities use their traditional approach, coal will be replaced by a combination of wind/solar and NG.

                That’s the short term, and not the optimal solution for the long term.

                • Synapsid says:


                  Japan has announced that its nuclear power plants are to be replaced by coal-burning ones, and that coal will replace NG as the main energy source by or in 2019.

                  The article is at Bloomberg; click Search.

                  • Nick G says:


                    It’s not quite as bad as that sounded – read the whole article.

                    Then read the next one, titled: “The World Nears Peak Fossil Fuels for Electricity”.

  3. Dennis Coyne says:

    Hi Ron,

    Nice job, thanks.

    The EIA’s STEO also includes estimates for total liquids for the World and the estimate looks very much like a plateau. The August 2015 total liquids peak of 96.7 Mb/d is surpassed in Oct 2016 (96.9 Mb/d) and reaches 97.6 Mb/d in Oct 2017. I don’t think the EIA’s projections are very good for any nation.

    • Dennis Coyne says:

      Chart below shows the changes better, data from EIA’s STEO.

      • Dennis Coyne says:

        If we replace the EIA’s Texas estimate with Dean’s estimate we have the following for US C+C output through March 2016. Data after this point is from weekly data which can be far from the mark.

        Note that Dean’s estimate is based on a simple algorithm using RRC data as an input, his method has not changed, just the RRC data.

        Chart compares the EIA estimate and a modified estimate substituting Dean’s estimate for Texas C+C output (which is much better in my opinion.

        • Brian Rose says:


          When would you expect it to become clear to the markets that U.S. production has been higher than forecast for several months?

          The EIA’s weekly inventory and production data comes out tomorrow morning. Any chance that they will start moderating their weekly production decline estimates tomorrow, or even say production increased to make up the gap?

          Anyone here know what the time lag is likely to be?

          I mean, the gap has become wide enough that they must be aware that their stated production is too low, right?

          The longer it takes the EIA to correct this the more dramatic the market reaction will be. I could see a severe price reaction since WTI is now firmly above $50, and the overwhelming sentiment/fear is that frackers will all instantly completing thousands of wells at that price.

          It would be an incorrect conclusion, but the timing between $50 WTI and revisions that show increased production would match the sentiment perfectly and oil prices would surely experience a significant correction.

          • learner2 says:

            If the EIA comes out saying production had increased to fill the gap, I would think the market will see that the price went up in real time, meaning supply and demand already balancing, implying that demand must be really high to soak up all the supply. I don’t think thats a reason to sell, quite the opposite in fact.

          • Oil companies shouldn’t “all instantly start completing wells” because they have different price forecasts,financial strength, available well quality, and contracts and logistics ready to proceed.

            A point forward estimate shows it’s wise to start contracting and getting all tangibles ready at today’s low cost environment and start completing wells SLOWLY, with a single spread able to complete 24-30 wells over two years, rather than rushing into a completion frenzy. The key is to keep those contracts valid for at least two years. This in turn requires hard nosed negotiations.

          • Dennis Coyne says:

            Hi Brian Rose,

            The incorrect estimates by the EIA won’t be clear to most for 6 months or more in my opinion. Even the readers of this blog who have followed Dean’s estimates for the past two years don’t believe the most recent estimates. There was a time (Jan 2015 and earlier), when Dean’s estimates were lower than the EIA estimates and most here (I was an exception) thought Dean’s estimates were correct (I thought they were a little to low at the time). Now Dean’s estimates are higher than the EIA estimates and most think that Dean’s estimates must be incorrect, in this case I believe Dean’s estimates will be correct, with the possible exception of March 2015, which might be 20 to 30 kb/d too high, the estimates through Feb 2016 will be very close to the final estimates by the RRC (which will not be known until April 2018), the EIA estimates will be revised upward by Dec 2016.

            By that time oil may be running short and oil prices may be over $70/b.

        • Brian Rose says:


          EIA data is out.

          Production rose last week – albeit by only 10,000 bpd.

          • Dennis Coyne says:

            Hi Brian,

            I ignore the weekly numbers, only the monthly estimates are worth paying attention to in my view.

      • Dennis, thanks for the heads up. I just don’t know how I overlooked this data. I have added a final chart to the main post above. Please revue the chart and comment. Actually it is the same chart that you posted but I have separated it to show what is projected. I think that shines a totally different light on things.

        • daniel says:

          Looks like they expect canada and nigeria to come back immediatly (and then some)

        • Dennis Coyne says:

          Hi Ron,

          I like your chart better, out of laziness I did not separate the projection from the “data”. The only thing I might change in your chart is to end the “data” at March 2016 rather than May 2016. The final two months of “data” in the STEO is based on the weekly estimates. In my opinion these estimates have historically been so bad that they should be ignored al together. The monthly data is also not very good due to poor estimates for Texas, we have to go back to July 2016 for a decent EIA estimate for Texas.

          I agree that EIA projections are not very good, this applies to all countries including the US.

    • Dennis, your first chart here is the perfect example of why so few of my charts are zero based.

      • Caelan MacIntyre says:


      • Dennis Coyne says:

        Hi Ron,

        I agree, that is why I posted the second chart. The reason for a zero based chart is to show how small the overall change in output is, in percentage terms it is not a big change about a 1% fall in output from 2015 to 2016 and then a 2% rise in output from mid 2016 to mid 2017.

  4. No matter what statistics tell us, governments will continue business as usual, like in the Australian budget 2016 for which I have now published the 2nd part of my analysis

    Australian Budget 2016 underestimates role of oil (part 2)

    On the 8th we’ll get the new BP Statistical Review

    • Survivalist says:

      I really like Jeffrey J Brown and his ELM. I also like Energy Export Data Browser website as it nicely presents data which illustrates how consumption in many countries compares to consumption.


      I’m really looking forward to seeing the new BP Stat Review data on that site!

    • Nathanael says:

      The BP Statistical Review emphasized the growth in wind and solar.

  5. likbez says:

    LukOil’s cuts in capex


    Lukoil, Russia’s largest private oil firm, announced on Monday a deep drop in profits in the first quarter of 2016 due to the new round of oil price slides that occurred in January.

    …LukOil’s cuts in capital expenditure might be significantly more than that of its Russian peers – Rosneft actually increased its 2015-2016 capex budget – but are relatively low compared to other big international oil companies.

    • AlexS says:

      Lukoil has sharply reduced capex in West Qurna 2 project in Iraq (-33%) and other projects outside Russia (-35%).
      The company’s capex in Russia was down only 2%.

  6. R Walter says:

    220,000 more humans just today. In 900 days there will be 198,000,000 more people who will need to be fed and clothed. One gallon of oil each per day, another 198,000,000 gallons of oil necessary for survival, 4,700,000 barrels of oil, more demand.

    7.6 billion, 98 million barrels per day demand for sure, crude and condensates.

    By Nov of 2018, there will be a need for 97,400,000 barrels per day. Might not be there, a few adjustments will have to be made.


  7. Maduro’s government sent its shill, former Spanish (socialist) head I of government Rodriguez Zapatero, to negotiate a “peace deal” with Leopoldo Lopez (a key opposition leader) at Ramo Verde military prison, where López has been kept for two years.

    The offer was for the opposition to forego the Recall referendum in exchange for the release of some political prisoners and a slight restructuring of the Supreme Court (which today is an illegitimate Maduro weapon). López refused the deal, which was also turned down by Henrique Capriles.

    The last few days we have seen continuous looting, hijacking of trucks loaded with food, and protests organized to have the government stop blocking the recall referendum.

    The regime has restricted food deliveries to stores and began to distribute food in bags under a system called CLAP. The system is designed to be controlled by socialist party activists, and I see continuous comments about food distribution being made to favor the pro government minority.

    This behavior is similar to what was seen in Somalia in the early 1990’s, which led to UN intervention. I started a campaign to start documenting via photos, videos, and recording this government behavior, which the Venezuelans have started calling “holomodor”, after a similar practice by Stalin when the communists were subduing resistance. Holomodor practices are considered a crime against humanity, can be prosecuted by the international criminal tribunal.

    Meanwhile both Obama and the EU continue to forgive loans and help the Castro family dictatorship, which calls the shots in Caracas. For example, the latest offer by the Maduro regime was made 24 hours after Maduro returned from Cuba, where he met with Raúl Castro.

  8. A Venezuela update I wrote a few minutes ago disappeared.

  9. Heinrich Leopold says:

    Natural gas jumped 25% over the last two weeks, options are up 50-100%.
    Natgas formed a beautiful bottom over the last year and – after going over resistance of 2.5 USD for HH – prices can go much higher depending on when drilling resumes.

  10. Eulenspiegel says:

    The best thing here is:
    Capex is slashed worldwide, hidden capex from 3rd world states I think even more since they are simply broke with the current oil prices.

    And the production continues to increase – why this Capex frenzy the last years, if you can increase production simply on no money spending, rust and decline being no problem anymore.

    Something smells fishy.

    • AlexS says:

      Production is increasing in some countries or remains stable in others because of ” this Capex frenzy the last years”.

      Current cuts in capex will be felt 2-3 years from now.

    • Ves says:

      ” Something smells fishy.”

      What is “fishy”is that so called “oil glut” is just about finished even without oil production freeze from just 2-3 months ago. It will be very revealing if the price goes even higher accompanied with very modest rig increases.

  11. Toolpush says:


    Feds solicit bids for wind farm off coast of NY, NJ

    NEW YORK (AP) — The federal government says it will auction off the rights to build an electricity-generating windfarm on 81,000 acres of ocean off the coast of New York and New Jersey.
    Interior Secretary Sally Jewell announced the lease sale Tuesday.
    Officials say seven companies have expressed an interest so far in bidding for the lease on the waters, which are about 11 miles south of Long Island.
    Public hearings on the plan are scheduled to be held in June.

    I wonder what the neighbours will think of what is going on in their backyard? Didn’t they try that before in a nearby state?

    • So how many wind turbines can they install in 81 thousand acres?

      • Doug Leighton says:

        Assuming the usually quoted 123 acres per tower (in an array) that would be about 650 towers. 🙂

        • GoneFishing says:

          The plan is for up to 200 3.6 MW wind turbines.


          There is also a plan for a 200 GW facility off of the Connecticut coastline.

          Will the wind tower bases become fish habitat?

        • Fred Magyar says:

          Mmm. I guess there might be other ways of looking at the problem. Maybe we need to teach some new ideas by putting wind turbines in a school and make them smarter 🙂


          Caltech professor John Dabiri uses his engineering expertise to try to understand how animals move in their natural environments. While researching the swimming patterns of fish, he recently came to a surprising insight: the way we’re thinking about wind power—specifically, the design of wind farms—is wrong.

          Furthermore, we need to stop thinking about fossil fuels as a solution to our problems! They are the # 1 problem!

          Wimbi is right! We need to stop the insanity!

          • Bob Nickson says:

            Great article Fred. Thanks for the link.

            I found this one compelling also:


            Leslie Dewan, a physics graduate student discusses her design of a compact molten salt reactor that “can consume about one ton of nuclear waste a year, leaving just four kilograms behind.”

            It is small enough to be manufactured in a factory and shipped to the power plant site.

            Unfortunately the article does not mention the power capacity of the plant.

            The method it uses to ensure that it cannot melt down, even in the case of power outage, is really cool. (har)

            • Fred Magyar says:

              Hey Bob, the real take away is that there are plenty of brilliant young people who are working on ideas to get us off fossil fuels. As I have said many times, BAU has to go and is already on its way. The only sane use for fossil fuels at this point is to use them for transition to renewables. As for those who want to go back to live in a cave, more power to them, well… maybe less power 🙂

              You might like exploring this site

              • Bob Nickson says:

                Completely agree Fred.

                Often lost in the minutia of climate arguments is the reality that the easy fossil fuels are largely gone. We’ve got to develop alternatives regardless. Procrastination will only bring greater pain later on.

                • PonziWorld says:

                  Bob Nickson Pseudo-Logic summarized:

                  “We can’t currently afford energy from fossil fuels because the easy stuff is gone. So we have to develop alternatives using no energy at all otherwise we can’t afford it”

                  Bravo Bob! You just fell into one of the two traps…it never fails that its always either The Hydrogen Hoax or The Decarbonisation DeGrowth Kamikaze Mission to Destroy Fossil Fuels.

                  Apathy is Golden!

  12. Oldfarmermac says:


    Any body interested in the future of the oil industry really ought to read this article.

    Personally I do believe that the key leaders of the House of Saud do understand that the oil won’t last forever- SOME of them,at least.

    My personal opinion is that the country is headed for hell in a hand basket, once the oil is gone. I don’t think they have a snowball’s chance on a Sahara sand dune chance of building an economy capable of supporting the country without oil revenues.

    The Germans in my estimation may be the only people in the world who have a really good shot at maintaining an economy based on importing raw materials and exporting finished goods while maintaining a high standard of living.

    And even the Germans are going to find it extremely difficult to always be at the cutting edge, ahead of every body else, with the best quality exports in the newest fields. Their may have lost their bet already on renewables, not domestically, but as exporters. The Chinese may not be as efficient, or skilled in engineering,etc, but cheap labor is cheap labor, and even engineers are dirt cheap in places like China.

    I just can’t see the Saudis as exporters of anything other than petroleum products, and they will have to hire out the design and construction of refineries. A few of them might actually be willing to learn how to supervise the operation of a refinery once it is built.Spoiled children are spoiled children, any way you slice it and dice it.

    In a very real sense of the idea, globalization is a race to the bottom, whereby countries that have a big advantage in technology and well trained workers, etc, give it up for short term gains that wind up almost exclusively in the bank accounts of the one percent. All the cheap Chinese junk in Mallwart will never save us even ten percent of what it is costing us in terms of the destruction of our working class and our industrial base.

    Young men and women who didn’t do well in school used to find jobs that paid enough in manufacturing industries to support themselves and kids.And it’s not just unskilled labor jobs that can be sent overseas. I have a hard time talking to the customer service people who answer the phone nine times out of ten these days. I know of programmers who have lost jobs to programmers who work for less than minimum wage in this country. X ray images are being sent out of the country, with the interpretation thereof being returned via the internet.

    Now of course the evolution of the economy is destroying manufacturing jobs everywhere, but that is no reason at ALL to destroy the livelihood of our own manufacturing workers any SOONER than necessary.

    • islandboy says:

      Something strange is happening in the land of Saud. Some sort of power struggle perhaps?

      Saudia Arabia: New energy minister slashes solar targets

      While the Middle East Solar Industry Association is not yet panicking, Saudia Arabia’s Energy Minister has said the country’s 2040 renewable energy target has been scaled back from 50% to 10%. A 50% renewable goal would result in some 41 GW of solar being added in Saudia Arabia by 2040.

      Bloomberg reports that Energy Minister Khalid Al-Falih said the kingdom will reduce its renewable ambitions, instead focusing on a vast expansion of gas-fired generation and production

      • texas tea says:

        maybe they sent someone to study a course in objective reasoning😊

        • Dennis Coyne says:

          Hi Texas Tea,

          I think the course may have been in cornucopian thinking. So the Saudis are going to import natural gas after 2035?

          They only have proved reserves of 8.3 trillion cubic meters and they presently produce 106.4 billion cubic meters(BCM) per year. Since 1986 they have had exponential growth in natural gas output of 4.89%/year.

          If we assume that growth rate in output continues and the reported proved reserves are correct, they are likely to peak by 2034 or earlier unless 2P reserves are much higher than proved reserves.

          If we assume the exponential growth in output of 4.89%/year continues until 2035 and then output is maintained at the 2035 level until 2050 (unlikely, but a typical optimistic assumption) then cumulative output is 9790 BCM from 1970 to 2050.

          Even if we assume 2P reserves are 1.7 times reported proved reserves (about 14,000 BCM) and the peak is roughly at the 50% mark of 2P reserves plus cumulative output (1890 BCM+ 14,000 BCM= 15890 BCM) that occurs at about 7950 BCM in 2044.

          So bottom line 10% renewable output in 2050 will leave them short on energy unless they want to burn oil instead of exporting it.

          • They’ll need to build six nuclear power plants. Lots of plutonium will be available for Saudi spaceships.

            • Dennis Coyne says:

              Hi Fernando,

              My guess is that solar would be cheaper than nuclear, the solar resource is fairly good in Saudi Arabia. 🙂 Some wind power might also make sense, though I don’t know about their wind resource.

      • Survivalist says:

        There is plenty happening in Saudi Arabia. A big uptick in domestic terrorism.


        I believe the pillars of the House of Saud are starting to crack. Unity among the leadership is fractured, energy revenues are compromised and its relationship with the religious establishment is no doubt complicated by the kingdoms decision to fight ISIS, a puritanical bunch with roots in Wahhabism.

  13. Ralph says:

    The main exports from Germany are

    motor vehicles, machinery, chemicals, computer and electronic products, electrical equipment, pharmaceuticals, metals, transport equipment, foodstuffs, textiles, rubber and plastic products

    and a very high percentage of those are either made of oil/NG or use oil as fuel. They are market leaders in wind turbines and catching up with EVs, but they have a long way to go. A lot of their exports will suffer from declining demand or unavailable raw materials.

    • Oldfarmermac says:

      Precisely. Even the Germans are going to have a very tough time importing raw materials. Suppose the Saudis do manage to establish a petrochemicals industry, and support it by preferentially selling that industry the oil it needs at less than the going price?

      And world wide demand is going to suffer everywhere, as most or all countries do what they can to keep the money and the jobs at home.

      One reason I support renewable industry is that renewables will enable us to keep a lot of the money home we currently spend on imported oil, while also providing domestic employment.

      The whole damned world is going to be in a desperately tough spot withing the lifetimes of some people reading this comment today, due to overshoot- growing population plus the depletion of one time gifts of nature such as oil, coal, gas, metal ores, etc, plus the loss of “free” ecosystem services currently provided by nature.

      Our only real hope of avoiding a world wide environmental and economic crash that could easily mean the end modern life depends on moving to a sustainable economy. This means keeping pedal to the metal on renewables, staying focused on efficiency, conservation, recycling, etc, and doing whatever we can to slow and reverse population growth.

      Unfortunately virtually all politicians are convinced even mentioning population control means political suicide.

      They are probably right.

      We could hit our population all time high here in the USA within three or four decades, conceivably sooner, if we were to very sharply curb immigration.This won’t happen except maybe as part of a violent political backlash later on.

      I believe a more or less sustainable economy is technically a real possibility, if we are willing to actually work at achieving it.

      But the window of opportunity is not going to remain open forever.

    • wimbi says:

      In my long years as fixit man on my dead end road, I never had any trouble with npt plumping components, but just a little while ago, something went real wrong under my living room, and my handyman went under there and found a 1/2npt elbow had CRACKED IN HALF. Took him a lot of grief to get it out and put in another one. Yes, made in china. Cheap? Hell no, VERY EXPENSIVE.

      I would have been happy to pay 4 times as much and get that little elbow from somewhere, like for example Germany, with the secure thought that it would NOT crack in half at 3 am on sunday in a tight crawl space.

      So, there’s lots of me types around, and seems to me that germany could always have a good market for anything that they could guarantee was NOT gonna crack.

      • GoneFishing says:

        A supervisor from a very heavily operated New York railroad told me the Chinese rail they bought started cracking and chipping within a few months after being laid.
        I see rail that has lasted over 50 years, some closer to 80 made in the US. In low traffic areas it can last 100 years, high traffic (30 to 40 trains a day) it can last up to 40 years. Rails on curves might have to be replaced every 5 years if there is heavy traffic.

    • Ulenspiegel says:

      “..a very high percentage of those are either made of oil/NG or use oil as fuel.”

      This misses the point. Only a small portion of the imported primary energy is used as chemical feed stock Therefore, reducing the fossil fuel demand for space heating and idustrial process heat solves the issue, i.e. electrification of these sectors is the way to go.

      BTW: Many chemicals can easily be made from coal. That is pre-WWI chemistry. 🙂

      • PonziWorld says:

        Fossil Fuels is an all-or-nothing game. With your “strategy” you won’t be able to import any fossil fuels period. You will simply be cut out of the chain entirely.

        Because “renewables” isn’t organic growth…its an accounting scam and a religion directed towards a bunch of university idiots trained in using powerpoint and excel.

        There is no such thing as “a little bit of fossil fuels” economy. How do you secure other basic raw materials with “a little bit of fossil fuels” economy? And the dirt you call quality coal in Germany is the reason manufacturing was transferred to China in the first place.

        • Ulenspiegel says:


          you are too stupid to get the basics straight. Please spare me with your comments in fututre. OK?

        • Heinrich Leopold says:


          Thanks for your comments and please keep posting.

          Germany cuts already subsidies for wind and solar, which are close to Euro 20bn per year. Renewables cannot exist without fossil fuels as they need massive back up capacity from natgas.

          Although the share of coal has been massively reduced in the US electricity generation mix, the natgas share has increased more than the share for renewables (see below chart).

          • Dennis Coyne says:

            Hi Heinrich,

            I believe you are predicting a rise in natural gas prices.

            I think eventually you will be correct.

            When natural gas prices rise the share of renewables will increase, not that the share of “renewables excluding solar” has almost tripled (2.5% to 7% or 2.8 times) in the 10 years covered by your chart. The higher the share of renewables the more widely dispersed and interconnected wind and solar can back themselves up.

            Also note that other forms of energy receive subsidies such as reduced insurance costs for nuclear(Price-Anderson Act in US), a free interstate highway network provided for the oil industry, and the coal industry gets the free health care coverage from Medicare (coal pollution results in high social health care costs).

          • Oldfarmermac says:

            Hi, Heinrich,

            I believe Germans earn at least ten billion and probably substantially more,probably fifteen billion, as wages and salaries working in their renewables industries, as well as avoiding spending billions more in avoided purchases of imported fossil fuels.

            Germany earns many billions more exporting machinery and services associated with the renewables industries.

            The renewables industries themselves pay substantial taxes into the national treasury.

            Do you believe fossil fuels will always be cheap and readily available?

            Do you ACTUALLY understand that fossil fuels come out of holes in the ground, and that they DON’T grow back like potatoes, and that the remaining one time gift of nature fossil fuel endowment is shrinking faster than ever as the population grows?

            Do you understand that one of the VERY MOST IMPORTANT reasons that Hitler started WWII was to sieze natural resources such as oil which Germany lacked then, and still lacks today?

            Do you think the Russians have forgotten WWII, or that the Chinese will be any more peaceable than is convenient and necessary as their economic and military power grows ?

            Has it ever occurred to you that Germany is making a huge bet on being at the forefront of the renewables industries for the next couple of decades or maybe the next couple of generations just as they have been at the forefront in automobiles and other machinery for the last couple of generations?

            Now as it happens, subsidies are not generally intended to last forever, and the idea when it comes to renewables has been to subsidize them so as to enable them to grow as fast as possible, so the German nation and the rest of the world can cut back on fossil fuels as soon as possible?

            I am hoping to hear what you think about these questions.

            If you have no more to say than that German is cutting some subsidies, and that this proves fossil fuels are better, then I must conclude you either don’t think much about the big picture, or else that you are opposed to renewables for some particular reason, such as maybe having money in the coal or gas industries ?

  14. Oldfarmermac says:

    “A lot of their exports will suffer from declining demand or unavailable raw materials.”

    Precisely. The oil exporters are moving to domestic processing of their oil, and will provide it preferentially to domestic industry thus keeping the money and the jobs at home.

    As resource shortages get worse, and they WILL get worse, more and more countries are going to do more and more to keep money at home and provide jobs at home.

    My personal opinion is that the leading thinkers in Germany understand that staying on top long term requires always being a generation ahead technically and in human terms as well. Maybe they will succeed for a while longer yet. They are doing more to free themselves of the need to import fossil fuels than any other country in the world, excepting a couple of small ones with super wind and or hydro resources.

    If it weren’t for resource constraints and environmental destruction, the world economy COULD continue to grow for a long time. Unfortunately, fossil fuels, metal and mineral ores, etc, don’t grow back like trees and potatoes.

    It’s an open question how much longer growth can continue. My personal guess is that the hard physical limits imposed by shortages of physical resources will force an end to growth within the lifetimes of younger people who read this comment.

    • wimbi says:

      I can’t believe that nobody says the obvious


      True? Yes. So that being a given, why in hell don’t people say that every time ff supply comes up, and instead keep arguing that we gotta somehow go get MORE. Not less.

      I am living in a madhouse.

      • GoneFishing says:

        Wimbi, I am with you totally. However, I think the only way out of this is for the human race to evolve. The current version just doesn’t cut it and can apparently ignore the direst of warnings.
        Apparently a large amount of humanity will neutralize and divert efforts to change civilization. Seems like we are self-stabilizing.
        Not a good thing when fast change is demanded.

