The EIA’s Monthly Energy Review came out a couple of days ago. The data is in thousand barrels per day and the last data point is July 2015.
US consumption of total liquids, or as the EIA calls it, petroleum products supplied, reached 20,000,000 barrels per day for the first time since February of 2008.
Something I never noticed before, consumption started to drop in January 2008, seven months before the price, along with world production, started to drop in August 2008. This had to be a price driven decline. Could the current June and July increase in consumption be price driven also?
US Production was down 96,000 barrels per day in July to 9,503,000 bpd. That is 190,000 bpd below the March level of 9,693,000 bpd.
Here is what the last 50 years of US production looks like. The peak was in 1970 or 1971, depending on what you call the peak.
In March 2015 we were still 351,000 barrels per day below the peak month of 10,044,000 bpd in November of 1970. But right now we are headed in the wrong way to break that record. In July we were 541,000 bpd from that record. Right now the 2015 average, January through July, is 9,534,000 bpd. That is 103,000 barrels per day below the 1970 average. But the 2015 average is likely to get smaller as the year plays out.
I have another chapter from Peter Goodchild’s Tumbling Tide: Population, Petroleum, and Systemic Collapse. I really like this book. The author comes closest to matching my sentiments than anyone I have read to date.
Tumbling Tide Chapter 10
The Pollyanna Principle
The problem of explaining peak oil does not hinge on the issue of peak oil as such, but rather on that of “alternative energy.” Most people now have some idea of the concept of peak oil, but it tends to be brushed aside in conversation because of the common incantation: “It doesn’t matter if oil runs out, because by then everything will be converted to [whatever] power.” Humanity’s faith in what might be called the Pollyanna Principle—the belief that everything will work out right in the end—is eternal.
The critical missing information in such a dialogue is that alternative energy will do little to solve the peak oil problem, although very few people are aware of the fact. The Pollyanna Principle, after all, is what gets us through the day. Unfortunately, a quick glance through any standard textbook on world history would show that the principle does not apply to many civilizations that lie buried in the mud. But to point at oil-production charts is to mistake psychological problem for an engineering one; most people do not like to be pushed very far in the direction of the logical.
The main stumbling block, as noted above, is not the fact of the decline in world oil production, but the related fact of the impracticality of alternative energy. Alternative sources of energy do have certain uses, and they always have had, especially in pre-industrial societies. However, it is not possible to use non-hydrocarbon sources of energy to produce the required amount of energy, and in a form that can be (1) stored conveniently, (2) pumped into cars, trucks, ships, and airplanes for the purpose of long-distance transportation of goods and people, (3) converted into a thousand everyday products, from asphalt to pharmaceuticals, and (4) used to run factories—and which costs so little that it can be purchased in large quantities on a daily basis by billions of people.
There is also the question of time. The entire conversion of world industry would have to be done virtually overnight. The peak of world oil production was probably around 2010. The more-important date of peak oil production per capita was 1979.There are approximately 1 billion automobiles and over 7 billion people. Throughout the twentieth century, food production only barely met global needs, and in the last few years it has not even reached that level. In terms of the amount of time available, the switch from hydrocarbon energy to an alternative form of energy would stretch the bounds of even the most fanciful work of science fiction.
But we don’t even know the name of such an “alternative energy.” Every month, the mainstream news media tell us of “the miracle of x power,” but in the following month the x has been replaced by another provider of miracles. And even if that x were named, there would be the immense task of setting such a program in motion on a planet-wide scale—half a century too late do any good.
Contemplating the expense will also take us far into the realms of fantasy. At $10,000 (a fairly arbitrary figure, admittedly, but no real figures exist) per vehicle, replacing the vehicles that are now on the road would cost $10 trillion. The substructure—the ongoing manufacture, transportation, maintenance, and repair—would add much greater expense. The existing furnaces in all the world’s buildings would be obsolete. Countless machines all over the planet would have to be replaced, countless factories redesigned. We would have to replace the asphalt on all the world’s paved roads with a non-hydrocarbon substance. The money and resources simply do not exist. It is perhaps fortunate that there is no politician or business leader who would be willing to initiate such a mad venture.
In actuality, the world of the future will not be crowded. Survival for a few will be possible; survival for a population of billions will not be possible. But very few people have asked the ugly question of exactly how rapid and dramatic reduction of population is going to take place. Voluntarily?
There are two further problems with trying to educate people on these matters. The first is that any discussion of either peak oil or alternative energy requires a scientific frame of mind: an understanding of empirical research and an ability to follow statistics without being misled. A grasp of basic science is essential in order to get balanced perspective on the data and in order to judge between the practical and impractical. The so-called civilized world is still largely the domain of astrology and other forms of superstition. Yet empirical research does not mean “I once saw something-or-other,” and statistics are meaningless unless one understands exactly what is meant by “statistically significant.”
The second of those further problems is that the concepts of peak oil and alternative energy extremely complicated. Although it is possible to reduce those two topics to five hundred words or so, the problem with such a single page explanation is that much of the vital information would be left out. If the document failed to mention every “an/but/or,” the message would almost certainly be lost. If, on the other hand, the document were to be expanded to cover every minute particular, the writer would probably lose track of the average reader, since the text might exceed the latter’s attention span.
The alternative energy problem can also be illuminated by examination of similar dialogues on other topics, especially in cases where science clashes with its opposite. A discussion about creationism, for example, might entail hours of exhausting dialogue, to be terminated when the creationist party raises his head, takes a deep breath, and says; “Well, I believe. . . .” The Conversation has reached a barrier, beyond which no travel is possible. When communication is in such a poor state, there is often little hope that the reader will go so far as to check citations, bibliographies, or further reading lists, or even to do something requiring as little labor as clicking on a hyperlink on a web page.
______________________________________________________________
There has been little data or other news to report lately. And I have been quite busy with little time to devote to the blog. I am in the process of a move to Gulf Breeze Fl. That is on a narrow peninsula between Pensacola and Pensacola Beach Fl. And I still have another week or two before I can get back to my leisurely schedule again. So don’t look for another post for another five to seven days. Well that is unless someone has a guest post they would like to give us.
Saudi Aramco compound goes up in a puff of smoke. Payback?
No, it was just an unfortunate fire in a high rise complex in Khobar.
Fire at Saudi Oil Workers Compound Kills 7, Injures Hundreds
The death toll is now up to 11 and likely to rise further.
One should not look for a conspiracy in everything that happens.
Perhaps. But it is common knowledge that the Houthis have weapons systems that can hit almost anywhere in Saudi Arabia, and in terms of asymmetric operations they are able to hit typical terrorist targets such as government buildings and landmarks to include hotels and infrastructure. At least that is what one ME analyst noted a few months ago. But fires do happen. As do explosions involving sodium cyanide in Chinese warehouses and fires at U.S. military bases in Kanagawa. But far more devastating still are the wildfires that have been ripping through Siberia for weeks now.
Thanks for the post Ron. Greatly appreciated.
Ron, according to BP US production in 2014 surpassed the 1970 peak (C+C+NGL).
Different definitions. BP’s oil production includes crude oil and natural gas liquids
And a few links to recent posts:
Oil Production Vital Statistics August 2015
Iran nuclear deal could pave way to higher output
OPEC’s Gigantic Blunder
This got lost and then reposted end of last post. Iraqi items, but the link (which does not contain all the data) seems pretty good, translator is good, but no ads so will die:
/////////////////////////////////////////////////////////////////////////
Redoing the Iraq stuff. Worth it cuz of the source material:
http://www.iraqinews.com/tag/budget/ the translator has advanced degrees in english lit
Bottom line Dec budget was 100 billion dollars. Since and year to date oil revenues on track to provide 50 billion dollars of influx. Response has been cuts . . . down 32 billion iraq proper and 18 billion for Kirkuk region up north. 45% salary cut for members of parliament.
Lotsa aid coming in. 1.5 Billion loan from IMF, a billion here a billion there from others.
6 million of the pop of 37 million are on govt salaries.
Another item ISIS collected $90 million in June in taxes from region it controls.
Basra Light Assay API 29 Sulphur 3.2% Kerosene 12%, Diesel 21%
Kirkuk Assay API 34.2 Sulphur 2.24% Kerosene 15% Diesel 24%
(the Kurds oil is superior)
Contrast the Libyan El Shahara yardstick
API 43, Sulphur 0.07, Kerosene 19%, Diesel 28% <– quite the anomaly from Jeffrey's chart showing middle distillates collapsing as API grows. This is why Libya oil was and remains such a big deal
“Something I never noticed before, consumption started to drop in January 2008, seven months before the price”
The US recession started in the last quarter of 2007, caused be high oil prices. They contributed, along with accumulated petro-dollar debt, to the financial crisis in 2008/09
22/7/2013
US oil demand peak was in 2007
http://crudeoilpeak.info/us-oil-demand-peak-was-in-2007
Thanks for your update. The more articles one writes, the more updates are needed later….
At one time a few years back I was convinced peak oil would mean the end of life as we know it. I fully recognize that if oil supplies decline abruptly enough , peak CAN wipe us out.
But more recently I have come to believe there really is a possibility of a successful transition – for some of us at least.
The incredibly fast fall in the cost of solar power, and to a lesser extent, wind power, the possibility of large scale coal to liquids production, more efficient ice cars and trucks, electrified autos and light trucks, changes in life styles, etc, etc, ALL taken together indicate that there is at least a DISTINCT POSSIBILITY that SOME PORTION of us can pull thru the peak oil in particular and nonrenewable resource bottle neck in general- while still living pretty decent lives in terms of enjoying modern technologies.
Most of us in my own humble opinion are going to meet unpleasant ends well before the end of this century. Goodchild may turn out to be right and the entire modern day world economy may collapse because it is built on the sands of fossil fuels.
BUT he is wrong, according to a number of capable scientists, when he says a transition to modern renewables based economy is IMPOSSIBLE. No doubt such a transition is going to be an awesomely tough experience even for the people who MIGHT live thru it and come out more or less whole on the other side.
I don’t have a copy of his book and no way to get one quick enough to read it and comment while this key post is fresh, but it is my impression he does not appreciate just how fast things are changing in the field of renewables – and that he does not appreciate how EASILY, in actual fact, we can adapt to fewer fossil fuels once WE MUST ADAPT.
Hardly ANY air travel for instance is really critical to the production of anything at all. A few spare parts and a few key people who are top notch troubleshooters NEED to go by air to solve problems PRONTO-but damned near every airplane in the sky could be permanently grounded without causing any REAL problems except the ones associated with unemployment in industries dependent on air travel.
Gas hog cars and trucks can be outlawed in a matter of DAYS once the necessity of doing so is absolutely obvious to everybody except the owners of the same. Appliances can be manufactured to use half or less of the energy they use today, and then half again. Led lights can be mandated and if another generation of lights use even less energy , the that tech can be mandated too.
CAN’T and WON’T are two different things.
SOME of us are in a favorable position to pull thru-IF we get started pronto. For this reason I say we should all be praying to the god(s) of our choice for Pearl Harbor Wakeup Events.
We DO NOT have to manage a total transition to renewables on any particular time frame. There will be substantial amounts of fossil fuels available to us for many decades to come. IF we can get just half or two thirds of the way within the next three or four decades we can stretch the remaining endowment of fossil fuels some decades beyond that. This gives us two or three generations to change our ways sufficiently to adapt to hardly any fossil fuels at all, but I do not anticipate running so short of coal for centuries that we cannot manufacture and recycle steel and a few other key materials.
IF we choose to manage our collective affairs well and conservatively, we have a good shot at least here in the USA and Canada and a few other places with large remaining endowments of non renewable resources.
We have almost all the high cards in our hands already and life is the sort of poker game where you can hold some and discard some in hopes of getting better ones.
We have the territory. We have the farmland. We have the coal-which if used frugally in the form of liquefied fuel can be used to meet our CRITICAL needs for liquid fuels. We have the military might necessary to defend ourselves , and yes, to keep ESSENTIAL imports flowing our way even if we have to seize them by force.
(Folks who think it cannot be done have the erroneous idea that when the cards are ALL on the table a truly modern army cannot simply WIPE OUT any local people who refuse to play. Just one aircraft carrier flying off fighter bombers armed with neutron bombs could depopulate a a dozen large cities in a few hours.IF we were to devote the output of our herbicide industry to wiping out food production in any given country… barring one able to fight back, and there are only a couple that really COULD… that country would starve in a year. )
We have defensible borders. We can allow in people who will help us survive and keep out those who will not.
Can we succeed? I don’t know.Luck will play a large part either way.There are plenty of things that could go wrong that CAN STOP us from succeeding.
But the transition is at least technically possible.
We have hundreds of millions of tons of recyclable steel in autos alone for instance- three quarters of that could go into towers for wind turbines. We KNOW how to build appliances and cars and furniture and houses that will last for generations. We know how to build net zero energy houses.
WE CAN build fifty times as much pumped hydro storage as we have today- by condemning land suitable for building the necessary reservoirs. This would cost a fortune of course – but we piss away fortunes or a regular basis on sports stadiums and airports and BELCH FIRE XXXL autos and trucks.
We can deliver potatoes to stores rather than potato chips for ten percent of the cost of potato chips in energy.
Above all we can have less kids.
We are having less already with more reductions in birth rates considered virtually guaranteed by most observers. My four grandparents iirc produced between them twelve kids that made it to adulthood. My parents generation cut that by more than half. My generation cut it in half again. The younger women in my extended family hardly ever have more than two kids these days and one is probably closer to the norm than two.
SOME of us are holding a promising hand. All we lack is one more card. If fortune smiles on us and sends us the necessary Pearl Harbor Wake Up Events in sufficient number and sufficiently often, we have a shot.
There are no guarantees but then …. there were never any guarantees.
Don’t get stuck in EGYPT.
But luck can be almost as good as a literal miracle sometimes.
http://www.reuters.com/article/2015/08/30/eni-gas-idUSL5N1150NQ20150830
It appears the Fates have granted the Egyptians a LITTLE peak fossil fuel breathing room.
Well, to replay my standard little lecture, I have found it EASY go get my house totally non-carbon, 100% solar electric, and FAR MORE, NOT LESS, CONVENIENT AND CLEAN.
We heat with PV electricity, we cool with it, we cook with it, we heat our water with it, and we drive our car with it.
And all that cost me LESS, NOT MORE, than the same services my BAU neighbor gets from ff’s.
And a little note on the Leaf. I listen to all the utterly specious, ever more desperate denigrations of EV’s here, and then ask myself “how does that stack up against my own everyday experience with my EV?”
The answer is, not the least like what I see every day. Today my wife and I tooled around to several demonstrations of local off-grid living, did a little shopping at the hardware store for the missing bits of my self-driven hot water circulator, and came home with the range meter reading 60.
Wife does that maybe a couple of times a day, between trips plugs the car into the 3kW charger, and has never had any problems at all.
Like near anybody these days, we can whistle up a gasoline car in a minute for a longer trip.
In the last 12 months, my electricity bill from the coal power company has been zero, except for Dec last, when it was $18.
I am getting close on a wood pyrolyzer that will fuel a generator to give me that bit of extra juice for the cloud periods. This thing puts out wood gas and charcoal. Charcoal is a perfect cooking fuel for when the grid is down– and beautifully smothers the potty poop that eliminates the absolutely absurd conventional flush toilet.
So, my recommendation– JUST DO IT. Or, if not positioned to do it, join a group that does.
PS-There’s a used leaf in today’s newspaper, identical to mine, for $10K.
PPS, Don’t get stuck in Egypt. Park your factory ship in the red sea, bribe the local bandits to use some of their solar sand for copious, near free electricity, make your high quality stuff, and sell it to me. My German kitchen knife is so superior that we never reach for any other.
All true. Just do it.
The Pollyanna disease is contagious. Mac done caught it. Other folks seems to have caught it also. Wimbi, Ronald, and of course there is Nick. Nick is our most vocal Pollyanna. And lets us not leave out Dennis, whom took offense when I said he was “Pollyannish” about a year ago.
But it is only human nature. As Goodchild says, “The Pollyanna Principle, after all, is what gets us through the day.”
And so it goes.
Mr. Patterson, I just think positive in hopes of staving off the inevitable downturn in the use of energy and the power it creates.
Collapse is an evil, wicked, mean and nasty word, not in the argot of the pollyanna lexicon. Chaos is another word that is Verboten. C words don’t fit.
Other than that, I am extremely cynical about what might be the unthinkable, what words can’t describe. Nobody cares to go there, it is frightening. You have to think positive, if it’s pollyannish, so be it.
Nick G sees the good side of an oil-free world, indefatigable and undaunted. Might be in LA LA land, but it helps. har
I have not exactly succumbed to pollyannaish thinking.
Note that I predict most of the human race will be meeting a hard end before the end of this century.
And for what it is worth-I have not PREDICTED that even a Fortress North America WILL survive peak oil in particular and peak natural resources in general.
But I do believe a portion of us yankees and some odds and ends of people in other places have a shot at pulling thru the next century or two at least by husbanding the dregs of fossil fuels, adapting to a low energy life style, and learning and applying a hell of a lot about renewables and conservation.
The population WILL be declining – here in the USA. My rock solid gut feeling is that the borders WILL be closed, by near unanimous agreement among all politicians who wish to REMAIN in office, with only a few very desirable people allowed in. With closed borders we are already below replacement level birth rates unless I am badly mistaken.
And for what we SPEND on imported oil, including the military adventures that make importing it possible, we can mount a war time type effort towards building out renewables and storage.
BAU is a dead man walking even here in the USA.
BUT for the price of one new tricked out F250 I can PERSONALLY with one strong backed helper to assist me , do things to a typical house that will make it only a third as expensive to heat and cool.
That puts the homeowner on a footing where he can afford renewable electricity NOW.
There is an old ragged out GEO METRO sitting out in the edge of the woods that I got dirt cheap, which was RUNNING when I parked it.
I can do a few things to that old car ( not altogether legal) that will make it get over sixty mpg at forty five to fifty mph, and it THAT car could be downsized by HALF and still serve ok to get to work and fetch the beer and groceries. At some point batteries and synthetic oil,probably coal based, can shoulder the transportation load.
IF I were to be a professionally trained engineer, like Wimbi, rather than a technically well educated jack of all trades, I could work near miracles with a few bucks and a few helpers.
Renewables CAN get us thru the next few decades by helping us stretch out the remaining fossil fuels. We will learn a lot during those decades- if we use them wisely- and we will learn from necessity to live well on a quarter of the energy we consume per capita today.
I know better than to predict we WILL act wisely. But there is a nonzero chance we will, and if we do, we have a shot. No guarantees.
Even though I am already old, I am prepared to fort up personally and have already talked to a select handful of people who have standing invitations to fort up with me. None of us believe we will live long enough that forting up will be necessary but we all understand that with bad luck …. even old farts might live to see some VERY interesting times. So… Our tentative plans are just that, tentative, with each of us making such preparations as can be made on a no lose basis.
Owning a large tool set for instance is a no loss proposition.Quality tools generally go up in value rather than down. Skills mastered as a hobby in leisure time MAY be critical later. If never needed, you still have had a good time with the hobby. One of us knows how to make leather after pursuing it as a hobby . . I know how to get the hide off of a cow or a hog.
ALL of us can hit a man in the head at a hundred yards first try with a scoped deer rifle- if necessary and he is foolish enough to stand still for ten seconds or so.
All of us for now at least are able and willing to chop wood and spade up and hoe a cornfield if it comes to that. It could come to that but imo things will not get so bad that forting up will be necessary during my remaining years- not around here at least.
A few years back I enrolled in nursing school hoping to master the basics of one more profession. My plan was to meet a lot of women and and have a good time- academics are very easy for me- and incidentally to get to be as well prepared as possible in the event the shit really does hit the fan. Big troubles with my Mom getting bedridden prevented me from finishing but I did learn most of the critical skills before dropping out to keep her at home instead of spending her last days among strangers in a nursing home.
I am not above breaking into a dental office and stealing a full set of tools so as to be able to properly ( more or less ) extract a tooth- in the event of outright collapse.I know in theory at least how to make opium. Never tried but it looks to be simple enough.I am not afraid to stitch up a bad cut in the event there is nobody around better qualified to do it. I know in theory how to set a broken bone. A couple of the other guys have done it for real.
The point is that I take the possibility of collapse VERY seriously indeed.
I just do not believe collapse will necessarily be universal all across the world.
The last electric light anywhere may wink out eventually, but my belief is that if it does… it will be century or two before it shines its last. At least.
As a matter of the most excellent sort of good luck I already live in one of the very best places in my estimation are for local people to pull thru.
With a little more luck I would be rich. LOL
It is often said that the size of the fight in a dog is more important that the size of the dog in a fight.
Focusing exclusively on bad endings is very bad for one’s morale and happiness.
I have made a conscious decision to enjoy my remaining years as best I can while still being realistic about troubles that may seek me out.
Sticks and stones can break my bones but words such as polly anna run off like water off a ducks back.
I forgot to mention it earlier but ecological collapse could definitely prevent ALL of us from managing a successful transition to renewables. .
Do you consider the technology event “the singularity” ever? We are pretty much at the elbow in exponential growth curve in technology, funny alot of things seem lined up that way also, population, currency, oil depletion, probably lots of other things too.
I believe in tipping points and that we just might reach a point whereby renewables can take the place of fossil fuels–sometime down the future road. But most of us are doomed to perish before that happens. The crisis is almost upon us an not many of us are going to make it into the inadequate supply of renewables lifeboats , in a manner of speaking, in my opinion.
The only reason I believe some of us might make it is that there still remains a substantial endowment of non renewable resources and that those of us who might make it are in possession of those resources all out of proportion to our numbers.
By making it I do not mean merely surviving. There will be people, not so numerous as now by a factor of ten or more, in most places people live now, a century or a thousand years from now.
By making it I mean still having food in stores, grid electricity, basic modern medical care, communications, some minor luxes, functioning water and sewer, a long life expectancy etc.
Cars, if industrial society does survive in pockets, will most likely be extremely rare.Casual air travel non existent. Bicycles and walking the norm except for mass transit and maybe a few electric cars. Cars might eventually become common again but NOT for a LONG time.
Roads cost the US $155 billion dollars per year and that is a shortfall of what is needed to keep everything in good repair. So the cost of keeping the road system operable is similar to the cost of fuel to use it.
We need to find ways to minimize the amount of roads in the US and ways to make the necessary ones less expensive. I am sure a lot of energy is tied up in that $155 billion dollar figure.
Lighter trucks will do it. Or they have to increase the number of wheels to spread the point loads.
Fernando is either dead right or dead wrong, you can bet he never occupies any middle ground and come away a big winner.
He is DEAD RiGHT about the trucks and the highways.
I foresee a time when trucks are MUCH lighter per axle and per square unit of contact patch ( the spot the rubber meets the road) than today.
It is not THAT difficult to build the axles on a truck so they can ” steer ” a bit and so allow the truck to round a corner without brutally scrubbing the tires on the road surface. A lot of trucks have this feature already.
Lowering the per axle weight can be accomplished by regulation alone, but the industry is going to RAISE HELL to prevent it happening, crying and peeing and moaning about the costs and the lost profits.
The solution is to grandfather old trucks for a reasonable period , say thirty years from the date of construction, and then ship any still in good condition to people who don’t yet get it, out of the country.
Given that all truckers will have to comply, none of them will suffer. They all pass their costs along just like other businessmen.
The public in general will suffer a little in the short term because freight rates will go up- but in the long term we will all save a bundle..
Truck drivers as a group are awesomely stupid when it comes to recognizing their own best interests. Lighter and smaller trucks means more trucks and more jobs for drivers, but anybody interested can bet his last can of beans they will not see it that way.
In any case the railroads are going to come back strong for as far out as the eye can see. Even Fernando predicts higher oil prices long term, and trains are about four times as good per ton mile as trucks on fuel.
And trains are vastly better managed these days than in the past due to computerized scheduling and yard management and faster loading and unloading due to using better machinery and methods.
When the first trainload of lettuce was shipped from California by train, in ICEBOX cars, to the Big APPLE it rotted along the way – not because the train was not fast enough, but because it was delayed and delayed and delayed again after that.
Such delays are now history barring accidents or earthquakes or something of that nature.
Intermodal means truck trailers will be driven onto flatbeds on the east coast and hauled to the west coast with three or four guys running the train rather than couple of hundred cowboys driving the trucks.
We will eventually( if Old Man Business As Usual lasts long enough) have intercity rail with grade separated crossings, meaning no accidents, with either the trains or autos and trucks using bridges or under passes.
Then the engineer can put the hammer down and the coal smoke can roll, just like in old western movies movies, if the wind ain’t blowing and the sun is taking a break as well. If renewable juice is available , a computer controlled pure electric locomotive will just mosey off a siding ahead of an oncoming coal fired locomotive and allow it to latch on and the human driving it can bank the fires until such time as the sun goes down or the wind quits blowing.
An average intercity speed of a hundred mph hauling freight will be as easy as pie, no super trains needed, just good well maintained tracks.
It just occurred to me last night that while not intended, letting the roads and bridges fall apart is one way to deal with peak oil.
Where I live, there’s been a lot of expanding and repairing roads. While some of it has been to add express lanes to encourage car pool and bus use, other parts of the work are just to add lanes to busy roads.
Some of us would rather the transportation budget be used for more trains, and that has happened in some places around here, but the focus is still on vehicle transportation.
Unlike my area, it appears that in other parts of the country there is no money to fix the roads. If, of course, you don’t want more cars and trucks moving about, letting the roads fall into disrepair may make economic sense. Why keep pumping money into an infrastructure you may not need in the future?
The trucks do account for significant damage to highways and roads. Road damage from one 18-wheeler is equivalent to 9600 cars. Freeze-Thaw, corrosion, erosion, and large temperature shifts are also culprits.
Fact is we need to get rid of a lot of the roads because even if all trucks were reduced in weight, there would still be significant cost to the public.
Truck weight damage:
http://archive.gao.gov/f0302/109884.pdf
Mac, the answer to the problem isn’t to hunker down and build a wall. Success will only come by bring a sustainable life style to the world before we destroy it. Your fortress will be breeched in time and you will fail. You’re thinking like a Republican. You are starting to see the light of renewables and will see the big picture in time. It wouldn’t be BAU, it could be better. We are all in this together.
“But I do believe a portion of us Yankees and some odds and ends of people in other places have a shot at pulling thru”
Trust me, Yankees are nothing special.
Chief as I see it republican thinking has nothing to do with it but then I ain’t no stinking republican anyway.
I agree with you about the ”sustainable ” thing but to repeat myself I do not have a great deal of hope that we will act wisely and in a timely fashion so as to create a sustainable society. I merely maintain that some portion of us may manage to do so.
I agree that my little( hypothetical for now) fortress MIGHT be breached in the event of things going all the way to hell in a hand basket, but things might also settle down. It might last until some sort of order can be restored, which might take as little as a couple of years or as long as a couple of decades. In any case it would likely enhance the likelihood of my living out my remaining years rather than being murdered for my stash of beans and diesel fuel.
I agree that Yankees are no better men than other men, taken all around, but this does not change the obvious fact that Fate has smiled upon us and dealt us the best hand of any country in the world in a collapse scenario.
Big enough, powerful enough, rich enough, enough people to sustain a more or less closed industrial economy, defensible borders, lots of built out infrastructure already,a tightly allied giant rich and barely populated country next door as big as we are, a population ready to peak and decline if we close the borders, etc.
It is not because we are better men than other men that my country has all these advantages.
It’s just good luck on the part of us yankees.
But I am NOT one to look down on fortune when fortune smiles on me.
I drew four of a kind in the poker game of life. If I had been born rich I would have drawn a royal flush. I am NOT complaining about my luck, no siree!!!!
“Chief as I see it republican thinking has nothing to do with it but then I ain’t no stinking republican anyway.”
The leader of the Republican party wants to start building the fortress with a 1900 mile wall to the south to protect us from Mexico.
“here in the USA. My rock solid gut feeling is that the borders WILL be closed, by near unanimous agreement among all politicians who wish to REMAIN in office, with only a few very desirable people allowed in.”
“We have the territory. We have the farmland. We have the coal-which if used frugally in the form of liquefied fuel can be used to meet our CRITICAL needs for liquid fuels. We have the military might necessary to defend ourselves , and yes, to keep ESSENTIAL imports flowing our way (even if we have to seize them by force). ”
If it walks like a duck, quacks like a duck and looks like a duck. It’s a duck even if it’s wearing a suit and tie.
Who is that “We” in your pocket ? Republicans are clearly the war party. You know which party sings “bomb, bomb, bomb Iran” and who won’t sign on to the current peace agreement with Iran to limit nukes. That don’t have an alternative but war. That right ! It’s Republicans that are always first to point out the war alternative.
“Success will only come by bring a sustainable life style to the world before we destroy it”
I beg to differ. My definition of success is personally not dying in the next famine when humanity goes through the population bottleneck. ‘Saving the world’, as you call it, makes you sound naive.
That’s the spirit…!!
Nancy Polosi and John McCain would be proud….
Actually I don’t think they would be proud. Your point is rather weak. If you would like to spend your days volunteering your time to ‘save the world’ then go ahead. I doubt you will. Your activism in this regard is no doubt limited to trolling the internet with lame comments. I’m focusing my efforts on looking out for number 1. Most people are doomed to die in a global famine within 10 years. There is nothing I can do about that. It’s outside of my influence and therefore outside of my concern. But go ahead, if you have plans to ‘save the world’ I suggest you drop the keyboard warrior shtick and get on with it.
Most people are doomed to die in a global famine within 10 years.
I’m not sure what you mean by “most.” Personally I don’t think “most” people on Earth will be dead within 10 years.
By most I mean something greater than 50%. By mid 2025 is my guess.
Not all people who ‘die in the famine’ will necessarily die of starvation. I suppose some might die from violence and hazardous migration behavior related to competing over access to food, aka fighting for survival. Some who die will be soldiers fighting in wars between states which are fighting over food. Fighting over irrigation is much the same thing. Some who die might be well fed indeed but be killed by enemy soldiers, starving migrants, food riots, stampedes. You name it. I’ll place them all in the same category as ‘die in the famine’ for the sake of argument.
It takes about 2000 kilocalories a day to keep body and soul united. Somewhat more if you are active or live in a cold place. Abstaining from sufficient caloric intake results in death rather soon. First you fight for food. If you do not win the fight for food you die. Perhaps in the fight. Perhaps from starvation. Indeed many may kill themselves. The distinction is moot.
Egypt has about 80 million people with no prospects whatsoever; they’ll be on the move rather soon. The world is at all times about 3 meals away from total anarchy.
The proximal cause of the famine will be peak oil, to-wit decreased net energy flow, and climate change.
Hi Boomer II,
I agree the 3 to 4 billion dead by 2025 scenario is very far fetched.
Now if we assume a nuclear holocaust within 10 years, perhaps such a scenario makes sense, though to be honest I have never looked into the likely outcome of a nuclear World War 3, I imagine it would not be pretty.
…how one pronounces that:
SHtik, or Stik?
Never got the handle of it, though it seems like you indeed do!
shouldn’t you be busy saving the world?
Jimmy, I’m not asking you for your help I assure you. Have a great day and best wishes!
Dear Mac,
-So:…”BAU is a dead man walking even here in the USA.”
-but your:…”old ragged out GEO METRO”…
-will fetch you:…” the beer and groceries”…
-because:…”At some point batteries and synthetic oil,probably coal based, can shoulder the transportation load.”…?
Did I get that correctly?
Boy, you got a pretty good handle on how things work in today’s modern world, don’t you Mac?!?!
I envy your time spent in writing comments, though.
I do indeed!
Be well,
Petro
P.S.: Geo was a piece of crap when new, let alone old and rusty…
P.S.: Geo was a piece of crap when new, let alone old and rusty…
I owned a Suzuki Swift, same car basically. It got 45 mpg and it sure beat walking. It was rear ended by a truck when I stopped at a red light. It was only cosmetic damage but the insurance company totaled it, otherwise I’d still be driving it. It was a great little car.
I have known of some Metros going right on past 300k miles without serious problems but they ARE very prone to rust out. The one I have is badly rusted which is why I got it for next to nothing, the scrap metal price, with the running gear still in great condition.
But I can go three hundred miles south and get one that is mechanically worn out but essentially rust free for peanuts, maybe a couple of hundred bucks. Salt is hardly ever applied to the highways in South Carolina and points south. That will cost me a day and six hundred miles on the old pickup truck. Going that far I will likely get a friend with a newer truck to tow the car home for me. Less gas less likely to break down.
I am not claiming I can survive indefinitely. I do have workable plans to survive for twenty years if the REAPER doesn’t get me sooner. That METRO will if necessary enable me to get around on a TINY gasoline ration. A Volt or LEAF would be better of course.
Swapping out the running gear will take only one day with a helper. Simple little car. Tools and workshop on the premises.
The more likely option is to SELL it to somebody who has one that is NOT rusted out for five times what I paid for it..
As far as having all day to post comments my patient is not having a good day and I am compelled to stick tight. So I will not be out of the sick room except to prepare food and go to the bathroom etc.
Most days I can look in every hour or two and on good days I can take off and check in by phone for four hours..
…good and all Mac, but the question here was not about your GEO!
-The question was about you thinking on one hand that:
”BAU is a dead man walking even here in the USA.”
…yet somehow -on the other hand – you are going to have batteries, synthetic oil, etc, etc, etc, ALL of which are created, made/produced and utterly depend on BAU going full steam ahead!!!
-Now, I understand that these things are difficult (to say the least!) and NOT everybody commenting here and thinking highly of himself and sure about the future comprehends them – and that is why I am pressing this and trying to make you and others pause a little, for what you write/wrote (forgive me for being a bit blunt and forceful here) is quite naive and knowledge lacking!
-I am not trying to be cynical and presumptuous, believe me!
I am trying to be helpful since you (and your progeny) are determined to make it through the impending “bottleneck” , so instead of building wood powered vehicles and using old GEOs, you make more – shall I say – educated choices.
Respectfully,
Petro
I suppose I should be more careful about saying things such as business as usual is a dead man walking.
By that I mean millions of new pickup trucks twice as big every year, more and more airports, cars, malls, subdivisions, people, more and more every thing, etc etc all built on the basis of cheap fossil fuel energy.
Barring the WORST sort of bad luck , we are not going to run out of anything really important ABRUPTLY.
I do not see any real reason why we should run out of oil for instance over such a short time frame that we cannot build some coal to liquids infrastructure. CTL will be expensive, for sure, probably between two and four times the price of crude oil- but that is not so expensive that we anybody except the very poor will starve as a consequence. I have already in my scenarios written off most of humanity ANYWAY.
As the old, current version of business as usual is dieing , a new version, just now emerging, is being born. We have pretty good batteries already, I own a bunch of small ones myself. We will have better ones by far well before oil becomes a critical bottleneck, if oil supplies decline at no more than two or three percent a year. I personally doubt oil will decline faster, and adaptation at that rate is possible- not for everybody, but again I have already written off most everybody ANYWAY.
BAU IS NOT GOING TO BE GOING FULL STEAM AHEAD in the usual old directions when the shit hits the fan. Truly substantial amounts of resources are already being devoted to a new bau paradigm, a new iteration of business as usual.
Any body who has studied history a bit can tell you that countries that seem to be unable to solve even relatively trivial problems for reasons of lack of resources ( mostly tax money ) are able to raise huge armies and put a substantial percentage of their young men to work killing people and burning thru resources such as trucks, guns, aircraft, food, etc at astounding rates.
Sure as hell I know a bunch of people who cannot afford to drive any more but I also know that just about every relatively poor person I know has a car today that gets double the gas mileage a poor mans car got twenty or thirty years ago. Thirty years ago poor guys around here were driving old full size Ford and Chevy trucks.( Today new ones half again bigger get better mileage.) Poor guys are driving OLD compact trucks now almost exclusively- trucks that get DOUBLE the mpg the old full size ones got.
I tossed out all my old incadesent lights years ago in favor of cfl’s and almost all my Cfl’s are now gone in favor of led’s.
Sure I expect to have some synthetic oil- and some ordinary oil too. Not a whole lot, compared to today, but SOME. Enough , certainly, to manage for another decade or two.
IF we get our asses in gear, a hell of a lot can change in a couple of decades.
I will go out on a limb here and predict that a repugnant elephant prez will come out within twelve years and call for hundred mpg cars being mandated the way the state of California has mandated some zero emission cars.
Business as usual as we KNOW it today is a dead man walking. A new generation of business as usual is being born. It may never grow up but it is going to survive infancy at least.
The wind and solar industries are getting close to ready for long pants, and the battery industry is taking some solid food and standing on its own feet but not yet actually WALKING, in a manner of speaking.
I have no progeny. I do have the Metro, and incidentally an old four by four Ford truck, the kind that can be kept running easily, which if time ever permits I intend to convert to a wood gasifier truck- mostly just because I think it will be an interesting way to pass the time out in the garage with old buddies.
Cutting my own fossil fuel energy footprint by half so far has been easy. I can cut it by half again without too much trouble, but at some substantial expense. The money will have to be diverted from other things. Less money for people who make cars and clothing but more for those who make heat pumps and insulation.
Personally I find it naive that people who are doomers think doom is going to arrive in the next few years like a thief in the night. Collapse is headed our way , no doubt about it, and it is already visible on the horizon. COLLAPSE is NOT going to arrive like a thief in the night, but more like a hurricane with nothing else on the news for the last forty eight hours. In the case of collapse the forty eight hours will be more like a decade or two.
SOME of us will most likely pull thru.
It is not unreasonable imo to think that the LARGE majority of people in at least the USA and Canada and a hell of a lot of people in Western Europe and some other places will survive albeit with their living standards falling to subsistence or near subsistence levels.
The USA is not what it once was in terms of unity and grit but otoh these days we still have plenty of resources that can be brought to bear on a wartime footing to stave off outright collapse.
Tell me , how fast do you think oil supplies will fall? Let’s not get too wrapped up with Chinese and Indian peasants all getting cars- anybody who has been paying the LEAST bit of attention knows that will not come to pass, barring miracles on the technology front. I never presume miracles.
How many people in your household? How many could fit in easily ?
IF it were not for overly meddlesome tax and labor laws mucking up my personal range of choices, I would cut a deal with some ugly ( so as not to ever want to take her to bed) but healthy woman in a financial bind to come live with us in exchange for room and board and helping in the house and with Daddy. She could have a full time job and her own car and put almost every DIME she earns, after commuting expenses, in the bank. She could move out any day she pleases. She could go out socializing every other evening. So could I.
But my lawyer tells me to avoid even talking about such an arrangement.
But things change. I may just go ahead and hunt up such a helper anyway. The heat and ac consumption would change not at all, maybe up five percent, ten at the most, electricity for cooking and laundry up a bit , not much. Trips to the store cut by a third at least on a per capita basis for the three of us.
Adaptation is not impossible. I parked our land yacht Buick because I didn’t drive it enough to justify the insurance premiums and tags. Half the people I know are relatively poor and still have two cars when one would do.
If things get really bad within the next ten years I will probably cut a deal with a couple of younger people to come here and live and work as share croppers. They will have a roof over their head and plenty to eat at the very least. If they can find a paid job they can share crop on the side. I will supervise and supply the land, the machinery and the expendables. Too old to actually do much real work anymore..
Since they would not be living inside the same house with me , I can legally work such a deal without having to jump thru IMPOSSIBLE hoops. They pay rent. They work. We keep books together. If there is a profit they share it. In any case they get a very cheap place to live and plenty to eat – if they WORK at growing it.
I read that in places such as San Francisco there are literally tens of thousands of illegally subdivided apartments inside supposed single family residences and garages etc. The authorities are not even making any serious effort to shut them up. Evicting that many people is impossible and trying it would likely mean losing the next election.
Change is already happening and it will accelerate.
Those of us who are thinking and acting have a pretty good shot.
I don’t expect that Metro to be a permanent solution but otoh it may serve ok for five or six years. By then I expect I can afford a ratted out old VOLT or LEAF and to have enough pv of my own to charge it most of the time.
The ONLY reason I do not have pv already is that the cost of it is coming down so fast I am much better off to delay the purchase.
THINK ABOUT THAT FOR A MINUTE.
The cost of small scale pv is coming down so fast I am better off to delay the purchase because I expect to get twice the system for the same money in five years, including all the essential components. Inverters, racks, instrumentation, everything is getting cheaper fast.
The farm house I live in,which I helped build, is mid twentieth century dirt cheap cinderblock.Over the years we have added good windows, lots of insulation up and below, and vinyl siding with insulation outside. Metal roof now too. Barring fire there is no reason that if it is cared for this house will not last a couple of hundred years.
You see what it means to have such houses with a DECLINING population?
Hardly any resources will be needed to build new houses compared to today. We already have plenty of roads, plenty of established grid and water and sewer right of ways etc.
Incidentally I just put in a new well and septic system at a rental that I expect to last a minimum of just about forever in practical terms, a hundred years for the septic system and essentially forever for the well, although it might go dry.
Total cost here, eight thousand bucks. Fifty kWh per month max to run the pump. A hundred bucks a year average maintenance costs long term. Water and sewer in town where I used to live now almost a hundred bucks a month and will be OVER a hundred a month soon.
@ Mac
Too many people down there Mac with guns and expectations. Look at a political map, every state has roads crisscrossing everywhere. If you are doing fine in your area you will have to pony up to someone. Plus, that 1900 mile fence isn’t built yet, and never will be. They going to land mine it too? Drone shoot migrants?
Economic and CC migration will be absolutely huge and will bring every problem with reset/collapse home, regardless of your situation. Imagine a constant “Katrina-like” situation unfolding in several places at the same time. That is what desperate migrations will look like. And Trump fences won’t fix any of that. And no, Mexico won’t pay for the fence.
We are all in this mess together, one way or another. I agree, renewables will help, but also believe Renew won’t replace this incredible ff lifestyle, ever, nor should it. We won’t have EVs tooling around to stores, we will have straggly lines of folks walking and lots of people waiting in lines in towns and cities.
I love Wimbi’s decsriptions of his PV foundation. Alas, I live in a cloudy zone 50+ north and PV is not a viable option. Our family answer is to drive less and less, super insulate, and heat with wood. Grow food. Hydro is for lighting and power tools, but our many power outages in storm season has trained us to live around limits to grid lifestyle.
We’re all going to live simpler and get along with a neighbourhood pulling together, at least in rural situations. Those with set aside wealth tooling around as per BAU will take some pot shots wherever they go, imho. And by potshots I don’t mean ‘tweets’.
From a practical standpoint the best solution is to put four parallel fences, and put dogs between the two inner fences. Anybody caught in the inner fence area can’t say they are there by accident, so they get an automatic 30 days in jail, and a free ride to the border.
Hi Petro,
Maybe you should share your wisdom about what those “educated” choices might be.
Most are arguing that we do not know what the future will be. There are some who think they know that there will be a total collapse of civilization, along the lines of the 1930 to 1945 period only 10 to 100 times worse. Maybe it will be along the lines of the Mad Max series of movies, only with less fuel, or that is my impression. There will be war, famine, no functioning government, general anarchy, and a large decrease in human population due to killing, starvation, disease, lack of medical care, environmental destruction, etc.
I will call this the low income view as World GDP is likely to fall.
On the opposite side of the coin are those that think we can easily replace oil, natural gas and coal with other forms of energy. This would include wind, solar, nuclear, geothermal, hydro, biofuels, wave, and tidal power in conjunction with the declining fossil fuel resource. Also there will be greater energy efficiency, better building and urban design, better transportation options (hybrids, plug-in hydrids, EVs, AVs, busses, rail (including electrified), light rail, and an updated grid with more HVDC transmission. This could be called the high income view.
There are many such as old farmer mac that take an intermediate position between these two extremes. We will call this the medium income view.
It is pretty clear to most that such a transition will be far from easy. Impossible? I doubt it. Easy? Equally doubtful. I would put the odds at a little better than 50/50 that such a transition will occur.
When it begins, how quickly it will proceed is unknown.
Fossil fuel output (in exajoules per year) will likely peak within 10 years and will be apparent to everyone within 15 years. When the reality of energy scarcity is fully realized the pace of change will accelerate and the World may get to work on solutions. Those of us who realize what humanity faces might as well start working on solutions, there is not much point in giving up before we have even tried.
Hi Glen,
Remember that Henny Penny thinks everyone else is Pollyanna.
Back atcha Dennis,
Yep. I have known Henny Penny since I ran across her in the second grade reader. In this neighborhood she usually goes under the alias of Chicken Little.
Pollyanna! Goddam it Ron, there’s a hell of a difference between an air-headed optimist who keeps saying “Things can turn out ok”, and a hard-headed hardware guy who says “ There, I HAVE DONE IT, so quit crying in your warm beer and go do likewise, or, if you insist, go die of stupidity like I think you will and you deserve to do.”
During my R&D days, I had the reputation for showing up at a conference with the THING ITSELF, sitting there running and doing its stuff, when the other guys showed up with megabuck proposals for STUDIES to investigate the POSSIBILITY of doing it.
I think of my granddaughter just off to one of those super- expensive eastern universities, and her dorm room, which looked to me like an overdone palace.
I had gone straight from a shack of a navy barracks to an identical shack of a university dorm, just as filled with ex-GI’s as the barracks had been filled with the same GI’s.
And all this in the sweltering delta with no AC anywhere.
“Try living in the delta without AC”. What a joke! I and millions of others did, and I, for one, am still alive, even if just barely.
To me, the modern generation, including lots of people here, sound like a bunch of wimps, made fat and stupid by a life spent at the swollen titty of the fossil fuel pig.
“…. sound like a bunch of wimps, made fat and stupid by a life spent at the swollen titty of the fossil fuel pig. ”
but they have known no other life ….
forbin
Are you that old wimbi? Came out of WWII?
Yep, lots of us left, some way older than I am.
Vonnegut- “Wars are fought by children.”
Only one close relative left in my family who is a WWII vet.
Wimbi you may not realize it but there are a LOT of us who are VERY fond of you.
“and so it goes”. Great Vonnegut quote. Here is another one – from Tom Wolfe:
“I’ve tried A! I’ve tried B! I’ve tried C! I’ve tried D! Tell me what else I can try!”
The Right Stuff – I have to admit, like Tom’s Edwards AFB’s doomed test pilot, I may be a “Pollyanna”. It happens to engineers and test pilots. Training kicks in. Despite the obviousness of a death-spiral, be it aero or energy, we go through our checklists, re-check the engineering. Try A, try B, try C, even try D, all the way down to augering in. Pollyanna-ish? or coming from a deeper survival instinct? To know that giving up guarantees augering in – the best instinct is to press ahead and try the alphabet soup of options that engineering continues to throw out there. From the first carving of the first wheel, man has been an engineer as well as a mystic. The engineer took us from the wheel to where we are now. Maybe we will auger in, but I’ll be engineering right to the moment of impact. Call it Pollyanna if you want – I prefer Tom Wolfe’s take – The Right Stuff.
Eject, eject, eject!
Not going to improve anything by drilling dirt.
Ron,
There are many people here who recently purchased electric vehicles and PV systems. After experiencing how affordable and convenient such a change is RIGHT NOW, not some magical mystery future, there is an undeniable change in what one believes is possible.
We’re talking about two distinctly different types of people here:
1. People incapable of ever holding a doomer view regardless of evidence.
2. People who held a doomer view, but have seen significant, tangible changes in the affordability and adoption of alternative tech.
Being a doomer regardless of evidence is psychologically identical to being a Polyanna – an inability to change regardless of data.
This is purely in terms of peak oil, and the availability of substitutes in the near future. It is not in regards to the long-term impossibility of growth. Even if human population stabilizes it would not change the fact that our global economic system requires growth to function.
Infinite economic growth is mandatory for a system based on loans and interest. It is also impossible to maintain indefinitely.
That is the ultimate wall that our civilization will ram into.
Developments in the availability and affordability of EVs and PV have allowed me to adopt them myself. As a middle-class American I was able to make that change. In 2008 that was not possible. Even in 2012 that was not possible!
Things are changing faster than many appreciate. It is natural to be skeptical because we’ve encountered such things before. I can tell you. EVs are now real. Affordable solar is now real.
I switched not to save the world with some green machine. I switched because it was financially savvy. I’ve saved money. That was never true before.
“There will be substantial amounts of fossil fuels available to us for many decades to come.”
1. How can you be so sure?
If Ron is right (http://peakoilbarrel.com/peak-oil-right-now/), global oil production will start declining soon. It will be double-squeezed due to the other phenomenon of Export Land Model (https://en.wikipedia.org/wiki/Export_Land_Model). There is also the Energy Trap (http://physics.ucsd.edu/do-the-math/2011/10/the-energy-trap/). I personally think that assumption (MANY decades) way too optimistic. We will not have that “luxury”.
2. To us, or to the U.S.?
When you write “us” I tend to include myself, European, in your “us”. But I guess what you really meant was “you”, the United States, am I right?
Hi Patrick,
If (when) things get really bad, which they surely will, I doubt the U.S. part of “us” will fare well: no better than Europe or Asia. I’d bet places like NZ, New Caledonia and possibly Vietnam will become highly desirable oases; Vietnam owing toughness and self reliance of the population and amazing productivity of the land. The Americas already have the highest murder rate in the world and times are good here (relatively). Of course you already know this.
Hi Doug,
I am sure you appreciate that overpopulation is one of the two key facets of human overshoot. The other is excess consumption of resources per capita.
The more we Yankees manage to kill each other the less problems the rest of us will have eating and staying warm and dry. Sarc light on.
Seriously,
In the event of a mad max scenario which I see as possible but highly unlikely during my lifetime at least, the fact that we have a lot of guns is hardly going to matter at all.
People can murder each other with a piece of pipe very easily. Or just a brick.
If talking about most of ” us ” perishing I mean humanity including a LOT of yankees. If talking about a successful transition I was probably thinking about the USA in particular but some Europeans as well as some people scattered all over the globe have a chance too- maybe not as good as North Americans, but still a shot.
The biggest plus for western Europeans as I see it is that your populations will peak sooner than just about anywhere else and that people there are already inclined to work together. Socialism is a cuss word in the USA but it can be a VERY good thing when it comes to solving really tough problems such as an energy crisis.
You Europeans are sensible enough already to tax the hell out of oil and build and use mass transit.
By many decades I mean at least four or five and maybe as many as ten. WE WASTE most of the oil we burn even NOW- even in Europe, compared to what COULD be in terms of efficient use of it. Ditto natural gas..Ditto even coal when we get right down to it. When I say there will be substantial amounts of oil and other non renewable resources available to ”us” I primarily meant the USA and Canada and maybe a few other places such as Brazil. Russia too. HUGE territory, small population, at no risk of invasion due to being a major nuclear power,etc.
BY going on a wartime economic footing I believe we Yankees can get by on domestic oil plus some synthetic derived from coal and what we can get from Canada etc. The failure to WELCOME Canadian oil of all sorts into the USA is in my opinion one of the DUMBEST mistakes we have made in decades.
Adaptation can happen very fast under wartime conditions and there is little doubt in my mind that once the shit hits the fan hard and steady we yankees will switch over to a wartime footing. This could mean you simply cannot buy a large car or pickup truck NEW for any sum- because none would be manufactured. It could mean having your car confiscated and being jailed for driving over forty mph or buying another drivers gasoline ration to go joy riding. (Driving forty will increase the fuel economy of most cars by a third at least compared to driving seventy.)
It will probably take us yankees another decade just to break the car habit to the extent we can get to seriously building mass transit and setting aside bike lanes on city streets.
There are tens of millions of us yankees living alone or maybe two of us in gigantic houses, by European standards. We can and will double up as a matter of necessity in those cases thereby cutting domestic energy consumption by close to half for that portion of us yankees.
Street cars and subways take a long time but buses can be cranked out in a HURRY.
It appears to me that the vast majority of this forum accepts the fact that the available supply of cheap resources such as petroleum and fresh water have peaked or will do with in the decade. We have built a complex, interdependent economy on these critical resources. The complexity and interdependency means that a a failure or significant reduction in one component will cascade through the entire net work.