        We have met the enemy and it is us, so party on.

      • clueless says:

        Cut out ff supply and you will soon find out what truly living in a madhouse is like.

        • Nick G says:


          If you weigh 300 pounds, you can’t just stop eating.

          It’s certainly good for you to cut out the junk food, and cut your overall intake a great deal.

        • wimbi says:

          Been there, done that. Those african and bangladesh villages used almost no ff’s and were NOT AT ALL madhouses. their people were just fine until nature gave them a whack, and they recovered well from that too.

        • GoneFishing says:

          I look at what we are doing right now and it looks like a madhouse to me.

          • Fred Magyar says:

            GF, that picture is photoshoped…

            • GoneFishing says:

              You get the point, I hope.

              • PonziWorld says:

                And the alternative is?

                Margaret Thatcher: “TINA”.

                Hydrogen Economy = Hydrogen Hoax
                Decarbonisation = Degrowth
                Biology Economy = The Pursuit of Immortality which is impossible in humanities present form. It would require engineering a new organ and the reality that development could never reach adult stage…a planet full of 13 year olds who stayed in that puberty-adult balancing act forever. In other words, the existing “healthcare” racket is a fossil fuel economy killer, …its producing tons of old folks who sucking up resources.

    • Stavros Hadjiyiannis says:

      In matter of fact, Germany is ending its mightily expensive state subsidies for windfarms this year. The losses incurred by EU economies on subsidizing so called “renewables” have been more than considerable and are one of the two main reasons why the EU has been the global lagard when it comes to economic growth in the last 10 years or so.

      • Oldfarmermac says:

        “In matter of fact, Germany is ending its mightily expensive state subsidies for windfarms this year”

        This is bullshit so far as I can see.

        Everything I can find relating to the Germans and renewable energy indicates they plan on continued large scale investment in renewable energy, including more wind farms.

        Germany has almost four hundred thousand people employed in the renewables industries, and earns many billions of euros annually by exporting goods manufactured by the industry, as well as saving many billions of euros annually on the cost of imported fossil fuels.

        There may be some cuts made to the existing wind energy subsidy budget.

        Neither the Germans nor the Russians have forgotten the Siege of Stalingrad.

        I suppose you do know that oil, gas, and coal come out of holes in the ground, and that they DON’T grow back like potatoes.

        It is possible to find some articles similar to this one.

        About Thomson Reuters
        German govt proposes lower cut to wind energy support-draft
        Fri May 27, 2016 9:40am GMT

        Print | Single Page
        [-] Text [+]

        BERLIN May 27 (Reuters) – The German government has proposed reducing support for new onshore wind turbines by 5 percent from April 2017, according to a draft proposal for a meeting on renewable energy between the federal government and Germany’s 16 states next week.

        The measure, which is aimed at slowing down the construction of onshore wind turbines, is lower than an originally planned cut of 7.5 percent, the draft seen by Reuters on Friday shows.

        It also proposes limiting the amount of solar power to be tendered annually to 600 megawatts from next year. The paper does not include any suggestion for the amount of new built onshore wind.

        The document, which has been re-worked following several meetings with representatives from Germany’s states, also suggests limiting the amount of new renewable energy in areas of Germany where there are bottlenecks in the grid.

        Chancellor Angela Merkel and the 16 states are due to discuss the proposal on May 31. (Reporting by Markus Wacket; Writing by Caroline Copley; Editing by Joseph Nasr)

        This is a LONG way from “ending its mightily expensive subsidies” for wind farms.

        The Germans plan on continuing to build new wind farms and solar farms, which will enable them to continue to live far better than most people in this world, especially in coming years as the prices and availability of gas and coal get to be real problems.

        Wind and sun DON’T deplete.

        • PonziWorld says:

          Wind and sun DON’T compete

          They produce bike paths occupied by Excel Pseudos and their mutts.

          These idiots are convinced the Goldman Sachs Fake Money Machine is going to take care of them.

      • Fred Magyar says:

        Oh yeah! I’m sure the future is going to be 100% fossil fuel based for ever and ever!

        Anyone working on a non fossil fuel based energy source should be put away in some insane asylum.

        While the European economy has more than its fair share of problems, subsidies to alternative energy generation aren’t the root cause of those problems.

      • Ulenspiegel says:

        “In matter of fact, Germany is ending its mightily expensive state subsidies for windfarms this year. ”

        OMG. Are you really so clueless?

  15. Revi says:

    I think growth is over already. There might be a few places and industries that are still growing, but the overall trend is now downward.

    • Dennis Coyne says:

      Hi Revi,

      If one uses Real GDP (inflation adjusted dollars) as a measure of growth, the only year the World has seen negative growth since 1960 is 2009. Maybe 2016 will see real GDP, but the World Bank expects about 2.4% growth in World GDP, most of this growth is in non-OECD nations. For the OECD growth has been very slow since the GFC.

  16. Duncan Idaho says:

    Daily CO2

    June 7, 2016: 407.55 ppm

    June 7, 2015: 403.39 ppm

  17. Pingback: EIA Short Term Energy Outlook | Energy News

  18. Dennis Coyne says:

    Hi all,

    The BP 2016 Statistics are out:


    I did a chart of World Petroleum liquids consumption from 1985 to 2015. I used the data in metric tonnes per year and converted to Millions of barrels of oil equivalent per day (Mboe/d) using 7.33 barrels per metric tonne. For the past 30 years consumption has increased by about 1 Mb/d each year on average.

    • Dennis Coyne says:

      Similar chart for World Natural gas from 1995 to 2015. An average increase of about 1.3 Mboe/d each year on average over that 20 year period.

    • Dennis Coyne says:

      Another chart using BP 2016 data for coal. There seems to be a 2014 peak in coal consumption, but even I am not optimistic enough to think that this temporary peak will not be surpassed, we can hope I am wrong as coal is the worst possible energy source for the environment.

      • Nathanael says:

        I am optimistic enough to think that 2014 might be a peak for coal. China is ordering coal plants shut, ordering utilities to operate solar & wind in preference to coal, closing coal mines… you know what’s happening in the US, with all the coal mining companies bankrupt and coal plants closing left and right… India has declared an end to importing coal and their energy minister says that wind and solar are cheaper than coal… Australia’s coal mining companies are losing money…

        Demand for coal is crashing through the floor even while prices at the minehead are very low. This is the sign of the final death knell for the industry. (In the case of coal, it helps that transportation costs are extremely high, so there’s always a large ‘wedge’ between price at the minehead and price at the power plant.)

        We are nowhere near this point with oil and gas. You’ll know we’re there when record-low prices *do not* cause a rise in demand, and demand keeps dropping despite record-low prices.

        • Oldfarmermac says:

          People – human beings, the species- are NOT going to evolve in any significant fashion in short order, in terms of our behavior. Evolution doesn’t work that way. Over the last few thousand years, we have evolved in such a way that our in groups have been getting larger and larger, until now we live in nation states.

          Nation states are not much smarter than tribal bands, but once a nation state has its back to a wall, it can and occasionally does undertake some pretty dramatic actions to guarantee its own continued existence.

          Some nation states such as Germany and China are making a real effort to wean themselves off imported fossil fuels as fast as they can without causing too many short term economic problems.

          Other nations will be doing the same later on, with the real question being whether they get started soon enough, and work at it hard enough, to succeed in transitioning to renewable energy.

          Now so far as fossil fuels are concerned, I am sure Wimbi and just about every body else agrees with me when I say business as usual MUST continue short term in order for us to successfully succeed in transitioning to a sustainable economy and culture.

          With good luck, the available supply of fossil fuels will increase in price at a moderate pace even as the quantities marketed decrease at a moderate pace.

          If the cards fall this way, then the MIGHTY MIGHTY MARKET and the ( near ) INVINCIBLE INVISIBLE HAND may indeed allow us to adapt successfully, allow us to transition to a NEW generation of business as usual, where by we use MUCH less energy per capita, and much less of the one time gifts of nature per capita, with a declining population, and with an ever large share of the energy supplied by renewables such as wind and solar.

          If fossil fuels run really short, resulting in a hard crash of the current day industrial economy for this reason, or any other reason, then there WILL BE NO TRANSITION.

          What WILL BE is so horrible just thinking about it is enough to drive you crazy. Start with mass migration of people, uncontrollable except by barded wire and machine gun. So far it’s only barbed wire, but how much longer will it be before it’s also machine guns?

          We do absolutely need to be doing everything possible to adapt NOW to a new way of life. Wimbi and Caelan are dead right about this. Incidentally I only raise hell with Caelan because he insists on only talking about solutions I see as impossibilities.

          Real solutions can only exist when there is a viable path from the here and now reality to the desired new reality.

          The human caterpillar is not going to sew itself up in a cocoon this autumn and emerge as a butterfly next spring.

          We need to be talking about anything and everything that can or might be done that will result in incremental change in the right direction.

          ONE thing that could be done, for instance, is to educate the people of the world concerning the troubles brought on by eating fast foods, rather than simpler , healthier, foods cooked at home.

          Business as usual will certainly kill us in the long run, but a lack of business as usual is equally certain to kill us in the short run.

          Somehow we must convince ourselves that our only hope is to work like hell on renewables, conservation, efficiency, and reducing and then eliminating population growth, and then ACTUALLY WORK on these things.

          If the cards fall right, some of our grandchildren will live pretty decent lives using hardly any fossil fuel at all. SOME of them.

          • GoneFishing says:

            Old Farmer said
            People – human beings, the species- are NOT going to evolve in any significant fashion in short order, in terms of our behavior. Evolution doesn’t work that way.

            Look around, humans are already diverging both physically and mentally. Evolution is always at work, it doesn’t usually happen suddenly in large steps. What happens is the changes are already started and then an environmental selection process occurs favoring one type over the other.

            Most animals have a very narrow set of physical and mental characteristics. Humans have a very broad set of mental and physical characteristics, allowing for adaptation to a wide variety of changing conditions and tasks.
            Once humans realize a subgroup of other humans is a threat, they eradicate them or damage them so heavily that they are no longer effective.

          • Fred Magyar says:

            OFM, while humans are most definitely not going to evolve biologically in the near future. That having been said cultural evolution can occur at blinding speeds.

            • While biological evolution must, by definition, take many generations, of course cultural change does not. But can cultural change be defined as a type of evolution? I would say not.

              The cell phone revolution took only a very few years. But was that evolution? I would say you are stretching the definition of sudden cultural change to the limit by calling it evolution.

              If something happens “at blinding speed” then it is a revolution, not evolution.

              evolution – noun
              any process of formation or growth; development:
              the evolution of a language; the evolution of the airplane.
              a product of such development; something evolved :
              The exploration of space is the evolution of decades of research.
              Biology. change in the gene pool of a population from generation to generation by such processes as mutation, natural selection, and genetic drift.
              a process of gradual, peaceful, progressive change or development, as in social or economic structure or institutions.

              I would say definition #4 fits the subject we are discussing here.

              • Fred Magyar says:

                Yeah, I’m quite familiar with the definition of biological evolution and agree that the definition of cultural evolution might still be somewhat controversial.


                Progress, Memes, and Cultural Evolution
                Peter Turchin is a professor of Biology and Anthropology in the University of Connecticut and Vice President of the Evolution Institute |

                Equating evolutionism with fixed stages is a very puzzling approach for evolutionary scientists, like me, whose training was in biological evolution. Biologists have long ago converged on a standard definition of biological evolution. Simply enough, it’s the study of how and why frequencies of genes change with time. This definition doesn’t imply that there has to be any kind of progress. ‘Progress’ (however defined) may result from changes in genetic frequencies, but it is equally possible to have regress, or long periods of stasis. Paleontological data show that different lineages in the animal and plant kingdoms can follow all kinds of evolutionary trajectories.

                Similarly, nothing prevents us from defining cultural evolution as the study of how and why the frequencies of cultural traits change with time. Whether there is progress, or whether societies pass through defined stages becomes an empirical question.

                Also relevant to this discussion is the work of Neuro Archaeologist Lambros Malaforis

                How Things Shape The Mind
                Malafouris Lambros
                How Things Shape the Mind
                MIT Press 2013


                Lot’s of dot’s still need connecting…

            • GoneFishing says:

              Fred, the new science of epigenetics shows us that our genetic code expression is constantly changing depending upon internal and external occurrences. Some of these changes are inheritable. So even though the basic code is not changing, the information transmitted by the code changes in a short time period.
              Biological evolution is actually changing much faster than was originally thought, since the transfer of information changes dynamically during a lifetime.

              • GoneFishing, gene expression is just that, gene expression. That is what genes do and what they have always done. You cannot separate the gene from its expression. They are not two different things.

                Genes are heritable. Which also says that how genes express themselves is also heritable. It’s the same thing. Biologists have known this for decades. This is nothing new.

                Biological evolution is actually changing much faster than was originally thought, since the transfer of information changes dynamically during a lifetime.

                That sentence makes no sense at all. Characteristics that occur, after birth, are not heritable. Learned behavior is not heritable.

                • GoneFishing says:

                  “Transgenerational epigenetic inheritance is the transmittance of information from one generation of an organism to the next (e.g., parent–child transmittance) that affects the traits of offspring without alteration of the primary structure of DNA (i.e., the sequence of nucleotides).[1][2] The less precise term “epigenetic inheritance” may be used to describe both cell–cell and organism–organism information transfer. Although these two levels of epigenetic inheritance are equivalent in unicellular organisms, they may have distinct mechanisms and evolutionary distinctions in multicellular organisms.”

                  Ok, lets move on from epigenetics. It’s a new area with many questions still to be answered.

                  Ten mutations per zygote in primates. http://www.ncbi.nlm.nih.gov/pubmed/8444142

                  Humans are subject to an increasing number of chemical mutagens, so the mutation rate should be much higher.

                  “Without a reduction in the germline transmission of deleterious mutations, the mean phenotypes of the residents of industrialized nations are likely to be rather different in just two or three centuries, with significant incapacitation at the morphological, physiological, and neurobiological levels. Ironically, the genetic future of mankind may reside predominantly in the gene pools of the least industrialized segments of society.”

                  So what happens if most of the world becomes industrialized? We are not talking 1000 generations here, just 20 or 30. We have already several generations subject to chemical mutagens and a broad range of human produced physical mutagens.

                  • Ok, lets move on from epigenetics. It’s a new area with many questions still to be answered.

                    Well you got that right. Bottom line, learned characteristics are not heritable. There is almost universal acceptance by biologists on that front. And nothing in any of the links you posted implied that it was.


                    These alterations may or may not be heritable, although the use of the term “epigenetic” to describe processes that are not heritable is controversial.

                    Your last link, the PNAS link, was spot on. It had nothing to do with the inheritance of learned characteristics however.

            • Oldfarmermac says:

              Hi Fred, I agree, cultural evolution can occur so fast it leaves us years behind in even figuring out what is happening sometimes.

              I was a little hasty and meant my comment to apply to physical evolution. That’s a relatively slow process, in terms of the way we interact with our environment.

              It’s true that minor physical changes can come about pretty fast. If for instance the people in a certain area found themselves entirely or mostly dependent on milk for sustenance, anybody who couldn’t digest it would exit the gene pool pretty quick. Not so funny but true. Folks who are really susceptible to skin cancer won’t reproduce as well in tropical environments as other people, and would gradually lose out, everything else equal.

              This is unquestionably real physical evolution, but it doesn’t amount to much in terms of the big picture over the life of a single generation or a couple of generations.

              We are not yet really WELL ADAPTED to a diet consisting of the sort of stuff produced by farmers for the last few thousand years. I spend a lot of time reading about nutrition, and mostly I read only books written by professors of medicine who research this field at leading universities.

              A rather large percentage of the health problems we experience, especially as we get older, are just about unquestionably the result of our not being well adapted to the diet we were eating even a century ago, before highly processed food became a problem.

              This is not to say that even a straight fast food diet isn’t superior to a starvation diet, lol.

              • Hi Fred, I agree, cultural evolution can occur so fast it leaves us years behind in even figuring out what is happening sometimes.

                No, it cannot. The term “evolution” implies very slow and deliberate change. If it occurs fast it is not evolution. It is, by definition, revolution.

                In society we have both cultural evolution and cultural revolution. Let us not confuse the two.

                • Dennis Coyne says:

                  Hi Ron,

                  Where is the dividing line? When does evolution become revolution? 100 years? Seems any such choice would be arbitrary. There is a lot of room between 10 years and 10,000 years. Maybe 1000 years? 500?

                  • Really Dennis, it’s not all that difficult. If it happens very slow, over a long period of time, depending on exactly what cultural change you are talking about, it is evolution. If it happens in only a few years, it is revolution, or just change, neither revolutionary change or evolutionary change.

                    Evolution, by definition, means change over time. If there is very little time involved, then it is not evolution. It is as simple as that. Evolution goes step by step by step. If it happens in one fell swoop, then it is not evolution.

                    Cultural change can happen with remarkable swiftness. Evolution cannot. Evolution is change over time. If little or no time is involved, then it for damn sure, is not evolution.

                    I realize it is a matter of semantics. But dammit, we should be more careful with our semantics, else we bastardize the language. Take the word “literal”. That words means we are not speaking metaphorically, but instead are speaking “literally”. But sometimes people use the word “literal” as a metaphor. How stupid. Speaking of a tennis match one might say: “He literally blew him off the court.” Well what did he use to literally blow him off the court, a huge fan or something?

                    We should not bastardize the language. If you use the word “evolve” you should mean something that did evolve, something that had change over time. If there was little or no time involved, then goddammit, it was not evolution.

                  • Dennis Coyne says:

                    Hi Ron,

                    My question was not really answered. Define long time. Just your opinion for when it is long enough to be evolution rather than revolution, yes it is simple. But you are the one looking for precision, but long and short are not that precise in my view.

                • Oldfarmermac says:

                  Hi Ron,
                  You make a good case, as you usually do, for defining terms narrowly and strictly.

                  I get your point, and don’t want to dispute it, but the world is passing old guys like us by fast, and the term revolution is quite often used to describe fast social change.

                  And as some other folk commenters have pointed out, sometimes changes in our genome can occur pretty fast. If for instance you were to be allergic to milk, you wouldn’t do so well in a society dependent on milk as the primary staple food. The folks who first evolved the combination of genes enabling them to digest milk won out in that situation.

                  Some people are born immune to some contagious diseases, and their kids would do better and eventually come to dominate a location where such a disease prevails. This is why black people can better survive in malarial climates. Malaria is a lesser problem for them than white bread like me and mine.

                  But evolving a foot better suited to walking upright than climbing trees probably took a full million years and the design of our feet still leaves something to be desired.

                  After the best part of ten thousand years, we are not yet fully adapted to living on farmed foods. A lot of us still get sick as the result of eating a modern diet, even one that is close to optimal according to the conventional nutritional wisdom.

                  Dennis has made another point we should remember. Whether a change is major or minor, whether a time frame is long or short, is a value judgement and depends on the pov of the person making the decision.

                  • Good grief Mac, it is not that complicated. Lactose tolerance took many generations to evolve, likely more than one hundred generations, more likely two or three hundred generations. It had to start a few thousand years ago when people first started drinking milk from goats and cows. That had to be at least four thousand years ago. There is even reference in the the Old Testament to “milch” cows.

                    The term “evolution”, by definition, means something that takes many years to “evolve”. If it takes place over a very few years then it sure as hell didn’t evolve, it just happened. The use of cell phones did not evolve, it happened almost overnight, relatively speaking of course.

    • Dennis Coyne says:

      Again from BP, World Fossil fuel consumption using millions of tonnes of oil equivalent converted to Mboe/d at 7.33 b/tonne. A peak in 2014, not likely to hold in my view, but it depends on too many factors to predict.

      A mistake was made on this chart, sorry.

      Corrected chart down thread.

      • GoneFishing says:

        World increase use of fossil fuels appears to directly correlate with population growth. So efficiency gain is merely canceling increases in demand up to this point.

        • Dennis Coyne says:

          Hi Gone fishing,

          Population and/or GDP seem to correlate with fossil fuel consumption, but the slope seems to change over time, the chart below has fossil fuels on the vertical axis and population on the horizontal axis, I used the average of the medium and low fertility UN scenarios from 2011 to 2015 for population and BP fossil fuel consumption in Millions of tonnes of oil equivalent (2016 report).

          I agree the efficiency of fossil fuel use has varied over time, the steep part of the curve is 2000 to 2008 (7500 Mtoe to 9100 Mtoe).

      • Hickory says:

        Dennis it would be very instructive to see global GDP on that graph as well.
        Thanks if possible.

        • Dennis Coyne says:

          Hi Hickory,

          I have two different data sets for Global GDP one from the IMF going from 1980 to 2015 and another from the World Bank from 1960 to 2014. I will use the IMF data so there is not a break and I will index the data so that 1985 for both fossil fuels and GDP is 100.

          I also included on the right axis the Real GDP/Fossil fuels (using the indexed data plotted on the left vertical axis) this is similar to the reciprocal of the fossil fuel energy intensity indexed to 1985. Energy intensity has decreased over this period while the reciprocal of energy intensity has increased.

          Note the rapid increase in GDP per unit fossil fuels from 1985 to 2000, there was very little increase from 2000 to 2010 and since 2010 the slope has gradually increased to the previous rate of increase.

          Whether that trend will continue is unknown, the optimistic among us may disagree with more pessimistic viewpoints.

          A possible compromise is that Real GDP per unit fossil fuels will increase at half the 1985 to 2000 rate of increase over the 2015 to 2030 period.
          Based on my estimates of future fossil fuel output that would entail a slow down in real economic growth from 37% over the next 15 years (assuming real GDP per capita grows at the 1975 to 2015 rate and population grows at the average of the low and medium UN scenarios) to 26% over the next 15 years. A growth rate in Real GDP/unit fossil fuels of 28% would be enough to keep the World on the GDP/per capita growth path from 2015 to 2030.

          • Dennis Coyne says:

            Hi Hickory,

            I made an error in the spreadsheet for fossil fuels, so the chart above is incorrect. Corrected chart below.

            • Hickory says:

              Thanks Dennis. Very interesting to see the interplay.
              I have a question for you- many people see the GDP growth since 2009 as being artificially stimulated by loose money/stimulus. To the extent that is true, does this get reflected in the Real GDP data? I’m trying to understand if the the global GDP minus current unfunded liabilities of all forms (private, corporate, government) has been really been rising so much in the past 6 years (as it would appear on the graph).
              This is important when trying to understand if the growth is self-sustaining. or just ‘artificial’.
              I think a considerable portion of the fossil fuel consumption flattening over the past 6 years is due to decreased demand growth related to tough economic times rather than just increases is efficiency.
              Anyway, thanks again.

              • Dennis Coyne says:

                Hi Hickory,

                Hard to know what is “artificial”. GDP is goods and services which have been “produced”. Have you seen a lot of “artificial” cars or homes? Have you eaten “artificial” meals?

                The World economy has grown at about 2 to 3% per year, the “hard times” are mostly in the OECD, and in failed states (much more so the latter).

                Real GDP is very far from a perfect measure, much like capitalism, it just happens to be the best we have.

                • Hickory says:

                  I guess I didn’t express myself too well.
                  What I meant by artificial was something like- “borrowed from the future instead of earned today”
                  I don’t think anyone knows how this quantitative easing will play out, how the explosion in the Feds balance sheet will be ‘normalized’, or how the rather meager growth it bought will be sustained. How will the velocity of money be restored to a healthy range?
                  In a sense, a considerable portion of the post-crisis growth has been manufactured by financial machination, rather than by traditional economic growth. And the growth has been very spotty- benefiting a smaller and smaller slice of the worlds populace. I don’t believe it is sustainable.

                  btw- I think the Fed has done a pretty good job trying to make cake out of crap. They can’t force the congress to act responsibly on budget and regulatory matters.

                  This is all just a chapter in the long book called Overshoot.

                  • Dennis Coyne says:

                    Hi Hickory,

                    As long as the debt is not overdone, it is not a problem. Borrowing is done all the time, do you own a home, did you pay cash or borrow money to but it?

                    Higher taxes on the wealthy could be used to pay down the debt, simply go back to pre 1965 income tax rates (with tax brackets adjusted for inflation), and eliminate all tax loopholes. Hire tax experts to make sure the legislation is air tight.

                    I doubt this would ever happen in the US, but in 1928 people thought the same thing.

                    A crisis can change things.

                  • Hickory says:

                    Hi Dennis,
                    My comments weren’t intended to bash all debt. I’ve got plenty of it myself.
                    Just saying that a lot of the post-crash growth is funded by a progressively thinning balance sheet,
                    which I think has big implications for growth going forward, and also impacts the demand curve for energy.
                    Treading on thin ice, so to speak.