There are those who welcome a destruction of business as usual (BAU). Today The Middle East and North Africa are in a state of civil war. Greece, Spain, Italy and Portugal are essentially bankrupt. Africa and Central/ South America are economic basket cases. Japan has been in an economic depression for twenty – twenty five years and China is now showing signs of the ‘Japanese’ syndrome. Central Bank money creation is the only thing that has kept a global economic depression form becoming evident. BAU is being destroyed daily and we are past the tipping point. Even if we suddenly found new sources of cheap energy we would still proceed to global economic collapse.
There are those who think that alternative energy sources (alternative to petroleum) will ‘save the day’. While solar, wind, hydro, nuclear, etc., will mitigate the impact of petroleum deficiencies, political, human nature and economic forces make conversion to those sources difficult to impossible. To date conversion to those sources have been no more than a pimple on a fly’s ass relative to petroleum use. Possibility is not reality!
OFM frequently falls back on a war time economy to ‘save our bacon’. In 1941 we had a population that had been hardened by the great depression. We were for the most part a homogeneous society/culture. People had to be self reliant in order to survive. Today 35% of the US population are on welfare. Another significant number subsist on Social Security and Medicare, both of which will soon be bankrupt. We are a soft, hollowed out, ignorant, society of fat, tatooed, nose ring, meth drenched paper shufflers and baristas.
I am 82 years old. Tonight I will meet with my community emergency preparedness committee. My son-in-law is the leader. Tomorrow I will meet with the community Security leader. Next week I will schedule a meeting with the County Emergency Preparedness Officer. Yesterday I preached at the local community Church. The previous Monday evening at the local Grange meeting, I updated the members on the global economy. All of these meetings result in community preparation for the inevitable economic collapse. In my spare time I teach dwarf fruit tree budding, operate a beef ranch (21 head year round) and maintain the garden/orchard for the family of six households with surplus for the old men and women in the community. I am confident that my rural community will have a good chance of getting through the inevitable ‘bottle neck’ because we are aware and preparing to cope.
I gave up a lucrative career as a senior executive of a global corporation to move my family to this rural valley because I saw in 1994 that the present system was destined to fail. Of course I am ‘talking my book’, but if you expect you and yours to survive the coming collapse you had better plan to cope with an 1890 type existence. That means figure out how you (not Chili) put food on the table and a roof over the table and protect it from the poor souls who out of ignorance or sloth failed to prepare!
There are those who think that alternative energy sources (alternative to petroleum) will ‘save the day’.
They will likely save the day for some people because solar and wind are easier to operate than oil, gas, coal, and nuclear if communities become isolated.
Look, I’m going to die when I get old enough. Nothing is going to save me personally. Similarly, everyone is going to die. Nothing will save any of us from that fate.
If some technologies allow some people to better survive, then those technologies have done their job.
All of us are expendable in the evolution of our species. If some homo sapiens survive to keep the species moving along, that may be a reasonable outcome in the greater scheme of things.
Hi TG,
You are new to me, glad to see your comment. ESPECIALLY THIS EXCERPT.
”OFM frequently falls back on a war time economy to ‘save our bacon’. In 1941 we had a population that had been hardened by the great depression. We were for the most part a homogeneous society/culture. People had to be self reliant in order to survive. Today 35% of the US population are on welfare. Another significant number subsist on Social Security and Medicare, both of which will soon be bankrupt. We are a soft, hollowed out, ignorant, society of fat, tatooed, nose ring, meth drenched paper shufflers and baristas.”
It is in large part because I agree with your assessment of our current society that I am so particular about saying MIGHT and MAYBE and SOME etc when I talk about the possibility of a successful transition to renewable energy. The forties yankee dog was lean and mean,young, with fast reflexes. The current day yankee dog is a lap dog by comparison in most respects, fat, senile, by comparison almost helpless.
Now my own family,what is left of it, is basically not interested in the things you talk about, which is why I will be forting up, if it comes to that, with a few select friends. Forting up is in essence what your plans are all about, only on a community level of course.
IF a couple of relatives show up, I may or may not take them in, it depends on their attitude more than anything else. Most of them only show up now when they want something.Young people have a way of forgetting old folks are alive except on holidays and when they want something. They never lived on the farm. They don’t know anything now except bau jobs and the bau lifestyle. They mostly think I am a cracked old fool for believing in collapse being a real possibility. The neighbors I can best count on to some extent are local church members. They DO believe in collapse but for different reasons.
It is amusing to note that the hard core doomers who hang out here likewise think I am a fool for believing a successful transition to a renewable economy is at least THEORETICALLY possible- but this is a polite forum and we generally do not call each other fools DIRECTLY.
I envy you your confidence your community will pull thru the bottleneck. I am not more than moderately HOPEFUL my little community will survive but we do still have a lot of TOUGH people – compared to most places.
I am wondering what you are doing in order to ensure your community remains peaceful and is NOT going to be overrun by people fleeing other places where life becomes impossible.
OFM said”I am wondering what you are doing in order to ensure your community remains peaceful and is NOT going to be overrun by people fleeing other places where life becomes impossible.”
It will not remain peaceful. However, 15 mile long, one mile wide fertile river valley with minimum access roads that are easily blocked and check pointed. The side ridges are difficult to traverse. We have ham radio communication throughout the valley and drill every other Sunday night to assure that the system works when needed. Security is routinely considered at our regular Community Emergency Action Group meetings. We do not underestimate the risk posed by the desperate.
I like what you say, and admire the things you are doing, very much the same as what I do.
I am quite a bit older than you and grew up during the depression, getting used to more or less universal lack of money and need for self-sufficiency as a natural state of humanity.
Of course I saw all the innovations and almost instantaneous changes of national effort, which was indeed impressive in its speed and depth.
It is true that most people these days are not at all capable of that sort of effective reaction to a major threat, but not a few are. I live in a relatively poverty-burdened appalachian hill country, and around there there are lots of people who have lived their whole life on their own wit and wisdom. They can, for example, make a functional wood gas fueled car like was used by the millions during the big war. Or turn any junk into useful stuff.
Most of my own remaining energy I use to show these folks a lot of great new tech they could make and use but had no chance at all to know about- for example, super good little engines that came out of very high tech space programs but were ignored for other uses that lower tech versions easily could have done
TG
Thanks for your comments. I am interested to hear more about your program. I would like to see something along those lines in our community. Perhaps you can point to some resources that would be of assistance?
Thanks
Walter
The 30 Tcf expected in the Egyptian field is quite large. I think that is between 1/3 and 1/2 of the Marcellus which in now the biggest nat gas producer in our nation.
The 30 TCF is in place gas in a deep water setting. I would use 20 TCF for speculative purposes.
Does not California’s drought lend an opportunity for the electric economy to demonstrate itself?
A state of 40m souls wealthy almost beyond the dreams of Midas, technically superb, highly developed, fertile, but for now with too much sunshine and too little water replenishment. Who knows how long the drought will last – 1yr?, 10yrs?, 100yrs? Its alleviation is by borehole drilling into deeper and deeper connate aquifers. Why do its citizens and legislators not take the bull by the horns and put the Pollyannas centre stage? Ok – there’s always the (pretty high) risk that the winter snows will return, but there’s a significant downside risk of long-term loss of agriculture and downgrading of quality of life.
So use all this insolation to transport and generate fresh water in abundance. Build an infrastructure that supports shipping of water from wet parts of the States/World to offshore California, then to be conveyed by large pipeline into the reservoir system. Massive electric pumps – no problem. Massive current – no problem; PV energy is cheap and abundant. Float an array of Single Point Moorings out to water deep enough to handle 250,000 tonne tankers – same at the other end where the water is coming from. Connect up with 72″ pipelines to the top of the reservoir system.
Temporary shortage of tankers? Build reverse osmosis plants along the coast and complement the water supply into the pipelines. Endless PV power and Li battery storage will provide the muscle.
How much water would stabilise a continuing parched landscape? Let’s say something around the 5 tonnes per day/per person, to include domestic use, industry and agriculture. We’re looking at 200m tonnes per day. That’s about 150 72″ pipes at 4m/sec flow. Increase it as desired to permit pumped downhole replenishment of aquifers (our frac’ing friends can help out here) and make good subsidence in populated areas.
Basic resources are steel, Copper, Lithium, transition metals, plastic insulation and Coulombs. Admittedly on an industrial scale – but hey! What’s in short supply? Commodities are cheap, oil is cheap, PV cells are getting ever cheaper, the Giga Factory can cope with the Li cells, people are available.
Within five years California could be permanently cushioned against ombretrophic failure and we’d all be impressed, if not a few confounded. Then build out to the other water-starved areas of the world, close enough to the sea. Simples!
California agriculture is toast. Using PV to distill or move water would make it much too expensive for crops. There is plenty of water for the urban areas. California agriculture at roughly $18B/yr is over 16% of US agriculture but only one percent of California GDP.
https://www.fieldtomarket.org/report/national-2/PNT_NatReport_Socioeconomic_AgriContributionToNatlAndStateGDP.pdf
I think we have little choice but to radically reduce the food we get from California and perhaps find some way to get the FF producers to compensate the farmers for their loss. The projected areas of expected future drought highlighted precisely this California area for major risk. Unfortunately the scientists cannot claim certainty on the linkage. It is just the best expectation that they could get from current science.
Of course, the other major drought area that is relevant is Syria. The military for good reason stated that our national security is at risk from global warming. It does not matter that world wide food production is now stable. Big changes in a food production in a local region that leaves specific people without food can generate societal collapse and provide the circumstances that give rise to groups such as ISIS. We can expect these problems to multiply by over an order of magnitude.
Don,
Agreed. But as money is cheap as chips these days along with seemingly everything else I can’t help trying to tease out the flaw in the aspiration of a brave new world of electricity which purportedly offers abundance affordably and yet may never deliver on the macro scale. Localised failure, technological, societal or of resource production, may have contagious effects that spread outward as you say.
Far too true! We have a huge range of problems for humanity going forward. I do think that renewable energy will be quite inexpensive and available in a robust variety of forms to solve many problems. However, it will not solve the California agriculture problem. Global warming is going to fry that poor state. We will need to move to some future agriculture that relies much less on vascular land based plants with their great need for fresh water.
California can become a giant energy producer, grow the food elsewhere. Deserts do not actually support large populations. They need to use other areas to produce the life support, which means those external areas are changed and depleted. It’s a shell game on a vast scale, but we can really get very good at it.
There is PLENTY of elsewhere to grow the food currently grown in California.
None of my farming friends and neighbors give a damn if it EVER rains in California again.
They all stand to make a lot better living without the competition.
And while the farmers in California have the law on their side for now, the odds are stacked so high against them in terms of the population that the urban people WILL eventually get control of the water.
If I were a big time irrigation farmer there I would try to sell any transferable water rights or sellout altogether.
It is not only drought they have to worry about.
How many people in this forum have ever heard of the super floods that hit the west coast during the American Civil War?
Look’em up, hardly any body believes such floods are possible.
There is plenty of gravel, it can replace asphalt. Start manufacturing horse-drawn milk wagons?
It would be possible to have an ev transition in short order. Small junked cars and a bank of batteries, electric drives installed, voila, instant ev. Wind and sun and hydro and nuclear won’t be gone overnight too.
All that manufacturing is done, recycle the old to the new. There are ways to solve problems that need solutions. It would be an inexpensive beginning. Junked Metros would increase in salvage value.
Recycle all those useless engines and transmissions into beer cans.
There’s biodiesel for farming, coal for steam turbines and engines. Build a new steam shovel and keep mining coal. There was a world civilization before oil, there will be one after oil.
There is no shame in using fossil fuels to survive. It is not a sin.
Government by horse drawn-wagon is gonna be interesting. We better start breeding up a population of horses quick and clearing land to feed them if that’s the plan. They got sent to the glue factory long ago. Might be a bit short on Veterinarians too. The logistics behind a horse-drawn economy will not spring up over night. The population bottleneck we have coming is gonna be a nasty one. Granted, their will be a transition from resource plentiful industrial economy to resource scarce industrial economy to scavenger economy but I don’t anticipate anyone living through it will be seeing it as a ‘solution’; more of a ‘fight for survival’. But hey, I’m a pessimist. Not for me I mean. I’m very optimistic for myself. I’ll do great. But everybody else is screwed!
But we won’t have the fuel to clear the land for growing feed. It takes a lot of oil to produce and raise horses now. Anyway, we will have eaten the horses if the food runs short.
People using draft animals NOW may continue to use them. Modern economies that farm with diesel fuel will never go back to draft animals so long as the very most critical users of diesel get the last rationed barrels. If bad luck stops industry dead in its tracks permanently, and this COULD happen, most of us will starve, no question. How many,precisely, I have no idea, but as somebody else points out, the horses and mules that would be needed no longer exist. The implements needed to work them no longer exist, the skills needed to work them are mostly non existent, etc.
If there is no fuel for farmers there will be none for truckers and cops. In that case the best we can hope for is mad max. As Doug pointed out earlier, the USA is a well armed society and we will go a LONG way towards solving our food problems by eliminating each other on a wholesale basis if things go mad max. (My sarc light is as dead as last weeks fish bait. )
Personally I would much rather go that way than to be a helpless city dweller with nothing to eat, maybe nothing to drink except rain water, and no hope of anything except a slow hard death, watching little kids all around me dieing the same way and unable to help them. I might actually go out and selectively start killing people who in my estimation are major net losses to humanity. I know of a couple of dozen of that sort personally at this minute.Wife beaters, hard core white shark crooked lawyers, habitual thieves , welfare bums on disability who hike for miles thru the mountains hunting ginseng, etc. Such a course of action would buy the local little kids a few more meals.
So long as I am armed, and know of somebody who still has food and water, they had BETTER be forted up – if mad max catches me out. LIFE IS DARWINIAN at the most basic level.
The average man nowadays would deny that he would commit murder to eat but if he is watching his kids starve their empty bellies will TRUMP all other considerations right up to and including murder. The Vassar educated mother without a gun will sell herself for a loaf of bread to feed her one point one babies.
I do notice that the hard core doomers do NOT scoff at my preliminary planning concerning forting up. This planning is at this time ALMOST all talk but I do practice the ”no lose” aspects. So far the only loss is minor, in that I have a stock of diesel fuel on hand that I could buy for less now that I paid a year ago. But I will keep using it a little at a time , and restocking, and the price is sure to go up again. My average cost over four or five years will be less than buying as needed in small amounts. Having lots of spares on hand, and plenty of expendables is actually cheaper than buying in small amounts as needed.
Simple tractors, combines, etc are FAR easier to build and maintain in terms of resources devoted to the job than raising maintaining and working draft animals. If it gets so bad we cannot manufacture tractors and implements, we are DEAD already.
But farm machinery is incredibly durable – if excessively complicated with tricky electronics. We would still be eating ok here in the USA for another thirty years if we never build another new tractor- the ones we have can be kept running. We would still have plenty of trucks for delivery of food too- because the ones currently being used to deliver throw away junk will be sitting around in storage.
The KEY thing about a tractor is that you feed it ONLY on days you use it. I have a good one in a shed that has not been fed for a couple of YEARS now. I could check the oil and water and hook jumper cables up and have it working in the field it ten minutes. Somebody let me know when they organize the tour of farms where they have horses that are not fed daily no matter what. I will be the FIRST person to sign up.( sarc blinking wildly )
Biofuels are cheaper by far than draft animals, and take a lot less land to produce than feed for animals equivalent to a tractor. AGAIN, you feed a tractor ONLY on the days you use it.
Hey guys , people who want to keep dogs in the future will be mostly keeping dogs that will fit in purse, dog food is going to be DAMNED expensive. But we yankees and richer people every where can drop halfway down the ladder and eat the stuff we feed cattle and hogs now and get by ok and we will actually be far healthier as the consequence of NECESSARILY eating down the ladder and doing a LOT of walking and biking.
Primary food production can be cut by three quarters in the USA without anybody actually starving – assuming rationing and welfare. We can manage that much farming using coal to liquids and biofuels.
Those of us ( humanity) who remain moderately well to do will still be able to have a chicken drumstick on Sundays. Some GRASS fed beef will be available. Maybe there will be a government operated lottery to determine who will be allowed to buy some of it.(sarc light blinking dimly)
If I can keep the poachers out I will have fish once in a while from the family farm pond. I will have some grass fed beef for myself so long as nobody succeeds in rustling my cows. Hopefully the government will not confiscate ALL of it under wartime type emergency regulations so as to feed people in town. Eggs will be no problem, I can have plenty of eggs. Chickens require only a modest amount of feed and can forage for most of that.
Grub before ethics. I’m a hard- crash peakist. It’s worth noting that during China’s last experience with major famine it was not uncommon to ‘let the old people die’. This means not giving them food and if they have any food then take it away. If there were no old people to let die then it was the youngsters. I’m sure ‘infanticide up to 12 yrs old’ so to speak. Most rational peaceful people that you see all around you are about 9 meals away from homicidal. History holds the lessons of what human nature is. Hobbes was a nice guy, though Hobbesian scramble is not a nice thing. Personally I’m prepared for the worst. Just remember though, ammunition is very heavy and those with a lot of it won’t be going very far with it unless they have lots of energy to move it.
Here is a good movie to watch for all you doomers and survivalists.
https://www.youtube.com/watch?v=GkiHNnudxr8
How long does diesel keep, and what age machine will burn it if it doesn’t?
I don’t know how long diesel will keep. Ten to twenty years at LEAST. I have used some that old without problems. It smells funkier than usual but it burns ok. I would NOT put fuel that old in a newish engine except in an emergency. It would be best to dilute it with some fresh fuel as well if at all possible.
People think gasoline will not keep, and it is hard to store it long term without air and moisture getting to it for sure. Without a pressure cap on the container the more volatile fractions evaporate eventually leaving you with a very poor quality fuel.
But I have often seen newish model cars left sitting for five or six years start right up with a hot battery at the turn of the key.
This is an everyday occurrence in the auto wrecking business and nobody thinks twice about it but the mechanic does usually carry a spray bomb of so called ”ether” to help get such long unused engine started. Some can’t be started because the moving metal parts have seized together. They can’t even be turned even with a long lever.
The guys who tear down old wrecked cars at used parts businesses habitually put ten year old gasoline in the tanks of their get to work clunker personal cars mixed half and half with fresh gas. I have seen ten year old gasoline from a wreck put ”neat” in the tank of an older carbureted farm tractor which ran just fine on it once it was started and warmed up a bit. It started easily hot but refused to start cold without that whiff of ether.
The fuel system is effectively sealed if a car was built in the nineties or later. Some fumes may escape but air and moisture do not get in unless there is a failure of a non moving part.
Now as to how long a diesel engine might last, I know of some seventy five years old that run fine that have never needed a serious repair. They have not been run that many HOURS in total though , usually less than ten thousand. Tractors sit around a lot. Ten thousand hours is roughly equivalent to five hundred thousand miles on a truck. Over the road diesel trucks run that far as a routine matter, some twice as far before they need a major overhaul. I know of one commercial stationary DUETZ diesel that has reputedly been running for over fifty years, all day every day except weekends and holidays, that is still running strong without even being overhauled. The Germans most definitely know some shit and they used to build things to LAST.
Nowadays people build stuff in the expectation it will be junked within a decade or two rather than used for a few generations.
My guess is that so long as diesel fuel is still fluid enough to flow thru the filters a diesel engine will run on it. If it is stored in tight drums in a cool place with a stable temperature, my guess is that it will keep half a century at least.
With well designed storage intended for the very long haul, diesel would probably keep a century. That sort of storage would be for rich folks and maybe military bunkers built for generals.
But I do NOT know.
FYI Rudolf Diesel invented his engine so farmers could make their own fuel.
OFM said, “Now as to how long a diesel engine might last, I know of some seventy five years old that run fine that have never needed a serious repair. They have not been run that many HOURS in total though , usually less than ten thousand. Tractors sit around a lot. Ten thousand hours is roughly equivalent to five hundred thousand miles on a truck.”
My little diesel Kubota is 27 years old with 5300+ hard hours with no engine repairs. I just bought a 60 hp International diesel that is thirty years old with 410 hours on it. Kept in storage and is, essentially, a new high quality tool.
RonW wrote:
“There’s biodiesel for farming, coal for steam turbines and engines. Build a new steam shovel and keep mining coal. There was a world civilization before oil, there will be one after oil.”
What happened after the fall of Rome? Took nearly a thousand years to return to the tech levels and living standards that Rome had achieved. Our Modern Society is based upon specialization. Rarely can a Doctor produce or repair the tools he uses, nor does he have the skills to produce pharmaceuticals. Once the Doctors equipment fails, and supplies are exhausted, he or she is nearly useless to treat all but the simplest issues. Probably 10% of the US population is dependent on drugs to live (diabetes, Blood pressure, Thyroid, etc). I suspect that as drug costs rise in the US, that people will not have the means to obtain the drugs they are dependent on and will begin dying off.
In the US, less than 2% of the population feeds the entire population. If farmers can’t get fuel, electricity, seeds, and agra chemicals, either they won’t be able to grow very much food, or none at all. Even farmers have become specialist. Most just grow a limited number of crops (or livestock/Poultry), Rely on Fuel and Electricity to plant/harvest/irrigate, hire a harvesting contractor with a specialized harvester (Corn, Wheat, Beans, Potatoes, etc) and also rely on Agra Chemicals (fertializer/Herbacides/Pesticides).
Getting the Food to urban areas and distributed is impossible with out fuel for trains and trucks. Even if we don’t run out of oil, if the “just in time” system fails nationwide, it not going to be available to transport goods if refined fuels cant get distributed sufficient to supply all of the critical systems. Everything in our system has dependences on other systems and resources. If the link between any critical chain is broken for more than a few weeks, the entire system begins to unravel and collapse.
When a system wide collapse occurs, the major of specialized people will die off quickly. Their skills will be lost. A collapse will bring about a die off overshoot, and it will take a very long time before society can re-establish itself.
Take a look at whats happen in the Middle East and North Africa. There are probably over a million refugees leaving these regions, which are in a state of collapse. These people have no choices except to flee or risk death. Venezuela is looking like a nation that is heading for a collapse. There are likely thousands fleeing VZ every day as the infrastructure fails to deliver critical resources (food, drugs, fuel, etc). less than 10 years ago VZ has a very decent economy and was a net oil exporter! After the poorest regions fail, collapse will work its way up to less poor and developed regions. Wars will also follow the collapse as anarchy leads to power struggles. At some point the world will enter another world war.
Why are you bothering to post here?
Your message is simple. Collapse.
Okay, we got it. Sounds like there’s nothing left to do, so we can move on to other topics now.
”Once the Doctors equipment fails, and supplies are exhausted, he or she is nearly useless to treat all but the simplest issues. Probably 10% of the US population is dependent on drugs to live (diabetes, Blood pressure, Thyroid, etc). I suspect that as drug costs rise in the US, that people will not have the means to obtain the drugs they are dependent on and will begin dying off.”
Actually rather simple and easily produced medicines are available to treat many conditions -and they are generics, almost all of them. My own doc hardly ever prescribes anything but a generic except in the case of infections. Infections can be tough to impossible to whip with generics.
We would still need a functioning pharma industry to produce these generic drugs but it would not take a big one spending megabucks on research and development and testing..
Now as it happens the only thing I can really brag on when it comes to having a so called career is that I am a CHAMPION first class rolling stone, and spent a good bit of time studying nursing and ag majors necessarily learn about keeping livestock healthy in any case. Humans are just another kind of livestock when you get right down to the essentials of health care.
MOST of our health problems, probably eighty percent of them AT LEAST , we bring on ourselves.
Overeating, eating the wrong foods, lack of exercise, alcohol and tobacco abuse , other drug abuse, pollution, reckless activities such as riding bikes in traffic, driving cars, falling off ladders, getting in fights , etc. failing to observe common sense cultural rules such as don’t sleep with everybody you meet, etc etc..Failing to practice reasonable self quarantine in times of epidemic illness
ALL these things and more are the REAL causes of our getting sick.
IF Doctors lose access to wonder drugs and sophisticated operating rooms, they will still be able to keep those of us WHO WILL LISTEN TO THEM healthy-UNLESS we are already sick as the result of bad habits and a bad lifestyle.
But a hell of a lot of people who are ALREADY sick will die if we lose access to extensive health care of the sort we have now, you are certainly right about that.
Plenty of people consume more health care the last few months of their lives than they do in their entire lives previous to those last few months.
For most of human history, humans have survived without modern medicine. There are still communities where people survive without modern medicine. Most of animal and plant life on Earth has evolved without modern medicine. We’ll survive as a species if it disappears.
OFM Wrote:
“My own doc hardly ever prescribes anything but a generic except in the case of infections.”
Generics require stable infrastructure to produce. All drugs contain materials that are not produced at the manufacturing plant. Solvents, Filers, raw chemicals are purchased from other companies. Many drugs also rely on crops that can only be grown in the tropics and need to be transported from a thousand miles away.
The issue with Generics is general the poor quality. The ingredients aren’t tested to the same degree as brand label drugs are. Many generic manufactured plants have long lists of violations do to poor quality control. There are increase risks associated using generics. Perhaps the generic drug is fine, but then again they may be contaminated, contain too little or too much of an active ingredient that can result in problems.
“it would not take a big one spending megabucks on research and development and testing”
Well that pretty much happening today. Manage care is killing off label brands and drug R&D. Most pharma companies in the US are downsizing or eliminating R&D departments. Most of the Big Pharma choose to buy up small independent R&D companies, but Venture Capital Investment in these small business is disappeared to the poor economics of Pharma caused by Obamacare. Currently most R&D is just for projects already being developed, but there are few pharmas starting new research projects. Perhaps if Obamacare is reversed in 2017, they will make a come back, but I wouldn’t bet on that happening.
OFM wrote:
“MOST of our health problems, probably eighty percent of them AT LEAST , we bring on ourselves.”
Absolutely. Unfortunately American diets are very poor. Most eat excessive amounts of processed and junk foods, and wash it down with a HFCS (Corn Syrup) or Sugar laced drink. This is a recipe for health problems when they get older. How many Americans are Diabetic today? Too many!
Is there a place which publishes the amount of revenue generated historically by the US oil and gas industry?
In particular, it would be interesting to see the gross revenue annually from upstream, midstream and downstream.
SS – “In particular, it would be interesting to see the gross revenue annually from upstream, midstream and downstream.” Being brutally honest, and not knowing how to be more tactful, what in the world would that tell you?? However, I do note that you said it would be “interesting.”
I know that this is a WAY OUT OF THE NORMAL example. But, a drug company spends $2 billion to get a product FDA approved – zero revenue. Then sells the pills for $100/month with a production cost of $1. So, on a revenue basis, only sales generate revenue. But, without the $2 billion of investment [tax deductible], there would be zero sales.
Clueless. I agree that to get a full picture we would need total CAPEX and OPEX.
Just think that this figure has been on the uptick for years for oil other than 2009 and 2015, which is suspect are considerably lower, while gas may be down since 2008, but with increased volumes tough to say.
Just thought it would e interesting, I agree would need to know a lot more info than that.
Shot in the dark, but you could try FRED.
Federal Reserve Economic Data – FRED – St. Louis Fed
Shouldn’t it be
“US oil CONSUMPTION nears previous peak”
?
No, though the first graph was about consumption, the next three, and the main thrust of the post, was about production. The monthly peak in US consumption was 21,666,000 barrels per day in April of 2005. We are still a million and one half barrels away from that. Not close at all.
In actuality, the world of the future will not be crowded. Survival for a few will be possible;
And that’s a reason for optimism.
Look, we’re all going to die. Some of us here are old enough that we personally will be gone before the worst hits.
And some of us recognize that for the health of the planet, it would be better if there are fewer people.
The economic pruning that some consider a doomsday scenario, others might see as a necessary step to creating a healthier planet for those who are left.
We will all die. It’s okay. That’s part of the process.
People used to have lots and lots of children knowing they weren’t all going to make it past childhood. Now we have lots and lots of people, and not everyone will live to be 80.
And that renewable energy will help the survivors. No, it won’t allow business as usual to continue, but we don’t want BAU to continue because it is wasteful.
I vaguely recall some discussion here months ago about bee organization. I paid no attention, so what I am about to say now may be a rehash of stuff that was talked about then.
As I understand it, the worker bees support the queen and that’s the primary purpose of the hive: to keep the queen, or a new queen, alive.
So why would it be such an unworkable idea that renewable energy and alternative energy technology will be an important part to keeping a small core of homo sapiens alive? While it may be true that there aren’t enough resources in the world to give billions of people a middle class life, there are likely enough resources to keep a core population going.
So whether it is putting resources together to shoot some colonizing group of people off into space (a scenario I think is unlikely to work) or developing technologies that will keep a core group of people in a sustainable lifestyle post-oil, it’s still taking action to perpetuate homo sapiens in a greatly reduced number.
Now, I doubt that the people we will end up keeping alive will necessarily be the most deserving, but I can imagine political and economic (and perhaps religious) forces engineering the survival of one group, even if the other groups lose out (either willingly or unwillingly) in the process. We’ve already got people seemingly voting against their best interests but in support of policies that benefit the wealthy.
Many cultures have glorified those who have sacrificed in the name of a greater cause. I can well imagine that people who do their part to keep that small core going will become “heroes” and others will be encouraged to do so as well.
Market Chaos impact: One hell of a connected web.
“If petroleum prices continue in to year end at their current YtD average ($52), this would represent a 60% decline in Petrodollar generated in 2015 vs between 2011 and 2014. Assuming that 30% of gross Petrodollars generated per year are invested in financial markets, this would imply $288bn ready for investments in 2015 vs a $726bn average between 2011 and 2014. Lower purchasing power from oil-exporting countries may in turn reduce demand for $-denominated fixed income assets, including $ IG and $ HY. US IG and HY firms have issued $918bn and $220bn YtD, which in total marks a record-high vs past years. ”
Investment Grade and High Yield graphics here:
http://www.zerohedge.com/news/2015-08-29/why-great-petrodollar-unwind-could-be-25-trillion-larger-anyone-thinks
Graph from above showing producers pain index. Who again is bloody from low liquids price?
The Pollyannas out there have to hope we come up with some magical replacement for oil AND some sort of hyperefficient C02 sucking machine.
I’ll believe it when I see it. I have no problem being wrong in such a case. But staking everything, to justify business as usual, on such dreams? It’s really dangerous.
Keep in mind that all “serious” policymakers (aka those in real positions of management and power) in the United States have bought this hook, line, and sinker: in their eyes, the future will have high growth, oil will be replaced, and everyone will embrace the wonders of free market capitalism. Problems are just speed bumps to the inevitable utopia.
We live on a crowded, hot, cop ridden planet, in population overshoot, oceans have been scraped and mined, more Co2 in the atmosphere that any human has experienced, ecologically devastated, and a population that discounts the future and thinks heuristically rather than critically.
And these are only a few of our problems.
Don’t worry that film editor guy says it’s all going to end soon.
Hi cytochrome C,
I am on board with you concerning the environment. ALL the way.
My comments in this present discussion are based on the assumption ( on my part) that economic collapse brought on by resource depletion and economic mismanagement will mostly PRECEDE ecological collapse.
Economic collapse will in my estimation do more to contribute to ecological collapse than ecological collapse will do to contribute to economic collapse. We gotta cross the bridges as we come to them.
This is not to say that ecological collapse is not already baked in to a very substantial degree. My personal belief is that the baked in climate problems alone are enough to wipe out billions of people and countless species everything else held equal. But not right away, probably not for a few decades yet imo, as far as PEOPLE being wiped out. Species are already disappearing fast of course. Economic collapse is approaching a LOT faster in my own personal opinion.
This is not to say that ecological collapse is not already baked in to a very substantial degree. My personal belief is that the baked in climate problems alone are enough to wipe out billions of people and countless species everything else held equal. But not right away, probably not for a few decades yet imo, as far as PEOPLE being wiped out. Species are already disappearing fast of course. Economic collapse is approaching a LOT faster in my own personal opinion.
I think economic changes, and us having to deal with them, are already happening now and will continue to happen. In the process, we will likely make changes that will reduce CO2 levels, so I don’t think we have to get into the political discussions that have been associated with climate.
In an unintended way, the gridlock in Congress is hastening the economic changes that will reduce consumption, which will reduce CO2.
I keep talking about the very wealthy taking over the world and it is happening. And if they do nothing to help everyone else, everyone else suffers. Some of the masses will die off; some will just cut back on their lifestyles.
Mac and I see very similarly on most issues, though I am likely more politically liberal than he is. And I guess we are likely to be about the same age.
Something I have said several times before on this site. Societal collapse of any kind will force ecological collapse as people struggle to feed themselves, large areas of infrastructure and forest burns off and the laws preventing rape of the environment are no longer enforceable.
To avoid collapse is the safest path to help the environment.
“hyperefficient C02 sucking machine”
There called trees. Try hugging or planting one.
But the trees are going away, loss of world forest is progressing. Around here they cut them down to heat their poorly insulated houses. Better to build well insulated houses with them, the wood is preserved for up to 200 years. Other places are just drying out or being overrun by agriculture.
Siberian forest fires:
http://englishrussia.com/2015/04/15/hell-on-earth-in-siberia-forest-fires/
North America
http://fires.globalincidentmap.com/home.php
Chile
http://www.bbc.com/news/world-latin-america-32045870
Link between Amazon fires and Atlantic Hurricanes
http://www.eurekalert.org/pub_releases/2015-08/nsfc-nau082415.php
I’m not sure why people think the renewable and EV crowd are any more Pollyannish than any person who thinks about a future more than 20 years from now.
Are space scientists Pollyannish?
Are people who plant trees Pollyannish?
Are people who have kids Pollyannish?
Are people who go to college Pollyannish?
Are survivalists Pollyannish?
Yes. To all. Almost all will be dead soon. Even if they think they are prepping, the odds are just horrifically poor because only the affluent can prep and they are going to be the first to go. They’ll be such obvious targets and rich countries will be the ones to suffer the sharpest available oil drop.
That’s why I invested in:
Hillenbrand, Inc. (HI)
> Interesting Fact: Sells 45% of caskets sold in the United States
> # of Employees: 3,200
> Most Recent Quarter Revenue: $212 Million
> Most Recent Net Income: $20 Million
I’m gonna be rich, Rich, RICH!
I wanted to post to a response to watcher but it won’t go through. It’s not controversial and there are no links in it. Not sure what the problem is.
Okay, I’ll try rephrasing what I wrote.
I get the impression that some of you want everything to stop right now since there is no future: everyone should just accept that life as we know it comes to an end within 20 years.
But that isn’t going to happen. And why should it? Why should life freeze now when it isn’t over yet? If there is nothing we can do about it, then logically there is nothing we should do about it. Just let it happen and enjoy ourselves while we can. We might as well tune out the bad news since it is beyond our control, right?
OMG, we have 20 years! That is great news. I probably won’t last that long anyway. Would love to be around 20 years from now and watch all those electric thingamajigs running around.
Suggest gas masks. There will be a LOT of flies in the air from the maggots feasting on unburied corpses.
But again, the Apocalypse trade never pays. No system will exist to do the funds transfer.
Boomer,
To be fair, anyone going to college in the U.S. has to be a BIT of a Polyanna. The cost is far higher than ever, and the return is far lower.
They’re paying more, and getting close to nothing unless they choose one of a select few majors.
Yes, I understand that. College is not turning out to be a good financial bargain for many people.
I just tossed it out as an example of a common way to think about the future.
I can’t imagine the entire world going along with the idea that there is no immediate and long-term future so therefore they should stop making any preparations for the future because they are doomed.
Boomer Wrote:
“I’m not sure why people think the renewable and EV crowd are any more Pollyannish than any person who thinks about a future more than 20 years from now.”
Quite simple because most of them believe BAU can be maintained! ie All we need to do install a few KW of Panels on our roof tops and buy a EV car (that we can’t afford). Nothing else is required to switch for fossils. There is no need to concern ourselves with economics, food distribution, HVAC, depleting aquifers, etc. “Nothing to see here, move along”, “No, that tumor on the side of my head is nothing, It will go away on its own”
Boomer wrote:
“I get the impression that some of you want everything to stop right now since there is no future: everyone should just accept that life as we know it comes to an end within 20 years.”
Not at all. I’d rather see more people take action to prepare and educate themselves to adapt to life of self-reliance. The more people that are prepared the better the odds that humanity will pull through. All I see is lots of talk, and little to no action. As I see it, civilization has adapted a cargo cult mentality. They set themselves up with a life based upon ultra-convenience, and expect someone else to fix everything for them. [“The Gov’t will provide for me. They will feed, cloth and shelter me. All I need to is put in a minimalist days work! and turn on the TV and listen how bright the future will be.” /sarc]
Its going to collapse, simply because no wants to accept and address the real hard problems.
Interesting quote from the chapter-
” The more-important date of peak oil production per capita was 1979″
Peak oil/capita. That is an interesting point.
Also, ENI reports a giant gas field find for Egypt. Huge deal for that country.
It’s about 3 months global consumption. The overall articles look somewhat hypy. Few yrs ago similar hype about Israeli Leviathan field. Nada yet.
The single largest ‘crop’ by area in the United States?
turf.
http://www.theatlantic.com/entertainment/archive/2015/08/the-american-lawn-a-eulogy/402745/
This will be one of the easier things to back off per OFM’s ‘we will adapt’ hopeful prediction.
I think that in the FF constrained future we in the U.S. won’t be spending $20B/yr on turf maintenance, nor will city governments be jailing people for not maintaining their yards per zoning codes.
Lots of things will be different in the post-peak FF future.
DON’T GET STUCK IN PHOENIX … (or VEGA$)
Exactly.
There is so much we could cut without significantly impacting our lifestyle. We don’t need nearly the resources we currently use.
Until we get to a point where we don’t have anything left to cut, I don’t see “the end.”
I read with interest the many posts here about population overshoot.
What is ironic is that rural USA, where the food and fuel are produced, is in a long, slow but consistent state of population decline. The exception would be the shale boom areas. However, where there was/is no boom, towns are shrinking, schools are shrinking.
Nearest town to me has lost 10% of its population in 30 years. School enrollment is down almost 20% during the same period of time.
Just not enough good paying jobs in rural areas for many of the kids who graduate from high school in rural areas. It is a shame because I know at least some of them wish they could come back and live close to family.
So, while population overall climbs, it is falling in some areas. Probably one of the many reasons for the disconnect between urban USA and rural USA.
That, and one of rural USA’s only economic activities is commodity production, which is quite often looked down upon, even attacked, by urban USA.
Another thing I saw above is the assertion we live on a “cop ridden” planet. This is another thing I can assure you rural USA does not get, is the general disdain for all law enforcement that is growing in urban USA.
So many disconnects. Maybe there needs to be a push to locate some industry or other business into rural areas. It seems to me the stress level in the cities is getting too high. They probably do not need anymore population growth.
This is the exact opposite of what we need.
The US desperately needs a reurbanization from the suburbs into the cities. The suburbs are extremely energy inefficient, wasteful, and cultureless.
This comment is an example of the urban rural disconnect.
I said nothing about suburbs, which I view as part of the cities (maybe more accurately stated, metro areas).
Tractors and combines use diesel fuel, not little dinky engines, powerful pulling power is what they have.
Rudolf Diesel built an engine that used peanut oil for fuel. An acre of canola will yield 2500 lbs of canola seed. 50 percent of the canola seed will be the oil content. 1250 lbs of oil at 6.2 lbs per gallon will be about 200 gallons per acre. A thousand acres of canola will yield 200,000 gallons of canola oil. GMO Roundup Ready canola seed will the crop to grow in the future.
A ten gallon per acre consumption of biodiesel will be 10,000 gallons required to grow 250,000 lbs of canola seed. Even 50,000 gallons used to grow the canola, you’ll still have a 150,000 gallon gain to distribute to those who are making sure they get it all.
Sunflower oil from oil seed sunflowers will work too.
Canola oil can fill some of the void, along with peanut oil, the original diesel fuel. Time to start growing the oil.
There’ll be time to hunt deer in the Fall. There was a good hatch of pheasant eggs this year and the pheasant are happy as larks.
Vertical factory gardening in urban settings will be a huge growth industry. The time for urban farming and gardening is now.
It all can be done. No need to panic until it is too late. It is not too late.
Ronald, you are going to convert food growing land to fuel growing land. In a world of starving people, that won’t be a popular move.
”Ronald, you are going to convert food growing land to fuel growing land. In a world of starving people, that won’t be a popular move.”
Dead on Ron.
BUT it will be more popular than converting five times or more land from human food production to the production of food for draft animals. Ya only feed tractors on the days you use them. Use it an hour, it consumes one twenty-fourth of its max consumption that day. A horse consumes half or so of its max consumption even if it rests in the shade the whole twenty four hours.A man in an office chair needs a couple of thousand calories, a big husky carpenter hustling to frame a house on piece rates needs four thousand.Roughly.
The nature of farming is such that both horses and tractors sit around most of the time and then are used hard for a few days or weeks followed by another slow time.
Horses can graze hill sides and rough edges of fields. First cutting hay in the winter. The reason they were replaced by tractors was to save on HUMAN labor. This is the same as any industrial process. Incorporating ever larger machines to reduce labor costs. Farm horses do take a huge amount of time to care for and work with. It is possible that at some time in the future people looking for work will appreciate being needed to work along side draft animals. Otherwise tractors are way better in every way! AC, Music, 4×4, dual control, and no one to bother you.
Hi Ron,
I understood Ronald to mean we would grow canola in order to fuel tractors in order to grow food. This seems no different than growing hay to feed the mule.
If we want food, we need to fuel the tractors, once the oil runs out. This won’t be a problem for quite a while as long as we waste less oil on personal transportation. High oil prices (once the decline in oil output begins) will reduce oil use for personal transport, people will drive less and will opt for more fuel efficient vehicles, also more long distance freight will be shipped by rail (which is more efficient than trucks), more busses, and light rail will be used for personal transport (in densely populated areas). So it will be many decades before scarce fuel will affect agriculture.
Probably the biggest focus should be aid to countries that have not started a demographic transition, education for women and access to low cost birth control and women’s healthcare can speed up the reduction in total fertility ratios worldwide. Sub-Saharan Africa is where there is the greatest need, maybe start in Nigeria where the population is largest.
I understood Ronald to mean we would grow canola in order to fuel tractors in order to grow food. This seems no different than growing hay to feed the mule.
This is true but it misses the point entirely. We do not feed the world today with food produced by draft animals. We have diesel fuel to power the tractor. Therefore we have turned the horse grazing land, and hay growing land, into food producing land to feed people.
If we grow canola oil to power tractors we will have to take land that currently grows food out of food production and put it into fuel producing land. It is as simple as that Dennis. True, it is no different from land used to grow hay to feed draft animals, but we don’t do that anymore. That land, formerly used to grow hay, is now used to grow human food. Land needed to feed 7.3 billion people does not leave any land to grow horse food on.
Bottom line, if we turn land into fuel producing land then we will every acre we use will be land that formerly produced food. But it will produce food to feed the hungry no more… we now need that corn to fuel our cars.
There is a lot of land in New England that has gone from farm field back to forest. It could get turned around again.
The Second Law will not be kind to this setup.
We grow building materials and ornamental products (flowers) on farmland and nobody worries about it displacing food. Yet, growing something that competes with petroleum, and it leads to starvation for the masses…
Increases in crop yields have lain fallow huge sections of once cultivated lands. The U.S. ethanol mandate have largely offset crop yield increases to maintain farmland in production. Vehicles built specifically to use ethanol can achieve identical economy and power as gasoline fueled vehicles. They would use smaller (and lighter) yet more powerful per cube engines and proportionally lighter suspension, drivetrain, etc. They would also cost less to produce.
We are probably already in transition anyhow. Electric vehicles have achieved cost parity at the high end of the light vehicle market. With the current 7 percent plus annual decline in battery costs (halving at least every 10 years) and ongoing declines in ancillary components, they will reach cost parity with median vehicles within 5 years at current fuel prices. Slightly less utile low range EVs are already the cheapest TCO light vehicles. Algae production costs are also nearing parity. Any increase in petroleum fuel cost solely makes cost parity for these alternatives occur sooner.
(As an aside, fuel economy mandates combined with increasing EV ownership would act to speed this kind of transition along. Higher mileage vehicles reduce fuel demand making individual stations less economic. As stations go out of business fuel availability declines making fueling less convenient. Likewise, it will likely also lead to higher per station fuel costs due to declining local competition in the sector. The higher cost and lower convenience will further tilt the TCO and draw of alternatives. Rinse, repeat. This is essentially the same death spiral the grid is facing.)
Most alternatives have declining cost curves and every reason to expect continued production cost declines as volume increases. Automated driving makes the impact even larger and quicker since automated vehicles can service many more people per car. U.S. light vehicles sit idle roughly 95 percent of the time. Automation can reduce the number of vehicles needed for any transition with significantly lower fuel usage per passenger regardless of drivetrain and again provide better, cheaper transportation. The technology is moving out of the lab and into production now. This transition will be well underway before the end of the decade.
We do face significant problems with resource constraints, environmental degradation, etc. and there is no reason at all to believe we will adequately address them. However, there are tons of transportation alternatives which are already significantly cheaper (walking, biking, carpooling, urban density, transit, etc.) than petroleum. All of these alternatives have been increasingly deployed globally already due to the recent high prices. Lower prices slow the transition, but we’ll swing right back to them when prices rise again.
The energy sector as a whole is in transition. Wind is the cheapest to build new energy resource. Solar is on pace to displace it on the cost curve by the end of the decade (even sooner?). Used vehicle batteries likely mean grid storage costs will be even less than $50 per kWh. At those prices, the grid is impossible to protect. Protecting the local grid from these cost declines would lead to lower economic competitiveness in those areas. The end result would be economic flight. These alternatives look certain to be both cheaper and more robust than our current energy supplies.
Pollyanna? Hogwash! The only issue for any of these transitions is how quickly they will play out.
There are several hundred thousand farmers in the USA today farming with horses. This would be the best source for info on farming with horses. Draft animals will not solve the “predicament” anymore than any thing else will; but they didn’t cause it either. Feeding draft animals is not really the problem. That is not why they were replaced by tractors in the first place. They were replaced to reduce human labor costs, just like any other industrialization process. Draft horses can eat many rough acres that are not the best land on the farm. They can eat lower quality hay than the bred cows or sheep.
As far as collapse goes; I believe in global collapse as much as the next person, but to me we still need to choose how we will live in the mean time (the collapse has been hard to schedule so far). Working with draft animals is about building community, living on a human scale, creating opportunities for others to live and work around me. I don’t disagree with much of what OFM says; ” biodiesel and a tractor will be cheaper than the horses” No doubt. Just choose how you want to spend your time.
Horses are not without their good points.
Nobody ever went out to the barn on a frosty morning and found a brand spanking new baby tractor.
Sometimes a horse can actually replace a man AND a tractor. My grandfather had one that could pull a wagon thru the field as it was loaded, stopping and starting as needed without a wagon driver, as did millions of other farmers back in the thirties and times before that.
A fairly large farming operation can make economical use of a few horses since on a larger operation it is possible to have work for them most days instead of just a few days at longish intervals.
But if you intend to WORK a horse , as in having it pull a plow or harrow all day, day after day , you can’t feed it on grass or it will lose weight so fast it shrinks before your eyes. A WORKING horse used on a regular basis has to be grain fed.
Men can subsist on rabbit food if they have sedentary jobs too. If they have to WORK HARD all day, day after day, they either eat some rice or beans or grain of some sort, or meat, maybe potatoes etc, or they wither away to skeletons and are soon unable to work. Grass and veggies just don’t pack enough calories and to support hard constant work.
A small timer who plows only a couple of acres now and then can get by keeping his his horse on pasture and hay.
Incidentally, when it comes to cushy jobs, it is worth noting that bulls kept for traditional breeding purposes have so much fun over a few weeks time that it is not unusual for them to lose three or four hundred pounds, sometimes even more.
The horse has to get it all done in the spring and fall. The bull has to get it done likewise in a few weeks because the farmer wants all the calves born as closely as possible to the same date, which simplifies running the farm.
“There are several hundred thousand farmers in the USA today farming with horses. This would be the best source for info on farming with horses. Draft animals will not solve the “predicament” anymore than any thing else will; but they didn’t cause it either. Feeding draft animals is not really the problem. That is not why they were replaced by tractors in the first place. They were replaced to reduce human labor costs, just like any other industrialization process. Draft horses can eat many rough acres that are not the best land on the farm.”
I very much doubt +8% of US farmers are horse operated. The US has only about 1.2 Million farms.
Horses have limited use, They can’t power a modern harvester, or haul 500 bushels of grain crops. A team of horse would never be able to harvest a 300 acre farm before it rots or frost & snow destroys the crop before its removed.
The American farmer is nearly a dying breed. The Average age of US farmers is 60 years, and younger americans don’t want to do farm work. The US is now reliant on expensive automation farm machinery and illegal immigants. Most farms heavily rely on Petrochemicals for herbicides, fertializers and pesticides, as well as groundwater for irrigation. At best ranchers make use horses to direct cattle herds, but a lot of them also use quads since they are faster and better than horses for most terrain.
I very much doubt we see 60+ year old farmers running a team of horses for weeks straight to plow and harvest 100+ acre farms. I am pretty sure if you took their tractors away, they would just all quite farming. Replacing fossiled fueled machinery with horses to feed +330M americans is just absurd.
Have you ever been to Amish country?
Hi Ron,
At some point we will start to run low on fuel for tractors and diesel or gasoline may not be an option. My point is that more food can be grown using a tractor than without it and that using a small part of the land to grow fuel for supplying tractors with fuel may allow more output than using humans or animals to do the plowing because we would need to feed the humans and animals.
Note that a human working in the field all day will need more food (especially if not using a tractor) than a human doing a less strenuous activity.
I’m sure tesla will sell a subsidized 300 kW delux e-tractor capable of doing 0 to 60 mph in 3 seconds.
The poor slob is too broke to buy a gallon of gas and has to rely on the generosity of someone who is starving yet compassionate enough to be kind-hearted enough to be willing to give.
I raise food products, when there is too much, I donate to food pantries, places that have food for those who can’t afford to buy at grocery store prices. The harvest is hundreds if not thousands of pounds of cucumbers that are marketed to grocery stores and direct marketing. Hundreds of pounds of zucchini, thousands of pounds of potatoes, hundreds of pounds of kale varieties, hundreds of pounds of squashes. Hundreds upon hundreds of pounds of tomatoes. Never a lack of food, it takes a great deal of effort to make it that way and I doubt if I’ll ever quit, something I can’t do.
I give by the bushel, don’t want to see it go to waste, yet there is plenty of waste anywho, don’t want to see anyone go hungry. If they don’t have money, they will still be given something to eat. I refuse to see them walk away empty handed.
In addition to the canola oil , you also get a substantial quantity of leftovers than can be used in livestock feed. Chickens can convert it into meat. So can cows and hogs.
I have not looked into the specifics on canola since it doesn’t do as well around here as soybeans but soybean meal is one of the PREMIER live stock feeds.
Biofuels are not as expensive and impractical as most anti renewables guys think, because they either ignore the coproduct deliberately in their arguments or fail to even realize such coproducts even exist.
Nevertheless if we ever make the mistake of trying to run the current generation of business as usual on biofuels, we are heading down the broad smooth preachers highway to ecological hell.
Allowing Joe Sixpack to get the idea into his concrete head that he can drive his F250 on biofuel is a potentially FATAL mistake- and unfortunately the sort of mistake a to of politicians are apt to make. Especially repugnant elephant politicians from corn states.
The doomers are absolutely right about biofuels never supporting the current day version of business as usual- barring miracles.
But if we HAVE to , we can FARM using biofuels. Food prices will go up and some people, potentially billions of people, at the very bottom of the economic heap will starve as a result. People a bit farther up the economic ladder will have to eat a more basic cheaper diet.People who can afford steak today will be able to afford chicken.
People in places such as the USA and western Europe, who are relatively well off, will not starve, not many anyway, and would actually be much healthier for eating less meat.
Shallow Wrote:
“Maybe there needs to be a push to locate some industry or other business into rural areas.”