                    I guess my original question is answered by- “No, GDP is not a balance sheet and doesn’t take into account accumulated liabilities.”
                    Will global accumulated liabilities bite into energy demand?

                  • Dennis Coyne says:

                    Hi Hickory.

                    For every liability there is a counterparty who receives interest and owns the asset on the other side of the balance sheet.

                    For the World there is a balance.

                    As long as we are not doing much interplanetary borrowing, we will be fine. 🙂

            • Now we have to take fossil fuels minus ethane production. Ethane is mostly chemical feedstock. If we were to take the amounts used to make plastics and fertilizers the actual burn rate has already peaked.

      • Dennis Coyne says:

        Sorry everyone,

        I made an error in the spreadsheet and the fossil fuels in the chart above are incorrect.
        Corrected chart below.

  19. Robert Spoley says:

    RJS. We are looking at fossil fuels only. Mistake. Methane hydrates can supply enormous amounts of methane. The technology is currently being developed by Conoco – Phillips and others. Once available, methane can be converted to super clean diesel by the Fischer – Trobst process. Sasol and Shell are leading the pack. VW’s TDS diesel engines are highly efficient and will last a very long time. This will provide the “mobile” energy required by modern societies. Thorium reactors will supply unlimited electricity for stationary use. No CO2 with that and no gamma radiation either, thus “scaleable”. China has had one up and running for some time. Norway is currently installing one as we speak. Wake Up!!.

    • Doug Leighton says:

      Re methane, you’re probably getting ahead of yourself. Apart from reaching the hydrates (at the base of ocean shelves), there’s the problem of operating at low temperatures and very high pressure AND the environmental issue of potentially destabilizing the seabed with danger of methane escape. Of course Japan has been evaluating seabed methane for years now so let’s see how that works out.



      • Oldfarmermac says:

        HI Doug,

        This article points out that importing gas has just about wiped out Japan’s trade surplus.

        Maybe they will succeed in commercializing methane hydrates. If they don’t, a hell of a lot of industry is apt to leave Japan for places with sufficient DOMESTIC gas supplies to support those industries.

        The fertilizer industry has been moving back to the USA since the price of gas went down here.

    • PonziWorld says:

      Usual gibberish once again ignoring EROEI. Robert needs to wake up.

      • likbez says:


        Still the efficiency of Fischer – Trobst process is pretty high and that gives us some hope that in the future when the shortages of fossil fuel hit the mankind hard ( let’s say in 100 years) theoretically it can be used instead storing all the energy in batteries (which I consider unrealistic). In other words it adds substantial flexibility to the path mankind can take.

        It can produce diesel using either methane directly or indirectly from hydrogen+CO2 (in this case we assume that hydrogen is obtained via electrolysis of water using wind power or nuclear power produced electricity and hydrogen and carbon dioxide react over a cobalt-based catalyst, producing methane). That makes the future of aviation and hybrid cars might brighter.

        But as somebody told here, the cost of trolley bus style electrification of all major roads in the USA is less then 100 billions (that is trolley-only cost that excludes the cost of additional electrical stations needed ) .

        This path also allows to cut the size of the battery in the passenger cars to Leaf size without major detrimental effects (assuming that the right lane is converted to “charging line” that can operate at car speeds less then say 50 miles per hour — much like is the case for subway trains) . With some automation the zones where charging happens do not need to be continues and instead can stretch only in parts of the roads where there are no exits and other obstacles. Retractable robotic arm can react dynamically on presence or absence of charging trolleys.

        100 billions is less the 1/20th of what was wasted during Iraq war (estimated total cost about two trillions http://www.reuters.com/article/us-iraq-war-anniversary-idUSBRE92D0PG20130314 ).

        In any case I would not completely discard this method as a compliment or even possible replacement of batteries technology. It might be a better path then production of ethyl alcohol from corn, sugar cane, etc.

        Mankind is very flexible and inventive, especially when this is life and death issues, so I hope some sustainable solution will be found.

        • GoneFishing says:

          I always liked trolleys, have ridden them a number of times. They make a lot of sense in dense towns and cities. Interurban trolleys were a part of the scene too, in years past. Light rail is also very effective, if one can keep up the passenger numbers. Efficiencies are very dependent upon having a good passenger load in both directions (or parking them until the rush occurs in the other direction).

          As far as batteries go, energy density is doubling every ten years. If any of the new technologies work out, energy density could quadruple very quickly.
          We can also store energy as hydrogen, then burn it to produce electricity.
          Luckily we have a large number of ways to produce and store power, so that may not be the big problem in the future.
          More likely over-population, increases in lifestyle, water shortages, climate changes and the horrifying thought of blights on our major food crops will probably be the biggest problems. Dust storms too.

          Living during a period of major inflection points gives a perspective of potential chaos. If we could get rid of the war machines, we could concentrate our resources on changing our way of life and helping the ecosystem. All of which presents great possibilities for building new economies based upon long term viability.
          We are never really safe, but that does not mean we have to continually tread upon the brink of disaster.

          The greatest thing about nature is it takes care of itself. Once given enough area and a decent start, it will run itself, which is the way it should be. Look how nature advanced back into the devastation as the glaciers retreated.
          Watch how an abandoned field just grows back into a forest if left on it’s own.

        • Bob Nickson says:

          The correct name is Fischer–Tropsch process.

  20. Longtimber says:

    Threats to the Grid. ISIS? EMP? Squirrels? Now .. Revenge of the Monkeys !
    ” A monkey has been blamed for causing a nationwide blackout in Kenya after ‘falling onto a transformer at a power station’. ” BTW any Refineries in Kenya?


  21. shallow sand says:

    Article in WSJ about shut in wells in the Bakken and various entities and individuals who are taking their first stab in the oil business by purchasing distressed Bakken production.

    Hope they have their eyes wide open, so to speak.

    Saw that Oasis sold all of its non Middle Bakken/TFS wells and acreage for $16.5 million to Samson. Not the KKR bankrupt Samson, but the Austrailian penny stock Samson.

    780 BOEPD net and over 50K of acreage, but lots of shut in wells.

    I hope everyone understands that by 2020, most of the 2014 and prior vintage Bakken and TFS wells will be just like what Oasis sold, 21,000′ well bores making under 20 bopd.

    Think we’ll stick to the ones that make 1/20th of the oil but are also 1/20th of the depth.

    There are going to be about 40,000 stripper wells in the US that have a TD in excess of 15,000′ in about 5 years. If those are economic I think we will be very happy.

    • texas tea says:

      is that “we” meant to be the you oil barrons😄, I think the Nathaniel’s and Fred’s of the world might have a different perspective, but it may also be a learning experience. For the first time in a year the light at the end of the tunnel might not be the another freakin train.🚀

      • shallow sand says:


        We means my family, as we own stuff together.

        We are hardly oil barons, more like mom, pop and the kids, etc.

        I sure agree, hope this rally isn’t a repeat of last year.

        • AlexS says:

          shallow sand,

          “hope this rally isn’t a repeat of last year.”

          I’m sure it isn’t.
          Short-term downward corrections are possible, but the general trend is upward.

          • texas tea says:

            I tend to agree, but it will not surprise me to get a soft patch in prices late summer, if it is shallow, no pun intended, we will have the episode be hide us and I would look at it as a time to add to pub co stocks. By then the production trends as highlighted in the work presented here will be very much in place. Who knows Dennis might have to adjust his trend lines on the C+C chart by that time and will need to use peak flow as the starting point.😄 Shallow you do not need to tell me, of the hundreds of thousands of people who work in oil an gas extraction the number of them “barons” would fit on one of the those new electric buses. 🚎

            • Dennis Coyne says:

              Hi texas tea,

              If we substitute Dean’s better estimate for Texas into the EIA’s US estimate (removing the EIA’s Texas estimate from the US total) and use the data from the peak in April 2015 to the most recent monthly data point of March 2016 and fit a trend line using the method of least squares we get production decreasing at an annual rate of about 200 kb/d over the most recent 12 months.

              See https://en.wikipedia.org/wiki/Least_squares

              This is the method used by a spreadsheet when a linear trend line is fit to the data.

        • AlexS says:

          John Kemp’s new article in Reuters:

          Oil market is back in balance

    • Greenbub says:

      shallow, did you see this?


      BRIEF-WPX Energy Inc prices public offering of 49.5 mln shares for total gross proceeds (before estimated expenses) of about $485 mln

      The stock went up with the dilution (?) and they plan to use the money to drill wells:
      “WPX says it plans to use the proceeds for general corporate purposes, which may include an acceleration of drilling and completion activities, bolt-on acreage acquisition, and midstream infrastructure in the Delaware Basin.”

      sorry for repost

      • shallow sand says:

        Greenbub. Yes. Saw that.

        You know that Permian, break even at $30, 30% IRR at $35. LOL!

    • Dennis Coyne says:

      Hi Shallow sand, the average Bakken (2010 to 2015) well is at 20 b/d after about 15 years.

      At the end of 2010 about 2000 wells had been completed in the ND Bakken/TF since 1951,

      2011 3,300 total wells completed since 1951
      2012 5,200
      2013 7,100
      2014 9,300
      2015 10,700

      If we assume all wells are “average” (not a good assumption) we would have the following numbers of wells reaching 20 b/d at 15 years out.

      2025 800
      2026 1300
      2027 1900
      2028 1900
      2029 2200
      2030 1400

      Between Dec 2004 and Jan 2010 there were about 1200 wells completed in the ND Bakken Three Forks and 190 wells prior to Jan 2005. The early wells from 1951 to 2008 had lower well profiles, after about 2008 well profiles became much better, note that Enno Peters data goes back only to mid 2006.

      So by 2020, most of the older wells from before 2008 (about 450 wells at most) will be producing under 20 b/d, but an average well from 2010 will be producing about 33 b/d, 2011- 36 b/d, 2012- 39 b/d, 2013- 43 b/d, and 2014- 47 b/d.

      My understanding is that a stripper well is 10 b/d or less, though perhaps the definitions have changed. The average ND Bakken/TF well gets to 10 b/d after 25 years. I have assumed exponential decline in the tail of 8%/year after 8.33 years with a hyperbolic profile fitted to the data for the first 5.5 years. The well profile could be incorrect of course, none of these multifracks have adequate data beyond 5 or 6 years. The average well at 5.5 years has an output of 50 b/d (data) and the hyperbolic profile has 38 b/d at 8.33 years.

  22. Oldfarmermac says:

    The Mighty MIGHTY MARKET and the ( near) Invincible Invisible Hand really can work economic miracles, sometimes, not every time, given time enough.

    Here is an example of incremental change that can WORK, NOW. Plug in hybrid trucks aren’t going to solve the oil depletion problem. Electric cars won’t solve it either. But they will DELAY the day of reckoning- maybe long enough for us to change our ways sufficiently to avoid an economic catastrophe.


    Twenty four miles on battery power alone is enough to cut substantially into diesel fuel consumption if a truck is running a short route. Ten years from now, fifty miles on battery power alone will probably be feasible.

    • hightrekker23 says:

      The “Invisible Fist” generally just plummets our proletarian friends.

      • Oldfarmermac says:

        I come from a proletarian background, and remain a prole at heart and politically.

        The large majority of my laboring class relatives, friends and acquaintances certainly don’t live like the “one percenters”, for damned sure, but five percent of them have achieved one percenter status starting as the kids of subsistence farmers and factory laborers. I would be a one percenter myself, no problem, if I had chosen to work on a regular basis instead of doing to suit myself six to nine months out of the year most years. Both my surviving sisters are one percenters.

        And just about all the rest are living well, except for having to work their tails off.The large majority of the ones who have “played by the rules” own their own homes, have some savings, smart phones, central heat and air, nice cars, closets full of good clothing, etc etc.

        There is a LOT to be said for capitalism, but unfortunately, times are changing, and it is getting to be harder and harder for those at the bottom to work their way up.

        If things continue as they have gone recently, upward mobility may just about cease to exist.

        Half of the people I know who live from payday till payday do so because they lack the personal determination necessary to improve their situation. The price of a deluxe tv entertainment package and a fancy phone, monthly, invested over a few decades, is enough to generate a comfortable net worth. Unfortunately most people these days seem to be like little kids who take the little candy bar today instead of waiting for the big one tomorrow.

        Anybody who can afford a new car payment can drive an older car for three decades and invest the difference and come out with a very substantial nest egg.

        That old KJB may get it ALL WRONG when it comes to science, but most people in modern western societies who play by the rules laid out in it have a very good chance at living quite well, long term. It’s chock full of good rules such as live modestly, work hard, turn away from strong drink, don’t fxxx around and catch a social disease, etc..

        • GoneFishing says:

          You are so right Old Farmer. Certain types of debt can be very helpful, if well managed. In general, debt is toxic for the individual or family. Living well below your means is the best way. Always having a big safety cushion for hard times will help a lot.
          A good pair of earplugs is the best investment ever. Keeps you from hearing the whining from the kids about not having all the junk the other kids have. 🙂

  23. Oldfarmermac says:

    Everybody interested in the long term should take a look at this.


  24. Toolpush says:

    Some interesting DUC numbers from Bentekenergy.com for the Marcelus. 2010 current, down 700 since Oct last year. The question remains, at what price and stock of DUCs, is required for the producers start drilling again.

    Northeast rig count continues downward march
    Tuesday, June 07, 2016 – 5:45 AM
    Active rigs in the Northeast have, yet again, hit another all-time low at 30 rigs for the week-ending June 3, down by 66% over the past year and by two rigs over the past week. Rigs have been on a precipitous slide since a recent peak of 144 during the first week of August 2014, declining by about 1.2 rigs per week. Producers Chesapeake Energy, Consol Gas, EQT, Range Resources, and Ascent Resources have accounted for half of the total drop since the August peak, with Chesapeake and Consol reporting zero rigs in the most recent data. Bentek is currently tracking 2,010 wells in inventory for March, down by nearly 700 wells since the October 2015 high and has helped production stay afloat as active rigs dwindle across the region. The wells in inventory will help offset the 0.8-1.0 Bcf/d first month-on-month decline from existing producing wells and if assuming drilling remains flat.

    • Coffeeguyzz says:

      Yesterday, the USGS released its latest estimate of the gas in the Piceance.
      Number has increased from 1 1/2 Tcf to 66 Tcf.
      Should be interesting to see both the Marcellus’ and Utica numbers when they get updated.

  25. Watcher says:

    Ya the new BP stats mazamascience is based on are out.

    The primary ones of importance:

    Chinese oil consumption increase of 770K bpd (5.6% over 2014).
    Let’s give the number its own line:

    11.9 mbpd

    This will have to be stopped by force and soon.

    India consumption rose 310K bpd or 8ish% and now exceeds Japan as 3rd largest consumer. Their time will come after China’s consumption suppression attacks.

    US growth in consumption: 1.6% 19.4 mbpd What’s that? Yes, growth. Not decline. Growth.

    Note, sports fans, this was all 2015 increases in global consumption, which of course drove the price down.

    Jet fuel/kerosene consumption grew 3.5% way above 10 yr avg. Diesel grew 1.2%.

    Grow Grow Grow. Consumption up. And if you believe storage grew, that means demand was up even more (and note it also means demand does not equal consumption, unless you want to contort storage to mean consumption. I’m sure walkers of the line will want to.)

    All the solar silliness strewn all over the report in text can be seen past if you simply download the oil xls.

    • Doug Leighton says:



      Following record-high temperatures and melting records that affected northwest Greenland in summer 2015, a new study provides the first evidence linking melting in Greenland to the anticipated effects of a phenomenon known as Artic amplification.


      • Doug Leighton says:

        “Arctic amplification, in the simplest terms, is the faster warming of the Arctic compared to the rest of the Northern Hemisphere as sea ice disappears. It is fueled by a feedback loop: rising global temperatures are melting Arctic sea ice, leaving dark open water that absorbs more solar radiation, and that warms the Arctic even more.”

        • Doug Leighton says:

          “What will ice-free Arctic summers bring?”

          Well I’d say more bugs: especially those blood sucking mosquitoes & and even more aggressive black flies.

          • Watcher says:

            I got dibs on Costner’s catamaran.

          • GoneFishing says:

            Heat is the right answer, the black flies only reduce the albedo further. 🙂
            Earlier snow and ice loss in the Arctic regions cause a huge swing in albedo and reflected radiation.
            Records at Barrow Alaska show a very rapid decrease on reflected shortwave radiation in early June when the snow melts. The change is about minus 200 w/m2, about 0.8 to 0.2 albedo.
            So just at the time when solar irradiance is reaching maximum, the albedo of the region does an inverse square wave shape until late September when the snow starts again.
            Due to atmospherics, the real change in overall forcing will be about 10 percent of that, meaning an anomaly of about 20 w/m2 due to snow cover loss. 20 w/m2 is about 8 times the effect of radiation forcing globally, which is why the Arctic regions are so sensitive to ice and snow losses. Just a change of few weeks in snow melt or an increase in open water causes significant changes in radiation forcing in the arctic and subarctic regions.

    • JN2 says:

      Solar silliness? Solar grew 28% in 2015, with a 5 year CAGR of 42% (doubling every two years). Another 6 doublings and solar will be 100% of global electricity.

      • Yes, you have just given a perfect example of solar silliness.

        • Oldfarmermac says:

          Solar can probably continue to grow in a country such as the USA fast enough to double every two or three years until it provides five or ten percent of our electricity.

          After that the growth rate will probably fall off quite a bit, but if the cost of solar keeps falling, and the political cards fall right, we may be getting twenty or more of our electricity from solar within a couple of decades.

        • Hickory says:

          Here is some more ‘solar silliness” for you (sarcasm intended)

          In the biggest state of the USA, yesterday was fairly typical summer day. Renewable s generated 24.6% of the states electrical consumption.
          Photovoltaic was the single biggest component of that supply.

          • Nick G says:

            That’s a beautiful example of the inverse correlation of wind and solar.

            It’s not perfect, but it substantially reduces the variance (“intermittency”) of the system.

          • AlexS says:

            It is interesting that growth in “new” renewables in California is offset by the decline in hydro

            As a percentage of total

            *Includes biomass, geothermal, nuclear, large hydro, small hydro, solar PV, solar thermal and wind.
            Sources: California Energy Commission

            • AlexS says:


            • Hickory says:

              California Hydro, along with the rest of the western hydro production is rather variable, depending on the rainfall/snowpack of the year. The drop in hydro from 2011 to 2015 is due entirely to a long drought.
              Unlike much of the eastern USA, the western precip varies widely year to year.
              On a yearly basis, wind and PV is much more stable/predictable.
              N Gas plants make a great compliment to these variable sources.

      • AlexS says:

        Solar is growing at very high annual rates, but still represents less than 0.44% of total global primary energy consumption.

        Solar as % of total primary energy consumption

        • AlexS says:

          Growth rates are decelerating due to higher base effect

          Annual growth in global solar energy consumption (%)

          • islandboy says:

            U.S. solar PV market on track for a record-breaking year; 14.5 GW to be added in 2016

            In the first quarter of 2016, 1,665 megawatts (MW) of solar PV were installed in the United States with the solar industry adding more new capacity during this period than coal, natural gas and nuclear combined.

            According to GTM Research and the Solar Energy Industries Association’s (SEIA) “U.S. Solar Market Insight, Q2, 2016“, the 1,665 MW accounted for 64 percent of all new electric generating capacity brought on-line in the first quarter of the year.

            This growth builds off the momentum of a record 2015, in which solar exceeded natural gas capacity additions on an annual basis for the first time ever. The report also says that this year the solar industry will install an unprecedented 14.5 gigawatts (GW) of capacity, a 94 percent jump over the 7.5 GW in capacity installed in 2015.

            Another source has the same story with a different headline:

            Solar dominates new U.S. power generation in Q1 2016

            The U.S. solar market got off to a strong start in the first quarter of this year, according to the latest report by GTM Research and the Solar Energy Industries Association (SEIA). According to the latest version of the organizations’ U.S. Solar Market Insight, the United States installed 1.66 GW-DC of solar PV during the first three months of 2016, a 24% increase over the first quarter of 2015.

            Solar represented 64% of all new electricity generation capacity that came online in the United States during this period. This is more than double the portion over the course of 2015, despite the fact that the first quarter is usually the slowest of the year.

            GTM Research and SEIA say that this is just the beginning. Driven in part by projects planned to take advantage of the U.S. solar investment tax credit (ITC) before a surprise extension last December, the organizations expect the U.S. solar market to grow 94% to 14.5 GW-DC over the course of 2016.

            It will be interesting to observe what percentage of new capacity solar will represent in two, five and ten years time when costs fall even further, relative to other options, than they are now.

          • JN2 says:

            Thanks AlecS. Yes, CAGRs have slowed since 2011. If they stay they same as today, solar+wind will be 100% of global electricity by 2031. If CAGRs increase, then sooner. Equally obviously, if they fall, then 100% will be later or never (Ron’s guess, I assume).

          • Dennis Coyne says:

            Hi AlexS,

            Not sure how you calculated this. If we take the natural log of solar consumption and find the change in the natural log from year to year we get an estimate of the average annual growth rate for each year.

            Chart below covers 2000 to 2015 growth rates with a linear trend line projected out to 2035. The solar consumption growth rate falls to about 7% by 2035 if the downward trend of the last 15 years continues. This is a very conservative projection. The fall in solar cost and the rise in fossil fuel prices which will occur by 2020 will limit the fall in the growth rate of solar to 10% and even that may be too conservative.

          • Nick G says:

            Those two arguments conflict.

            If solar is still so small as to be insignificant (less than .5% of primary energy) than there’s no reason to think that it’s growth will slow down anytime soon.

            In other words: there’s no such thing as a “higher base effect”. Growth rates can stay high (and even increase due to network effects and economies of scale) until they hit limits to growth, such as saturating the market demand, hitting supply bottlenecks, or using up good sites.

            None of those limits apply any time soon.

        • Longtimber says:

          It’s 50 to 200% for my customers

          • Ves says:

            Who are your customers if it is not classified info?

            • Longtimber says:

              We are one of 2 integrators that Focus on PV in Pensacol Market. There are perhaps 400 Grid Tie Commercial and residential systems in our tiny service Area. I’ll dig up a link of public systems. We deploy mostly Solar Edge now but have deployed lots of SMA, emphase, SolarBridge, etc. Now cuttin our teeth on our 1st Utility scale system. My passion is Autonomous microgrids.

              • Watcher says:

                your autonomous microgrid fails instantly the day spare parts can’t ship.

                • Oldfarmermac says:

                  So does anything else, including the existing centralized grid.

                  One thing to say in favor of small systems and microgrids is that if they fail, they fail one at a time instead of all at once.

                • Nick G says:

                  No, they’d fail when a critical part breaks, AND no replacement parts are available.

                  PV is mighty reliable: a rock that makes power.

                • Longtimber says:

                  “your autonomous microgrid fails instantly the day spare parts can’t ship.” – No concern – ONLY ONE active ubiquitous component … made like popcorn, 60 second swapout, High MTBF, low cost ( $20-$200), Potted & waterproof ( IP67) , off-shelf from thousands of suppliers , designed to survive severe exposure , ie constant hammering by high impedence grid transients. Universal Wide Input Voltage AC Grid OR 127-431 VDC, Millions deployed worldwide. While the Grid is AC, key loads are DC. An example: http://www.meanwell.com/webapp/product/search.aspx?prod=hlg-320h

                  • Longtimber says:

                    “your autonomous microgrid fails instantly the day spare parts can’t ship.”
                    What happens to thousands or perhaps millions when a spec of insulation flakes off inside a key transformer only made in Asia that has a 8 month lead time ?? BTW – That’s a serious as a heat attack concern.

              • Ves says:

                Thanks Longtimber.
                So how your customer market is divided among these 3 products: Solar electric, Solar Water Heating and Solar Pool heating?

                • Longtimber says:

                  Ves, Deployed in terms of kWh .. 90+% Grid Tie PV. A personal energy project, I’ve working with perhaps the #1 power conversion firm on the planet (in terms of millions of converters shipped) on a super simple autonomous economical solution which gives RELIABLE ROCK SOLID DC Power at SELV ( 10-60V) voltages or settable current for 7-13 hours a day – without Batteries. Deploy and Forget for decades. All that is needed for Juice is PV, Racking, wiring, and Converters. Perfect for Inside LED Lighting, Pumps, Blowers, DC Freezers, Fans for Livestock, Dog houses, Segmented Lithium Battery charging, etc. If one has a application.. I’ll send link or drawings for deployed feedback experience. contact @ my handle at G mail.

              • PonziWorld says:

                Meanwhile, fossil fuel usage goes up, and you become ever more dependent on the manager of the network: Goldman Sachs when the weather isn’t in your favor.

                But hey, you’re “independent” and “green” and gots some fake money in your pocket.

                And the master of fossil fuels has got a plan for you while you blissfully just pretend someone loves you will provide it.