This is happening on a small degree. Taxes and land prices are very low in rural area. So as the urban regions become over taxed, business will move operations to rural regions. I see a big movement in the Northeast. Many business are leaving the Northeast heading for lower tax regions (mostly southern states). Rural regions are also where all of the natural resources are located (Wood, crops, livestock, ore, water, energy resources, etc). Its only fitting that business that produce real stuff, relocate production where the resources are. I think at some point urban regions will see very high unemployment as taxes to pay for wealth fare, pensions, more services for growing populations,etc force taxes to soar and business to leave causing a feedback loop. Although, most of the US production left to go to Asia since its even cheaper and beyond the jurisdiction of US Federal regulations. If China does collapse into a depression and becomes too volatile, perhaps US production will return home, which will be to rural America, not the urban regions. Notice that US auto production growth in in NC,SC,TN and other semi-rural states and not in Detroit.
I don’t think we will much further population growth in US cities because they are very expensive and jobs are hard to find. I believe most of the jobs are located outside of cities since its usually cheaper. The rust belt Cities like Detriot are declining fairly rapidly (https://en.wikipedia.org/wiki/Rust_Belt)
However, its probably better for the rural regions to remain in a low population areas. Large population growth is like a swarm of locust, converting resources into waste and converting good fertile crop land into worthless shopping malls.
FWIW: I am relocating to a rural area (still looking for the “right” property). I may start a small business or two, depending on how things shape up. I would need to see some cuts in federal taxes and regulations before I would consider hiring workers.
Sorry for the off topic post.
Back to oil. August is set to be the lowest month for oil prices yet. July was weak. Third quarter looking to be as bad, or worse, than the first.
Two months away from third quarter 10Q. They will be ugly yet again.
There will be no increase in prices…don’t wait for it.
Except for a the volatility of “..a bomb went off here…” and “… a war broke off there…” news, there shall be no $200/brl oil…
…it is going down and, when Yellen and Co. lose control and what was left unfinished in’08-’09 resumes, it is going down and off….permanently!
Be well,
Petro
Petro, you and Gail Tverberg need an economics course. She been calling for collapse forever and it’s not happening. The world is currently awash with resources including labor. The problem is a congress that wants to cut spending, taxes and government. The Fed has their foot on the pedal with monetary policy but congress is a total failure when it comes to a stimulus fiscal policy. They can’t even get a highway bill on the desk of the president. It is intentional gridlock over the struggle of power. The price of oil will rebound soon. The low price is already increasing demand. The Fed’s cheap money will win over the lack of spending of congress. The rich will continue to get richer, while the poor continue to vote against their own economic well being for conservative reasons. As the price of oil recovers, the poor will be hurt the most.
Chief,
Always a pleasure reading your comments. You remind me of that fella in the movie (retired Captain from the Navy) that tells someone he just met, “My name is Bob, but my friends all call me CAPTAIN.”
For some reason, some folks need to make sure others know their RANKING in life. I see you as one of those poor slobs.
Anyhow, collapse is coming. So, just wait around a little while as U.S. oil production declines 60-70% by 2025, and we will see who WAS RIGHT and who WAS WRONG….LOL.
steve
Dear Chief,
it looks like you have an excellent understanding of economics (and politics for that matter!), therefore the only thing I would say in response to your assertive: “…The price of oil will rebound soon… The rich will continue to get richer, while the poor … will be hurt the most….”
is:
No my dear Chief, this time around shall be different!
This time around shall be a tough going for richer and poor, bacteria and mammals, plankton and whales, viruses and humans …
This time shall be indeed different for all!
Be well,
Petro
Petro,
I believe the BACTERIA at least will do JUST FINE. 😉
They can after all evolve and reproduce at astonishing rates.
Viruses won’t give a damn even in the sense that mammals struggle to reproduce given that they are arguably not even ALIVE. Never been able to make my own mind on that particular point, about whether viruses are alive. It depends on the definition of alive.
Some of them can encapsulate themselves and enter a state of apparently total inactivity for many years – meaning NO metabolic activity is going on.
Does a zero metabolic rate mean such a virus is DEAD? It certainly means YOU would be dead and that all other known life forms would be DEAD.
The viruses will be ok too. They piggy back on the entire biosphere.
Hello Petro,
If there is one thing the world has learned over the past 5 years. It’s that at $100 oil, there are alternatives(most likely the reason the Saudi’s are now flooding the market). Lots of them and more oil than the world can consume.
Now, the world ecosystem is another issue. But that wasn’t your explanation of collapse in your first statement. No Petro, this time is just like the last time. We’ve been here before and world isn’t going to end because of oil. Oil will find another medium term equilibrium point. Your first statement falls under just playing the conservative fear card. Which is a lie to gain political power.
Chief,
You ever heard of the FALLING EROI?? What say you on that issue? Can’t squeeze blood from a stone.
steve
HMFIC,
I say EV’s, solar panels, conservation, technological advancement and human ingenuity. We don’t burn whale oil anymore for lighting or use gold and silver as currency either. You can’t buy a Big Mac with gold. You can’t live in the past. We can only live in the future. It’s called evolution. The law of diminishing returns has been around longer than humans.
But you are a engineer—
You solve problems by building machines and moving dirt.
But what if this is the problem, not the solution?
Cytochrome, of course the problem has been building machines and moving dirt. We dug our own graves with those machines.
But what if we build new machines and technology that will allow us to dig ourselves and much of the rest of the species out of the hole toward a new way of living.
We have to do something, just letting the insanity continue will have the most massively destructive result. There are no guarantees, but we should take our best shot and learn some lessons along the way. The direction must be changed, first steps do not bring the destination into view.
OFM,
Just for clarification:
Virus’ are a strand of DNA or RNA covered in a protein capsule. They contain only enough information to reproduce that protein capsule.
No metabolic DNA or RNA to speak of. No ribosomes, cytoskeleton, cell wall, mitochondria, etc. They are literally just a tiny snippet of DNA/RNA, and a protein capsule.
That is why they straddle the line between alive or not – they do not contain enough information to reproduce themselves like even the most “basic” Prokaryotes.
According to the current definition of life an organism must contain within it all the information needed to reproduce itself. Virus’ would need some kind of nucleic acid that codes for the replication of its own DNA; it has none of that.
The organisms that can excrete a coating and go dormant are a different and equally fascinating occurrence. 8 million year old dormant bacteria have been found in Antarctica that happily began dividing when placed on an Agar gel.
Thanks C C ,
It has been a good many years since I studied biology except to read the news and read a bunch of books accessible to a person who knows the basics as taught in introductory level biology classes in modern university classrooms .
I remember a professor saying take your choice , viruses are alive by some measures and dead by others.
I am familiar, or used to BE , with basic abc viral ”biology” of course but according to your comment maybe off base about how viruses ”survive” for long periods outside obviously dead hosts.
I had not heard for sure about bacteria surviving dormancy for such a long period until now. Given the constant cold and stable environment it seems just barely logical. The metabolic rate must be so low as to approach zero in the rhetorical sense for the bacteria to survive so long.
If metabolism stops totally and absolutely , by definition the organism is DEAD by the modern definition, is it not? Or NOT ?
If it HAS absolutely stopped metabolizing and then revives then is that not spontaneous generation?I can get in over my head in a hurry in such murky waters.
I do have a substantial number of credits in the life sciences and their applications but I do not mind admitting that the times passed me by three or four decades ago.
The last pure course except human anatomy and physiology I got was intro to micro well over ten years ago. Had to take both to get into nursing school since my credits were ancient. I have forgotten most of the details of that study in that ten plus years. My memory is not at all what it used to be. The principles stick ok though.
The things I learned in that HUMAN anatomy and physiology course ( the real mccoy with labs, LOTs of reading and hours of study) flat out blew me away- compared to what I learned in a basic mammalian anatomy and physiology course taught in the biology department back in the sixties.
You had to take THAT course sitting in with the biology and premed guys to get into any of the higher level courses labelled ”Animal Science” over on the ag side of campus.
I OFTEN feel like the old guy whats his name who slept for forty years and woke up again to find the world changed beyond his comprehension. CLASSIC AMERICAN SHORT STORY. Senior moment. I will remember in a little while.
RIP VAN WINKLE.
Viruses are not alive.
And they can be a single strand of RNA.
Te future is bright for dinoflagellates!
It’s even brighter for Turritopsis dohrnii… 🙂
My last comment hasn’t appeared. Have I been accidentally blocked?
Well, this showed up. Not sure why my reply to watcher didn’t.
Okay. I can’t seem to post that response to watcher no matter where I place it. I’ll see if this shows up without my response to him.
Just remember there is nothing you can say that will matter and such things won’t bother you.
I know. That was precisely my point. If we’re all doomed, nothing any of us says here matters and is hardly worth even reading. Does party-on also come off as pollyannish?
We’re not all doomed. There are folks living on the shores of Lake Tanganyika who are in communities that are only accessible by boat and have little contact with the ‘outside world’. They might hardly notice the collapse of industrial civilization. The folks living in Phoenix are screwed though. One thing I learnt early in life is that mountains favor the defender. I’ve got a retreat in the Rockies. The Highlander way.
As a scientist I find interesting to discuss where we are heading and what may happen or not. As a biologist I have come to accept that all species are headed towards extinction with an average span of 2 million years, but many disappear within a few hundred thousand years. Hominins in general are short lived species due to their lifestyle, as compared for example to clams. I have also come to terms with my own mortality as my lifespan is measured in decades. As a human I am worried about my future survival and the survival of those that I love. I believe with little basis that having a grasp of what is coming and preparing for it may increase our chances of survival for sometime even if slightly. I am trying to prepare for it becoming a self-reliant organic farmer.
So personally I see lots of reasons to talk about what is coming. I consider myself extremely lucky. I have lived most of my life comfortably through the most prosperous time for mankind. I have seen the human civilization reach the Moon. And now I have a front row seat to contemplate its inevitable collapse. From a scientific and personal point of view I wouldn’t choose to live any other moment of mankind, past or future. We are really living interesting times. By contrast those very young now are going to be extremely unlucky. They are going to get a glimpse of the heydays of the industrial civilization before everything is going to be taken from them.
The Romans coped with their collapse by developing Stoicism, a philosophy that defends that people have to accept that bad things happen and adopt a posture of doing the right thing at any time even if the world is crumbling down around us.
I suppose Stoicism and not despair is the exact opposite to Pollyannism.
Actually, Stoicism is a school of Hellenistic philosophy founded in Athens by Zeno of Citium in the early 3rd century BC.
You are only off one civilization, and 500 years–
But the point is valid.
I hereby proclaim that JAVIER is a LOT smarter than I thought he was until reading his eight thirty one six twenty three am comment.
I still disagree with him about some things of course.
And for what it is worth, given the fact that we broke out of Africa and have evolved so as to use tools extensively and can thus live almost anywhere on the planet, I think we may be around for a VERY long time – compared to other hominids.
We might even split into distinct species or at least really distinctive phenotypes based on more than just skin color and minor variations in size or body shape ,as for instance Pygmies and Inuits with more barrel shaped bodies than typical.
We won’t last very long compared to some of the more common species of cockroaches though.
I wish I had your optimism.
I think we will be more like the passenger pigeon.
From mtDNA , we know we were down to about 2000 individuals 70,000 years ago, and that was with oceans full of fish, and Continents to plunder, etc—-
There was that volcano though—–
Old Farmer, you really thing the nuclear weapons will stay in their launchers and just fade away? Or that a lot of fissionable material won’t get into the wrong hands?
Good luck with that one if we have a worldwide societal collapse.
I think that there is an excellent chance that some smallish populations of naked apes will survive even a nuclear WWIII, yes.
And seventy thousand years ago we were not yet all over the globe. I don’t know what the odds are of a REALLY extensive and long lasting volcanic episode are but they appear to be low, as the earth is aging and less energetic than formerly, in the geological sense.
Just ONE super volcano is not going to wipe us out these days.
We may have a few million years. Maybe not. I am not worried about the deep future. There are so many things that could go wrong optimism is not indicated, in the abstract of course.
But with naked apes being so adaptable , if any survive anywhere after a major disaster we will most likely recolonize the rest of the planet. This might take a few hundred years or a few thousand years.
For the next ten thousand years there will be plenty of easily salvaged stainless steel around to make tools and stone engraved with pictures of boats and wheels etc so that we won’t have to start from scratch again for that long at least.
As Gandalf said, it is given to us to deal with the problems at hand.
”Sufficient unto the day are the problems thereof. ” I forget who said it FIRST.
Extinction is hard to face—-
I have compassion for those who can’t go there.
The groundless world we live on needs story and myth to get a bit of solid ground.
Extinction is hard to face—-
I have compassion for those who can’t go there.
Of course homo sapiens will likely become extinct. What isn’t settled is when and by what cause.
And I’d say all of us here will be gone before that happens, so is it worth our time to even focus on it?
I am glad that most have no real concept of what full scale nuclear war will do to this planet. At least they can sleep at night.
The downside is we have come to accept the constant threat of annihilation of the biosphere. If we can accept and ignore that real possibility (only a few minutes/hours away at any time), we can certainly ignore or deny just about any other threat. The human mind is a very strange place.
Well, Ron’s latest post shows EIA has US oil production down pretty significantly from June to July. Tough to say how accurate that is.
However, it seems several of the shale companies guided oil production drops into the third and fourth quarters and on in to 2016. $30s in the field ($20s in some places) surely will stomp out any conventional growth.
I think if prices stay down here the next 2-3 months, could be looking at an OPEC cut December 4. If not then, maybe next spring.
This is a rough one in the industry. Wonder how businesses in other industries would handle a more than 1/2 cut in revenue.
I’m going to try to get the discussion here back onto oil. This board should maybe change its name to peak doomer, peak ev, etc.
I am making an assumption here, there are a lot of folks posting here that live in urban areas (I include suburbs in that BTW). Mike doesn’t live in a city. Neither do I. Anyone else posting here who is “rural?”.
Nothing against city people, just trying to understand the views here, which seem to be more along the lines of what is going through urban dwellers minds. After spending time in commute traffic, I can see why the mind would be focused on doom and gloom, self driving EV, etc.
OFM also rural. Who else??
I’m rural as well and the lefty city people can pass all the laws they want and I’ll just keep on ignoring them.
WTI slumping into the thirties last week put a damper on things. Everybody started sitting on their hands in the real physical world of oil. Afraid to buy and then get killed on the price paid. Everybody eyeing WTI trying to figure out what to do. Then it jumps to 45 because the shorts get scared. It’s difficult to run a business when the universe keeps changing overnight.
Keep your chins up lads. If they keep this up, entire countries will go out of business soon.
And by Sky Daddy anybody who wants my truck and my tractor and my chainsaw and my four wheeler and my stash of diesel fuel can have them – along with the gun they pry out of my cold dead fingers.
But there WON’T be any ammo left in the gun unless they get me before I see them coming. 😉
We can MAYBE EVENTUALLY get by without oil, at a cost that is impossible to calculate- but it is going to be an unimaginably HUGE cost, and it is going to be paid in blood and tears and sweat and cussing rather than in electronic dollars. The biggest part of the cost is going to be in BLOOD- the blood of the larger part of the human race unless we are EXTREMELY lucky.
You guys in the oil biz need not worry about work for the rest of your natural lives. The price of oil IS going to go back up. Probably within two years at the outside limit according to my layman’s seat of the pants. You hands on fellas have convinced me that within that time frame ENOUGH high cost oil will be shut in to reduce the current high production level that is THE primary cause of low prices, along with improving efficiency and the economic flu.
Some of us do not believe in supply and demand determining price. I will not actually say what I think of their intellects, but it is LESS than complimentary I assure everybody.
SURE supply can be manipulated. SURE consumption can be manipulated.
But supply and consumption still determine PRICE except in the event of successful rationing.
20 acres.
Horses, llamas, chickens, a donkey and 2 mules.
On a well (that I’m worried about).
Fruit trees, large garden, etc.
I’d say I rural.
Hi Shallowsands,
I guess it depends on how rural is defined. I live in a town of 10,000 people, my state is fairly rural with around 40 people per square mile, but where I live is a suburb of a small city with a metro area having a population density of 45/sq mi.
Greetings
I am mostly a lurker here,but enjoy the conversations, and the linked articles. I enjoy both the oil info and the EV and doomer stuff.
On the rural urban poll. We are 17 miles from the nearest town, on 40 acres. Garden, orchard, pond,no livestock. Two water sources. Two heating methods. Two hot water methods. See a pattern? I’d like to get an EV, to have two types of vehicle.
Keep up the good work!
Shallow: Living on a lake 15 miles from the nearest town is my situation. Deer in the yard nightly. Have a tree farm as a hobby. Living off of selling what hydrocarbons I find probably puts me in a minority on the board. I subscribe to what the old geologist, (Pratt), I believe, who said, “Oil is first found in the minds of men.” I have a mind full of them and can’t wait until economics get back to a situation where I can get back to drilling. In the meantime, I continue to send a seismic crew to the field every week to troll for that next bump. No Mike, I didn’t lay them off!
Doodlebugger
Goodonya, Doodle. Forget the bumps, man; we’re looking for big hills with 300 feet of structural relief!
Heck yes Mike 300′ plus hills are still out there, (just finished developing one), but the game changers will be stratigraphic traps in those “ram pasture” areas that the big boys declared dead long ago.
Yes sir Doodle. Made three discoveries in goat pasture like that. Thank God for AVO. Still like those big structures though. Good hiding places for hydrocarbon.
I tend to agree. If I were in the business I would focus on very subtle stratigraphic traps or very low relief structures. For big finds, I would say you need lots of cash and look underneath the salt or basalt.
Yair . . .
SHALLOW SAND.
I don’t post much here because most of the discussion is way above my pay grade but I have lived most of my 74 years in remote regions of Australia and the Pacific and deal with distances and conditions most Americans just can’t comprehend.
I really appreciate the down to earth no bullshit comments of yourself and MIKE and some of the other fair dinkum oil folks on here and wish you all the best.
Cheers.
I have dear Australian friends; been there several times. Mostly to the west. I was in Kalgoorlie once; had some beers with a good guy who asked me to deliver mail with him the next morning. Three stops (all sheep stations), 6 hours in a Cessna 206. Amazing, beautiful country.
Thank you, sir.
206 is a great aircraft!
I landed in a meadow at 11,000 feet, and later got it out.
A craft that has not gone unnoticed by smugglers.
I’d a liked to have seen that rotation. An amazing aircraft, the 206; hundreds of hours in them in Southern Africa. With a belly pod you can flat move some stuff. I have got a picture somewhere I took from the right seat looking back into 4 people, all their clothes in bundles, and two nanny goats.
I like Cuba. Big permit. Cool cars.
I’m a fly fisherman—
At this point in life, it all about Permit and Steelhead.
The 206 is one of the best.
Thanks scrub puller. Haven’t been to your land but it’s on my list.
Shalow,
I don’t think anybody will cut. If OPEC wanted to cut they would cut it in August/September 2014. Nobody can afford the cut save SA. I suspect SA partially does not want to cut because of politics. And politics will always trump economics.
Oil price will balance when the shale naturally declines and if they don’t continue drilling. They only proved that can successfully drill cash into the ground. But “balance” is funny word. The pole that bends to one side will not catapult to the center but all the way to other side. But whoever survives these low prices will tell us about that time 🙂
Why would they cut it in August/Seotember? I see no obvious reason why that seems most likely. I suspect they will wait until at least after October when the credit redetermination cycle pulls the rug out from under the highly leveraged marginal oil production aka shale oil producers. The OPEC meting in November/December seems the obvious time to do that.
Aug/Sep of last year, 2014 not this year. Now the train has left. I don’t even think that they are even waiting for that October credit thing to do anything.
Well they just tweaked the 1st day of month pricing for Sept.
Pricing you can tweak overnight with pencil, but it is little bit harder to tweak production. It is the production that will determine what the future has in store. They are pumping full steam but in terms of pricing for particular customer they can tweak the price.
Shallow, I don’t lock my truck, or my house at night. When I see people on the highway, I wave. Never live anywhere that you can’t pee off the front porch, I say.
“The US desperately needs a reurbanization from the suburbs into the cities. The suburbs are extremely energy inefficient, wasteful, and cultureless.” God help us.
Mike
Mike, Amen.
Mike and shallow, I can’t disagree with the principle and the sentiment, but consider what would happen to the pastoral/rural, smaller-town hinterlands were even a small minority of urbanites and suburbanites to migrate to the hinterlands. They would most likely bring with them their SUVs, Minis, BMWs, espresso machines and Starbucks, Coach and Gucci bags, oversized washers and driers, and their “urbane” tastes, preferences, and sensitivities, including being repulsed by the smell of cow, pig, and chicken $h!t. 😀
I have witnessed the influx of “city folk” into rural areas. The real estate prices rise to the point the local sons and daughters can’t afford them. Schools have to be built, taxes go way up. Congestion, traffic, shopping centers pop up, maybe even the dreaded mall. There are definitely not enough jobs in the local area for the population so they commute huge distances, but like that country living. The country living equates to overpriced (for the area) houses in gated grapevine communities.
For a few of the locals there is opportunity, for most there is just lots of traffic, confusion and never enough police to deal with the new influx of crime and drugs. If they liked it before, most won’t like it now.
Add to that, they usually develop pristine areas that the locals would never touch, so there is a large negative ecological factor. The local water supplies can temporarily run dry because there are just too many people drawing on a given underground aquifer at once. The refill rate gets below the output.
A Double AMEN for MZ.
Amen Mike.
I don’t even HAVE KEYS to our house anymore. Might find them someplace but would rather buy new locks than look for them. I leave the keys in my car and truck parked on the street in mythical Mayberry NC. Actual town name Mt Airy. I do lock the tool shed but the contents thereof are more valuable and more easily sold and it is somewhat remote from the house making it a better target.
Enough of us tote that only a bank robber or somebody on the edge of insanity would attempt a carjacking. Bank robberies still happen because the bad guys know bank clerks are not allowed to bring guns to work, lol.
Nobody has forcibly raped a strange(meaning unknown to them personally ) woman in this immediate community within my memory. Spousal rape exists of course, and date rape once in a while that is NOT reported just like every where else. The women are not easily intimidated as some and the men are not prone to wait around for a trial. If they even THINK they know a perp , he better DISAPPEAR in a hurry for his own good.
If I had a little girl and she were to come home raped and crying I would NOT hesitate to shoot the perp AND his Daddy to if Daddy got in the way. A local jury would find a way to go easy on me if at all possible.
People on rural roads stop to help strangers around here if they have the hood of their car up.
It’s just too damned bad we have been ”discovered” and well to do urban people who HATE our way of life are flooding in and taking over politically.
Thieves are a problem but they are VERY careful to make sure cantankerous old Baptist farmers are ELSEWHERE when they ply their trade. They mostly steer clear of the handful of local Quakers who are slow to shoot or fight but quick to call the sheriff and short fused Baptist neighbors, lol.
People here do occasionally shoot each other. Sort of often as a matter of fact. The cause is almost always a nasty personal dispute involving women or dope, occasionally just plain old macho.
My first hot young blossom wife was about as good looking as Angelina Jolie in her best days and she rode her horse all over the country by moonlight in the summertime wearing a halter and short shorts and bug spray and sandals. Nothing else. I never worried about any body bothering her but back then strangers were few and far between. Local guys KNEW better. She might have cheated occasionally but she was in near zero danger of being FORCED. Such rides put her IN THE MOOD and she generally jumped my bones within minutes of galloping that horse the last half mile of the ride home.
Anybody with a hot young blossom OUGHT to buy her a horse if he can afford one. For damned sure. 😉
Nowadays I would feel compelled to accompany her – but she didn’t really need me, even then.She as likely as not had her own snub-nosed thirty eight special in the little ”possibles” bag on her saddle along with the bug spray, flashlight, etc. Her brothers taught that lanky gangly tomboy to shoot and drive a tractor and a truck before her tits sprouted.
I like my disappearing world better than wearing panties and being dependent on ” law” that may not show up and generally DOES NOT show up until well after the harm is done – and ”law” that might BE the problem rather than the solution.
Crooked cops are the RULE in many places rather than the EXCEPTION.
It IS a real tragedy when a person minding his or her own business gets killed by a madman. But the number of people in this country who die that way is so close to zero, considering the overall population, as to be a price I am willing to pay to preserve the right to bear arms.
My SECOND wife was a hot young JEWISH blossom who lost her known her extended family in the territory captured by the Nazis. Some might have escaped the Holocaust but if so her American grandparents never located them.
I DO NOT want to live in a society where the only people who are armed are wearing uniforms and answerable to remote authority rather than their neighbors.
IF the cops ever come for me, they will get me, no question. The sheriff can send a dozen deputies, the state police can send fifty troopers , the FBI can easily manage a hundred G men, the governor can send the National Guard if he feels the need.
The CIA and the NSA can send an assassin without a doubt in my mind although I believe assassins are seldom if ever ever used inside the borders of the country. They seem to be routinely used elsewhere.
A few of the cops at least will be aware that they are themselves vulnerable to retaliation. The more intelligent ones will also understand that a police state in the end is a bigger threat to their own extended families than a civil society and that knowledge will go a long way towards keeping all of them SOMEWHAT honest.
I appreciate your country way’s, Mac. I would never be so bold as to criticize law enforcement, anywhere, anytime. That’s not my place. Its a tough job. We are reeling here in Texas from the murder of a deputy in Harris County, shot 15 times in the back by a young black person. The deputy was filing his patrol car with gasoline. I don’t see much civility in that.
Agree, Mike. There are a few bad apples in law enforcement, but most are doing what they were hired to do, and doing it well.
Almost every felony committed these days involves someone who is drunk, stoned, has a mental condition or all of the above.
Not an easy job when those are your “clients” every day of the week.
Each case has its own set of facts. To call out all law enforcement due to the horrible actions of a few is a mistake. Same with making a decision about a particular issue until all the facts are in.
I find generalization is usually a mistake. In fact, although I have been critical of some “urban” views, it is the views and those who hold them I am critical of, and not all urban people. I know many who live in cities and find most to be good people. Likewise, we have our share of fools in the rural areas.
Each case and each person is an individual, and making generalizations is not wise. Imagine if there were no police. I do not think many would really want that. Maybe those who want to make a living selling drugs or stealing would go for that.
Last off topic post from me, I hope, for awhile.
I am going to try to do that too, Shallow. It would help if various posts were color coded; green for oil related, yellow for renewables and EV’s, red for all the other sh… stuff. Kind of like a traffic light.
All political statements would be the same color as the webpage background, so you couldn’t even read the crap.
I like and trust my local police. They all know me and I know most of them on a first name basis. They have tough jobs. They DO NOT get excited and shoot people unnecessarily.
My next door neighbor, now long deceased, and a far gone drunk, once pinned a couple of deputies down that came to arrest him with a shotgun and took a few potshots in their direction. They arrested him peacefully when he passed out a couple of hours later. No need for grenades and armored cars.
They didn’t even call for a dozen more cops to help them.
Anybody who reads the news extensively knows the police in a LOT of places are corrupt and controlled from the top down by corrupt politicians.
In some countries virtually ALL the cops are more or less by definition corrupt. Cuba for example. They are all part of the Castro dictatorship.
Have you been to Cuba?
A socially conservative country, and a bit tight, but if you get far enough down the ladder, things work quite well.
Produces most of the Doctors for the 3rd World, and comes in just behind the US in health rankings by the World Health Organization.
(The US comes in 37th, although we spend twice as much as everyone else)
35 Dominica
36 Costa Rica
37 USA
38 Slovenia
39 Cuba
40 Brunei
But a top down dictatorship.
We will see how this emerges.
Never been to Cuba. Might get to go someday.
Our family physician for many years was a Cuban refugee. His heart was in the right place and he charged very little which was critically important in those days. He was the only MD we ever knew who invited us to visit his personal home. Result of his growing up on a subsistence farm, same as my parents as kids.
But he missed the fact that my mom was diabetic for the fifteen or so years he looked after her. I wonder how good his training actually was.
Of course any doc might have made the same mistake in those days but the tests were simple and cheap even back then.
Castro HAS accomplished a lot.
Now it is time for his police state to fold it’s tent.
Agree—
They need to abandon the authoritarian state (we all do).
Taxes are what Americans are well-known to pay, whether it be for tea or to fund their roads. Now, while the 91% tax rate on the wealthy put into place by the admittedly liberal Eisenhower administration has done well to support the public infrastructure in America over the last few decades, some have expressed concerns over the future costs of said public spending, though these are perhaps inconsequential worries of mere Cassandras–taxes, increase by 50% or even 500%? Alarmism, unsupported by data analysis.
http://www.strongtowns.org/journal/2015/8/31/transactions-of-decline
http://www.strongtowns.org/journal/2015/5/10/lafayette
Meanwhile, others have been asking where the wealth has gone.
http://www.strongtowns.org/journal/2014/12/11/port-arthur-in-decline
Mmm, empty stroads.
Based on the Wikipedia article the highest marginal rate was in 1945 during the Truman administration at 95% and this had fallen to 92% by 1953. In 1965 the top rate was lowered to 70% from 1965 to 1980 and then was reduced to 50%, 40%, 28%, and then rose to 40% under Clinton, dropped to 35% under Bush, and recently increased to about 40% under Obama. In 1944 the income threshold for the top marginal rate was about $3 million in 2014$ and there were 24 different tax brackets (true until 1964 when there were 26 tax brackets, these were gradually reduced to 16 in 1981, 5 in 1987, and today there are 7 tax brackets.) Today the top rate is paid on income over $400,000.
I think extra brackets should be added at $1 million, 2 million and 4 million with rates of 50%, 75%, and 90% and that there should be no special treatment of dividends, capital gains, or any other type of income, I would also eliminate the mortgage interest deduction for second homes and homes worth more than one million (or limit the amount of the mortgage interest deduction to $40,000 in 2014$).
Shallow,
How about”who cares about anything, you’re dead anyway.”?
That seems to capture it.
Sorry, I live in the suburbs of Houston, though I’m graduating to the country when my last one goes to college in a few years. Maybe the many city dwellers here can remember that Houston is 70+ miles across. Train covers the very inner city. We drive by necessity.
Hi Richard,
That is a big metro area. My guess is that you don’t have to go 70 miles to buy groceries and if you lived on the outskirts of the Metro and had to commute to the city center an EV at full charge would work, though parking at the end of a metro line and taking light rail(or a bus) into the city and back would probably save time (rather than sitting in stop and go traffic). I am not familiar with Houston so perhaps this is not possible.
Dennis,
Yes, groceries can be done with an ev. Getting to the stable, same though you’d need a charge while at stable.
Business is where I get killed. Total daily mileage when I have to meet interest partners, check on properties, etc, can approach 200 miles, and I drive to meetings etc sometimes 2-3 days out of the week. Bus and train not available since I’m offices and living 45 miles north of the city. I frequently have to go a near equal distance west and sometimes south for business. Bus will get me downtown from park and ride and thus to park and ride on south and west. Then I have to figure out how to get to meetings. Doesn’t work well. Again train not an option. Also, charging an EV is easier said than done. We need WAY more charging stations.
Living in the yuppie suburbs of Houston is great for EV. Outside of that, long way to go.
You have to live here to really appreciate the problem. We are very different from northeastern big cities.
Appreciate your comments though.
Shallow Sand: “I’m going to try to get the discussion here back onto oil. This board should maybe change its name to peak doomer, peak ev, etc.”
It is my opinion that many of the commenters like to address all kinds of topics (unrelated to oil) in which they do not have the expertise but nevertheless happily give their opinion, leading to lively discussions only ending if someone initiates another subject. Discussions on oil related topics is a mundane topic compared to philosophical ones such as the collapse of societies. I think Peakoilbarrel is a misnomer and should be changed perhaps to “Current and future societal issues and problems”.
I’m one of those who, unfortunately, sometimes takes the bait and responds to a “what will happen to society” statement. I’m actually trying to end those discussions by pointing out that they seem to be speculation and off-topic.
It’s not so much that they aren’t interesting (sometimes they are), but they are speculation. And people have such varied opinions here that it just goes to show that we don’t know for sure how things will play out.
It seems to me that if we just stick with oil and gas topics, then people can take that information and interpret as they wish, but elsewhere.
There’s enough going on in the world of oil and gas to keep the conversations going, I think. Using gas and oil as a way to discuss other topics seems unnecessary here.
There are others that seem not to happy about the hundreds of comments unrelated to oil by dozens of commenters.
Mike says: 09/01/2015 at 7:46 am. “Thank you for your work, Alex. You are now one of about 6 that still seems willing to engage in oil related issues and I am grateful.”
Thank you for this post, N; I agree with your observation, by the way. There are so many different aspects of oil and natural gas exploration and production, all incredibly complex, I think it is often intimidating to the casual observer. Its hard to render an opinion regarding, for instance, frac radiuses and potential well interference in parallel horizontal laterals if you’ve never even witnessed a frac. Or more importantly, if you’ve never spent your own money paying for one.
Discussing important oil related topics are not mundane to people like you and me, and a few others that post here; they most certainly are for the casual peak oil enthusiast. Perhaps one of things someone like myself can do to keep people engaged in oil related topics is to mix it up a little. We know the shale wankers are losing their shirts, and why, production is fixin’ to begin it’s big slide down Mt. EIA, nobody knows what the price of oil is going to be next Monday much less next year…lets try something different. I’ll make this little lesson about the Bakken because that is all that appears to be on anyone’s minds these days:
NDCC 43-02-03-18 is the basis for well spacing, well densities and number of acres per producing unit; it is the law in N. Dakota. Basically the law establishes parameters that “protect the correlative rights of others (can’t steal oil from folks), prevents waste (allows drilling to capture oil that would otherwise go to waste if not produced), prevents drainage (can’t steal oil from folks on the other side of the fence), ensures conservation of N. Dakota’s resources and prevents the drilling of “unnecessary” wells. Pretty cool law. Similar laws exists in all producing states in the US.
The problem is these laws can be easily circumvented thru regulatory hearings before the NDIC, a small example can be seen here: https://www.dmr.nd.gov/oilgas/dockets/2013/docket032813.pdf
Essentially any operator with the bucks, and the proper legal representation and evidence, can get just about any spacing rule changed in N. Dakota. Same in Texas. In the LTO business, where borrowed money is King, and Rune Likvern’s Red Queen rules the shale kingdom, conservation principles are being thrown out the bathroom window and the drilling of “unnecessary wells” is the rule, not the rarity, in my opinion.
To perhaps prove my point, Drillinginfo.com can often do a good job of dumbing stuff down and making it interesting and easier to understand, even for me. Rather, especially for me. Here, for instance, is an old DI article regarding potential well interference and “downspacing” in the Bakken : http://info.drillinginfo.com/well-spacing-bakken-shale-oil/. There might be some new argument regarding downspacing but I would choke on it; in the Eagle Ford I have witnessed the negative economic ramifications of downspacing. Its real, and its ugly.
So, there are existing, applicable laws in all producing states just like my example above and all of these laws can be bent, and are bent everyday. The question is, to what end and who benefits from this bending? If you are a royalty owner in 1280 acre unit in ND that has 8 wells crammed into it, you are happy. If you are a lender who loaned Shale R Us 40 million dollars to maybe drill 4 more wells than necessary (now that the price is dropped 50%), you ain’t happy. In fact, in about 2 more months you are going to be damn well pissed. http://www.forbes.com/sites/woodmackenzie/2015/08/31/will-the-oil-industry-face-an-october-surprise-of-its-own/
If you happen to be 20 years old and 30 years from now wonder where all your country’s hydrocarbon resources went, and for what reason, you ain’t going to be very happy at all.
It is a very complicated thing, this oil stuff.
Mike
Mike. I still do not understand infill drilling at these prices, absent some very onerous contractual requirements for it.
There needs to be an October surprise for these shale guys. It is one thing to keep existing wells going, but drilling when you are in debt up to your eyeballs?
HK is a perfect example. 40K BOEPD. $3.5+ BILLION of long term debt. Yet still have three rigs running, borrowing to do that without a doubt. Two are in the Bakken where I am sure the 1/1-9/1/15 average price is sub $45.
I am hoping for an OPEC cut 12/4, and then we can just put 2015 behind us.
But if these shale guys give any hint that they are going to keep at it, bye bye OPEC cut, and 2016 may start out like crap.
Hopefully EIA has it right now, we drop 100K per month and end 15 well below where we started.
If US and Canada end 2015 below the beginning of 2015, it would seem with the demand numbers OPEC would just need to cut about 1 million bopd and things would be near balanced.
I don’t understand either, Shallow.
My comments about the EIA’s grossly incorrect reporting hardly got a response. I thought that amazing. Somebody should hold those folks accountable for their grievous errors. It had a huge impact on prices. Glenn responded, that’s it.
My post above was really kind of experiment regarding the nNgass theory and posting here. It was long, and likely not well written, but should have been interesting as to spacing and unnecessary wells in the Bakken; all pretty relevant stuff. I hoped it would provoke some conversation. It didn’t. You at least responded, thanks.
nNgass is really right. This blog doesn’t have anything to do with oil anymore, its just a place for people to voice opinions about everything EXCEPT oil related issues. Some really stupid stuff, like politics and women’s rights and police states. Nobody wants to learn anything about the real oil business because they think they already know enough. Which I have always enjoyed, at least, for the entertainment value. Watcher wants to learn occasionally and John below answered his question very well. Other than that, it is primarily a place for big egos and dumb opinions. People who are oily just kind of want to stick to their area of expertise, that’s it.
The entire point of the blog has been lost, in my opinion. I find myself embarrassed to be participating in it now. So, I am out. Good luck, Shallow. Your production will be profitable again, I assure you. If you want to get ahold of me you may ask Ron for my email address, or Rune. Adios.
Mike
Understand your sentiments Mike. Really hope Ron keeps this going. His posts are good and there are some very good posters here, just a lot of broken record off topic material.
Will be in touch. Have enjoyed your contributions here greatly, especially during a very challenging time.
Good luck to you, your family and your employees!
I also hope Ron ignores the negative comments which are directed more at the people that make off topic comments, than at Ron himself. No blog is perfect, I prefer the eclectic mix of this blog where most points of view can be heard.
If people continue to complain, the whole thing may fall apart.
I hope this forum keeps going. It’s the only one I read concerning oil. It has been very valuable to me (and to others, I am sure).
I’m Really unhappy to see Mike go (again) even though I may be partly to blame, with my EV/renewable energy link bombs in the previous Ron Post. In my defense however, I will repeat that, in my neck of the woods, as is the case in Hawaii, Puerto Rico and many other small island territories/states, most electricity is generated using petroleum based fuels. As I may have said before, I am an electricity guy so I know on which side my bread is buttered and express my concerns accordingly.
To be frank I see Hawaii as a model for my island country to observe, if not to emulate and what are the proposals to deal with the future in Hawaii? 100% renewable by 2045, with the main motivation being energy security. It is not comforting to live on a island knowing that, should the ships carrying fuel ever stop coming, for any reason, life could get really ugly, really quickly. It will be interesting to watch how Hawaii deals with the transport fuel issue, seeing as how EV ranges of 200 miles or more should be good enough for a huge proportion of their population.
I must admit that I often times lose sight of how insignificant the case of small island territories/states is in the larger scale of things. The total consumption of all such islands combined is probably below a rounding error on the world scale. In that case, my apologies for mistakenly thinking that, anybody here should give a shit about the plight of small islands!
In terms of comments related to oil, I guess Mike may not have been a regular over at TOD, if he ever visited at all. I don’t remember him there, unless he is Rockman going by a new screen name. I don’t know how many regulars here who were also regulars at TOD recall my incessant belly aching over the optimism of EIA forecasts and the apparent disconnect with reality that exists in that agency. I am sure anybody who has followed my posts over the years should remember me questioning the motivation for the EIA given their mission statement which I have cut and pasted as a part of a comment at least twice. So yeah, I think this change in reporting by the EIA is huge! Maybe they are finally understanding the meaning of their mission statement! Here it is once more (bold mine):
The U.S. Energy Information Administration (EIA) is the statistical and analytical agency within the U.S. Department of Energy. EIA collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment. EIA is the nation’s premier source of energy information and, by law, its data, analyses, and forecasts are independent of approval by any other officer or employee of the U.S. government.
Edit:When I went to the EIA web site to copy their mission statement, up pops a user survey! Boy, did I give them a piece of my mind! One question asked about the percentage of US oil consumption that was imported and when I guessed right, the response was “Congratulations, you got it right! How did you know the answer?” So, I proceeded to tell them about this awesome web site and all the awesome analysis of their data that goes on around here! 😉 I actually told them that EIA staffers might learn a thing or two from this site!
Hi Mike,
You will be missed.
Sometimes an intelligent comment like yours is simply read by others and they feel there is nothing that they can add that they have not said before.
I just read your comment on well spacing now, so sometimes people don’t see a posted comment right away.
I also do not understand why new wells are being drilled at current prices and am amazed that it continues because I have believed this since January.
I think the EIA does its best to estimate oil output and has a difficult time predicting a change in trend. It also seems possible that RRC reporting may be better since going to all digital filing and this may have messed up the EIA estimation techniques. Let’s say the RRC’s reported output used to be about 80% of actual output (reported about 18 months after the most recent reported data) and now it is somewhat higher (say 90%), the EIA can only guess and they seem to now realize their previous guesses were too high.
If the RRC data were better (like the reported output data from the NDIC), there would be no need for the EIA to guess. I decided not to say this before cause I knew you wouldn’t like to hear that.
I agree that the more tightly spaced wells are a bad idea, but some people think the oil companies should be free to drill unprofitable wells. If the oil company is applying to drill a horizontal well between two wells that they already own, they are the one who stands to lose their shirt. Likewise the bank or bond holders that lend the money should be free to take the risk of lending to companies that drill unprofitable wells. Eventually the bad actors will go bankrupt and things may get back to normal.
Sometimes an intelligent comment like yours is simply read by others and they feel there is nothing that they can add that they have not said before.
Yes, I appreciate the oil comments, but don’t respond because I don’t know enough about the subject. Still, learning about the economics of oil is why I am here. I live in an area where there is oil drilling. I also know people in the industry. I want to know more to know more about the economics to know what to anticipate down the road.
Totally agree with you and shallow sand..
Mike will be missed.
I still hope he will be back soon
Exactly. Mike’s posts are very insightful, and I always try to catch his comments.
I do agree with Mike that more moderation, or separating different topics, would definitely help this forum. It’s a pity that Ron doesn’t feel that way, and has a fatalistic attitude.
I do agree with Mike that more moderation, or separating different topics, would definitely help this forum. It’s a pity that Ron doesn’t feel that way, and has a fatalistic attitude.
I generally read everything posted here, so I don’t lose the oil comments. But reading everything as it is posted is the only way I am able to keep track of everything. When I try to search for a topic, I don’t have as much luck. So I can understand why the oil folks and those interested in oil topics get frustrated with all the side discussions.
It would make it a better site to separate comments but the software does not allow me to do that. I would have to have different posts, saying “This is for oil comments only”, or something to that effect.
However I am growing tired of the whole damn thing and thinking of just chunking it. I don’t need the aggravation.
Hi Ron,
There will always be complainers, just ignore them.
Your site is great, IMO.
I really appreciate the site Ron. I look / read almost everyday.
I enjoy almost all of the posts and think one of the best parts are the info provided in “off topic” threads. Although since petroleum affects almost everything, it is hard to see just what is off topic.
I have been led to new authors, web sites, ideas, etc. from here.
I hope some of your aggravation can be tempered by the overall quality of this site.
Thank you.
Yair . . .
RON PATTERSON
I visit site twice a day but only post occasionally.
I find the mix of comments informative, entertaining, and it is not all that hard to sort the wheat from the chaff.
It would be a great shame if MIKE, SHALLOW SAND of any of the other real boots on the ground oil folks leave and I would appeal to them to hang in although I realise comments do take time and it can be annoying when pertinent points are glossed over and ignored by subsequent posters.
I call it the “invisible post” syndrome. On the earthmoving and heavy equipment sites where I frequently post there can sometimes be three or four posts saying the same thing with none acknowledging the other.
All the best to MIKE if he does depart and RON PATTERSON your blog would be sorely missed by this old bloke half a world away if it should fold.
Regards to all.
Scrub Puller
This is a great site and largely so because of the mix of comments. Mike sounds like he just does need to leave since he has become so bitter about the whole thing. I am a third generation oil guy and have roughnecked, worked on a rig, programmed software for the back office, loaded mud trucks…you name it. But still I enjoy and find very relevant the other topics discussed here in the academic way they are discussed. Hang in there Ron, this blog does a great service for all who read it.
Ron,
Understand about the aggravation. There are a lot more of us reading across the world than the few who post regularly. And we far outnumber the whiners. We don’t know enough to comment, but we sure want to learn, so we lurk and read.
We figure out quickly who has which agenda and who is interested in oil and energy news and data, and analysis, however anal that gets.
Please, just do what makes this easy for you and we’ll sort out the chaff.
Damn, I hate to see Mike take his insights elsewhere. I considered his inputs among the pearls of wisdom occasionally found here.
Thanks for all you do for all of us.
Jim
+1
I am another lurker who would really miss this site! I’ve been reading it several times /week since TOD stopped… I hope you can find a way to overlook the griping and continue your insightful and helpful posts – I don’t understand much of the really detailed bits about oil production, but I read what I can and I look for the oil-experts’ opinions of current situation.. much more informative than the mainstream press! I have had several blogs, so I know they are a lot of hard work. I hope you opt to keep going, and that the oil experts like Mike decide to keep commenting.
Hi Ron, I’d pay for your site if you started charging for it. Sign me up. Lifetime membership.
Hi Enno,
Neither Ron or I have the skills to allow the comments to be separated.
You (and no doubt there are others) have mad computer skills. If you have a simple solution. Maybe a check box for oil or not oil and a user could choose to only look at “oil” or not oil comments by checking a box on the site, that might work (as I don’t know html code that well, it may not be possible). Email me if you have a solution and I will run it by Ron if he is interested.
Maybe I ought to pack my bags and go elsewhere if the OIL guys want a purely oil related forum.
BUT if the forum is kept strictly to oil, then some portion unknown of the people who read it will simply quit dropping in. How big a portion I really don’t know but a lot of us will simply go elsewhere if that is the route taken.
Not many people are hard core strictly interested in the technical end of oil, although each one of them is worth fifty of someone like me when it comes to posting real honest to jesus OIL information.
The rest of us are here because of the sense of community and to explore the IMPLICATIONS of peak oil in particular and peak resources in general.
So it boils down to this. The forum can have a small number of strictly oil guys, and going by how many comment, that number will be pretty small.
OR – it can have a LARGER readership, how much larger, it is impossible to say.
BUT the more people read it, the better, in terms of it having an impact on society. Here and there a person who has gotten interested in the broader issues involving oil will run across this blog and start reading it.
He may introduce a couple of friends, coworkers ,acquaintances to it as well. This in my estimation is the only real hope of the forum ever having a large audience.
But in the last analysis, it’s Ron’s personal property, to do with as he pleases.
I just made a firm deal which I think will work out with a mostly unemployed local kid who is a highly skilled in computer tech right across the board. He designs websites and write original programs and wants to swap out with me to get into auto work since I explained the opportunities to him- a guy who really understands computers is in a position to make a lot of money telling guys like me why a car is not running properly once he learns the basics of automotive electronic control systems. I know the basics but not the nuances, hardly anybody does, not really. GOOD computer guys are RARE in the auto business.
So- Hopefully very soon I will have a technically sophisticated (in terms of having separate threads etc ) blog of my own, one wherein I can set up separate threads and compartments and just copy content from this and others and have my own little frog pond where the basic intent is to explore the IMPLICATIONs of peak oil in particular and peak resources in general.
Depending on how long it takes this kid to create my website, it might be up and running in as little as a month.
Hi Glen,
My thought is to try to have a switch where people check off whether there comment is “oil” or “other”. The reader will be able to check a box that shows “all comments” or “oil only”. This could potentially please most people.
It is Ron’s blog to do with as he wishes and I do not even know if it is possible to do what I suggest. I do not have the web design skills to accomplish this, but perhaps there are readers with better skills than me that would know if this is possible in Word Press with a plug in or by designing a custom “theme”.
An alternative strategy would be to simply post a separate ‘open topic’ thread, refreshed at 500 comment intervals or so.
That way, oil and other wouldn’t need to mix.
I’m sure I’m not the only Drum Beat refugee that’s here as much for the diverse opinions as the production data, but certainly understand why the chaff is an affliction to those trying to gather wheat.
Hi Bob,
That is also a possibility that Ron could try.
Probably much less work.
Hi Old Farmer Mac,
The oil guys can just ignore your comments if they wish, many of us love your comments (though when they are very long, people may not read them), you might consider breaking them up into smaller pieces or try to be more concise.
Though this is a pot kettle thing.
I think you have some great input OFM. I’ve heard Ron refer to this blog as a Collapse Blog not just a Oil Blog so I think it’s fair to include comments on various energy and civilization topics.
I think you have some great input OFM. I’ve heard Ron refer to this blog as a Collapse Blog not just a Oil Blog so I think it’s fair to include comments on various energy and civilization topics.
My thoughts most closely resemble OFM’s. We both expect hard times ahead, but neither of us has decided that collapse is inevitable.
If I believed that, I wouldn’t bother to read this forum at all. If the future is fixed and is likely to happen in my lifetime, then I don’t want to spend what time I have left sitting at my computer. In fact, I don’t understand why anyone who believes in collapse is at a computer telling people about it. Go out, enjoy the world, spend time with friends and family. Why waste time reflecting on doom if you believe it is coming? If you can’t change it, don’t fret about it.
If, however, you think some of the world’s problems can be lessened, moderated, or prevented, then I can see value in sharing info with people.
Really interesting stuff, it’s pretty much the same worldwide.
Alberta has lost 35,000 oilpatch jobs, petroleum producers say
After years of struggling to find drivers, Southland Transportation, which provides school buses to Calgary schools, has been inundated with applications this year, including some from engineers and geologists.
http://www.eia.gov/todayinenergy/detail.cfm?id=22732
EIA estimates U.S. crude oil production in June 2015 at 9.3 million barrels per day (b/d), a decrease of approximately 100,000 b/d from the revised May 2015 figure. Production estimates released in the PSM for January through May were revised downward by 40,000 b/d to 130,000 b/d. The largest revisions in volume include decreases of oil production in Texas (ranging from about 100,000 b/d to 150,000 b/d) and increases in the federal Gulf of Mexico (ranging from about 10,000 b/d to 50,000 b/d). U.S. crude oil production for the first six months of 2015 averaged 9.4 million b/d.
The annual US C+C peak in 1970 was 9.6 MMBPD (million barrels per day). Unfortunately, we don’t know what the Condensate to C+C ratio was in 1970. I did look up some EIA versus Texas RRC data for Texas in the early 80’s and if memory serves, the Condensate to C+C Ratio was around 3% or so. In any case, I think that a plausible estimate for the US Condensate to C+C Ratio in 1970 was about 4%, which would put actual US crude oil production at about 9.2 MMBPD in 1970.
The EIA appears to have estimated, last year, that US C+C production in 2015 would be about 9.5 MMBPD, which seems pretty close to the first six months:
http://i1095.photobucket.com/albums/i475/westexas/US%20CC%20Production%20by%20API%20Gravity_zps0aa4elnz.gif
They also seem to have estimated that actual US crude oil production (45 and Lower API gravity crude) would be at about 7.5 MMBPD in 2015, which would be 1.7 MMBPD below my estimate for US crude oil production in 1970.
As I have periodically noted, when we ask for the price of oil, we generally get the prices of two grades of crude oils, WTI and Brent, both of which have average API gravities in the high 30’s. But when we ask for the volume of oil, we get some combination of crude oil + condensate + natural gas liquids (NGL) + biofuels. In other words, we get the volume of actual crude oil + partial substitutes. This is analogous to asking a butcher for the price of beef, and he gives you the price of steak, but when you ask him how much beef he has on hand, he gives you total pounds of steak + roast + ground beef.
Shouldn’t the price of an item directly relate to the quantity of that item and not to the quantity of the item being priced + partial substitutes?