                Some people are born to be slaves.

          • Caelan MacIntyre says:

            I second Ves’ question.

        • Dennis Coyne says:

          Hi Alex,

          If we consider non-hydro renewables, the growth rate has been about 15% per year from 2005 to 2015 on average. The chart below has the natural log of “Renewables other” from BP Stats 2016 from 2005 to 2015 with a linear trend line (showing the exponential growth rate as the slope of the line).

          • Dennis Coyne says:

            Hi AlexS,

            The scenario below has fossil fuels growing at 0.55% until 2035 and then declining (this is consistent with my medium scenarios). Non-hydro renewables grow at 15%/year from 2015 to 2025, 10%/year from 2026 to 2035, and 7%/year after that. Note that oil and natural gas grew at 7%/year from 1900 to 1970 and was constrained by demand. As fossil fuels begin to decline (or grow too slowly) there will be almost no constraint on demand for renewables before 2050.

            This admittedly optimistic scenario has renewables equal to fossil fuel in 2051. Chart below.

            • Hickory says:

              Interesting article from Reuters today gives a snapshot on the interplay between renewable electric generation and natural gas plants in supplying the Calif market.

            • AlexS says:


              I hope you understand that such extrapolations are not correct.

              BP itself has very different projections in its 2016 Energy Outlook released earlier this year.

              • Nick G says:

                Good lord.

                We’re really going to suggest that Beyond Petroleum(!) is an even slightly useful source for projections for non-fossil fuels???

            • AlexS says:

              Even in power generation, where renewables are most competitive,
              their share is projected to increase to only 16% by 2035, although they account for over a third of the growth.

            • AlexS says:

              BP’s projected consumption of renewables (ex. hydro and biofuels) by 2035 is 1359 mtoe, about a third of what your chart shows.

              I personally think that BP’s and Exxon’s forecasts for renewables are too conservative. But your chart looks unrealistic as well.

              Global consumption of renewables (excluding hydro and biofuels), million tons of oil equivalent
              source: BP 2016 Energy Outlook

            • AlexS says:

              BTW, according to Exxon’s forecast, wind and solar will provide slightly more than 10% of electricity by 2040, vs. 4% in 2014. This is even lower than BP’s projections and is too conservative, in my view.

              Source: “The Outlook for Energy: A View to 2040”. Exxon, 2016

            • AlexS says:

              The EIA does not separate hydroelectricity from other renewables.

              They expect the share of renewables, incl. hydro, in total global energy consumption to rise from 11.6% in 2012 to 16.1% in 2040.

              Source: EIA International Energy Outlook 2016

              • Dennis Coyne says:

                Hi AlexS,

                Most forecasts of renewables have underestimated their growth. Most major agencies and fossil fuel companies tend to overestimate the future production of fossil fuels, so they believe there will be no demand for renewable energy.

                I believe they are mistaken.

                • AlexS says:


                  (As I said above,) I agree that the EIA, IEA, BP, Exxon and others may underestimate growth in renewables, in some cases intentionally.

                  But I think the enthusiasts of renewables tend to overestimate their growth.

                  In any case, forecasts should be based on detailed, professional bottom-up analysis by energy source, by major countries and regions.

                  Such forecast will be definitely wrong, but at least we will know where they are wrong.

                  • Nick G says:

                    The future growth rates of renewables and electric transportation depend on political decisions.

                    It’s useful to identify what’s technically possible and economically viable. Based on similar industries, I’d say the technical and economical upper limit is about a doubling every two years. That would give us a 90% renewable grid in very roughly 20 years.

                    Those upper limits are much higher than the growth rates we’re seeing now or are likely to see any time soon, due to social/political resistance to change.

                  • Dennis Coyne says:

                    Hi AlexS,

                    There are a lot of nations and a bottom up analysis is not always possible. Some nations will ramp up renewables more quickly than others. Note that growth rate is based on historical data and an assumption that energy will be scarce in the future.

                    Also note that oil and natural gas grew at a 7% annual rate from 1900 to 1970, so this would be our floor. The growth rate of oil and gas was mostly constrained by demand until 1980.

                    The energy will need to come from somewhere unless GDP grows more slowly than I have forecast (pretty likely that this will be the case), or energy intensity falls more rapidly than 1% per year (also somewhat likely).

                    A bottom up analysis is just the sum of many guesses, I prefer a simple top down analysis.

          • Dennis Coyne says:

            Hi AlexS,

            On extrapolations being correct.

            Often the forecasts by the IEA, EIA, BP, and Exxon Mobil are also extrapolations which may prove incorrect.

            As to what the future will be, this is inherently unknowable, we can only guess.

            Using past real GDP per capita data and the average of the UN low and medium fertility population scenarios and assuming real GDP per capita continues to grow at the 1975 to 2015 rate of 1.4% per year in the future and that energy intensity falls at the 1979 to 2000 rate of -1.1%/year, I developed a demand forecast for fossil fuels. This forecast assumes no growth in renewables or nuclear energy and is thus unrealistically conservative.

            A supply forecast for fossil fuels assumes the maximum amount is needed and that prices are high enough to make this supply profitable to produce. The supply is based on shock models for oil, natural gas, and coal and used the medium scenarios aI have presented in the past.
            Chart below illustrates the supply and demand for fossil fuels assuming non-fossil fuel energy is fixed at 2015 levels.

            • Dennis Coyne says:

              The chart below shows the gap between fossil fuel supply and demand, to bridge this gap we will need this level of output from non-fossil fuels, both renewable and/or nuclear energy. In addition, energy intensity could fall more rapidly or GDP growth could be slower. There will be some mix of all of these no doubt.

              I do not believe that the Energy Gap show in this chart is correct as there is likely to be some growth in non-fossil fuel energy output and/or lower demand for energy due to either slower GDP growth than I have modelled or faster decline in energy intensity, possibly both.

              • Hickory says:

                Very interesting chart Dennis.
                It will be interesting to track this over time, with the price of various fuels superimposed.

            • Dennis Coyne says:

              The chart below shows the energy gap from 2016 to 2040 and assumes non-hydro renewables grow by 11.5%/year until 2027, then the rate falls to 10%/year growth until 2035, and the rate of growth falls to 7%/year in 2036. The chart also shows non-hydro renewables added after 2015. After 2040 the energy gap grows at less than 7% per year and renewables will be able to grow at that rate if needed, potentially fossil fuels could be replaced by renewables to reduce the risk of dangerous climate change after 2040. A continued 7% growth rate of renewables after 2040 could eliminate most fossil fuels by 2062.

              In practice this will not be possible as there are some uses of fossil fuels (aviation, ships, fertilizer, and other inputs into industrial processes. So most of the elimination of fossil fuel would be land transport, electric power, and heating of buildings and water, and in cooking.

              Fossil fuels might be replaced by biofuels in some of these uses (farm tractors, ships, and aviation).

              Complete elimination of fossil fuels for energy use may not be possible, we will reduce as much as is practical based on climate research and the relative costs of different types of energy in the future.

    • islandboy says:

      On the matter of Chinese oil consumption, China has the most rapidly growing EV market in the world. I have said here before that I think China will be ground zero for EVs. The resistance to EVs that exists in countries with long histories of relatively high car ownership per capita, should be tempered considerably in China. As far as I know, most Chinese car buyers are first time buyers so, they have less of a built in expectation of what the car ownership experience should be. You never miss what you’ve never known.

      In addition China has developed an extensive high speed rail network, providing an extra option for people wanting to travel long distances. The other long distance travel option is, of course, air travel. If the Chinese do not adopt the “road trip” habits of the West, the growth in their oil consumption could come to a halt sooner than you think. Remember car ownership is not a tradition in China like it has become in the west. I doubt there are many driving age Chines who can talk about “the family car” or the car their dad used to drive. As a result if their first car is an EV, big deal! They have nothing to compare it to.

      • Synapsid says:


        The growth in Chinese vehicle sales is in SUVs. (snif)

        • Brian Rose says:


          This is where every “optimist” (Yes, I speak for all – OK probably none) is torn. Transition will happen given a flat growth rate of population and wealth, but current trends and Jevon’s Paradox realities make for a damned either way kind of end point.

          We’re far better off than in 2008, but it also only lead to a higher global demand base rate.

          Global GDP matched with global oil consumption makes me think we’re almost worse off even though we’re so much further on successfully transitioning.

          • Dennis Coyne says:

            Hi Brian,

            Jevons Paradox assumes that the supply of coal is not constrained. So greater efficiency reduces demand and then reduces the price of coal.

            If we have a situation where the efficiency reduces demand for coal while the supply of coal falls at a rate equal to the rate that demand falls, then the price of coal does not fall and Jevons paradox does not apply.

            Fossil fuel supply will fall, if demand falls more quickly than supply due to efficiency gains then there may be some Jevons Paradox type of effect, but demand will be limited by supply.

    • PonziWorld says:

      The pseudos (Excel and powerpoint fools) have nothing but contempt for fossil fuels because they might have to leave the office to get their hands dirty. So they wax poetic about climate change and The Piddly Toy Electricity Generator instead.

      • Oldfarmermac says:

        Folks like PonziWorld have nothing to offer except a little bit easier life for the next few years in exchange for a truly miserable life, if life is even possible, a decade or two down the road.

        PonziWorld, you are obviously so ill informed you just don’t belong here at all, except maybe if you are willing to keep your eyes open reading and your fingers off your keyboard for a year or two. By then you MIGHT have a clue.

      • islandboy says:

        My “Piddly Toy Electricity Generator” is currently (12:00 EST) producing about 300 W of power, under overcast skies. I noticed a peak earlier today of over 1300 W and my energy production up to now is about 3.5 kWh. On the 4th of May it produced over 9 kWh. I set the system up as an experiment and although it is mostly code compliant, a few things need to be done to make it meet local codes and be eligible for the required license and standard offer contract. As a test, I configured the inverter with one string of six 270W modules out of a possible two strings.

        Once the paper work is being sorted out, I plan to go to two strings of seven modules in order to be able to produce the 3 kW nameplate capacity of the inverter for most of the six hours starting after 9:00 a.m. The roof of my apartment is a little more than 600 sq. ft. and can easily accommodate my plans. On sunny days I am running a heavy duty fan to cope with the 30°C plus temperatures, made worse by the concrete slab roof getting up to over 37°C and radiating the heat down into the living space, so my energy consumption is between 4 and 5 kWh days when both the night and day are hot.

        If I get an EV and can charge it during the time the solar is producing, I should be able to get in excess of 14 kWh on good days. “Piddly Toy Electricity Generator”, I think not!

        Neither do an increasing number of large commercial consumers on my island. See the table under the heading Installed Capacity at a Wikipedia page I put together on “Solar power in Jamaica”. I have a spreadsheet with over 8.4 MW that, has many entries for installations that I have spotted but, for which there is no data publicly available.

        • Ves says:


          So you are almost “energy independent” if you state that your “energy consumption is between 4 and 5 kWh days when both the night and day are hot” and your “energy production up to now is about 3.5 kWh”. So far so good.

          And then you state “If I get an EV ” ??!!!!

          Why do you need EV on the Tropical island and why do you need to get into position where financial claims on economy (that EV ownership represent) are ALWAYS GREATER then economy itself? Why do you want to fall in the same trap that fossil fuel type of economy has where finance is disconnected with real economy and financial claims are many times greater than economy itself?

          All you need is electric scooter, flip flops and pair of shades on the tropical island. 🙂

          • islandboy says:

            Below is the on-line portal page for my system showing the data for today June 9, 2016. Note the box labeled PV system information indicates PV system power: 1600 Wp. The actual production from the modules is roughly 20% lower than nameplate due to temperature effects, running cell temperatures around 70°C so, I intend to increase the number of modules to get roughly 3600W nameplate or 3000W after temperature related losses. Under the local Net Billing arrangements. I will get paid about half the retail rates (currently about 25 US cents/kWh) for electricity I feed to the grid so, I estimate that this system will reduce my electricity bill to close to zero.

            All you need is electric scooter, flip flops and pair of shades on the tropical island.

            I guess that’s what we get for all the money spent, advertising the island as a tourist destination but, from the TRANSPORT SECTOR PLAN 2009 – 2030;

            “During the period 2004-2008, Transport, Storage and Communication (TS&C) contributed on average 11.5% to Jamaica’s Gross Domestic Product (GDP). In 2008, transport (road, railway, water and air including services allied to transport) and storage contributed 5.6% to total GDP. The overall transport sector (including land, sea and air transport) is the largest consumer of petroleum in the Jamaican economy, accounting for 37% of the total quantity of petroleum consumption in 2008.”

            Just as I am acutely aware of the island’s heavy dependence on petroleum for electricity generation, I am similarly aware of it’s dependence on petroleum for transport fuels. I view solar PV, wind and EVs as a way of breaking that dependence in the shortest possible time without major disruptions to the economy. The purchase of a PV system is a one time cost with very low operating costs. The use of the PV system to charge an EV means that the marginal cost of the distance traveled by the charge from the PV system is low to zero.

            I am beginning to form this idea in my head that, it is not petroleum itself that is valuable but, the ability to provide transport services that it facilitates. EVs have the potential to increase the value of electricity, if they allow electricity to become a major facilitator of transportation services. As such they have the potential to greatly increase the value of renewable energy sources, where there is no fuel cost associated with each unit of energy harvested. This is a new paradigm, where abundant renewable energy resources can be converted into a valuable useful service, transportation. I believe the implications are profound

            • Ves says:

              “I view solar PV, wind and EVs as a way of breaking that dependence in the shortest possible time without major disruptions to the economy. ”

              Shortest possible way to break dependence is to change current definition of “economy”. Who is exactly benefiting in Jamaicas’ current “economy” that you are so afraid of being disrupted?

              • islandboy says:

                I live a few minutes walk from a very busy transportation hub in the middle of the island’s major metropolitan center. The metropolitan bus company has a major terminal and several “informal”, loosely regulated transport service providers originate and terminate there. The area around the transport center in addition to regular shops, is littered with vendors, some with fixed stalls, others with makeshift stall, yet others with no stalls at all. Many of the vendors are selling clothes and/or footwear, others are selling snacks, prepaid phone cards, cigarettes etc. and others are selling fruits and farm produce. This is the case at just about every location in the island you could call a transport center, including the town center close to my late father’s homestead in a rural part of the island.

                All these people, moving around and providing or consuming goods and services, are a very visible part of the economy that is facilitated by petroleum. In the absence of adequate supplies of affordable fuels, the whole economy is likely to unravel. If this economic activity is disrupted, what are people to do to occupy their time and earn the means of of subsistence? There are way too many of them to return to living off the land and many of us will not relish the hard labor that farming entails.

                In addition there are far too many single mothers in this island. One was on television during the prime time newscast sometime ago, complaining about how hard it is to raise nine children because, the authorities shut down her vending stall before they had completed alternative arrangements, so she could continue vending. If some semblance of BAU is not maintained, I’m afraid some of those who will suffer are the very young, who are here through no fault of their own

                • Ves says:


                  Let’s try again.
                  All I am saying is that you don’t get in trap of having your personal economy finacialized by having financial claims on economy that are significantly bigger than economy itself. Does this make sense to you? I will give you example: Let’s say you are a driller and bought a drilling rig and paid inflated price in 2011 and then oil market crashed (for whatever reason) at the end of 2014. Your financial claim on a rig is significantly higher than oil economy itself with price of $50 a barrel. It absolutely does not matter that we have world oil depletion to your financial situation if you are owner of that drilling rig. You have to sell that drilling rig for 10 cents on a dollar.

                  Do you see that our logical mind is not really helping us with logical reasoning because life is illogical. That oil driller should be making money because you logical mind is telling you that we are running out of oil. Maybe we do, but that driller is broke regardless of that.

                  If you are very close to be energy sustainable with your home solar panel system why do you want to make your personal economy so more complicated and demanding and less resilient with purchasing of EV where simple scooter with some front load carriage would do just fine in the climate where you live?

                  Make it simple as opposite to complex. We are born simple. Every child is like clean school board and then parents start drawing on that board what they think we have to become. Then school teachers, religious leaders, politicians, Exxon’s, Tesla’s also start drawing on that school board what you have to be, how to live, or your life will be useless. But everything is just opposite. You don’t have to become anything.

                  islandboy: ” If this economic activity is disrupted, what are people to do to occupy their time and earn the means of of subsistence?”

                  Just be simple and self-sustainable. If solar is available where you live and you state that is economical then you are already going in the right direction but don’t make your economy more complex by adding more energy wastes that don’t really give you any benefits. Strike a balance.

                  • Dennis Coyne says:

                    Hi Ves,

                    Do you own a car?

                    If the answer is yes, it may be that islandboy owns one for similar reasons. My understanding is that it occasionally rains on tropical islands, but in any case the choice of whether to purchase a car or not is up to the individual.

                    Everyone could drive a scooter, many choose not to. They could also ride a bike, walk, etc.

                  • Ves says:


                    The question is could this debt based ponzi economy pay itself for individual ownership of the car. Answer is no, otherwise majority would pay for cars with cash instead of 8 year financing. That is definition of being broke.

                  • islandboy says:

                    Sorry Ves, I’m not understanding the point you are trying to make. For one, I don’t understand how acquiring an EV equates to “having financial claims on economy that are significantly bigger than economy itself”. Bear in mind, I already own and operate a vehicle, not a car, a “panel van” that I use to carry stuff around as part of earning an income. So does the ownership of my current vehicle constitute “having financial claims on economy that are significantly bigger than economy itself”?

                    Are there any circumstances under which acquisition of an EV would NOT represent “having financial claims on economy that are significantly bigger than economy itself”. I do not plan to buy new (expensive) and actually have something in mind, shown below. This vehicle shares it’s battery, control electronics and drive train with the Nissan Leaf and can be had in the UK for about £10,000. In your opinion, given the low running costs of EVs, would such a vehicle constitute “having financial claims on economy that are significantly bigger than economy itself”

                    I’m not sure what you mean by “having financial claims on economy that are significantly bigger than economy itself”.

                  • islandboy says:

                    Just want add that the vehicle pictured above costs somewhere in the region of £24,000 brand new, including the outright battery purchase as opposed to the battery lease option (~£17,000). The £10,000 I mentioned above was the lowest cost for a used one. They were introduced to the market in the UK around October of 2014 so none of them are two years old yet as of today, June 2016. Barring unforeseen circumstances I expect the price for the 2014 model year to drop somewhat after October 2016.

                  • Dennis Coyne says:

                    Hi Ves,

                    I noticed you did not answer the question.

                    Islandboy may pay cash for his vehicle, and if not that is his decision.

                    Debt is fine, it is too much debt that is bad.
                    One runs the numbers and does what they think is best.

                  • Ves says:


                    I don’t care what islandboy will do with his money. I have asked why he is buying that particular vehicle and why he thinks that particular vehicle would be better for him than the one he already has.

                    The question that you have asked “if I own the vehicle?” is irrelevant for this discussion. I am not in the market for new vehicle at all.

                    Dennis: “Debt is fine, it is too much debt that is bad.”

                    90% of car market being in debt is bit “too much”

                  • islandboy says:

                    I have asked why he is buying that particular vehicle and why he thinks that particular vehicle would be better for him than the one he already has.

                    My current vehicle uses diesel for fuel and my country has zero known FF resources. A company called Tullow is doing seismic surveys off shore in the islands territorial waters but, unless they find something, Jamaica will continue to have to import virtually all it’s liquid transportation fuels. I have no idea if or when such fuels may become prohibitively expensive, making the use of such fuels a “claim on the economy that are significantly bigger than economy itself” If or when that occurs, my current vehicle will have to be old at a significant loss, unless I can find an extremely high value use for the capabilities of the vehicle, or sell it to somebody who can put it to much more profitable use.

                    I have a significant sunk investment in PV systems that can provide me with some energy to charge an EV at little or no additional cost. I am waiting until I can get the vehicle that I’m interested used, hopefully not les than three years old, at which time it should be significantly more affordable. Does the EV make sense now?

                  • Ves says:

                    ” Does the EV make sense now?”

                    No. Every time we humans rush to “fix” something we make more mess. Look at example of shale. Total f#@@ up. Destroyed land, destroyed capital, destroyed people’s savings, destroyed lives. Was it worth it? No.

                    Always allow life to happen first. Don’t cling to desires that you as individual can “fix” something and don’t cling to idea that you will know 100% how life will evolve. That is only possible in the movies.

                    Change can only happen if local community gets organized together. If just few of you in your community have EV to deliver goods to the market then who are you going to trade with? What if different kinds of trades develop than what you have now? Maybe something that needs more emphasis with food supply and you need vehicle with freezers and not trade with plastic trinkets? You don’t know that right now. Allow life to happen and then you will act accordingly. Why do you rush? Maybe with upcoming deflation that vehicle that you want will be half price. Then you can buy 2. You just never know and that is the beauty of life. Allow yourself to get surprised.

                    And anyway diesel is cheap right now 🙂 and I don’t think it will get too high for too long before oil price crash again.

                  • Stan says:

                    Vez said: 90% of car market being in debt is bit “too much”

                    Hard to see why one long term durable good with utility “cars” has to be paid for in cash while another long term durable good with utility “houses” can be financed or the economy is in trouble.

                    There is constant harping on debt levels on this site. Most are by those sure the global economy is in a tailspin. Most of the complaints posted have no technical merit. What exactly is the mechanism for economic collapse that all these concerns are based on? One person’s debt is another’s asset outstanding. If you wipe out all debt, you equally wipe out the assets. It is a wash. Sure, we could get to the point where the debt isn’t payable. It just means the assets aren’t real. However, if the time value of money is declining, why shouldn’t total debt levels increase?

                  • Nick G says:


                    PO pessimists expected high prices to make the economy crater. When that didn’t happen they found an explanation that felt right: debt somehow borrowed energy from the future, and put off the “day of reckoning”.

                    The fact is that oil just isn’t as valuable as was thought. Really, PO would be the best thing that could happen, the sooner the better.

        • Longtimber says:

          One key metric is kWh per kW .. daily monthly annual

  26. PonziWorld says:

    Gee, we have a finanshual supernova happening here:

    Global Yields lowest in 500 years of recorded history. 10 trillion of neg. rate bonds. This is a supernova that will explode one day.

    Remember all roads in the fossil fuels paradise lead straight to hell (war in Siberia where all the ff goodies and ore are left).

  27. Oldfarmermac says:

    It may be impossible to say just HOW the situation in Venezuela will play out, and what effect it will have on oil markets, but it’s safe enough to say it won’t be a trivial effect, and that it won’t be YEARS in coming.


  28. Watcher says:

    Post didn’t post.

    • Watcher says:

      Some oil consumption fleshing out from the BP .xls:

      Shoulda quoted China as the big round 12 mbpd. It’s 11.968 mbpd.

      US 19.396 mbpd.

      India 4.159 mbpd
      Japan 4.15 mbpd
      K S A (isn’t that quaint) 3.895 mbpd +5% on the year
      Brazil 3.157 mbpd -4% (which they’ll get fixed)
      Russia 3.113 mbpd
      Germany 2.338 mbpd
      Iran 1.947 mbpd
      France 1.606 mbpd

      Something called Other Middle East is 1.7 mbpd probably sum of Iraq, Jordan, Bahrain, whatever)

      This is not pure crude, but the US still consumes about 20% of global total with 4% of pop. If it was pure crude that would be about 24%.

      • Watcher says:

        psssst, assuming you think money means important things in a world of negative rates and trillions of printed sawbucks . . . maybe if you’re KSA, the 5th largest consumer in the world, you don’t want the price up domestically.

        • Dennis Coyne says:

          Hi Watcher,

          The domestic price in Saudi Arabia is set by the government. The international price bears little relation to the domestic oil price in the KSA.

  29. robert wilson says:

    I am pleased to announce that I encountered a black Nissan Leaf yesterday. This is the second EV that I have seen in Camarillo CA this year. It entered Leisure Village where I live but I was unable to determine if it belongs to a resident or a visitor.

  30. Survivalist says:

    I find this recent chart from Eaun very interesting.


    If you lay it over Ron’s OPEC charts for Saudi Arabia, KuwIat and UAE it looks even more interesting.

    Does anybody have any insight into how much increased drilling was to bring on new fields and how much drilling was infill drilling in old fields?

    Do any of the co’s doing the drilling in Saudi Arabia report what projects they’re drilling or is it kept quiet?

  31. Greenbub says:


    “Political Conflict Drives Oil Outages to Highest Recorded Levels”

    “From April to May, disruptions grew by 0.8 MMBOPD, averaging more than 3.6 MMBOPD”

  32. Heinrich Leopold says:

    Natgas increased another 5% yesterday. Although inventories are way above 5 year average, inventory surplus shrinks by 50 bcf per week and the inventory build could be in deficit in about 15 weeks( see below chart). In my view this trend will accelerate as natgas production decreased to a two year low this week to 69.6 bcf/d.