But in any event, the fact that partial substitution has so far worked, in response to higher crude oil prices, does not mean that US and global crude oil production has not peaked.
Many on this board and prominent analyst like Steve Koppitts from Princeton energy advisors have been saying that EIA numbers have definitely been overestimated for some time and finally EIA has got religion.
This is a big revision HF. Looks like US could be below 9 million bopd C + C before year end, maybe well below.
Oil prices up another 5% or so this morning. Methinks there have been some huge losses for people holding short positions on crude oil in the past three business days.
As HF noted, the EIA monthly C+C production number for June was 9.3 MMBPD, versus 9.6 MMPBD in April. According to CNBC, this report contributed to today’s oil price spike (WTI had been down early).
Current discussion on CNBC is whether investors should follow Warren Buffet’s lead into energy. (Gentle cough). . . . someone speculated last week about what Buffet might be doing in regard to energy.
Fuel Fix has an article on the EIA’s latest C- arithmetic test. It blames Texas “reporting” difficulties for over exaggerating US production the past, what, 5 years? Did these “exaggerations” help throw oil prices into a tail spin last fall?
So the EIA has been lying to us?
This of course begs the question: Why?
In an interview published yesterday, the ex-president of PVDSA, Rafael Ramírez, gave a very good reason as to why the EIA and folks like ExxonMobil’s Rex Tillerson have missed no opportunity to try to talk or manipulate the price of oil downwards:
http://www.jornada.unam.mx/2015/08/31/mundo/023e1mun
In order to understand what is going on in the oil markets, it really is necessary to think globally, and not locally.
Glenn, no habla espanol! 🙂
Could you please summarize in 2 sentences what is the scoop? Thanks
Ramirez is saying that transnationals like ExxonMobil have the staying power to be intermediate- and long-range players, and that they provoke or exacerbate, and then take advantage, of these low oil prices and the political and economic crises they create in order to expand and consolidate their long-term reserve base. This expansion is done on the cheap one might say: deals done under duress and conditions unfavorable to the seller.
Ramirez, being a spokesperson for the Venezuelan government, of course gives a somewhat distorted view. The US/NATO and the transnationals are not the only folks in the world who have imperial ambitions. China and Russia also have imperial ambitions and are looking for their “opening” to make friends and influence people in Latin America. Over the last 12 months they and their NOCs have invested heavily in Venezuela, Brazil and Argentina, not only in direct foreign investment in the oil and gas sector, but also with loans to the Venezuelan government to try to keep it afloat in times of crisis.
Clearly, the transnationals, China and Russia have decided that non-conventional (read expensive-to-produce) oil and gas have a long-range future, and they have the staying power to make bets that they believe will pay off handsomely in 10, 20, or more years.
I have created the graph below to hopefully put things in perspective, and illustrate what the transnationals, China and Russia are vying for, not only with their direct foreign investment but also with loans to South American states, I assume for the purpose of accumulaitng some political capital during these critical times.
Ramirez doesn’t give any insight into why Saudi Arabia and Russia might want low oil prices, only why the EIA and Rex Tillerson might want low oil prices.
Thanks Glenn.
To me it looks like that the game that is being played is that if you lose all chips (oil reserves) you lose the game. So nobody likes the low prices but you have no choice but to double down in the game – and that is to produce more oil. It s the game of attrition. The winner is the one who keeps standing with the lowest possible price. The sad part is that majority of us are just collateral damage in this game.
I know Rafael Ramirez, went to meetings with him, heard his speeches, even watched a Keanu Reeves movie sitting next to him on our way to a meeting. Rafael was a political appointee who grew in the job after 2003, but didn’t have anybody to mentor him properly This, and his need to obey Chávez 100 % no matter how stupid the orders, was a toxic mix which destroyed PDVSA.
The interview shows Ramirez repeating the same old story, which reveals he doesn’t know much about economics or how to run a cartel like OPEC. As dumb as he is, he was one of the top three brains around Chávez. But Maduro and Ramirez had a disagreement over issues such as the bolivar devaluation, and Ramirez, was eventually demoted to his current post, in which he’s barely able to function.
In conclusion, the article is worthless. Typical Latinamerican left wing donkey pee.
That is a very good article, thanks. I will let you answer Ves but apparently I am not the only one who smells a rat.
Jeff,
I hope I can correctly express this thought.
Have you ever tried to model the amount of oil that is available for import?
If I am understanding your export models, you are showing that production available for export is reduced by the exporters internal consumption.
But what about oil that is not available for a country to import?
I am making an assumption here that much of the world’s oil import / export is controlled by long term contracts.
So what about oil production that is already contracted from producer to end user? It would seem that this oil is no longer available for another end user to import?
I was thinking about this wrt sanctions on Iran but also for supply contracts to say China as I think I understand that they are trying to lock down production for Venezuela.
So for the US, if a producer has a supply contract to another country, then that oil is not available for import to the US.
Am I making any sense here?
Unless we see prices recover meaningfully, I think 8.8 Million by year end is highly likely.
I am following a lot of individual companies and I still think EIA is smoking some serious weed for June numbers. Some Canadian company numbers are down 9% between March 31st and June 30th , so I felt this revision was coming. I know Canada is different, specially in the second quarter but it is not THAT different when everyone stops drilling.
Ron, the title refers to USA production but it should be products supplied. Production is down.
Off topic: that location you picked is exposed to storm surges. I would put everything of value in weighted waterproof metal boxes in the attic. If the attic isn’t finished I would make it a top priority (I own an old house in Florida, but it’s built like a bunker, on a solid carbonate foundation and raised above ground level, which in turn is raised above street level).
Hi Ron,
FYI: the title reads “US Oil Production Nears Previous Peak”. I think you meant “US Oil CONSUMPTION Nears Previous Peak”
Ron. I don’t agree with this from your last paragraph:
“There has been little data or other news to report lately.”.
One thing did happen: Oil prices rose in one day, undoing the price drop of a whole month. The largest price rise in a day for 10 years.
I don’t know what caused it, or if it is important. But it is some kind of news, ain’t it?
so what is going on here? prices increasing due to responses from reporting?
Increasing to adjust the 1st of month sequence of collateral valuation.
JW said:
I don’t know what caused it…
According to an article published in Rigzone yesterday, the precipitous uptick in oil prices was caused by the EIA finally admitting that “mistakes” had been made in its previous estimations of US production:
NEW YORK, Aug 31 (Reuters) – The U.S. oil industry pumped less crude than initially estimated this year, according to new government data that offered the clearest look yet at the impact of drillers’ retrenchment in response to collapsing prices.
The downward supply revisions were “unambiguously” bullish for a global market awash with oil, said Credit Suisse global energy economist Jan Stuart, suggesting the oft-cited resilience of U.S. shale producers to lower crude prices might have been overstated. Oil prices surged by as much as $3 a barrel on Monday, with some traders citing the new data.
The Energy Information Administration said its new survey-based output data showed the United States pumped a hair below 9.3 million barrels per day in June, down by 100,000 bpd from a revised May figure.
The June figure was also nearly 250,000 bpd below what the EIA had estimated a few weeks ago, highlighting the steep reversal in output as a five-year boom sours and suggesting to some analysts that a global glut might ease sooner than expected.
“If the downward trend in U.S. production continues, global markets should return to balance by early 2016,” said veteran energy economist Philip K. Verleger….
U.S. oil prices sharply reversed early-morning losses as traders digested the new data, with U.S. crude up more than 6 percent by 12:56 p.m. EDT (1656 GMT), adding to a nearly $7 rise on Thursday and Friday….
Thus far, many analysts have been surprised at the apparent resilience of the shale industry. While oil prices have tanked to more than six-year lows, energy companies have rushed to employ cheaper, more-efficient drilling techniques and target the richest shale seams, helping sustain output.
– See more at: http://www.rigzone.com/news/oil_gas/a/140374/EIA_New_US_Oil_Data_Shows_Lower_2015_Production/?all=HG2#sthash.KFqlfNS4.dpuf
Maybe that “resilience” is little more than the EIA massaging the data?
I tend to agree. The EIA seems to have a political agenda. I don’t think they wanted to push oil prices down to hurt USA producers, but they may have wanted to see how Russia reacted.
New U.S. oil production data released today (Monthly Crude Oil and Natural Gas Production
http://www.eia.gov/petroleum/production/?src=home-b6) vs. Monthly Energy Review released on August 26th
Revised numbers for all months of 2015 are lower than in previous report (>300kb/d for June)
Downward revisions by month (kb/d):
Jan-15 -39
Feb-15 -81
Mar-15 -126
Apr-15 -79
May-15 -111
Jun-15 -303
New vs. previous month data for Texas
Downward revisions (kb/d)
It would be interesting to see what the drillinginfo data for Texas says, unfortunately nobody seems willing to share this data.
If the current EIA Texas estimate doesn’t get revise downward in the future, then June 2015 Texas output is pretty close to the December 2014 level, interesting.
Comparison of Texas oil production statistics from various sources:
Here are my corrected data from December 2014 (plot in a thread below):
Dec 2014 3493779
Jan 2015 3384569
Feb 2015 3466477
Mar 2015 3552208
Apr 2015 3475217
May 2015 3464565
Jun 2015 3510529
Hi AlexS,
Your RRC data may need to be updated:
I found the following:
My apologies, Dennis, but I used the numbers from the EIA website. Probably they quoted old numbers by TRRC.
Hi AlexS,
No problem. I didn’t realize that was pulled from the EIA website, I thought you put it together. The RRC data I got from the RRC today.
I also got the “final estimate for crude output” and assumed condensate would also be higher by a similar percentage for June 2015.
Based on that estimate C+C output for June 2015 was 3386 kb/d. Note that these “final estimates” tend to be too low.
For example in April 2015 the final estimate for Jan 2015 crude output was 2613 kb/d, but currently the RRC reports 2720 kb/d of crude output (no condensate included) in Jan 2015.
Also note that if the final estimate for June is the same percentage low as the Jan estimate above, then eventually the June 2015 output might rise to 3525 kb/d (a little higher than the current EIA estimate of 3460 kb/d.)
See
http://www.rrc.state.tx.us/all-news/033015b/
Article from Reuters:
New U.S. oil data shows lower 2015 production: EIA
Mon Aug 31, 2015
http://www.reuters.com/article/2015/08/31/us-usa-oil-data-idUSKCN0R01T520150831
The U.S. oil industry pumped less crude than initially estimated this year, according to new government data that offered the clearest look yet at the impact of drillers’ retrenchment in response to collapsing prices.
The downward supply revisions were “unambiguously” bullish for a global market awash with oil, said Credit Suisse global energy economist Jan Stuart, suggesting the oft-cited resilience of U.S. shale producers to lower crude prices might have been overstated. Oil prices surged by as much as $3 a barrel on Monday, with some traders citing the new data.
The Energy Information Administration said its new survey-based output data showed the United States pumped a hair below 9.3 million barrels per day in June, down by 100,000 bpd from a revised May figure.
The June figure was also nearly 250,000 bpd below what the EIA had estimated a few weeks ago, highlighting the steep reversal in output as a five-year boom sours and suggesting to some analysts that a global glut might ease sooner than expected.
“If the downward trend in U.S. production continues, global markets should return to balance by early 2016,” said veteran energy economist Philip K. Verleger.
The EIA revised production data for the first five months of the year, based on an expanded monthly survey of operators that includes crude oil and lease condensate for the first time. As a result, output in the months of February, March and May was 80,000 bpd to 125,000 bpd lower than previously reported, according to a detailed breakdown.
Until now, the agency’s monthly production figures were primarily based on individual states’ data, which was often incomplete or with a months-long delay, as well as some third-party figures and agency modeling.
While the report sheds new light on the global oil glut that has walloped prices this year, it did little to change the broader narrative. The data showed that output peaked in April before entering a sequential decline as months of deep cuts to drilling rigs finally put the brakes on the shale boom.
The revision is “a rounding error” in the 94 million bpd global oil market, cautioned Rapidan Group President Bob McNally.
Still, the rate of that decline was somewhat sharper than the agency had been anticipating. Earlier this month, the EIA’s monthly Short Term Energy Outlook had forecast June output would show a slight rise to 9.54 million bpd.
“To the degree that fundamentals matter, these data appear unambiguously constructive,” said Stuart.
U.S. oil prices sharply reversed early-morning losses as traders digested the new data, with U.S. crude up more than 6 percent by 12:56 p.m. EDT (1656 GMT), adding to a nearly $7 rise on Thursday and Friday.
As oil traders began searching this year for any sign of a slowdown in booming U.S. shale production that could stem a deep rout in prices, the EIA’s data became a topic of sometimes fierce debate. Some analysts suggested the agency was significantly underestimating the rate of production.
My continuing pet peeve: “Oil” refers to total liquids, while the quoted price refers to actual crude oil (less than 45 API gravity crude).
Thank you for your work, Alex. You are now one of about 6 that still seems willing to engage in oil related issues and I am grateful.
I think this is an incredible story, these EIA “revisions.” Its over exaggeration of production has, in my opinion, had an enormous impact on world crude markets. I do not accept that the EIA has now magically been able to implement a “new production data gathering system” from operators that explains these revisions. I am not a large producer by any means but I have not been notified of new requirements by the EIA and neither have other operators I work with, some of which are quite large and have very significant production.
I more or less think this all stinks. In any case, it’s fascinating and not getting the attention it deserves in the press. Yesterday’s jump in WTI, post EIA press release, proves the affect EIA data has on markets, good and bad, up and down. The oil community is very upset about all this funky arithmetic, I assure you.
Mike
Mike said:
In any case, it’s fascinating and not getting the attention it deserves in the press.
It’s not getting attention in the US press.
But trust me, it’s getting plenty of coverage in the Latin American press.
Folks like you and me are just collateral damage in a much larger global economic and political war.
Not an oil post..
The state of California has achieved a new electricity generation peak record for utility-scale solar energy, according to recent reports. The new record of 6.391 gigawatts (alternating current, not direct current) was achieved on August 20, 2015, according to California’s grid operator. This figure refers to both utility-scale solar photovoltaic (PV) projects and concentrating solar power (CSP) projects.
While the 6.391 GW figure includes both utility-scale solar PV and CSP projects, it doesn’t include the output of distributed solar energy system output (so-called “behind-the-meter” electricity generation). GTM Research has previously estimated a figure of 3.2 GW of total distributed solar system capacity in California for Quarter 1, 2015 — so, assuming that’s correct, and that peak generation sometimes approaches peak capacity for distributed, then the total peak figure could actually be as much as 50% higher.
http://cleantechnica.com/2015/08/29/california-achieves-new-utility-scale-solar-energy-generation-peak-6-931-gw/
And…..
Gov. Jerry Brown is working on an ambitious plan for transmitting electricity across state lines and bolstering California’s role in the region, according to energy officials..
The plan would integrate PacifiCorp, a utility serving six Western states, into the electricity grid run by the California Independent System Operator, which is based in Folsom.
If successful, it could make solar and wind energy available more widely throughout the West — a potential victory for Brown, who has sought partnerships beyond California’s borders in his fight against climate change.
http://www.latimes.com/local/politics/la-me-pol-brown-energy-20150830-story.html
The electric FedEx truck just drove by to delivery my neighbors amazon purchase here in SoCal. A lot quieter an the ICE UPS truck.
“Later in 2015 EIA will report monthly crude oil production by API gravity category for the individually surveyed EIA-914 states.”
This is HUGE.
Somebody at EIA is reading Mr. Brown’s posts and, therefore, Mr. Patterson’s site.
I will have a post on this later this week, Wednesday or Thursday.
Let me point out again that it’s possible to be a doomer exactly at the point when things seem to be going fine. Isn’t that what a peak is all about?
Also, one doesn’t need to focus only on energy to be a doomer. Just read history, and pay attention to politics and finance. You see the breakdowns, you see the cycles.
All it takes to be a doomer is:
1) the belief that the present state of affairs cannot continue
2) the belief that the transition to a new state of affairs is usually not a kumbaya affair
That’s it. Pretty simple and consistent I think. So yes, prepare and hunker down if you want but then again people in Berlin in 1945 prepared and hunkered down. Nobody knows what’s going to happen.
All it takes to be a doomer is:
1) the belief that the present state of affairs cannot continue
2) the belief that the transition to a new state of affairs is usually not a kumbaya affair
But some of us expect both of those situations and yet we are seen as pollyannish if we think the result might have some positive value.
I think that’s where we differ. Some people think certain things will happen and the result will be bad for everyone. Some of us think the same things will happen, but that Earth will still exist and no matter what it becomes, it is still Earth, so that is good, and when Earth is gone, there will be still be a universe and that will be good.
In other words, given the exact same set of circumstances, some of us focus on the bad and some of us focus on the good.
Doom suggests bad to me. If I don’t think the long term result will be bad, then I can’t be a doomer, can I?
I will die; you will die. Is knowing that death is inevitable a doomsday approach, or just acceptance of the course of life?
It’s the half full versus half empty debate.
Some folks want us to dwell on the half empty concept.
Others of us are going to focus on the half full no matter what. And we going to do activities that fit with the half full scenario. They may seem to be futile to the half empty folks, but they make sense to the half full people.
Of course, some of us see 8oz in a 16oz glass.
This is satire, but seems appropriate to some of the discussions here.
Nation with Crumbling Bridges and Roads Excited to Build Giant Wall
Boomer, The Donald needs the Latino/Hispanic vote, so he is going to “straddle the fence” (bad pun intended) by proposing building “The Great Wall of Meximerica”, which, of course, will employ mostly illegal Meximerican labor. 😀
But to take up the slack from the tar bust in the Great White North, the Canadians will likely propose their own “Great White Wall”, which also will require tens of thousands of Meximerican workers to construct for 10-20 years. 😀
So, hey, it’s a win-win-win situation for all, eh?!
Vote for The Donald! Mr. Trump, put up those walls! Keep Meximerican jobs at home! Make Meximerica great once again!
Boomer, The Donald needs the Latino/Hispanic vote, so he is going to “straddle the fence” (bad pun intended) by proposing building “The Great Wall of Meximerica”, which, of course, will employ mostly illegal Meximerican labor. 😀
I know. The irony of it.
There’s no need for a Great Wall. A set of four parallel fences, tied to jail sentences for those found within the two center fences should reduce illegal immigration. The other issue that helps is to enforce existing laws. Otherwise the illegals will keep on flooding the country. Long term, that’s going to harm the nation, because most of those illegals are uneducated and lack the proper background. They seem to be bound to become a poor and crime prone underclass which will eventually drag the country into a third world status.
The Solar Sunflower: Harnessing the power of 5,000 suns
The Sunflower has a massive total efficiency of around 80%, thanks to very clever tech.
http://arstechnica.com/science/2015/08/the-solar-sunflower-harnessing-the-power-of-5000-suns/
No way a single junction cell is doing 38%, even/especially at 5000 suns.
Ah, by the official IBM release, it is triple junction cells – OK, the laws of physics still rule.
http://www-03.ibm.com/press/us/en/pressrelease/40912.wss
n.b. “… collected solar radiation …” for concentrator systems is only the “direct normal insolation”,
meaning they loose 15% of total insolation, even under optimal conditions.
http://www.ftexploring.com/solar-energy/direct-and-diffuse-radiation.htm
PV-thermal hybrids are one of these ideas that keep resurfacing, but never seem to go anywhere.
Beside the issues of solar concentrators (DNI only, need cleaning, need good tracking, hard to mount on structures, etc. = expense & limited application), it has the problem that you get a fixed ratio of electricity and hot water, regardless of the varying need for either.
back to PEAK OIL – I will be glad when EIA reports oil by API gravity, and hope Ron will report the break-out.
For me, the current canonical oil output chart (now that graphoilogy.com is moribund), is figure 4 in Rune’s
http://fractionalflow.com/2014/10/19/world-crude-oil-production-and-the-oil-price/
Rune splits out bitumen (oil sands to Americans), the Bakken and the Eagle Ford from conventional C&C, and overlays the Brent price yearly average.
Really, really clear that in 2005 conventional oil hit a wall (Ken Deffeyes – who worked with Hubbert – predicted that, yes?).
From that one can ask, “so why did $10 million wells in the Bakken and Eagle Ford take off when oil nears $100/bbl, but conventional output (much from <= $1 million wells), just drifted around? Hmmm, could that be due to the peak of conventional oil?"
My dream chart (if I may be so bold – anybody with the time and energy?) would be like Rune's, but going back a few decades so it would show the high growth rates until the 2005 wall.
And it would dot-in something like a 5% decline rate on conventional, the "Red Queen" isn't limited to Light Tight Oil. (any good studies of global decline rate since the IEA's 6.7% for major fields? But that was back in 2008).
In extreme fantasy, the chart-maker also has the time & energy to figure out how much "conventional" is offshore.
And given the non-standard reporting and incomplete data around the world, would it even be possible to break out enhanced recovery "conventional"?
Hi All,
find below my Texas data for June, together with the latest EIA data…when you say convergence… 🙂
Well done, Dean!
Yeah, nice call Dean!
Thanks!
Thanks!
Hi Dean,
I think the EIA may have revised to too low a number. The RRC “final estimate” is usually about 10% too low and for June it is about 4% below your June 2015 estimate (if we assume the crude adjustment should be applied to condensate as well as crude.) The adjustment factor is about 1.22 for June, so about 3415 kb/d for C+C in TX for June 2015 for the “final estimate”. If this estimate is 10% too low, then actual final output (when all the data is in by March 2017) might be 3750 kb/d or so. If the estimate is only 5% too low output would be 3580 kb/d. Your 3510 kb/d estimate will be a little on the low side, I think 3600 kb/d will be a better guess, in 18 to 24 months we will know for sure.
Good job Dean.
So EIA got memo there is no more benefit of acting crazy 🙂
By the numbers:
1) The overproduction or glut is absurd thinking. There’s nowhere to store it that wasn’t already nearly full over a year ago.
2) If there is any single (or double) parameter in civilization that should have unequivocal measurement and be entirely known it is oil output and consumption. That there is doubt about these measurements after 100 years or so of it becoming obviously the OVERWHELMINGLY most important thing to civilization suggests obfuscation.
3) QE has wiped out the sanctity of money. Its thin air source is far too visible now. Pricing the most important thing in civilization with something that is arbitrary and expecting it to conform to any truth is just not a promising philosophy any longer. The price, as a novel thought, is what is agreed on by buyer and seller, and neither sellers nor buyers are necessarily compelled to want to maximize the thin air substance in that transaction.
Watcher, good point.
Allow me to reiterate that the money-supply-adjusted value of US oil production per capita is at the same level as the 1930s-50s to early to mid-1960s, meaning that, despite the boom/bubble in shale, US oil production per capita is down 40-45% since 1970 and is at the level of the late 1940s, whereas its value in debt-money terms per capita is at the level of the Great Depression.
Multiple increases in debt-money supply per capita to oil production has not increased the value of the 9Mbd of production for the economy.
Thus, in debt-money terms per capita, there is no “glut” of oil.
Interesting comment, factually wrong:
1. Inventories have grown over the last year and consequently the price of oil on a daily trade has been cut in half because of it. As far as the amount of oil that inventories have grown the last year, I will admit is minor compare to the amount consumed on an annual basis. But we live on the edge of a knife.
2. I would not consider oil an OVERWHELMING single measurement of civilization. I would put electrical production ahead of oil for one.
3. Here I have my biggest disagreement with you. QE has done nothing to change the sanctity of money to virtually anyone. Money only has value because of it liquidity to trade real assets. Todays money has no real intrinsic value without the backing of government laws in it’s transactions. If the United States said tomorrow that the dollar was illegal in the use of trade and punishable by death. That would wipe out the value of the dollar or your sanctity of money. Your fear baiting.
Who said anything about the US? I was talking about the BOJ and ECB.
The US was the first to do QE. It was an example and holds true elsewhere. You didn’t state the ECB or BOJ. Your comment doesn’t disagree with my post. Your still factually wrong.
Actually, the BOJ was the first to commence QE in the early 2000s, following the onset of their debt-deflationary regime in the late 1990s, coincident with the Asian Crisis. The English-speaking world and the EZ are about 10-12 years behind Japan, and China, Oz, and the Asian city-states are now where the US was in 2008-09.
http://www.thesocialcontract.com/artman2/publish/tsc_18_1/tsc_18_1_duncan.shtml
http://www.thesocialcontract.com/artman2/publish/tsc_23_2/tsc_23_2_duncan.shtml
http://www.thesocialcontract.com/artman2/publish/tsc_25_2/tsc_25_2_duncan.shtml
But I don’t disagree about electricity and civilization (and neither would Richard Duncan). I personally experienced a power outage recently that lasted 5 minutes, then later 40 minutes, and then another 30 minutes. Even though I have prepared with candles, matches, flashlights, batteries, hand-cranked radios, canned and dried food, water, cash, firearms, gold, extra gasoline, and a fireproof safe, I don’t actually feel prepared for the worst. (I have spent extended periods in Mexico, Central and South Americas, SE Asia, the Middle East, and North Africa for my work over the years, and the experience informs me that the vast majority of Americans are utterly unprepared for even a week without electricity, gasoline, cash, food, etc., and it’s a HUGE problem for our society/civilization.)
That we are now utterly connected (some would say increasingly disconnected in many respects) and dependent upon the grid for our existence, being without electricity, lights, refrigeration, and high-speed Internet for 5 minutes felt like 5 hours.
https://www.youtube.com/watch?v=QfYCrLq1DJU
2-3 to 5-7 days without electricity would probably tip the economy/society/civilization over the edge and into the zombie apocalypse, especially for urbanites and suburbanites living largely in a kind of abstracted, virtual, complex, high-tech, high-entropy “reality” dependent upon “energy slaves” that the vast majority of us cannot actually afford in net energy terms per capita.
2-3 to 5-7 days without electricity would probably tip the economy/society/civilization over the edge and into the zombie apocalypse, especially for urbanites and suburbanites living largely in a kind of abstracted, virtual, complex, high-tech, high-entropy “reality” dependent upon “energy slaves” that the vast majority of us cannot actually afford in net energy terms per capita.
You realize, don’t you, that in recent years there have been parts of major urban areas in the US that have gone several weeks without electricity and sometimes without any utilities after hurricanes.