    In my opinion the industry made a huge mistake by talking down the price of its own product (‘we will flood the market with cheap natgas’). Besides the absurdity that an industry advertizes lower prices for its products, this destroyed the natgas future market for a decade (March 2026 stands at Henry Hub 1.7 USD) and took out the floor of a major financing source for future production. As also equity and debt financing as well as cash from product sales has completely dried out, bank overdraft is the last source of funding. So, the industry has completely lost credibility from shareholders, debtholders, the future market and is totally dependent on banks. We will see soon how much can be produced with this thin capital base.

  33. wimbi says:

    Take the Chart estimated us energy consumption chart, which shows we take in nearly 100 quad per year to run BAU

    Now, replace all inputs by solar/wind electricity. You only have to supply the useful energy on the chart, since electricity is pure available energy, so right there you need only 38 quad of input, not 100.

    Then take the next obvious steps to jack up efficiency, like insulation on houses, etc. I am guessing we could cut that 38 quad to about 25. So, with all solar/wind we don’t need 100quad input, we only need about 1/4 that in wind/solar.

    Yet some here keep saying renewables can’t possibly supply anywhere near 100quad needed for BAU,
    THAT IS NONSENSE, since even with BAU, all that’s needed even for BAU is 38 quad of renewables, and with any sense, 25quad.

    I await enlightenment.

    • Oldfarmermac says:

      Hi Wimbi,
      If you were a child again, you might live long enough to see that enlightenment in all its glory.

      • Fred Magyar says:

        I await enlightenment.

        OFM and Wimbi,

        “Almost always the men who achieve these fundamental inventions of a new paradigm have been either very young or very new to the field whose paradigm they change.”
        — Thomas S. Kuhn
        The Structure of Scientific Revolutions (1962), 89-90.

        Only a very few of us are privileged to remain young and flexible in our mind’s eye until the end of our lives. Most become calcified in their views and have very little to offer in terms of new ideas. Witness many of the old guard posting on this very site…


        • Dennis Coyne says:

          Hi Fred,

          Mark Jacobson (The Solutions Project) is only 50, that is not that old.

          See Wimbi’s link below.

          As far as I can tell we have some older people that know how to think outside the box who post here.

          • Fred Magyar says:

            As far as I can tell we have some older people that know how to think outside the box who post here.

            Of course, Wimbi is one but people like him are the exception and not the rule. Most people even here are stuck in the old paradigm and still think a future based on fossil fuels is possible.

            • Dennis Coyne says:

              Hi Fred,

              I disagree. I think most here believe a future where fossil fuels provide most of the energy will be behind us by 2050 (or we will be close), by 2100 fossil fuels will be either eliminated or a minor player (maybe 5 to 10% of total energy).

              How quickly this will happen and how it unfolds, those are areas of disagreement.

      • wimbi says:


        Just one of many studies which conclude switching to all renewable can be quick complete, and profitable.

        So, OFM, If you disagree with stanford et al, I would be glad to see your references.

        That was what I meant by awaiting enlightenment

        • ' says:

          It’s not JUST debt. It’s piss poor choices made on a daily basis for a lifetime. A few cents spent on a toothbrush and tooth paste earns a thousand fold return in avoided dental health problems.

          A few dollars a week spent on junk foods consisting mostly of sugar, the wrong kinds of fat, and highly refined flour only adds up to a few thousand a year, but this sort of diet quite often results in early death and disability and hundreds of thousands or even millions in medical bills.

          Most of the people I have known casually over the years have always looked sort of smug and superior when they see my old car and my old truck. But

          I have NEVER made a car payment, or a payment on anything at all, unless it was an INVESTMENT. I have paid out a lot on real estate such as house payments, but my monthly living expenses in houses I have owned with payments have always been less than the monthly cost of a comparable rental, and I have always made a substantial profit when I sold or traded up.

          Debt is ok so long as you make sensible use of it.
          Debt is a MARVELOUS, WONDERFUL TOOL if you use it wisely.

          The banking and retail industries spend millions every day training people to run up high interest debt on mostly worthless junk.

        • Oldfarmermac says:

          Hi Wimbi,

          I am with you all the way on the POSSIBILITIES when it comes to making fast progress shifting away from fossil fuels and to renewables.

          I should have put a smiley face or a sarc alert on my comment.

          My intended point is that the majority of people are usually a generation or two behind in their thinking and habits when it comes to really major change.

          I am sure that you are familiar with the old saying about change even in the physical sciences coming one funeral at a time, as the old folks who control the status quo eventually die.

          That sort of thing was what I had in mind.

    • R Walter says:

      You are just too doggone hidebound to your doctrinaire, much too indoctrinated by your dogma. har

      Yes, it is sarcasm. It is called irreverence, nothing is sacred. Thank Wimbi for all of the kind.words.

      I want more information on the pyrolysis you have achieved. Must have some kind of special autoclave with wood as an energy source, something like that?

      • wimbi says:

        cook the wood in a red hot sealed oven. It pours out gas which goes to the flabby sack outside. When gas quits coming out, turn off the heat, scoop out the charcoal, put more wood in, turn the heat on etc etc. Real easy

        Heat the oven with anything easy to get, like some of the stored gas, or a wood fire, or solar or even electricity.

        You get out far more than the heat you put in. Net negative carbon energy. Any trash will do. Makes it easy for us PV people to coast thru weeks of cloud without putting any ff’s anywhere in the process. Just run the honda genset on the wood gas.

        • Dennis Coyne says:

          Hi Wimbi,

          How do you feed the woodgas into a generator, is it pressurized?

          Do you have any posts that shows how this all works?

          The idea sounds great, it seems in practice it might require a degree in mechanical engineering to get it to function.

          • wimbi says:

            Any IC engine will happily run on propane or any such gas, a million vehicles ran on wood gas during WWII. The web has all the details on wood gas vehicles.

            I am suggesting something much simpler than on-board generators – electric vehicles that get their battery charged from a stationary IC using the pyrolyzer gas. This allows the generator to be big heavy, and far easier to make and run than the on-board. That’s the neat thing about EV’s – they can get their charge from anything making electricity from any fuel.

            If tomorrow I got cut off from the grid and denied any more ff. I could go ahead happily with a neat package accepting any fuel and putting out juice AND carbon, which came from the air.

            Like an air conditioner, user need not know anything about what is in it , just follow the owner’s manual.

    • GoneFishing says:

      Wimbi is right again. I was wondering when someone was going to come out and state the obvious.

    • Dennis Coyne says:

      Hi Wimbi,

      The renewables in the BP report are scaled up to make them equivalent to fossil fuels. So if we have a GJ of renewables (at the electric meter) we take 1 GJ/0.38=2.63 GJ of equivalent fossil fuel energy.

      So we don’t get some of the boost you think we get when using the reported Renewable consumption in millions of tonnes of oil equivalent from the BP Statistical Review of World Energy.

      Excluding hydro, 2015 renewable consumption was reported as 365 Mtoe, but actual output was only 38% of this or 139 Mtoe, but your point that we only need 38% of the energy is roughly correct and as we use more EVs, build to Passive House standards, and generally waste less energy we could easily get to 25% of the current energy used assuming no GDP or population growth.

      Eventually population and GDP will peak, but we will be using quite a bit more energy, we will be doing well if we can keep total energy use to 100 quads by 2050, there are a lot of people that would like the kind of standard of living in Europe or the US, that will require some energy. By 2100 we can be down to 80 quads at least (assuming fossil fuels are not completely replaced by renewables.

      With complete replacement of fossil fuels by renewables by 2100 (not very feasible in my view) we would be at about 60 quads of energy use, probably 70 quads is a more realistic guess.

      • Dennis Coyne says:

        Hi Wimbi,

        I realized you said 100 quads for the US, I mistakenly thought you meant the World, my comment above should be read as 60% of 2015 output, or 70% 2015 output, etc.

  34. R Walter says:

    The birds are singing, dogs are chasing cats, the sun is going to rise in about an hour and five minutes, trees are green, crops are growing, gas stations have gas.

    Another great day on earth.

    Give us this day our 95,000,000 barrels of oil.

  35. R Walter says:

    Coal = 33%
    Natural gas = 33%
    Nuclear = 20%
    Hydropower = 6%
    Other renewables = 7%
    Biomass = 1.6%
    Geothermal = 0.4%
    Solar = 0.6%
    Wind = 4.7%
    Petroleum = 1%
    Other gases = <1%

    That would be 67 percent fossil fuels providing the energy to generate electricity.


    48,800 wind turbines to provide 4.7 percent of usable electricity. 7×4.7=32.9, 7×48 800=341,600.

    589 coal-fired power plants to generate 33% of the electricity ready to use in the US.


    Eighty times more wind turbines than coal power plants to generate 1/7th the amount of electricity.

    You would need 7 times the current number of wind turbines to equal the capacity coal has to generate electricity. That would be about 341,600 wind turbines. Going to gobble up a great deal of resources to build 341,600 wind turbines. All that is necessary is to maintain 589 coal-fired power plants and avoid building 300,000 more wind turbines at a cost of 4 million each, a total of 1.2 trillion dollars, $1,200,000,000,000. Go figure.

    I think Einstein's definition of insanity applies for wind turbine investment. Has to be a far worse expenditure than the cost of exploring for oil.

    • Nick G says:


      I know this is irony, (or sarcasm, depending on the tone), but really….most readers don’t realize that YOU know that what you’re writing actually makes no sense.

      Irony is very hard to convey in writing, and especially on the internet.

      • Oldfarmermac says:

        I used to refer to RW quite often as our resident court jester.

        I quit doing that because it seemed unnecessary to keep pointing it out.

        RW is a VERY sharp guy ( girl?) and occasionally his stuff is good enough he ought to be getting a fat paycheck for it.

        Once in a while he leaves me scrathing my head, not very often.

    • GoneFishing says:

      Lots of benefits to coal burning power plants:
      Mercury, arsenic, cadmium, uranium, lead, Sulfur Dioxide, NOx, CO2, CO, particulates, loss of forests, loss of mountain tops, loss of streams, loss of drinking water, pretty orange streams, oil burning, hydrocarbons, toxic ash, huge amounts of cooling water, lots of dead and sick people, toxic fish, changing climate, dust, smog, acid rain, loss of habitat, wrecked ocean life, 34 billion in fuel cost each year, millions of dollars in diesel costs, hundreds of aging plants that need replacement – average age 42 years.

      Cost of wind power is about 1 thousand dollars per kW installed. Cost of coal fired power plants is three times that : “The estimated cost of the 960 MW plant
      is currently estimated at nearly $3 billion, without any financing costs. This
      represents a construction cost of more than $3,100 per kW. And the available
      evidence suggests that plant costs will continue to rise.”
      And then there are the fuel costs, the delivery costs and all the above listed benefit costs.
      Wind delivered for free at no cost.

      Yes, there are just so many benefits from coal burning power plants, I just can’t list them all.
      The biggest benefit happens when the coal runs low and everything stops. So many benefits, so little time.
      Wind is blowing here, no coal blowing by though. Coal plant shut down for four years now. Sun is shining too.

    • wimbi says:

      walker–And you totally ignored the essential point WE HAVE TO QUIT PUTTING CARBON INTO THE ATMOSPHERE.

      So what the hell are you talking about coal for?

      • Hickory says:

        R Walter has a strong vested interest in the coal industry (family money), so they say.

      • PonziWorld says:

        Wimbi’s Pseudo-Logic: “The CO2 is killing us so we have to shut down all the coal plants and erect wind turbines nonstop. In order to build the necessary # of wind turbines we have to build way more coal plants than before which will emit even more CO2”

        Thats Wimbi folks, a card carrying pseudo!

        The banks love the windmill garbage because they get their cut on transaction volume like a true mafia. More transactions more money. They don’t want to be on the hook for anything because everything is a writeoff due to peak oil.

        • Nick G says:

          In order to build the necessary # of wind turbines we have to build way more coal plants than before which will emit even more CO2

          No. Not what Wimbi said, and not at all true.

          You’re wasting your time, and that of the readers here, making up nonsensical stuff.

      • R Walter says:

        Yeah, but that’s not what will happen. Coal provides the base energy source. Wind turbine generated electricity is icing on the carrot cake. Coal has the capacity to lift the barge while wind turbines sail along in virtual mode. Natural gas ties for first, looks like fossil fuels lead the pack. None of it has to make any sense anymore. There is a huge demand for electricity. Easy to sell, everybody wants electricity. Make it with coal, wind, water, nuclear, light, electricity flies off the shelves at the electricity store.

        Coal carries the load, wind is there along for the ride.

        Coal and hydro support wind turbines, not a question of maybe, it is a definite yes.

        We in the US can burn 900 million tonnes each year for the next sixty years and make better decisions as time goes by. We can argue about it until the cows come home, coal burning will continue unabated, end of story. At a current rate of 7.5 billion tonnes per year, it will take time to burn it all.

        Wind turbines are located near coal-fired power plants because the owner of the coal-fired power plant owns the wind turbines.

        If wind turbines can cause environmental damage, disrupt the avian species, kill eagles, and can be ignored, ‘takings’, then pollution from coal burning can be ignored too.

        It’s only fair. har

        • GoneFishing says:

          Coal is entering retirement age.

          As far as the raptors go, my personal observations of nests show failures in 75% of the nests I observe, mostly eagles and ospreys. No next generation is far more devastating then a few birds getting accidentally killed. Hope this is not more chemical warfare on them like the DDT plague.

          Broader studies of migration counts show slowing or no population growth and a number of population decreases.

        • Nick G says:


          I’m not sure what you’re doing here. That doesn’t make realistic sense, and it’s not even funny.

          You’ve got to work on your comedy.

          • A different Ron responding here… but nevertheless… I don’t think Ronald Walter was trying to be funny, he was deadly serious.

            I have tried to stay out of this coal debate because I agree with both sides. I agree that it is deadly, it causes smog and breathing problems, it causes global warming and… I agree that we will burn it all, every goddamn lump of it. If you think we are addicted to oil, we are far more addicted to coal. The would’s electricity is generated with coal and will continue to be, that trickle from renewables notwithstanding.

            China is choking on coal smog and will continue to do so.

            I am just sorry to inform all you green guys, as I am for everything you are for, but there will be no transition to renewables. It is just not going to happen. As energy from fossil fuels declines, whenever that happens, a decline in our prosperity will follow. And that will be followed, a few years later, by a decline in our population.

            While it is true that fossil fuels are killing us, we will die a lot faster when fossil fuels are gone.

            • Nick G says:

              As energy from fossil fuels declines, whenever that happens, a decline in our prosperity will follow. And that will be followed, a few years later, by a decline in our population.

              I find this so puzzling. You and I have argued about this for years, and we seem to have made no progress.

              Why is fossil transportation better than non-fossil???

              EVs get you to work just fine. they employ design engineers just the same, they employ the same factories and assembly line workers. Extended Range EVs, like the Volt, have the same range and use 10% as much fuel (which can be synthetic or bio).

              Trains are great. They work just fine for freight. Electric trucks would work too, though they might be a few percentage points more expensive.

              And why is coal better than non-coal???

              Wind and solar are affordable, scalable, high EROEI, etc., etc. etc.

              • Nick, if you have been following my posts for years then you know very well that you are posting a lot of shit above that I have never claimed. Fossil transportation is not better than non-fossil transportation. Coal sure as hell is not better than non-coal. I have never made such claims and it is patently dishonest of you to imply that I have.

                Better has not one goddamn thing to do with it. It is what is available, what is scalable and at what price. It is all about what it will take to replace fossil fuel. What is available is a pittance of what it will take. This country will never run on total renewables, not even close. You guys are dreaming.

                • Nick G says:

                  When I say better, I mean overall: cost, availability, scalability, reliability.

                  Fossils are more expensive. They’re dirtier. They’re harder to find. They’re far scarcer. And, it’s getting worse: they’re depleting, and getting dirtier and riskier.

                  Wind and solar are far more plentiful and cheaper than fossils, even now. In 3o years they’ll be even more plentiful and cheaper, and fossils will be far more expensive and scarce.

                  EVs are cheaper, right now. They’re also better: faster, quieter, cleaner, better handling, lower maintenance. But, most of that’s a bonus to the fact that their energy source is far cheaper, more plentiful and more reliable.

                  30-50 years ago the situation looked the way you describe it: wind and solar were expensive. The only substitute for liquid fuels appeared to be ethanol, which is very hard to scale up. Batteries were very expensive, heavy and short lived.

                  But that’s all changed: wind and solar are cheap and their “fuel” is free and incredibly abundant – far more than fossils. Liquid fuel can be replaced, mostly by far cheaper batteries, and ultimately the last 10 or 15% can be replaced by synthetic fuel.

                  Things have changed.

                  • Not to worry Nick, if renewables are all that better as you suggest, then oil, coal and natural gas will all be gone in short order. If something is better, cheaper and more economical then the public will find out about it on short order. Fossil fuels will be gone in a decade, or two at the most.

                    If not they will hang around. So just watch how long fossil fuels hang around, or… see how long it takes renewables to replace them… then we will know who is correct in this exchange.

                    I am betting that fossil fuels will be around… unti they are gone. You are are betting that renewables will replace them in short order.

                    I hope you are correct.

                    But I would bet all my Social Security check every month that you are wrong. And I would give you odds of ten to one every month.

                    The problem Nick is that you do not understand human nature. You assume society will do what is best for society. Not so, people will do what is best for their own personal welfare, society be dammed.

                  • Nick G says:

                    You are are betting that renewables will replace them in short order.

                    That depends on your time frame. I don’t think coal burning will be eliminated in 10 years. But, there’s little question that most coal will be left in the ground.

                    The problem Nick is that you do not understand human nature.

                    What the heck do you mean by that? That’s broad, and general.

                    Humanity eliminated slavery. Humanity greatly reduced DDT, R12 chloroflourocarbons. China dramatically reduced it’s fertility and population growth. So, I don’t get that argument.

                    On the other hand, I agree that political, social resistance to change is the main problem, rather than technical or geological limits.

                    I’m glad we agree on that.

                  • Caelan MacIntyre says:

                    Hi Nick,
                    Humanity did not eliminate slavery, it just got more ‘cloaked’.
                    There are many other and new dangers than DDT, etc., and, if recalled from something I came across recently, China’s population growth had already been slowing beforehand, but is still growing, nonetheless.

                    These may be along the lines of what I had read about China:

                    “One of the academics, Wang Feng, director of the Brookings-Tsinghua Centre for Public Policy, argues that China’s demographic pattern had already changed dramatically by the time the one-child policy began in 1980. The total fertility rate had been 5.8 in 1950, he notes, and had declined sharply to 2.3 by 1980, just above replacement level.” ~ The Economist

                    “By taking a closer look at population figures before and after the policy took effect, and by doing a more careful statistical analysis, researchers have found that China’s population growth rate would have decreased in any case, and the policy was not just cruel, but unnecessary.” ~ Charlie Jane Anders

                  • Stan says:

                    Caelan, you didn’t refute Nick’s point. He didn’t say DDT was the only deadly chemical. He did not say we had to impose a one child policy. We can and have made major changes.

            • Hickory says:

              My baseline assumption is that the scenario Ron describes here will come to pass- it is the path we are on.
              But that doesn’t mean I don’t think we should go all out in a push to fight that trend with massive deployment of renewables.
              Better than building bombs or aimlessly prolonging life, and it may help quite a lot of people to the extent it makes a dent in the oil shortfall.

              Another point regarding Germany- I can’t think of any other country with as great an incentive to come up with a viable carbon sequester mechanism for coal. They do have some engineering expertise, and they have the 6th largest proven reserves of coal. They import 61% of their total net energy, much of it oil from the Islamic states and N Gas from Russia.
              If they can’t pull it off, I’d be very surprised if anyone else does. although the news from Iceland this week is intriguing-

              • Nick G says:

                assumption is that the scenario Ron describes here will come to pass- it is the path we are on.

                Not really. We haven’t been on that path since, oh probably 1975. IIRC, that’s the year the US passed the CAFE regulations. That was a very large decision to move off the FF BAU path. It’s reduced oil consumption by at least 9M bpd, or roughly the total output of Saudi Arabia or the US.

                “People”, through their government, have made many large decisions to take an alternative path from FF:
                the US kickstarted hybrid electrics in the 1990’s with the PNGV program. California kickstarted EVs through the CARB program. The US gave EVs another push with the recent set of incentives that helped Tesla and made Solyndra infamous. They extended wind and solar incentives just a few months ago – that required both Democrats and Republicans to agree, and they did.

                Renewable power production can’t realistically be described as a trickle: it’s dominating new power production. Coal is declining dramatically in the US, and appears to have peaked in China.

                So, the very pessimistic scenario where people have done nothing to move away from FF, and will do nothing in the future is quite unrealistic.

                • Hickory says:

                  Wishful thinking Nick, and I applaud you for that stance. Wishful thinking is useful here, as it enables enthusiasm rather than just being pissed off or spiteful.
                  Rons point that we will ‘burn every lump of coal’ is an acknowledgement of how far into overshoot we are, and that the 7.3 B people use a shitload of energy.
                  And many have aspirations for a life that actually consumes more, not less, energy.

                  I too engage in wishful thinking in my mind, but that doesn’t change the big reality out there in the world.

                  • Nick G says:

                    Wishful thinking isn’t the right phrase. Wishful thinking is unrealistic, and there’s nothing unrealistic in the previous comment. Maybe the word you want is optimistic?

                    I agree that we have done a lot of environmental damage, and put a lot of GHGs into the air and water already.

                    But, it’s also true that humanity is doing quite a lot to transition away from FF. Perhaps that seems too nuanced to you, but it’s really very different from a vision of the world where people do nothing at all about the problem.

                    Finally, people don’t want more energy. They want the services that energy commonly provides: temperature controlled homes; transportation; etc. We can do those things without fossil fuels, and even with less energy.

        • Oldfarmermac says:

          Har says it all.

          Personally I believe wind and solar power WILL prove to be economically viable on a stand alone basis within the easily foreseeable future. But this will depend on building up both industries to several times their current sizes.

          Most mining is done already with electricity, and the only steel mill near my home is an electrically powered mill that reprocesses scrap steel as good as new for a minor fraction of the cost of making brand new steel.

          It’s going to take awhile, the shift to renewables isn’t going to happen like the shift to cell phones.

          Wimbi and I won’t live long enough to see the renewables industries dominate but happen it will, eventually.

          • Nick G says:

            the shift to renewables isn’t going to happen like the shift to cell phones.

            It’s already happened, just like cell phones.

            Keep in mind, there are still a lot of land line phones out there, just like there are still a lot of fossil fuel power plants. But…wind and solar dominate NEW SALES, just like cell phones dominate new sales.

            You have a cell phone, I bet, but I bet you still have land line phones. Same thing.

            • Oldfarmermac says:

              It’s going to take hell of a lot longer for the world to go from ice cars, etc than it did to go from land lines to cell phones.

              Virtually everybody I know even in the Appalachian backwater I call home now has a cell phone, even unto the kids down to ten years or so of age. Ten years ago, they were rare here in the immediate neighborhood, due to poor reception.

              Cell phones are far more useful and cheaper than land line phones all things considered.

              The transition to renewable energy is going to cost many times per capita what cell phones cost, and the process is going to be LONG DRAWN OUT. I am as big an advocate of renewables as anybody, but I very very seriously doubt if even a quarter of the cars on the road will be electrics in less than twenty years.

              We can’t afford to throw away things so costly as serviceable conventional cars, and the more electrics sell, the easier it will be to buy fuel for an ICE.

              And so far, there simply AREN’T any really viable alternatives to diesel powered trucks, tractors, and bulldozers. No alternatives at all to jets for now.

              I may not have made it clear, but that was the point I intended to make.

              It will take quite a long time for people to give up their ICE cars, trucks, tractors, construction machines, coal and gas fired power plants, jet aircraft, etc.

              Then there will be the political opposition to be dealt with. It will be many times stronger than the opposition put up by the old land line phone companies trying to protect their turf.

              • Nick G says:

                It’s going to take hell of a lot longer for the world to go from ice cars, etc than it did to go from land lines to cell phones.

                But, the land lines are still mostly here. Renewables (wind, solar) dominate new generation, just like cell phones dominate new phone sales.

                I am as big an advocate of renewables as anybody, but I very very seriously doubt if even a quarter of the cars on the road will be electrics in less than twenty years.

                Well, “renewables” is different from EVs. EVs are ecumenical: they can be powered by anything.

                We can’t afford to throw away things so costly as serviceable conventional cars

                We do it everyday. Cars depreciate because they’re no longer fashionable, not because they wear out. Then, we throw the car away when a small body or mechanical repair costs more than the artifically low depreciated value.

                the more electrics sell, the easier it will be to buy fuel for an ICE.

                Don’t forget network effects: if gas stations get few and far between, it will get harder, not easier to buy fuel for an ICE, regardless of price.

                And so far, there simply AREN’T any really viable alternatives to diesel powered trucks, tractors, and bulldozers. No alternatives at all to jets for now.

                Actually, electrifying trucks would pay off right now, but the industry will have to be pushed to make large, apparently risky investments.

                Synthetic fuel is viable, but not competitive with subsidized fossil fuel (subsidized by not being charged for external costs). Of course, even those prices will rise soon.

                Then there will be the political opposition to be dealt with. It will be many times stronger than the opposition put up by the old land line phone companies trying to protect their turf.

                No doubt, though the rising tide of inevitability is starting to slap car companies upside the head. Look at all the EVs being announced right now. Europeans are starting to be quite clear that diesel will have to be replaced with EVs.

                • wimbi says:

                  aren’t any viable alternatives to diesel

                  Yes there are.

                  I was asked to comment on stirlings as vehicle engines in the early ’70’s . I listed a long string of reasons that the stirlings of that time would not compete with diesels, and later events proved me right on every point, and the automotive stirling effort petered out, after a $100 million effort by the engine industry.

                  Diesels are now facing a huge problem of micro particles capable of deep penetration in lungs, What to do?

                  I happened across the book by Walker and Senft and was chagrined to find an obvious solution staring me in the face from 40 years ago.

                  Take the auto stirling of that time, cut off the crank, replace with free piston driving hydrostatic pump, and there it is, a fully competitive auto engine as good or better than diesel in power and efficiency, less volume, instant response to load, near zero emissions, and able to run on any liquid or gas.
                  MAN diesel had at that time made their own careful analysis of diesel vs stirling, and came up short, But every one of their problems just disappear with the free piston, making stirling all around better engine than diesel according to their own criteria.

                  I hope they notice, now that diesel is in real trouble.

              • wimbi says:

                Long drawn out? So why did I do the turnover to all PV/biomass for house and car in a few months with less money than goes into favorite f-150?

                Every one of those f-150 buyers could have done exactly what I did, and like me, now be sitting securely with no worry at all about keeping going during a grid collapse.

                In fact, it’s now even easier, since lotsa used leafs on the market, exactly like mine except 1/3 the price I paid.

                I differ with most honorable host Ron in my guess for the future- Coal will go away for a very simple reason – Solar will be cheaper. Nothing to do with ethics or politics, just bang for buck.

      • R Walter says:

        Wimbi, this year I had to find a new location for my potato patch, the potato bugs are so numerous, they can’t be controlled, they approach overshoot with a large planting of potato hills. It has become too much to bear and has become too time consuming.

        The location is ten miles away, didn’t want to drive the tractor for two hours and burn through ten gallons of gas driving a heavy tractor. It would be a waste of time and fuel. I planted 500 pounds of seed potato with a shovel, dug probably 3000 holes, planted a piece of potato in each hole and covered it with dirt. Did it the old-fashioned way, worked like a dog to get ‘er done.

        It was a grueling task, dreaded drudgery, and you don’t know if the potato seed will grow or not, a gamble. Fortunately, my one man power labor has paid off and the potatoes are growing in leaps and bounds.

        Not one ounce of fossil fuel, that extra-somatic energy, was used to plant the 500 pounds of potatoes. The new spot will eliminate hours of potato bug picking.

        Planting the 500 pounds of potatoes by hand was the easiest thing that could have been done at this time. It worked better than any other option.

        I do cut back heavily on using fossil fuels when the answer is to not use them for the best possible results.

        • wimbi says:

          Our experience exactly. But I noticed that the few potatoes that popped up by themselves in random spots around the garden seemed to do far better than those planted all together which were thick with potato bugs.

          So next time we scattered the plants, and also, hired a highschool kid to shake off the bugs on to a sheet and toss ’em into our pond where they instantly vanished into the pan fish and bass.

          Fortunately, there are still kids around here eager to get a job of any kind.
          We paid him money + the permission to eat a bass or two

          • Caelan MacIntyre says:

            Brilliant, wimbi. That’s, as you may know, along the lines of what, for example, permaculture teaches.

            If you eat the fish that ate the potato-eating bug, then you could almost say that you had potatoes with your fish.

        • Fred Magyar says:

          Wimbi, this year I had to find a new location for my potato patch, the potato bugs are so numerous, they can’t be controlled, they approach overshoot with a large planting of potato hills.

          Potato bugs are a feature, not a bug if you harvest them and eat them.

          Also called “sow bug”, “potato bug”, or “pill bug,” the wood louse is actually not a bug at all. It’s the only terrestrial crustacean in North America, and has a flavor that’s similar to shrimp.

          – See more at: http://www.backpacker.com/survival/8-edible-bugs-that-could-help-you-survive/#bp=0/img1


          • wimbi says:

            Thanks Fred, for that useful list. But here I remain stuck on BAU. Run the bugs thru the bass first, then eat the Bass As Usual.

    • Dennis Coyne says:

      Hi R Walter,

      What do we do when the fossil fuels stop increasing (probably before 2030 for total fossil fuel output)?

      Those coal fired power plants don’t work too well without coal.

  36. shallow sand says:

    ND rig count up to 28

    Maybe US drillers will scrounge up enough money to add rigs and keep a lid on prices.

    As Tom Ward recently said on CNBC, “If you give us capital, we will certainly spend it.”

    $50 WTI still does not work in either a 3 or 5 year payout scenario in any of the major shale basins, using my simple payout calculation.

    Death by 1,000 cuts.

    • GoneFishing says:

      What price is needed for your 5 year payout scenario?

      • shallow sand says:


        Price is variable well to well.

        Seems we have a handle on the Bakken the best.

        Assume a Bakken well that produces 220,000 gross barrels of oil, 220,000 mcf of gas in the first 60 months and assume the well, drilling, completion and facilities, costs $8 million. Also assume 20% royalty burden, and assume LOE of $8 per BOE and G & A expense of $2.50 per BOE. Also assume 10% severance tax. Finally assume well head gas price of $2 per mcf

        Net 5 year production of oil = 176,000 BO

        Net 5 year production of gas = 176,000 mcf x $2.00 = $352,000

        Total BOE (oil and gas at 6/1 ratio) =205,333 BOE

        Total 5 year LOE = $1,642,664
        Total 5 year G & A = $513,333

        So, assuming cash is being paid for all CAPEX, LOE, G & A, etc., over 60 months, the amount of $10,155,997 will be spent to drill, complete, equip and operate the well, including the allocated cost of companywide overhead (G & A).

        Net gas income, after payment of 10% severance would be 316,800. So, after applying that to the above total, we are at: $9,839,197

        Of our 176,000 barrel of oil, 10% of the proceeds will go to severance, so we have 158,400 barrels to apply to the cost of the well.

        $9,839,197/158,400 = $62.12 oil price at the well.

        Keep in mind further that there has been a discount to WTI in the Bakken of around $7, so $62.12 + $7 = $69.12.

        The problem above, of course, assumes cash is being paid for the well. If one half is financed, at 6% interest, add another $1.2 million.

        So, under financing half scenario, the price needed is

        $11,039,197/158,400 = $69.69 + $7 = $75.69.

        Also, question whether costs of wells would hold if many start returning, keep in mind until crash average Bakken well cost over $10 million to drill, complete and equip. So, under that scenario:

        $13,039,097/158,400 = $82.32 + $7 = $89.32.

        Just some quick guesses. Every well varies, of course.

        I encourage all to gather production info from Enno’s site and look at company expense information, and do your own calculations.

        I did this quick, please let me know if I made computation errors, or see anything amiss. I again invite all to show me where I am wrong.

        • Dennis Coyne says:

          Hi Shallow sand,

          Didn’t check your calculations, but I have also come up with about $75/b with cash financed wells in the Bakken. It is a little more in the Eagle Ford, maybe $77/b, not sure in the Permian basin, I don’t have a good well profile there.

    • AlexS says:

      shallow sand,

      It’s availability of cash that really matters for shale guys. If they have cash, they will drill new wells,
      regardless of profitability, the size of the debt, etc.

      • shallow sand says:

        AlexS. Yes, I agree with you.

        Many of top management receive bonuses based upon increases in production, regardless of financial performance.

        $49 WTI does not come close to a price where shale companies are able to at least hold oil production flat and be able to show GAAP net income.

        I fully expect that Q2 will show the majority again with losses, albeit smaller than Q1, 2016. This will mark 6 quarters of very weak earnings. I further fully expect that, absent a return to oil above $60, most will show little to no earnings due to D,D & A averaging between $25-$30 per BOE, in addition to LOE, G & A, interest expense and gathering expenses. Further, although gas has recovered, it is still low and even $3 gas only generates $18 per BOE.

        However, give them $$ and they will drill a hole. None are at all concerned (outwardly at least) about the principal balances of their debt.

        I do think banks are going to be unable to loan shale much money, but I do not doubt many will be able to issue more shares to generate more cash to drill and complete wells. The question is, how many more wells?

    • Dennis Coyne says:

      Hi shallow sand,

      On a point forward basis the DUCs pay out completion costs in the Bakken at about $52/b in 60 months. The money spent on drilling the well is like a horse that has left the barn, no cash flow until completion so the increase in rig count does not make sense, but we could see more DUCs completed at these prices.

      • shallow sand says:

        Dennis. I agree, assuming the wells are believed by the companies to be good wells or at least “average”.

        We have a TA well offsetting us that has sat idle for several years. Drilled but not completed. It could be considered a DUC.

        I assume there is some issue with the well, otherwise it would have been completed, especially as the completing of such a well is a much smaller percentage of the total cost than in the Bakken.

        I think Mike is correct, some DUC’s are not going to be strong producers, or there is some issue down hole. Or the operator doesn’t have the money to complete it.

        Remember, I am trying to come to “the average producing well” which is impossible.

        Likewise, there is not an average DUC.

        I do agree, all things being equal, better to complete drilled wells than drill new wells.

        • Dennis Coyne says:

          Hi shallow sand,

          It may well be that all the “better” DUCs have been completed, so the rest may be below average, the companies would just have to guess at the well profiles of the DUCs left and run the numbers. I agree costs will eventually go up, which might be a reason for completing wells now before that happens.

          I agree it would be even better to wait for oil prices to rise to higher levels, some companies are just trying to generate some cash to keep the lights on.

    • dclonghorn says:

      The nd rig report still has Nabors B5 drilling two wells at once. So probably the report should be 27. I thought the April production and directors cut was to be released today but I can’t access it. Has it been delayed?

      I appreciate your analysis coming up with around 69/bbl to breakeven a bakken well. From what I’ve seen on Enno’s site, 220,000 in 60 months is a much better than average well.

      • shallow sand says:


        I try to use better than average as it gives some wiggle room.

        Same with LOE, G & A.

        Seems to me it might be time to start using cash flow to pay down some debt principal.

        Wonder why I am not reading that shale co are using cash flow to pay down debt principal?

  37. PonziWorld says:

    Ponzi Finance requires PseudoLogic…China: “we are betting the farm on the Jobless Consumer like the USA”…LOL.


    “China’s shift to consumption and services lies at the heart of Xi’s quest for new growth…The government at all levels in Guangdong has been encouraging companies to replace human workers as rapidly as possible,” said Lu. “I can see our business increasing more than 50 percent this year.”

    “More than half of the members of the American Chamber of Commerce in China said the increase in costs was the biggest challenge to their businesses in the country”

    $.80 per hour is a tremendous “challenge” to the “business” of global slavery…

    Canadian Banks hire Pseudo-Logicians too…

    Canadian Banks: “We no longer lend to the Oil & Gas Industry…we do however lend to businesses that get their entire business from the Oil & Gas Industry because there is nothing else in this country”

    • Brian Rose says:

      A year ago there were 9 MORE active oil rigs than gas rigs in Canada.

      Now there are 7 LESS active oil rigs than gas rigs in Canada.

      That is one heck of a jump in oil vs. gas rigs this week in Canada though.

      Is that just due to different conditions in gas v. oil plays in Canada?

      Seems like oil rigs fell behind on its usual yearly jump, but gas rigs didn’t.

      Could be a good way of tracking lost production coming back online from the fire – if rigs are coming back in, then maybe shut down facilities are also going full bore to get up and running.

      I have zero clue about whether the fire, the offline production, gas rigs, and oil rigs in Canada are located, so maybe it is all completely 100% unrelated.

      Anyone care to help me become about this ignorant on this? It would be greatly appreciated as I’m quite curious!

      • Oldfarmermac says:

        A wild guess from way out in left field? The tar sands industry seems to be a hell of a good customer for the gas industry.Maybe the gas market is holding up a lot better than the oil market because of the tar sands.

  38. Brian Rose says:


    I was just citing Jevon’s Paradox in regards to moments like 2009-2010 and 2015-2016 where low prices caused a pick-up in demand. Basically, every time demand growth slows down it just creates the conditions for a an above trend spike to new record demand.

    On top of this is the unstoppable march of population growth and global wealth growth.

    I’m extremely optimistic of how rapidly we will transition, but that effort is just eaten up by the fact that oil demand will always rise to meet supply through the price mechanism – like U.S. vehicle fleet sales stagnating for 2 years now even though record numbers of EVs are inside that stat.

    My overwhelming concern is that your last sentence is the only possible outcome – demand will rise with supply until supply permanently peaks at which point demand will be permanently CONSTRAINED by supply, which is a bland way of saying that events like the 2008 Global Financial Crisis (in my mind a result of the oil crisis and record oil prices) will become the new norm, and all it will take is for one of these crisis events to be handled poorly for the entire global monetary system to collapse.

    As bad as 2008 was it was super-happy-fun-time compared to what would have unfolded if humpty dumpty wasn’t saved. I watched the crisis unfold and have watched every documentary that covers its events, and we were literally hours from a complete, irreparable collapse .

    Frontline PBS has some AMAZING documentaries that interview Bernanke, Hank Paulson, and Senators that were at the closed door talks before the 2nd TARP vote. There are books written by Bush cabinet members that reveal even more.

    It really would have been unfathomably worse than the Great Depression. Wal-mart and Sears wouldn’t open the next day due to the interconnections between corporate financing (where does operating income actually reside?), the banking system (answer to previous question), and what a digital run on the banks really means (money from EVERY entity goes POOF, not just the defunct bank or insurance company).

    That was SO DAMN CLOSE to happening into 2008… in a relatively benign political environment. If oil prices ever spike because supply is stagnating/declining and demand is close to supply (as it even is NOW with this huge 1% surplus), then, at first, elastic demand (a vacation, taking the boat out, buying a new sofa, etc) will be destroyed, which is no problem – it’s like your body burning off fat. THEN, if supply falls below the ever growing base of inelastic demand, necessary for the daily activities of the global economy, (like the energy your body needs for its basal metabolism) prices will spike violently until something in that system breaks.

    Looking at the current political environment in the U.S., and how difficult it is to pass even no brainer legislation, I see a TARP 2.0 passing Congress as… well, difficult. Same for Europe as we’ve seen how slow and difficult it has been to approve relatively small loans for Greece. If the “weakest link in the chain” was China they may hold it together due to their tremendous foreign currency reserves and expedient form of government.

    Ultimately, I am optimistic, but this series of scenarios – demand always close to supply until supply peaks, an ensuing 2008 crisis where prices rise until something cracks, and a political inability to save humpty dumpty this time – seems to be both plausible and reasonably likely.

    At least a 50/50 chance this will occur some time in the future because if point 1 happens the next events naturally follow with high fidelity – as we saw in 2008. As we see NOW global demand can rise rapidly EVEN WHEN EVs are selling well. Not only growth in demand from emerging economies, but growth in net U.S. demand as surge sales of SUVs more than offsets record EV sales and ownership.

    Just my two cents anyway.

    Does this sound rational to anyone else?

    • Hickory says:

      Yes indeed Brian. I see it along much the same lines.
      Overall, its a big chapter in the book called “Overshoot- the big unraveling”.

    • clueless says:

      Brian – More rational than many [most?]. But, the public is naive and not financially smart. To this day, the majority wanted the big banks to fail. But, banks do not have any money. They sell nothing. All they have is the public’s money – checking accounts, savings accounts, CD’s, children’s college funds, company payrolls, etc. Banks fail – no money system. Many grandparents lose everything. Remember, if the entire system crashes, the FDIC will not work either.

      By the way, except for General Motors Acceptance Corp [now Ally Financial], every large bank paid back their entire loan, together with a high rate of interest, and a government kicker for preferred stock.

      And the line that “banks were bailed out with taxpayer money” is so insane that it is difficult to comment on. No one’s taxes went up. Even me, with social security, I got something like a $250 “extra” check. The FED just printed money. Cash for clunkers. Energy efficient appliance upgrade rebates.

      I am convinced that many investors are selling short oil into rising rig count numbers. This will delay a price spike, but will likely make it more severe when it occurs. It is like selling short when car makers are selling a record number of cars. Or selling short homebuilders when sales and new housing starts finally started to improve.

      • Brian Rose says:


        You hit the nail on the head.

        The difference between public perception and reality you elucidated so well is why we cannot assume democracies will choose the obvious rational solution, and seem increasingly likely to embrace the opposite.

        If 49% of Congressman vote for rationality we’re still screwed.

    • Dennis Coyne says:

      Hi Brian,

      Probably another financial crisis will be handled appropriately, if not there will be a depression, eventually governments will start to understand what Keynes taught us in 1936 and was later improved upon by Paul Samuelson and others.

      When the peak arrives, prices increase, people buy more EVs, wind and solar become more competitive and perhaps legislators realize the necessity of a carbon tax or fee and dividend plan.

      All of this is disruptive and it also creates new opportunities and new jobs. Output will only decline rapidly if EVs and renewables build out very quickly, in which case not as much fossil fuel will be needed.

      None of this will go smoothly, but it need not be catastrophic with appropriate policy.

      • Brian Rose says:


        I have tremendous respect for you, and your contributions of effort and time. This site would be at a tremendous loss without you helping Ron in the laborious process of keeping this site up to date and relevant. Those of us who frequented theoildrum.com or even lifeaftertheoilcrash.com recognize the large sacrifices that are made just to keep these sites running.

        I’m sorry if this is considered an off-subject area, and let me know if you or Ron feel it is deviating too strongly from the rules.

        Most regulars here love this site, and you and Ron’s posts (as well as many other labor intensive analyses by several off-site folks) not because we’re unusually fascinated with the global supply, demand, and net export availability of a random resource, but because there’s a recognition that this particular resource is uniquely important. I recognize you wouldn’t be here either if you weren’t also of this perspective.

        For those of us that analyze the world through physics it appears that the 2008 crisis, the slow growth since then, and declining EROEI for oil are intimately related.

        The impact on the population as a whole has been one of frustration and anger. They do not know why things are changing, but they do know they are changing. This reaction is not only reasonable, but also fascinating to anyone who is deeply interested in physics/thermodynamics and how it effects ecosystems and Homo sapiens historical progress over millennia.

        It seems as though there is a direct relationship between what has unfolded in global oil prices and the political and economic consequences that followed. There is a distinct difference between the political atmosphere of compromise in democracies GLOBALLY since the 2008 crisis. The ability to hold the monetary system together in 2008 was barely achieved.

        I hope this doesn’t come off as insulting because I don’t mean it that way, but you don’t seem to be aware of how close we were GLOBALLY to complete collapse in 2008. When it comes to Democracy and politics the rational option didn’t pass the 1st time. Before the 2nd vote a meeting was held where the most respected and knowledgable people told Congressional leaders “if you don’t pass it this time there’s a 100% chance you’ll be more worried about finding food than getting re-elected”… and it still BARELY passed.

        There’s a political trajectory that is layed upon what has unfolded since the 2005-2009 plateau in global oil production. As much as rational people like you and me enjoy the prospects for rational political outcomes when faced with crises the recent history of how the 2008 crisis was handled should give significant pause. TARP failed the 1st vote, and barely passed the 2nd vote after a literal “do it or we’re all f%&#^$” private talk.

        Do you genuinely feel as though the current political climate is BETTER than in 2008? TARP barely passed the 2nd time and the electorate is more pissed and uncompromising as ever… both in the U.S. and in Europe.

        I would hold your position that there would be a “do what is needed” outcome to save the system if it were not for us having a recent, historical, well documented example of how this could play out. You may underestimate how insanely non-rational the electorate and their politicians can be, even when the rational option is beyond obvious.

        Personally, I just hope we never encounter a 2008 redux of supply being unable to meet growing demand because we are living in a much more irrational political world (both in Europe and the U.S.) than we did in 2008, and even then we BARELY made it. If TARP wasn’t necessary to save the global financial system they wouldn’t have gone through Congress in the first place, but it was necessary, they did go through Congress, and it almost failed (after failing the 1st time ). The EU’s political structure of ratification would make a “do now or its too late” situation impossible as they need every EU country to vote. The flaws of that system were revealed by the rather slow moving European Sovereign Debt Crisis – a fast moving crisis would be catastrophic – like someone seeing a light turn red, but not being able to react in time because the reaction time is too long.

        Again, sorry if this is too off topic, but I sense we’re all here because ultimately we’re all interested in oil production because of its unique relationship to economics, growth, and industrial civilization itself.

        • Nick G says:

          This uniquely important historical transition away from Fossil Fuels is intimately linked with our increasing political paralysis.

          The oil industry, in the form of the Koch brothers, is deliberately sabotaging government in order to protect itself from regulation and fuel/carbon taxes.

          When George Bush Sr. said “Read my lips, no new taxes”, he was speaking words written by the Koch brothers, aimed squarely at fuel and carbon taxes*.

          *as well as income and property taxes, of course, due to the influence of other wealthy special interests.

        • Doug Leighton says:

          I don’t know what you’re worried about Brian: reason will prevail.

          First, just get those walls built along the Mexican and Canadian borders, export the nasty Muslims (no all of them, nasty or not) and cancel that bloody Paris climate deal right away.

          Oh yeah, Dennis will probably give you an address where you can order a pair of pink glasses.



          • shallow sand says:

            Doug, in my very conservative neck of the woods, in which Trump beat Cruz by a few points, very few people will publicly admit support for Trump.

            I feel like I am watching a modern version of, “It Can’t Happen Here”.

          • Brian Rose says:

            Whoa Doug,

            The plan is to “temporarily ban Muslims from entering the U.S. until the threat has ended”.

            No Muslim will be exported, and new Muslims will be allowed in once terrorism is defeated.

            Also, climate change is a lie.

            But politicians will do the rational thing because they have to… even though they very nearly didn’t do the right thing during a period of relative bi-partisanship that evaporated long ago.

            • Dennis Coyne says:

              Hi Brian Rose,

              Though I agree things may have gotten worse, politics was pretty polarized by 2008, probably a lot of politicians thought bailing out the banks would “look bad” to people back home. They were probably right, except the alternative was much worse (Great Depression 2).

            • Also, climate change is a lie.

              Spoken like a true Trump supporter. Trump is a con artist, a fraud, a business man who makes money by not paying his contractors. The last Trump showed his tax returns, he did not pay a cent. Trump University was a fraud from the very beginning.

              But Trump does have one thing going for him, he has every fool in the country on his side.

              “Hain’t we got all the fools in town on our side? And hain’t that a big enough majority in any town?”

              Mark Twain: Huckleberry Finn

          • Dennis Coyne says:

            Hi doug,

            Reason does not always prevail, a crisis can lead to a fascist dictatorship as it did in some nations, or it can lead to progressive changes as it did in the US and elsewhere.

            There is no way to know how it might go, I would prefer if a crisis is avoided, but that is not very likely in my view.

            Now you may know that only negative outcomes are possible.
            I am convinced that there could be a positive or negative response to a crisis, that view seems more balanced and realistic to me.

            • Doug Leighton says:

              I don’t pretend to know much about political decision making Dennis but when a (one of your) presidential candidate talks about scrapping international treaties (i.e., NAFTA and the Paris Climate Accord) together with building border walls, that seems totally bizarre to me. And, how does that translate to: “[I] knowing that only negative outcomes are possible.”

              • shallow sand says:

                I’d just like to know why we have not heard from John Miller and John Barron?

        • Dennis Coyne says:

          Hi Brian,

          I am very aware that there would have been a severe depression without action by the government during the GFC.

          The legislators that vote against the sensible option may be held to account when the depression arrives, maybe then we will get better people elected, the crisis could potentially lead to positive social changes.

          Note that Wimbi used to teach Thermodynamics at MIT, in his view EROEI won’t be a problem, I think. I agree with him.

          Paul Krugman thinks the economy won’t fall apart, I believe.

          Both of these men know far more than me about thermodynamics(Wimbi) and economics (Krugman).

          • wimbi says:

            Oops! I spent some time at MIT learning more about engineering thermo. I was a student there, not faculty.

            I jumped from there a few blocks away to boston u, and helped start up their original ME department.This startup had only a few guys, and each of us had to teach every thing from remedial math to gas turbine design – highly educational.

            • Dennis Coyne says:

              Hi Wimbi,

              Sorry, I heard you mention you were an ME professor and that you were at MIT and I conflated the two.

              So you Graduated from MIT, but taught for a while at Boston University.

              Anyway, my point that you probably have forgotten more about thermodynamics than I have ever known, stands. I did take a few thermo classes at the ME department at UMass-Amherst before switching to Physics, but that was at an undergraduate level, many moons ago.

          • Nick G says:


            One helpful thought: it’s can be very hard to tell what’s real action in politics, and what’s deliberate theatre.

            Many votes are understood by all of the participants to be symbolic. You can take 100 stupid votes to make your constituents happy as long as the final vote is the right thing, or as long as you know it will get vetoed later.

            For instance: The Affordable Care act isn’t going to be repealed, but the Republican House has voted to repeal it dozens of times, because….they know it won’t pass.

            US politics has indeed become less functional, but it’s not nearly as bad as it looks. Look at the bottom line of the pretty good progress the US is making in CAFE standards, coal reduction, EV production, wind/renewable building, etc.

            • Dennis Coyne says:

              Hi Nick,

              Yes so far things haven’t been too bad.

              I was referring to Brian Rose’s point that if the TARP legislation had not passed, the outcome would have been very different.

              Many people continue to think TARP was a bad idea, generally they are people with a poor understanding of economics, in my view.

              In the future, if people with those views prevail in a GFC2 situation, there will be a Worldwide depression and the idea that not bailing out the financial industry is a smart move will have been disproven. The anarchists will love it. 🙂

              • Nick G says:

                I agree that our government isn’t what it should be. But…many votes are symbolic, and brinksmanship is normal.

                TARP failed the 1st vote, and barely passed the 2nd vote after a literal “do it or we’re all f%&#^$” private talk.

                This doesn’t really tell us what happened. The first vote may have been pure theatre, planned so that congress-critters could tell their voters that they fought hard agin’ it.

                And votes that barely pass are perfectly normal: votes by members in marginal districts are minimized, because all you need is a bare majority.

                Again: there’s no question that the Koch brothers are irresponsible, and are willing to cause crises. But…they don’t have complete power over the Republican party – they’re one of many influential power and influence bases.

                So…. (with apologies to “tale of two cities”) we may be in the best of times. We may be in the worst of times. Or…we’re in something in the middle, muddling through.

            • HuntingtonBeach says:

              Hi Nick,

              “The Affordable Care act isn’t going to be repealed,”

              I’m not so sure your correct. There are over 20 Republican governors who refuse basically free Medicaid from the feds for over 10 million of their citizens. The Republicans after 50 years are still trying to roll back abortion and have limited it. Elizabeth Warren this week said if the Republicans gained control of the White House, Senate and the House, that they would repeal the ACA.

              Republicans aren’t looking for a functioning government because that limits the power of the wealthy.

              • Nick G says:

                I like Elizabeth Warren, but…she needs something to campaign against. It’s exactly the same game Republicans are playing with the repeal of the ACA. OldFarmerMac will tell you that repubs have managed to demonize the ACA, and use the ACA as an effective propaganda weapon against democrats, even though their voters actually benefit from it.

                I would guess that most Republican congress-critters don’t want to repeal the ACA, though at this point many may be trapped by their previous votes. Reading their internal discussions suggests to me that their preferred strategy is to replace it with something that they can claim is vastly superior. They can use the repeal of ACA for their PR, tweak the program, but not repeal the bulk of it, which is very, very popular with it’s recipients.

                The contradictions of Republican misinformation are nicely captured by the quote from a sign: “keep your government hands off my Medicare”.

                • Oldfarmermac says:

                  I think Nick G has his arrow pretty close to the bullseye when it comes to OCARE or the ACA.

                  The REAL problem with it is that it does damned near NOTHING to fix any actual problems with the health care industry ITSELF.

                  Basically what it is, is an income transfer scheme, resulting in one guy I know of seeing his insurance costs going up to about five or six thousand bucks a year, while this same guy’s GIRLFRIEND gets a SUBSIDY that is just about EQUAL to his increased costs, lol. He earns about eighty thousand, she makes only about sixteen thousand, due to being young – and for now- unskilled and making just about minimum wage.

                  The ACA hasn’t gotten rid of any of the problems excepting one- covering some uninsured people.

                  • Nick G says:

                    Sure. It was a relatively modest change. As you say, it was primarily intended just to cover some previously uninsured people.

        • Dennis Coyne says:

          Hi Brian Rose,

          As far as the EU, I think an economic union without a political union that has a stronger central government, will not fare well in a crisis.

          The monetary union was a mistake and possibly even the political union is a mistake as each separate nation state needs control over its own fiscal and monetary policy, especially when the economy is doing poorly.

          The European Union as it now stands is not really viable especially in the face of a crisis. Better to roll back the monetary union until a Europe is ready for a “true” political union with a stronger central government.

          Eventually Europeans will figure this out, the UK was smart to stay out of the monetary union, and a few nations (Norway and Switzerland) chose to remain independent, also probably smart though the UK gets the benefits of membership without giving up as much control over fiscal and monetary policy as other EU members.

  39. Hickory says:

    “Fossil fuels might be replaced by biofuels in some of these uses (farm tractors, ships, and aviation).”

    I sure hope its not much. That would an environmental/social catastrophe.

    • Dennis Coyne says:

      hi hickory,

      I imagine there will be less aviation, ships might use a combination of sails and combustion or go slower to save fuel. Perhaps batteries can be used for tractors, much will depend on future prices of fossil fuels, biofuels and alternatives. At some point there will be less uncertainty about climate change and maybe we don’t have to reduce fossil fuel use to zero, if that is even possible. Eventually there may not be much fossil fuel to use that is affordable, so we will have to figure out some solution.

      We got along without fossil fuels for most of pre-history, it would probably be best if we minimize their use, eventually.

      • Nick G says:

        Biofuels are very useful, but not very scalable without substantial environmental damage.

        Synthetic liquid fuels from renewable power are certainly feasible, and would cost well below $10/gallon.

        $10/gallon would be very affordable for aviation, long-distance water freight, seasonal agriculture, and for extended range ground EVs. In the very long term it will make sense to produce maybe 15% of what we produce now, for aviation, long distance water freight, seasonal agriculture, a little personal transportation.

        “1 Euro per liter”
        “The Audi e-gas plant in Werlte, Lower Saxony, already produces Audi e-gas (synthetic methane) in a comparable manner; drivers of the Audi A3 Sportback g-tron can fill up on it using a special fuel card.”

        For instance, these people claim 70% efficiency, which is pretty good. Might make it a little more widely useful than otherwise.

        “A pilot plant in Dresden has started production of the synthetic fuel Audi e-diesel using water, CO2 and green power—i.e., power-to-liquid (PtL). After a commissioning phase of just four months, the research facility in Dresden started producing its first batches of high?quality diesel fuel a few days ago. (Earlier post.)”



      • Nick G says:

        Synthetic liquids would have a nice synergy with “wind-gas”.

        There are three scenarios mentioned in the article (there’s one as cheap as $1 per litre, that’s already in pilot production). The likely scenario for a renewable grid would involve wind and solar overbuilt by 1.5x to 2x (or more) which would mean that wind & solar power would exceed consumption about 90% of the time, and very, very cheap power would be available probably 75% of the time. That would make backup from “wind-gas” (in the form of hydrogen stored cheaply underground, and probably burned in cheap turbines, not fuel cells) very feasible.

        “Net production cost ranged from $12.41/GGE to $21.35/GGE for a system powered by a wind power plant with a full load fraction of about 47%, depending on the assumed electricity feedstock price and electrolyzer capital cost.
        For systems with full load fractions between 70% and 90%, the production cost was in the range of $5.48/GGE to $8.03/GGE.”


  40. islandboy says:

    Earth to MIT: is that really what you guys think?

    Let’s start from the beginning: first, we did not invent this comparison between German and US power bills. We simply improved it.

    Comparing the price of a kilowatt-hour (“$/kWh”) is fine, but it only tells you so much – especially when high energy prices are a goal. Take gasoline, which is easily 50-100% more expensive in Europe than in the US. Europeans make gasoline artificially expensive through taxation in order to lower consumption. That’s why, in 2008, I was able to buy a five-seater station wagon for €16,000 that got around 60 mpg. The only similar car in the US at the time was the $26,000 Prius.

    Germans intentionally tax electricity. Consumers respond by paying attention to the power consumption of levels of appliances when making purchases. To take just one example, Americans still use conventional lightbulbs – including during the day, when Germans manage fine with daylight alone indoors – that give off more heat than light. They then use air-conditioning in many parts of the country to compensate for those “internal heat gains,” as Passive House experts call it (in the early 1990s, the Germans came up with an architecture that does without central heating).

    The logic of not comparing prices alone is that we need to take account of the rebound effect. If you do what Americans do and simply mandate greater fuel efficiency in cars (CAFÉ standards) in a command-and-control policy approach (Washington telling Detroit what to build and Americans what to drive), people can react, for instance, by purchasing vehicles with bigger engines, which are now more affordable in operation thanks to lower fuel costs from efficiency. But if you use environmental taxation as a market mechanism, consumers can react however they want: by walking or cycling more often, using public transportation, or buying more efficient cars. Because efficiency is then the effect, not the cause, the rebound effect is smaller. Efficiency often fails without price increases.

    And if you want to protect the poor, then address poverty, not “energy poverty.” If you are American, you are on very thin ice if you criticize in Germany for welfare policy.

    This Post was written by Craig Morris, an American writer and translator in the energy sector who has been based in Germany since 1992. He is Editor for Renewables International, lead author of EnergyTransition.de, director of Petite Planète, author of the book Energy Switch (2006) along with numerous articles in both English and German on energy technologies and policies. I think others here may find the above article interesting.

    • Ves says:


      islandboy: ” So does the ownership of my current vehicle constitute “having financial claims on economy that are significantly bigger than economy itself”?”

      Yes, ownership of any vehicle (ICE or EV) represent financial claim on economy. If economy cannot support your monthly vehicle payments and maintenance and other cost of ownership than financial claims on that asset are bigger then economy. Your vehicle is the same as drilling rig and if oil economy cannot support financial claim on that rig than it get’s sold 10 cents on a dollar or it rots in yard.

      Look, in economy we have business and we have finance. Business operates in cycles, S-curve up and down. Finance has its own mathematical growth and it is purely exponential growth. When finance grows faster than real economy it gets disconnected with real economy. That is the moment when finance has financial claims on economy that are bigger than economy itself. As case in point you can look what happened with shale oil where finance of shale was growing purely exponentially in the last 6-7 years and got totally disconnected with real economy where oil demand was not growing at the same pace.

      Once again I am not saying it is” bad” that you purchase that EV vehicle that you have shown me. All I am saying before you make decision to spent £ 10.000 (not a small change) to think if there are better ways spent it.

      • Dennis Coyne says:

        Hi Ves,

        Perhaps island boy knows best how to spend his money. I noticed that he is not suggesting the best ways that your money should be spent.

        Perhaps you think it would be best if no more vehicles were produced. I disagree, I think we should raise fuel prices through taxes so that people will tend to choose more fuel efficient vehicles, or plug-in hybrids, or EVs. The total social costs of such vehicles will be lower than a typical SUV (in the US) that gets 20 MPG (US gal).

        • Ves says:

          This is the second time that you are jumping in conversation between islandboy and myself. Islandboy clearly asked MY opinion about the topic of his interest on financial claims on economy. Twice. He did not ask you anything. He clearly is not interested in hearing your mantra “debt is good”. Debt is toxic. Less debt is less toxic but none the less it is still toxic.

        • Caelan MacIntyre says:

          Hi Dennis,

          How are you this Saturday, ostensibly at ground zero of Empire in 2016? Things are teetering, aren’t they? Kind of shifting.

          Apparently you think your empire knows best how to spend some of your and everyone else’s money, including, of course, overseas resources? (Like for PV/EV buildout? More oil for the military, less for the population?)

          How ‘government’ makes money work is a ratchet job toward a status-pyramid: Inequality and undemocracy– built-in, by law.

          I suspect that most people are anarchists if they really think about it, but some of them need to see it close up and personal, like maybe being mugged at gunpoint a few times (and a few more times for the tough nuts) in a dark alleyway by someone with a shirt or suit that says, ‘government’ on it and who tells you that for your next mugging you’ll get some of it back in the form of things you don’t necessarily want, but maybe more if you work with them and pony up for, say, an EV and PV and happen to want those anyway. So maybe it’s ok for you, except for the muggings. You’d rather have them save you the time and angst and automatically take it off your pension or salary.

          To repeat from elsewhen, USA and assorted Western folks, likely like you, benefit from this sociogeopolitical setup, and disproportionately, and through the forced and violent displacement of people from their foreign lands and accompanying human and cultural genocide are some of the results. Not only that but your ‘taxes’ (that mugged money I just told you about) go to uphold that way-of-death. Again, some people would think differently if they experienced some of the dynamics they apparently benefit from up close and personal. A good bombing campaign. Take out their cars first; a few tracts of roadway next; and sewage and water infrastructure just to get going, never mind friends and family.

          Jamaica is not an empire and can’t really be one, can it? It’s, at best, perhaps a cabin on the edge of town. Russia’s a Castle on a sprawling campus. Europe ‘wanted to be like that’ with the EU. If the planet was a neighborhood, Jamaica would be one of the smallest homes in it. So all the electric cars and solar panels there is really saying little, except perhaps from the standpoint of someone living there, like islandboy.

          (Just teasing you a little islandboy, but only a little. I still think running around nude, hanging out at the beach, swimming, and making love, eating papayas and drinking pina coladas all day is a far better use of your time and resources than staring at a computer for most of the day in a canned office environment in what David Graeber calls a ‘bullshit job’. Somewhat like BAU, many of us make the rest of us look like a bit of a walking-dead species.)

          Like Diamond (and/or Tainter) have writ; lots of land, resources, labor (population), and energy from it like food, oil and moonshine, and then laws/rules/brainwashes, power empires’ ideologies, expansions and weapons of mass destructions.

          “Fuck the EU.” ~ Victoria Nuland

          Total Invasion
          (At 3:00 that’s from Wikileaks’ ‘Collateral Murder’ video. They were apparently journalists and there were children in the van. Julian Assange is still holed up in the fancy prison of the Ecuadoran embassy.)

          • Fred Magyar says:

            (Just teasing you a little islandboy, but only a little. I still think running around nude, hanging out at the beach, swimming, and making love, eating papayas and drinking pina coladas all day is a far better use of your time and resources than staring at a computer for most of the day in a canned office environment in what David Graeber calls a ‘bullshit job’. Somewhat like BAU, many of us make the rest of us look like a bit of a walking-dead species.)

            Now here is a pretty good example as to why your ridiculous black and white view of the world is so profoundly flawed. I guess one could argue that people like Amit Sood have one of those canned bullshit jobs.
            Even worse he works for Google with deep learning algorithms…


            However your constant put down of any possible redeeming value produced by our industrialized civilization is not only getting extremely boring I’m beginning to worry about your mental state especially given the Youtube video you posted.

            I guess one could enjoy looking at all the art in the world and make connections and learn about human cultures or you could chose to spend time staring at a computer screen searching out garbage like the video you posted.

            Please get some help before you hurt either yourself or somebody else.

            • Caelan MacIntyre says:

              Hey Fred, have you ever been to or seen a Haka?

              Apparently, another form of Haka is more intimate than this, and by invitation only, but there’s the idea anyway.

              I don’t normally listen to so-called post-punk or pre-heavy-metal and yet, here I am, doing so.

              I am not necessarily averse to industrialism or government as decontextualized concepts, but maintain a concern for when their concepts leave the labs if ever or whenever they do.

              In an earlier time, would you be plopping ‘Hey look!’ things in down in our laps and telling us how, for example, flying cars, robotics, nuclear fusion, or industrial automation, etc., were going to disrupt things and free us to lives of leisure and the pursuit of art, beauty, philosophy and exquisite happiness and so forth?

              Anyway, if real democracy, equality and local/community participation and so forth are not injected into views and practices regarding social and material technology, then they won’t likely work or in the ways we hope and expect and merely be implementations of an elite ‘Get ‘er done.’ set that know or care little about what others want and need and are willing to live (and die) with on their shared planet. That’s shared planet, Fred.

              “In 1999 Jaz Coleman [of Killing Joke] and Maori singer Hinewehi Mohi recorded the album Oceania. The record went double platinum in New Zealand. The song ‘Pukaea’ appeared in the film Year of the Devil (2002).

              In 2001 Coleman was commissioned by the Royal Opera House in Covent Garden London for his first large scale opera entitled The Marriage at Cana.

              Also commissioned by the Royal Opera House was Coleman’s Unwanted, a concerto grosso for violin, viola and string orchestra whose theme portrays the plight of the Romany people of central Europe. This work was in collaboration with Czech photographer Jana Tržilová, whose portraits of the Roma taken within her own country moved the composer with their deep compassion and humanity

              In 2006 Coleman was writing a book about permaculture, free energy, freedom and freedom-loving individuals…

              [ironically perhaps] Coleman was made Chevalier des Arts et des Lettres by the French Minister of Culture for his contribution to contemporary music, and was decorated by the French government on 27 September 2010, while Killing Joke were in concert at the Bataclan in Paris…”

              Incidentally, maybe you can determine, for the rest of us, if this guy, as you might suggest, ‘needs some help’, I mean, as open-minded and un-black-and-white as you seem to insinuate for yourself:

              • Fred Magyar says:

                In an earlier time, would you be plopping ‘Hey look!’ things in down in our laps and telling us how, for example, flying cars, robotics, nuclear fusion, or industrial automation, etc., were going to disrupt things and free us to lives of leisure and the pursuit of art, beauty, philosophy and exquisite happiness and so forth?

                Obviously you don’t understand anything I have been saying. I have been talking about disruption, that much is true but for you to suggest I’m talking about flying cars and nuclear fusion is insulting! Furthermore I have never once said any of this disruption was guaranteed to free anyone from anything.

                My point has only been that things can and are changing very fast. I have never said that any of those changes would save all of humanity in the long run. I have always said that I do not believe this planet will be able to support 9 or 10 billion inhabitants with or without BAU.

                That doesn’t mean that technological disruptions are not having major impacts.

  41. Frugal says:

    Statoil ‘disappointed’ with reduced prospects for Bay du Nord discovery

    Birkeland said there was still a lot of assessment to do on the project, and there were no firm schedules for commercial operations to begin — if they start at all.

    Now 300 million barrels sounds like a lot of oil, but apparently not enough when it’s located 500 km offshore.

    • George Kaplan says:

      Deep water, far from shore with possibility of icebergs (more and more recently as Greenland glacier melt has accelerated) equals very expensive wells to drill. The associated gas would have to be reinjected which might not be ideal for the reservoir management. I think helicopters might have to stop for refuelling on Hibernia platform to make the trip, that would significantly increase workers risk exposure and narrow the operational window. Overall this equals very expensive oil, though it’s good quality at 34 API, but some of the other finds around there have been heavy and smaller deposits, which would be still less attractive. With the loss of the riser from the Shell drillship offshore Nova Scotia earlier in the season, and the general economic woes from lower oil costs and declining production, and big cost overruns for the large Labrador hydraulic power system it’s not been a good year for East Coast Canada to go with the fires in Fort MacMurray (which, from memory also happens to have either the second or third largest Newfoundland population after St. John’s and Toronto).

    • Dennis Coyne says:

      Hi Frugal,

      In the grand scheme, that’s enough to supply the World for four days (at 80 Mb/d), so no it does not sound like a lot of oil to me.

  42. SatansBestFriend says:

    Off Topic but touches on discussions that occur in this forum.


    Food for thought. Old article but good IMO.

    Dave Stockman was Ronald Reagans budget director.

    With the exception of his views on moving to the Gold Standard, I agree with his views (unfortunately).

    • Dennis Coyne says:

      Hi Satan’s best friend,

      So that’s the “Voo doo” economics (George Bush Senior’s term) guy?

      The Supply side economics stuff is bunk. In practice, Reagan’s policies were classic demand side stuff.

      Basically Reagan cut taxes and boosted military spending and was responsible for a huge increase in the budget deficit. Any talk of a balanced budget, was only talk.

      • SatansBestFriend says:

        Stockman resigned under Reagan

        “The destruction of fiscal rectitude under Ronald Reagan — one reason I resigned as his budget chief in 1985 — was the greatest of his many dramatic acts”

        Anyway, I think it is a good article. Obviously, your economic biases will affect if you like it or not.


        • Hickory says:

          I do think that Stockmans views posted in that article are very insightful,
          regardless of ones partisan position.
          I have never extended any love towards Reagan

  43. Politcal Economist says:

    Hi Ron and Dennis, as I promised, I have prepared the World Energy 2016-2050 Annual Report. This is an update of my 2014 report posted here.

    How should I communicate with you?

    • Political Economist,

      You can just post it to me and I will post it. My address is DarwinianOne at Gmail.com.

      However this time of the month is when we have the most other stuff to post. The OPEC Monthly Oil Market Report will be out Monday and I will have a post on that then. Also the North Dakota data comes out early next week followed by the Texas data. So it will likely be next weekend or later before we can publish it.

      But we are looking forward to your post.

    • Dennis Coyne says:

      Hi Political economist,

      My e-mail is my first initial and last name at gee male dot com. Trying not to get my address picked up by bots.

  44. Jeju-islander says:

    Ves: All you need is electric scooter, flip flops and pair of shades on the tropical island.
    That’s brilliant. Am still laughing. I live on an island where 400,000 ICE cars will be replaced by 400,000 EVs in the next 14 years. The owners of petrol stations have begun campaigning hard against this idea. I will pass on your helpful suggestion.

    • Fred Magyar says:

      The owners of petrol stations have begun campaigning hard against this idea.

      Gee, what a surprise! Doesn’t matter though, if they can’t adapt to change, others will!

    • Dennis Coyne says:

      Hi Jeju-islander,

      Are you on Jeju doe (I am using the phonetic spelling) in Korea, I have heard it is a beautiful place.

      If my guess is correct, are Hyundai and kia producing any EVs yet or are people buying the Chinese EVs?

    • I live on an island where 400,000 ICE cars will be replaced by 400,000 EVs in the next 14 years.

      Intriguing. Googled it, found this, bold mine:
      Korean Island Plans for All Cars to Be Electric by 2030

      The island already has nearly 500 240-volt charging stations, according to Yonhap News Agency, about 10 percent of which are DC fast-charging stations. There are currently only about 360 electric vehicles amongst the population of about 607 000, a figure that the province wants to expand to more than 500 this year. The provincial government expects about 370 000 total cars on the road in Jeju by 2030 compared to about 300,000 today.

      To meet that goal, the government is providing some hefty incentives. Along with EV-ready infrastructure, buyers on Jeju will also get up to 23 million won (US$ 21 800) in subsidies to purchase an electric car this year, although the high subsidy may only last one year. A subsidy of 15 million won (US$ 14 200) will be offered nationwide. The government is also introducing an emissions tax on gas-powered vehicles.

      Good luck after that first year. I have my doubts as to the success of this plan after the subsidies expire.

      • aws. says:

        Why don’t they just build an effective public light rail network?

        • Nick G says:

          To cover the whole island would be extraordinarily expensive, both in capex and opex, and use more energy.

          Mass transit has to provide frequent and 24 x 7 service to ALL locations in order to replace personal vehicles. That means a lot of empty (or almost empty) trains and buses. That’s far more expensive in anything but the densest areas.

          • Jeju-islander says:

            Caelan MacIntyre hates exported western, neofeudal/elite-driven, pseudoculture. Wonder if he hates buses too.

            Jeju is also in the process of converting all the public buses to electric. They are using a battery swap technology. The battery is lifted from the roof of the bus up into the charging center. See http://www.begins.co.kr/
            It’s in Korean but you should get the idea from the pictures.

            • Ves says:


              A bus looks fine and there should be more busses like this in NA.

              Have you driven on these busses?
              So could you tell us whether the second passenger that enters the bus sits next to the first passenger that sits behind the driver and says “Hello” to him and starts chatting or goes all the way back, further away from the first passenger, and sits there by himself?

              • Jeju-islander says:

                Ves” Have you driven on these buses?

                Yes. At the front the old ladies sit on the floor in a circle singing songs in the local dialect. Boxes of garlic, mushrooms and live chickens fill the racks above. They are on their way to the local 5 day market to sell their produce.
                At the back the school students sit quietly studying for tests later that day. They cannot understand their grandmothers songs because they do not speak the same language. Once finished studying they will put in their headphones and re-listen to ‘Gangnam Style’ for the 10,000th time.
                In the middle sits a lone traveler. It is a he. It is always a he. He is returning alone from a night of drinking. He daydreams about his life on this tropical island. He thinks about running around nude, hanging out at the beach, swimming, and making love, eating papayas and drinking pina coladas all day

                • Ves says:

                  So still no one is talking to each other on the bus but everyone is running away from themselves and everyone else, but this time in electric and battery swap technology. Wow!

                  So the roots are still cut, man is almost uprooted. When you are uprooted then you rely solely on society, culture, parents because you have no roots. This time you depend on electric swap technology. It could be a big problem with Chinese electricity consumption in just few years. Have you looked the numbers?

                  That could be the moment you become aware that you have no roots and you will feel crazy, you will go insane. Then you could realize that your knowledge is borrowed, it is not your own. It is borrowed from some university, corporate conglomerate, the state. Then you realize you have nothing of your own. That could be a big problem.

                  So the electric busses are still fine but next time you enter the electric bus say “Hello” to the old ladies or even join them singing because you could gain your own knowledge.

                  • Jeju-islander says:

                    A second traveler gets on the bus at the next stop. Sits down next to the lone traveler and says, “Hello Caelan, had any good papayas lately”. The reply “Not now Ves I’m looking at the numbers”

            • Nick G says:

              They have an english version:


              It sure looks useful for other things, like trucking.

    • Caelan MacIntyre: Feudal Fuel; Affluent Effluent says:

      I wonder if Jeju Island, a province of South, as opposed to North ‘Oh-hey-what-happened-to-half!?’ Korea, got any nuclear fallout from Japan. I’ve studied Japan a little and mentioned it on The Oil Drum.

      Jeju Island, along with Japan might be among two of the last places I would want to visit. That would not have been so had truly-cultural, ‘non-elite-cookie-cutter’, paths gone in different directions.

      So what’s my point? It’s all those bullshit jobs and crap we don’t need, like 400 000 cars.
      It’s exported western, neofeudal/elite-driven, pseudoculture.
      And nuclear power and roadways and pollution and lost/detached zombie-people. And subsequent generations that don’t know any different because they were born into it, maybe like you, Jej’. Our species, in part through status-plays, is slowly but surely turning heaven-on-earth into hell.

      I’ve been to China’s east coast, incidentally. Shanghai and a little bit up halfway toward Beijing. It’s a mess. Bladerunner/Dystopic-looking set-design here and there.

      While I was in Korea

      …I couldn’t help but notice the ubiquity of recognizable consumer products. One tourist map I carried everywhere in Seoul had symbols for cultural centers, historic sites, museums – as well as about one hundred curious little green symbols. They showed the location of all the Starbuck’s coffee joints. Dunkin’ Donuts shops could be found not only in Seoul, but on Jeju Island. I also saw McDonald’s (no surprise), Baskin-Robbins (usually in conjunction with a Dunkin’ Donuts), Pizzeria Uno, Kentucky Fried Chicken, Old Chicago and Cold Stone Creamery. While looking for gifts for the folks back home in Seoul’s high-rise ‘Techno Mall’ I walked into a store and nearly burst out laughing. Over the loudspeaker came a kind of hip-hop version of John Denver’s Country Roads.”

      Wabi-sabi, Jeju-islander.
      (Your island ass appears westernized-tatooed/bought-and-sold too. No longer really an island in a way. ‘No man is an island.’)

      From my TOD comment:

      “If Japan were to have had the earthquake and nuclear “accident” on the west coast, a sizable area of it might have been contaminated, knocked out.
      There is little margin for error in such a place so small… (but this speaks for the entire planet now). In this sense, the very presence of nuclear reactors in a country as small as Japan seems out of scale. Their presence, from a classical cultural, metaphorical, perhaps even Zen, wabi-sabi, environmental and/or Buddhist standpoint, would seem antithetical. There is nothing meditative about an out-of-control nuclear reactor, but then, such things can never be in full control.

      To speak of immigrants coming in and helping to somehow cushion its economic slip, I can’t help but think of how attractive Japan might have been for a visit, even a stay, if it upheld some of its or this “classical purity”. As for the notion of insularity-of-culture, well, we notice the nuclear wave of emigration.
      The northeast of Japan, and maybe the proximities around Chernobyl and Three Mile Island (and downwind) are probably now out of bounds for me for the rest of my life, even if it’s claimed to be safe, because trust has been lost if it was ever had. Where else? How many more in the future?”

    • Caelan MacIntyre says:

      I wonder if Jeju Island, a province of South, as opposed to North ‘Oh-hey-what-happened-to-half!?’ Korea, got any nuclear fallout from Japan. I’ve studied Japan a little and mentioned it on The Oil Drum.

      Jeju Island, along with Japan might be among two of the last places I would want to visit. That would not have been so had truly-cultural, ‘non-elite-cookie-cutter’, paths gone in different directions.

      So what’s my point? It’s all those bullshit jobs and crap we don’t need, like 400 000 cars.
      It’s exported western, neofeudal/elite-driven, pseudoculture.
      And nuclear power and roadways and pollution and lost/detached zombie-people. And subsequent generations that don’t know any different because they were born into it, maybe like you, Jej’. Our species, in part through status-plays, is slowly but surely turning heaven-on-earth into hell.

      I’ve been to China’s east coast, incidentally. Shanghai and a little bit up halfway toward Beijing. It’s a mess. Bladerunner/Dystopic-looking set-design here and there.

      While I was in Korea

      …I couldn’t help but notice the ubiquity of recognizable consumer products. One tourist map I carried everywhere in Seoul had symbols for cultural centers, historic sites, museums – as well as about one hundred curious little green symbols. They showed the location of all the Starbuck’s coffee joints. Dunkin’ Donuts shops could be found not only in Seoul, but on Jeju Island. I also saw McDonald’s (no surprise), Baskin-Robbins (usually in conjunction with a Dunkin’ Donuts), Pizzeria Uno, Kentucky Fried Chicken, Old Chicago and Cold Stone Creamery. While looking for gifts for the folks back home in Seoul’s high-rise ‘Techno Mall’ I walked into a store and nearly burst out laughing. Over the loudspeaker came a kind of hip-hop version of John Denver’s Country Roads.”

      Wabi-sabi, Jeju-islander.
      (Your island ass appears westernized-tatooed/bought-and-sold too. No longer really an island in a way. ‘No man is an island.’)

      From my TOD comment:

      “If Japan were to have had the earthquake and nuclear “accident” on the west coast, a sizable area of it might have been contaminated, knocked out.
      There is little margin for error in such a place so small… (but this speaks for the entire planet now). In this sense, the very presence of nuclear reactors in a country as small as Japan seems out of scale. Their presence, from a classical cultural, metaphorical, perhaps even Zen, wabi-sabi, environmental and/or Buddhist standpoint, would seem antithetical. There is nothing meditative about an out-of-control nuclear reactor, but then, such things can never be in full control.

      To speak of immigrants coming in and helping to somehow cushion its economic slip, I can’t help but think of how attractive Japan might have been for a visit, even a stay, if it upheld some of its or this “classical purity”. As for the notion of insularity-of-culture, well, we notice the nuclear wave of emigration.
      The northeast of Japan, and maybe the proximities around Chernobyl and Three Mile Island (and downwind) are probably now out of bounds for me for the rest of my life, even if it’s claimed to be safe, because trust has been lost if it was ever had. Where else? How many more in the future?”

  45. aws. says:

    I was under the mistaken impression that geothermal was free of emissions.

    CCS, is still a con, the infrastructure and energy needed to capture, compress, transport and inject/store CO2 makes this ‘solution’ unrealistic.

    CO2 turned into stone in Iceland in climate change breakthrough

    Radical new technique promises a cheaper and more secure method of burying CO2 emissions underground instead of storing it as a gas

    Damian Carrington, The Guardian, Thursday 9 June 2016 19.00 BST

    The research, called the Carbfix project, took place at Iceland’s Hellisheidi power plant, the world’s largest geothermal facility. The plant pumps up volcanically heated water to run electricity-generating turbines but this also brings up volcanic gases, including carbon dioxide and nasty-smelling hydrogen sulphide.

    • Synapsid says:


      They inject the CO2 and H2S underground so the CO2 reacts with metals in the basalt (Iceland is basalt, basalt contains lots of magnesium, iron, and calcium silicates) to form carbonates. I don’t think the article mentioned what the H2S does when injected, but the researchers found that the carbonates formed within a few years which was a huge surprise. That’s the good news.

      The uh-oh news is that they found that prokaryotes underground were breaking down the newly-created carbonates and releasing methane. Um, research is ongoing.

    • Caelan MacIntyre says:

      What’s with all the technoshit all the time? Why not just plant some native species of plants all over the place? It’s climate-control, food, beauty, comfort, nature-stabilization/stability and even tourism all at the same time.

      “Uh-oh, a healthy, vital forest is growing again…”

      • Oldfarmermac says:

        Hi Caelan,

        Why don’t we plant some native species all over the place? Let’s tear down Manhattan, and bulldoze suburbia, and let the cornfields go back to forest?

        This would not only go a long ways toward restoring the environment, it would also solve our population problem. Sarc light on.

        Tourism must necessarily cease to exist in your dream world, but some people who take up seasonal migrations, following the herding animals, might get to see a lot of scenery over the course of a year.

        • Caelan MacIntyre says:

          We don’t need to bulldoze (which uses fossil fuel anyway) suburbia to plant things and have edible food forest gardens all over the place instead of lawns that need to be mowed, and Manhattan, while possibly being unsustainable in the long-run anyway, would benefit from lusher, greener suburbs, less C02 emissions, more climate control, and extra, locally-produced food. That’s part of transition. Apparently, some, perhaps many, local governments get in the way of people trying to farm/grow food on their properties.
          New York is right on the water and there are a lot of boats. Travel/Trade won’t go away, even if tourism, at least as we know it, does.

          Frankly, I’m unsure whether you’re really interested in ‘saving people’ as you seem to claim, except yourself. In any case, your BAU doctrine is no such savior for the rest– if even for you or your family.

          I suspect that what you’re afraid of is that if enough people did stuff like grow/make their own and embrace real community, BAU– its teet upon which you’ve apparently got your teeth firmly clamped– would be relatively and increasingly unneeded.

          One vested interest in the maintenance of BAU apparently goes to the so-called pensioners, as it can be the elderly that become increasingly vulnerable in collapse/decline modes. But then that’s where the forging of real communities comes in. It doesn’t help, however, that the some of the older might potentially create a drag on transition that condemns other generations, and that may even go against their own self-interests. Politicians– the one that pull the levers– can be among the older of course.

          • Fred Magyar says:

            I suspect that what you’re afraid of is that if enough people did stuff like grow/make their own and embrace real community, BAU– its teet upon which you’ve apparently got your teeth firmly clamped– would be relatively and increasingly unneeded.

            Caelan, either you reading comprehension is at the level of a third grader or you have never bothered to read what OFM has been saying for a very long time. Since he is both an actual farmer with a firm grasp of scientific principles and someone who embodies being a true community member you might do well to get off your high horse and stop your condescending preaching tone to him.

            You obviously have zero grounding in reality if you truly believe that farming lawns will provide enough food for even a tiny portion of humanity.

            I strongly suggest you start a small farm and run it for a few years before you continue to pontificate on how your pie in the sky ideas provide any kind of solution.

            While I myself have never run a farm my cousins who are agronomists and chemical engineers have run a small family farm now into the third family generation down in Brazil. They have always been careful stewards of the environment and local ecosystems. They support their local community. Yet I have seen first hand the financial devastation a freak frost can have when it wipes out 90% of a year’s crops.

            You don’t have even the slightest clue what you are talking about with your ideas of a utopian anarchy. Unless of course you are advocating the immediate death of 90% of humanity and if so please just say so and I will have a lot more respect for your honesty!

            • Caelan MacIntyre: Feeding Fred says:

              Good morning Fred,

              I think Glen (Oldfarmermac) can brow-beat fine without your help, but thanks just the same. I will save it for the next time I have to wipe.

              Lawns are just a few of the many places in and around town and suburbia where we can all become farmers again and maybe better ones– diversity and redundancy (such as in the face of freak frosts) and all that– and feed ourselves again. There’s some organic spoonfeed for you. Yumyum.

              Plants grow and propagate themselves– sure-sure a little help/coaxing is nice– and we’ve been feeding ourselves fine long before there were such terms as ‘agronomist’, ‘feedlot’, ‘farm runoff’, ‘frankenfood’, ‘soil despoilment’, ‘corporate farm’, ‘aquifer depletion’, ‘superweed’, ‘monocrop’, ‘irradiated’, ‘mad cow’, ‘Monsanto’ or ‘pesticide chemical engineer’.

              • Oldfarmermac says:

                Hi Caelen,

                Maybe all my browbeating is finally having a little effect on you. Now you are making some suggestions that can actually acted upon, such as converting some lawn space into food producing space.

                You have in almost as many words implied it might be a bad idea to knock down houses already built, lol.

                My folks have been doing this sort of thing as far back as we have oral memory. There are black walnut trees on the old places that provide both shade and nuts- and an opportunity to harvest a squirrel once in a while as well, without having to set aside time to go squirrel hunting. LOL

                I AM working towards sustainability

                HEY, Fred and I UNDERSTAND that business as usual will kill us, and a huge part of the biosphere as well, we have never disputed that point.

                I am just trying to get you to acknowledge there has to be a BRIDGE across the chasm between our HERE AND NOW, and any future sustainable THERE AND THEN.

                IF we work hard enough at it , and we are lucky, there will be a new generation bau, a bau based on conservation, effficiency, low energy life styles, recycling, falling population, renewable energy, etc.

                If the hard work and the good luck together aren’t enough to bring this new generation bau to pass, then we are collectively going to suffer a HORRIBLE economic and ecological crash, which might range all the way up to a full blown chemical biological and nuclear WWIII.

                Now you are speaking of trade and travel continuing, and actually coming close to admitting that some of that GOD AWFUL FARMING might be needed, that the plants might need a little help.

                I await any comment from you indicating what you think might happen to most or nearly all of the seven billion or so people in the world in the event of a hard crash.

                • Bob Nickson says:

                  “…[T]here has to be a BRIDGE across the chasm between our HERE AND NOW, and any future sustainable THERE AND THEN.”

                  Well put Mac.

  46. shallow sand says:

    Interesting to me that investors continue to throw money at LTO.

    Read an article about farmland REIT’s. Apparently trading below book value and very out of favor.

    • shallow sand says:

      I would add it appears SEC WTI oil price for the first six months of 2016 is $39.38.

      So to finish with the same price as last year, WTI will need to close at an average of over $61 on the first day of each month, starting in July.

      What kind of hocus pocus will keep PV10 above long term debt in the 2016 10K? Further slashing of future estimates of production and development costs?

      Again, no one pays attention to future cash flows. The very few of us who do are getting kind of tired of CEO who say they can return 30% at $50 WTI when what they report in their SEC 10K says something altogether different.

      • Ves says:

        “What kind of hocus pocus will keep PV10 above long term debt in the 2016 10K? ”

        It is very hard to do capitalism when resources are finished. All that is left is lying, pretending, fudging the numbers, printing money, creating “new” investors out of thin air. But drilling will continue of what is left until the last drop regardless of price.

  47. Oldfarmermac says:

    Maybe somebody can make sense of this:


    It’s hard to imagine any body wanting to get into a business partnership with Venezuela at the moment. I guess the hoped for returns are so good the backers think the risk is worth it.

  48. Heinrich Leopold says:

    The RRC Texas monthly drilling, completion and plugging report for May just came out.
    As in many production forcasting models a reduction of producing wells is not assumed, the current reduction of wells is at a staggering 1709 oil and gas wells. Net oil wells (wells plugged – new permits) stands at 1012 per months (see below chart). This is finally the right move to reduce production and pave the way for an oil and gas price recovery.

  49. Duncan Idaho says:

    Daily CO2

    June 11, 2016: 407.40 ppm

    June 11, 2015: 403.22 ppm

    • SatansBestFriend says:

      Excuse my ignorance.

      Why is the difference 4ppm?

      I thought we were growing at 2ppm per annum.

      • GoneFishing says:

        Surprise, it’s accelerating. Was 2, then 3, now 4.
        No one thought it would level out, did they?

        • SatansBestFriend says:

          Sorry, I don’t stare at CO2 PPM readings every day.

          I have more important things to do, like stare at world production oil graphs every day….LOL!!!!!!!!

          But when I did follow the long term trend, they weren’t supposed to double this quickly per annum, if ever.

          If they are doubling this quick we are in big trouble.

          This must be some sort of anomaly.

          Maybe the Japanese digging those methane hydrates out of the ocean floor has awoken………Godzilla and he farted!!!!

          • GoneFishing says:

            At this point in time this may be an anomaly, but something on this large of a scale usually is not. The ever increasing use of energy is one factor to point toward a trend upward.

            Possibly the CO2 and methane releases from the tundra releases and the millions of more southern lakes/ bays. Possibly the ocean is reaching saturation as it’s surface warms. Possibly the large amount of forest fires and purposeful burnings. All of these and more could be in play, as well as the increasing use of energy worldwide.
            All of this happening, while the earth is supposedly greening more than ever. Shows the magnitude of the problem.

            A lot of trees are being cut down and burned for heat and electricity. When you build a house from wood, that can sequester it for 200 years or more. When you burn a tree, all that sequestered carbon is released right now.

      • It’s an El Niño effect. Warm water n the tropical pacific doesn’t absorb co2 nearly as well. But the water is cooling now, so we should see the current value drop very fast.

  50. R Walter says:


    Happy Motoring!


    China’s consumption of electricity is now greater than the United States by some 600 billion kilowatt hours in a year’s time and makes China number one in electricity consumption. They are 1/7th the population and consume more than 20 percent of all the world’s electricity. They’re taking more than their fair share.

    You can’t travel from Edmunton to Anchorage in an electric vehicle, you need a one ton Chevy pickup truck to pull the fifth-wheel camper. A diesel motor with plenty of horsepower is what you gotta have. You need diesel fuel not electricity. The generator in the camper will provide all of the comforts of home while on the road.

    Your motor home will have a diesel motor. The motor home will have a 150 gallon tank for the diesel fuel. Roll it down the road for 1200 miles on one tank. Electric motors to move a motor home will last less than a day. An internal combustion engine will be the choice to make, especially when you attend the national motor home convention.

    There’ll be a battery to send a jolt of electricity to the starter to start the engine. It’ll run for 15 hours with no problems. You can tow a Volt for short excursions into the wilderness.

    When you have refrigeration, you can play hockey in June. You can watch the Stanley Cup playoffs on satellite TV inside your motor home parked at a recreational campground in The Yukon. Drive to Fairbanks and fly home.

    That is the 21st century, the real picture, energy from fossil fuels rule. Everything else is a distant second. Planes, trains, boats, automobiles, yachts, ships, super trains, tractors, combines, dozers, scrapers, a lollapalooza of energy, equipment, and transportation. It’s going to happen because it’s gotta happen. Nobody wants to go back to the 20th century, even.

    Gas and fuel sales will probably be at an all time high this summer. They will dwarf solar and wind generated power.

    Beer sales will be even more! The St. Louis Fed needs to research beer sales.

    The Long Term Energy Outlook is a cinch, more will be produced and consumed than ever before.

    • Nick G says:

      Yeah, Alaskans are going to be hurting…

      • GoneFishing says:

        Alaska population peaked after a long rise and actually fell, before the drop in price of oil. Failing oil exports should push the exodus. Back to the military, wildlife and hardy souls.

    • Oldfarmermac says:

      Horses and mules outsold automobiles for a good long while even after the debut of the Model T.

      My personal opinion is that automobiles will remain extremely popular any place most people can afford to own and drive them.Or not drive them, as the case may be, if the car is self driving.

      I am a big believer in renewable energy, but fossil fuels will continue to dominate the world economy for quite some time yet.

      Let us all pray to the Sky Daddy or Sky Mommy of our choice that the renewables industries scale up fast enough to keep the price of fossil fuels from going thru the roof due to depletion. If that happens, then the current day BAU economy will crash and burn, and there won’t be anything left to fix.

      If we are lucky, society will be forced to recognize that fossil fuels ARE depleting, and that we need to transition to renewable energy as fast as we possibly can, before a fossil fuel supply crunch results in an economic catastrophe that might well morph all the way into a full blown WWIII.

      At the WORST, our past and future investments in renewable energy will buy us a few years of extra time to adapt to life with super expensive fossil fuels.

      A LOT can happen in just a couple of years, once the people and LEVIATHAN wake up and respond to a crisis.

      Let us pray to the Sky Daddy and or Sky Mommy of our choice for a series of Pearl Harbor Wake Up Bricks upside our collective head.

      A bad oil supply crunch that lasts six months would have a very bad short term effect on the economy, but over the long run, it might be the best thing that could happen to us.

      Such an oil crunch would enable our ( necessary ) government nannies to pass new laws putting a big tax on gas guzzling vehicles, mandating higher fuel efficiency standards, providing more funding for mass transit, more subsidies for the still fledgling electric car industry, etc.

      The spillover or knock on effects would include updated building codes, greater support for the wind and solar and other renewables industries, etc etc.

      I don’t usually defend rich people per se, but if every body in the world who could afford one were to buy a TESLA , gasoline for the rest of us would be MUCH cheaper, lol.

      I am a big believer in the efficacy of free markets and all that, but unless we go proactive, NOW, in terms of energy supplies, it is altogether possible that when fossil fuels start running really short, there won’t be time enough left for the markets to solve the problem.

      Moving from horses to cars was no problem, the horses were there, and people switched to cars over a period of decades. So the horses were gradually put out to pasture or shipped to canneries.

      WHEN oil comes up really short someday, and it will, due to depletion or war, a gradual transition away from ice cars just won’t be possible. It will take decades to build out any possible alternative transportation system.

      • Nick G says:

        I generally and broadly agree with that, but…

        It suggests that oil is more valuable than it is, that the transition is harder than it is, and that a shortage would be more harmful than it really would be. For instance:

        It will take decades to build out any possible alternative transportation system.

        If N. America were to lose all imports, it would be ok. Carpooling could be implemented quickly and effectively with smart phones, and the vast oversupply of light vehicles means that low efficiency vehicles could be mostly left un-used: Dad takes back the Toyota Corolla from teenager for commuting, abandons the Chevy Tahoe.

        Really, the US has about twice as many vehicles as it needs for peak periods, and each one is only about 1% utilized on average: driven 1 hour out of 24, and carrying only about 1.2 people.

        Rural people have less flexibility here, but most people aren’t rural. And, as you note, even they tend to have a choice of vehicle to use: leave the pickup in the garage, use the small sedan.

        • GoneFishing says:

          Fuel rationing will quickly force people to adjust their use of vehicles.

          A full size van with eight people gets about 160 pmpg highway and 120 pmpg city, while a Toyota Camry gets 175 pmpg highway/ 125 pmpg city with 5 squeezed in (not sure if that is practical). So if vehicles are fully utilized they can have similar fuel use per passenger, though I would give the edge to the larger vehicle since it will be less weight sensitive.

          Loss of oil availability will quickly force manufacturers to build higher mpg vehicles and more hybrid/EV’s.
          Due to the US being quite inefficient with the use of the automobile, it allows fairly easy and quick changes to cut use of fuel.

          The average car travels 34 miles per day. If cars got 35 mpg, that would mean 1 gallon per day and 7 gallons per week. A 7 gallon rationing limit would work quite well then, especially with some car pooling.
          Gallons used per driver is now about 1.6 per day. Gallons per person is about 1.07 So with a little car pooling and consolidation of trips we get down to the 7 gallon per week limit, especially if cars get a little more efficient. That is a 38 percent drop in use.
          Of course hybrids and EV’s make a much more dramatic reduction in use, but it will take a while for them to penetrate the market fully.

  51. Westexasfanclub says:

    Oldfarmermac, I totally second what you wrote. But I think we already had luck that fracking and some other sorts of difficult to produce oil delayed PeakOil for a couple of years already.

    In those years wind and solar grew, electric cars became economically more feasible, over all efficiency of the industries became better. Now a lot of technology is already in place and scaleable with much more ease than, say, a decade ago. I know people are buying gas guzzlers again, but the whole picture holds some possibilities.

    Even population growth is now in the home straight with an average of 2,3 children per woman – the global replacement rate, joining those of developed and underdeveloped countries.

    Without a doubt there are tough times ahead, but the possibilities are there.

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