If you are talking about the entire world simultaneously going without power, it isn’t going to happen.
I swear, some of you can’t imagine life that isn’t exactly what you are familiar with.
I swear, some of you can’t imagine life that isn’t exactly what you are familiar with.
That might the understatement of this thread! 🙂
Boomer, not simultaneously or regionally along with an extended disruption of the national financial payments system.
I’m talking about Katrina-like events with 2008-09 in 3-4 or more regions of the US, including water shortages and protracted disruptions to the just-in-time inventory system via our friendly mfg. client-state, China, and her regional SE Asian intra-Asian sub-contractors and re-exporting countries.
Take a look at what is now happening in Thailand, Malaysia, Indonesia, Vietnam, Mindanao, India, Eastern Europe, South America (protests in Venezuela, Uruguay, Peru, Chile, Brazil, Bolivia, and Ecuador), Central America, Central Asia, the Middle East, parts of Mexico, and countless places in China (that we don’t hear about).
The global “grid” and just-in-time supply chain is fraying at the weaker linkages, if not collapsing at the weakest linkages.
The effects are cumulative on the global system, and any number of factors can cause a systemic precipitant that renders the global distributional system compromised to the point of collapse, affecting even us self-delusional, self-satisfied, “educated”, bourgeois professional middle- and upper-income types “permanently”.
Moreover, the US stock market is exhibiting unambiguous signs of a repeat of the cyclical top in late 2007 or early 2008 and late 2000 to early to mid-2001.
The global financial and economic system is at one of its most systemically vulnerable positions in 8 to 15 and 42 to 75-80 years, although we are daily conditioned not to have a clue about the fact.
I’m talking about Katrina-like events with 2008-09 in 3-4 or more regions of the US, including water shortages and protracted disruptions to the just-in-time inventory system via our friendly mfg. client-state, China, and her regional SE Asian intra-Asian sub-contractors and re-exporting countries.
I’m talking about the same kinds of events. I know people who lived through them.
Yes, they are disruptive, but people get through. These kinds of events will not hit everyone in the world at the same time.
And running low of energy resources is not the same as having them end on no notice.
We are currently in an economic disruption. To many, it is happening gradually enough that they don’t realize they are in the middle of one.
The current world isn’t going to end in an apocalypse. Maybe someday something will slam into Earth and destroy most of it, but otherwise, everything isn’t going to suddenly stop functioning.
The world isn’t going to simultaneously stop producing oil either. But a lot of oil production requires electricity production. Also the refining and transportation process.
Quite, Chief.
I do not think that Ron has stated my view of the “problem” this way, so he may or may not agree.
First a note: I believe that everyone reading this post will be dead before fossil fuel unavailability [collectively, in any form] will be a huge problem.
My view of the “problem.” The history of humans has shifted from an emphasis of brute strength over intelligence/logic to a period now, when intelligence/logic prevails. In the US, Silicon Valley alone is minting 100’s, if not thousands, of millionaires every year under age 30.
But, if we do not find an adequate/better replacement for fossil fuels [nothing currently qualifies], the balance of power will shift back to brute strength [Think “Lord of the Flies.”]. My view [and Ron’s] is that the population will decrease. My view; the number of intelligent/logical people will decline at a rate of at least 5 times as fast as the brute strength people.
Caveat: Maybe the intelligent/logical people can accomplish 2 things first: (1) genetically alter babies in the womb so that all humans will be intelligent/logical. And (2), create affordable robots that can defend/eliminate brute force threats.
Note: I think that I see some signs that brute strength is starting to assert itself [ISIS, Russia, US, mass migration].
But, if we do not find an adequate/better replacement for fossil fuels [nothing currently qualifies], the balance of power will shift back to brute strength [Think “Lord of the Flies.”]. My view [and Ron’s] is that the population will decrease. My view; the number of intelligent/logical people will decline at a rate of at least 5 times as fast as the brute strength people.
True. You walk a straight line behind a plow, manhandling it around rocks, or you have no value.
And that will be that for women’s rights.
>>>And that will be that for women’s rights.
Darn it! Hope they still keep the birth control and yoga pants thing going though…
Watcher: I am not sure if it is “misery loves company” or if it is “nothing succeeds like flattery.” But, this might be the first time that you have agreed with me. Thanks!
clueless wrote:
“My view; the number of intelligent/logical people will decline at a rate of at least 5 times as fast as the brute strength people.”
I am pretty sure this has been ongoing even for over a decade. The SAT score had become absolute dismal in the past few years:
<b<SAT scores continue decline; 57 percent of incoming freshmen not ready for college
http://news.yahoo.com/blogs/sideshow/sat-scores-continue-decline–57-percent-of-incoming-freshmen-not-ready-for-college-001618038.html
Clueless wrote:
“I believe that everyone reading this post will be dead before fossil fuel unavailability [collectively, in any form] will be a huge problem.”
I find that difficult to believe. Sure there is plenty of Oil in the ground, but its going to become increasingly costly to produce. The easy oil has pretty much been consumed. Rising Oil prices will trigger demand destruction (perhaps this is already beginning). I have doubts that consumers can afford sustained oil prices above $100 bbl. Since 2008, Central banks have used QE and other financial gimmicks to prop up the economy which assisted in keeping high energy prices affordable by consumers via credit expansion (using borrowed money to finance consumption)
I also worry that Horizontal drilling has temporarily delayed declines at many aging fields. At some point its likely to cause higher global production decline rates, and probably cause some very severe oil shocks. Instead of slow and steady declines in older fields its held production rates above natural decline curves. There may be sudden production collapses in the largest aging fields with 10% to 30% declines in a single year.
The Middle East is becoming a disaster zone. Over population, religious zealots are creating severe stresses in the region. At some point these stresses are likely to start impacting ME production, and not in a good way. The Arabian peninsula is become engulfed in civil war (Iran, Syria, Yemen, etc). Its very likely that KSA will become embroiled in its own internal conflict in the not to distant future.
To summarize:
1. The Majority of global Oil production relies on oil, depleted fields using new tech and debt & credit to offset declines.
2. Oil rich regions, but with poorly educated people are becoming destabilized and falling into civil war (Middle East, Africa, Latin America)
3. Consumers will unlikely be able to afford expensive oil. and expensive oil is need to finance new field development (arctic, deep water, shale, and other non-conventional sources). Oil industry need Oil prices sustained above $120 bbl to slow future declines.
4. Insufficient resources committed to mitigation and lack of tech in alternative energy solutions (or too expensive for the majority of the population)
5. Destruction of low cost energy systems (ie coal) need to provide bridging for mitigation because of political movements over “climate change”
6. Aging labor force, and poorly educated younger workers, or lack of interest in “difficult” skilled jobs (such as energy development, infrastructure, etc). College education becoming too expensive.
7. Lack of realistic discussion about oil and gas depletion to the public, in gov’t and the media. It appears to be “deliberately” ignored.
Urgent report. Down 500.000 bpd the global production of oil in july.
http://seekingalpha.com/article/3477846-oil-production-vital-statistics-august-2015?isDirectRoadblock=true&uprof=80
“World oil supply fell nearly 0.6 mb/d in July, mainly on lower non-OPEC output. OPEC crude production held steady near a three-year high. As lower prices and spending cuts take a toll, non-OPEC supply growth is expected to slow sharply from a 2014 record of 2.4 mb/d to 1.1 mb/d this year and then contract by 200 kb/d in 2016.”
IEA Oil Market Report, 12 August, 2015
This is one of Peak Oil Barrel’s most whack threads yet.
A throwback to the daze of yore on TOD with the whole Country mouse vs. city mouse thang…
…and Watcher on point wearing his dark heart on his sleeve to the max:
“And that will be that for women’s rights.”
It must be a Monday and all the country mice are all hung over from the ‘shine.
This is one of Peak Oil Barrel’s most whack threads yet.
Yes, I think it mostly just buries the oil info which is the primary reason most of us are here.
There other places where people can talk about survival or doomsday scenarios in depth.
I suppose I should know better than add to the doomsday discussions, which I have been.
Hi all. To you people working every day in oil business. This last jump in oil prices, what effect will it have short term (1-3 months) if we stay around 50$ WTI? Anyone starting to drill? And do you expect anyone to hedge at this level or just leave it? Nice to see reality in the EIA stats finally come through. Think the drop will escalet hard the next months. And hey I live in a city, thats does not make me an idiot. Or at least not a mayor one. LOL
Many of you may enjoy an article about someone living in a home where all electricity usage comes from a single very small solar panel. I found his computer, media and other options to be quite creative. The link and a quote defining the entire scale of his electrical power:
http://arstechnica.com/gadgets/2015/08/op-ed-how-i-gave-up-alternating-current/
I am electrically self-reliant. My home life runs comfortably on a single 100W solar panel, which cost $150 and was available on Amazon Prime. I tracked down a few manufacturers in China who all said it costs around $40 to make. The US for some reason leverages massive tariffs on Chinese solar panels, so they ship them through Malaysian customs. Why do the politicians even bother?
For storage a $65 lead acid automobile battery does the trick. It’s 12V so can be charged directly from the solar panel, and holds 420Wh, way more than I use in a day. That’s $0.15 / Wh so I don’t see why everyone is so excited about Tesla charging $0.43 / Wh for the Powerwall, sans inverter and installation.
In 2013, the average annual electricity consumption for a U.S. residential utility customer was 10,908 kilowatthours (kWh), an average of 909 kWh per month. Louisiana had the highest annual consumption at 15,270 kWh, and Hawaii had the lowest at 6,176 kWh.
We already did this.
That’s from the EIA. Daily that is 30+ kWHrs, not 400 WHrs.
You want to dictate how people live, go dictate to some other country.
Watcher, I am not dictating to anyone. I just found this guy to be quite creative in finding a way for him personally to reduce his electricity usage. Don’t make assumptions about what others want or think. My significant other has a primitive cabin where this type of thinking might be quite useful.
Price my boy. That is how we do it in the you ess of ay. And the price goes up. It of necessity goes up if you include all the costs of its generation in the bill. Something we have never really gotten around to doing. We prefer to put the lions share of those costs off for future generations to deal with. Fine with me. I’ll be dead.
You want to dictate how people live, go dictate elsewhere.
Economics will dictate, which hasn’t dawned on a lot of people yet.
Incomes go down; costs go up. Lifestyles change.
His camp stove, soy milk bottles and (shipping of) new-instead-of-washed clothes are petroleum based.
Doesn’t sound very peak oil prepared to me.
Or all that inviting to women…
Average California household used 557 kWh/month in 2013.
http://www.eia.gov/tools/faqs/faq.cfm?id=97&t=3
Pretty easy to get that 18 kWh/day with about 3 kW of PV in Lost Angels.
There are some domestic manufacturers of PV panels, thus the tariffs to offset Chinese subsidies.
Watcher and sunnnv. I am neither presenting this example as a template that others must emulate or considering doing it myself when I am in the city. His 400 wh/day is literally about 3% of the average usage. It does seem to be a dirt cheap way to bring some modern conveniences to a primitive cabin.
I doubt that Rob Rhinehart will have any trouble attracting women. He is rich. He owns his own company. There are plenty of women who would find his values and passion to be quite wonderful. I have some relatively well off space science friends who refused to use their AC even when their home got to 85F inside. Beyond that I sincerely doubt that Rhinehart will have any trouble dealing with peak oil. The doomsayers are just too extreme.
http://rabett.blogspot.com/2015/08/coal-collapse-and-first-burst-carbon.html
“The last few months have seen major bankruptcies among American coal companies and the near-elimination of the market value for the rest over the last 5 years (another Hockey Stick, except mirror-imaged and with the stick part also tilted down). What hasn’t changed much is the amount of coal reserves these companies have. To the extent that these companies had been valued based on the reserves they own, usually the major component of their value, then the climate divestment argument that fossil fuel stocks are overvalued by a carbon bubble gets a lot of support. The market appears to be saying that a lot of that coal these companies own is now worthless and will stay in the ground.”
Further down, Eli Rabbet has:
“…and meanwhile the bankruptcy papers are shaking out some interesting connections between climate denialists and previously undisclosed coal funders.” which is a link to:
https://firstlook.org/theintercept/2015/08/25/coal-giant-bankruptcy-reveals-secret-ties-republican-dark-money-groups/
“Alpha Natural Resources, one of the largest coal companies in America, was a player in major congressional election efforts last year — but you won’t find records of their corporate donations on the Federal Election Commission website or in any public record.
You will, however, find signs of the Virginia-based coal giant’s secret political activities buried in a creditor document filed last Thursday. The recent downturn in coal prices and high debts forced the company to seek bankruptcy protection earlier this month.”
Well, I wonder what we’ll find when the oil companies go bankrupt.
How much have they given to climate change deniers?
What did they find with KIC-1, etc?
KIC-1
Kaktovic Inupiat Corporation #1, a test well drill in the Arctic National Wildlife Refuge back in 1985.
Brent went under $9/bbl in 1986, and oil was sub-$30/bbl for several years previous.
So it’s conceivable they didn’t want to develop it then. But when oil passed $100/bbl a few years back,
not a peep from BP or Chevron. Hmmm – “good luck, bad luck, Mukluk” – part 2?
dang bit-rot, original isn’t at aspo, fortunately the wayback machine saved it.
https://web.archive.org/web/20081006234637/http://www.aspo-usa.com/index.php?option=com_content&task=view&id=437&Itemid=91
Personally I believe the PRESENT perceived lack of value of coal in the ground is not due to a lack of conviction it will be dug and burnt but rather the PERCEPTION that the digging and burning of it will be delayed and taxed to a substantial extent- whereas the PAST perception was that it would be dug and burnt soon with only minimal taxes due.
While I do believe that a renewables based economy is technically doable, I also believe that a FULLY renewables based economy is a LONG way down the road, probably a century or more at least.
Now here is an interesting thing that escapes most people at first glance when it comes to the value of certain classes of assets.
A HIGH PRESENT DAY PRICE depends almost exclusively on the likelihood of being able to sell the asset for USE in the relatively near future. If anybody has any problems understanding this , then pull out the amortization schedule for a thirty year mortgage. A typical one has five bucks going to the principle and five hundred bucks going to interest. Basically what this means is that you can pay five bucks on the principal now and save the five hundred by wiping out the interest on the LAST payment- you finish up a month earlier.
What this boils down to is that money in the hand is a worth infinitely more to a business man that money ten twenty thirty years down the road. Noboby wants to hold a dead asset that long waiting for it to come to life –UNLESS he buys it DIRT cheap. Plus the buyer has ongoing expenses while he waits, such as property taxes, which SUCK UP ADDITIONAL CASH that could be invested elsewhere.
If somebody offered me a very nice very well built house that I would have to let sit empty for fifteen years before I could either sell it or rent it, I would not pay over ten cents on the dollar for it compared to an identical house next door that could be sold or rented within a few months.I would not pay even two cents on the dollar if that house had to be left sitting empty for thirty years.
Anybody who thinks easily accessible coal will NOT be burnt is in my estimation just abysmally ignorant of the realities of energy NEEDS and energy consumption.
The arguments made by the hard core doomers are BASICALLY correct. It is for this reason that I say MOST maybe nearly all the human race is going to die a hard death, barring miracles, within a century, as non renewable resources inevitably run out.
But it IS technically possible that a few people in a few places will be able to manage the transition to a MOSTLY renewable economy within that time frame and get by ok on the DREGS of fossil fuels and other non renewable resources while constantly learning how to get by with less and less non renewable resources..Such people MIGHT eventually succeed in going virtually one hundred percent renewable by making the necessary choices.
Such choices might involve setting up their population and industrial base in a place where both wind and solar resources are excellent plus at or close to a a really good hydro resource. Certainly they would use only minute amounts of actual fuel to get around in personal vehicles- although they would be able to afford enough liquid fuel to run essential vehicles such as trucks used to deliver food and maintain the infrastructure and that sort of thing. They might even eat a lot of meat- wild meat such as bison harvested on plains where damned few if any people live at that future time.
Given the cost of building a truck in terms of limited energy supply and a very low volume manufacturing industry, a truck would be built to be easily repairable for a century or more.
ALMOST nothing would be scrapped outright, almost everything would be reused and recycled. There would not likely be such a thing as a furniture industry in the sense of a factory employing hundreds of people pulling in components manufactured in dozens of other plants and boxing up furniture to be shipped to stores. There would be local small craft type manufacturers using lumber and screws etc to build furniture that is EXPENSIVE as hell compared to mass produced- but dirt cheap considering it will last for GENERATIONS.
Juice sucking advertising signs – non existent. Fast cars- maybe one or two for the sheriff and a couple of fast trucks for the fire department. Otherwise nothing on the road would go over thirty mph so as to damned near eliminate the waste of energy batting the air aside.
Canned and frozen food would come in more or less infinitely reusable containers. Food miles burnt up fetching a few days worth of groceries in the family grocery getter will be mostly eliminated by a kid running a route with a delivery van right to the consumers door. Fifty miles on such a van would eliminate five hundred miles on fifty different cars.
Working on the book. Not saying any thing along these lines WILL come to pass. But it MIGHT.
I don’t think Eli knows much about oil. His cousin Ebenezer is a bit smarter.
Warning: Oil post ?
The engine oil in my vehicle needs to be changed before the weather changes from hot to cold to freezing. It’s synthetic oil, the greatest development of the oil industry ever. Mobile One for lubricating the moving parts and comfort in knowing it will still go another 10 thousand miles.
You only need to change the oil in your vehicle every eight to ten thousand miles of driving, not 1500 miles like in the old days of plain old engine oil. Saves time and money, even at six bucks a quart.
When I drove my Suburban, I miss driving it badly, I could go 800 road miles on one tank of gas. It has a 42 gallon tank, one barrel in volume, and I never worried if there would be enough gas until it ran out and I needed some more. It’s an old horse and is now out to pasture. At two dollars per gallon way back when in 2004, it was what to drive.
If I want to go on a 400 mile trip, I’m not driving an electric car.
I’m filling the tank with premium gas so the ice will fire on all cylinders.and move down the road at 75 mph for several hours with no worries if I’ll make it there or not.
Oil at 45 is the bargain of the century.
The mechanic that has worked on my vehicles over the years always says to look both ways and buckle your seat belt. He’s seen too many wrecked cars at the junkyard next door.
Drive safely at all times. Coffee time.
If I want to go on a 400 mile trip, I’m not driving an electric car.
I agree, I will be going on a 400 mile road trip soon and I will be driving a tiny older model Brazilian made Chevrolet Corsa, 4 cyl 1.2 L engine, manual 5 speed, no power steering or AC, thing will easily cruise at 80 mph on the highway if necessary and it gets over 50 mpg. In a crash test it’s probably not a whole lot safer than a motorcycle but it keeps the rain off you… So yeah, I will be very carefully looking both ways at all intersections. I’m guessing that most people who have never lived outside the US and still drive SUVs would probably not want to drive or ride in such a vehicle but at the end of the day it still beats walking 400 miles… 🙂
Americans need to start wrapping their minds around the fact that they make up a mere 5% of the world’s population and use about 25% of it’s limited resources. My hunch is that the rest of the world is going to start putting more and more pressure on us to rethink our so called non-negotiable lifestyles.
When the President of the United States of America takes a road trip, it’s probably 12,000 miles in distance in a 747 that is topped off at 54,000 gallons of jet fuel.
The job of president has its perks and benefits. It is the toughest job on the planet. Nobody is ever satisfied with how you do the job, there’s always a critic complaining about what you did or didn’t do. If you’re the president, you will need to get away for a few days. A Boeing 747 is the way to go. You’ll be flanked by F18s, no need to worry about too much.
If it’s not Boeing, I’m not going!
I’m not going to feel guilty if I burn 25 gallons of gas on a short trip for business purposes.
If it’s not Boeing, I’m not going!
Boeing’s 747, going, going, gone…
http://www.bizjournals.com/seattle/morning_call/2015/04/the-end-of-the-boeing-747-could-be-coming-sooner.html
The end of the Boeing 747 could be coming sooner than we thought
Boeing did not receive any orders for the 747 last year at all, and has only a few orders for the planes so far this year. That’s only a few months worth of work for the Everett assembly line.
The 747s are likely selling for significantly reduced rates as the company tries to hold out the production line as long as possible. Reuters cites sources saying the jets are selling for about 50 percent less than list price, or about $400 million each.
US consumes 25% of world’s resources because dollar is the reserve currency, when that’s no longer true this equation will change pretty quickly.
Pound was the reserve currency for approximately 100 years, based on that I’d say US’s turn is coming up if we take end of WW2 as the start.
Fred said “Americans need to start wrapping their minds around the fact that they make up a mere 5% of the world’s population and use about 25% of it’s limited resources. My hunch is that the rest of the world is going to start putting more and more pressure on us to rethink our so called non-negotiable lifestyles. ”
All the answers are available already, we have no politicians with the real guts to do what needs to be done. Low mpg vehicles need to be phased out and taxed, high mpg vehicles need to be phased in along with the owners of high mpg vehicles getting tax breaks. Combine that with a liquid fuel rationing system and the problem of too little oil will go away as high mpg and electric vehicles take over. Americans can be told it’s a move toward energy independence, which it is.
So like Fred and others, get ahead of the curve with high mpg ICE, hybrid or EV.
You do NOT need to change your oil just because winter or summer is coming if you use a top quality pure synthetic such as Mobil ONE – which IS such an oil unless you buy a BLEND which is also marketed a little cheaper.
Synthetics are astounding bargains. My still working friends who are mechanics tell me that switching to synthetic lubricants has resulted in the trucks they work on going twice as many miles before they need rebuilds on the differentials, transmissions, wheel bearings etc.
If you buy a car with a well designed engine and take good care of it you most likely will NEVER drive it far enough for the engine to wear out, using a top shelf full synthetic, a half a million miles even. It will eventually fail though, due to leaky gaskets and such.
WELL DESIGNED and properly maintained ice auto engines are already good enough to last a half a million miles without WEARING out. I saw an older Volvo engine torn down recently that had over three hundred thousand miles on it that still looked new. Zero scuffing on the cams etc. Traces of the original cross hatching remaining in the cylinders. Bad head gasket.
Most auto engines these days however are not designed to last indefinitely, the manufacturers know cars are apt to be scrapped within twenty years for many reasons.
worth reading
http://www.resilience.org/stories/2015-08-31/europe-oil-consumption-peaked-2005
Lots of good data, plenty of good graphs all about historical European oil consumption.
We have a leading candidate for most misleading/ridiculous energy story of the year, which was linked on Peakoil.com:
New ‘Super Giant’ Natural Gas Field Could Be Straw That Breaks OPEC’s Back
http://dailycaller.com/2015/08/31/new-super-giant-natural-gas-field-could-be-the-nail-in-the-coffin-for-opec/
The 30 TCF number refers to estimated total (apparently dry) gas in place. Actual recoverable reserves will be a function of the actual size of the reservoir, the reservoir properties and the economics (especially total operating costs).
In any case, for the sake of argument, let’s assume an EUR of 20 TCF of gas. This volume of gas, presumably produced over many years to many decades, would meet total global gas demand for about two months or so.
I’m reminded of a 2009 Bloomberg column that discussed the outlook for Brazil, a net oil importer, “Taking market share away from OPEC.”
And so it goes.
The story was hypy from day one. Smells like it’s pointed at Russia.
I think this discovery is important for Egypt, which could become self-sufficient in the next decade.
But certainly it doesn’t change drastically the global balance
AlexS and all:
30 trillion cuft puts Zohr in a three-way tie for 19th place in the list of the world’s NG fields, at Wikipedia.
There have been some articles pointing out that Egypt having its own NG supply would have a fair impact on Israel’s plans to export the stuff from Tamar and Leviathan, its two new fields.
Synapsid,
30 tcf is 0.5% of the global proved reserves (6606 tcf, according to BP)
But 30 tcf is not proved, it’s preliminary estimate of recoverable resources.
For Israel, yes, that’s negative news. They hoped to export part of their production from Tamar and Leviathan to Egypt by pipeline.
Now, if they still want to export nat gas, they would need to build liquefaction capacity or build a costly pipeline to Turkey (which is also a politically vulnerable option).
I think the daily caller article was written by a person who thinks the word gas referred to gasoline. I do wonder if that gas has any co2? Egyptian oil fields are really depleted, they could use a lot of co2 if they can find a cheap source.
Re: Global Gas Production
The reason that I have spent so much time on crude versus condensate is that the conventional wisdom is that there is no evidence of any kind of peak in sight, and my contention is that this is manifestly false, in regard to actual crude oil production. And if actual global crude oil production has probably peaked, it’s when, not if, that we see similar peaks in global gas and associated liquids, condensate and NGL. In that regard, the global gas data (BP) are pretty interesting. Some rates of change:
2005 to 2010:
Global Gas: +2.8%/year
Global Gas, Excluding North America: +3.2%/year
2010 to 2014:
Global Gas: +1.9%/year
Global Gas, Excluding North America: +1.3%/year
Note that the rate of increase in global gas, excluding North America, fell from 3.2%/year for 2005 to 2010 to 1.3%/year for 2010 to 2014. And of course, “Net Export Math” works for both oil and gas (as well as for domestic food consumption versus production).
Of course, the shale advocates would argue that shale plays around the world will keep up us on an indefinite rate of increase in production, but global results have been disappointing in many areas, e.g., Poland, and high costs are a problem, combined with the very high decline rates.
In any case, what causes a peak is the inability to offset declines from existing wells, and therefore the higher the production rate, the closer we are to a peak, because the volumetric decline from existing wells increases in tandem with the increase in production (it’s pretty amazing that so few people are willing to admit this).
Jeffrey,
The slowdown in global gas production is due to slower demand growth rather that resource constraints
That’s certainly one possibility, but it looks (going back five years) like the Japanese LNG import price did not show a material decline until the second quarter of 2015, while 2011 through early 2015 showed a sizable increase in price, relative to late 2010:
https://ycharts.com/indicators/japan_liquefied_natural_gas_import_price
One of the most visible examples: natural gas production in Russia declined in the past few years due to a sharp drop in Europe’s gas consumption. As a result, Russia now has significant spare capacity.
Natural gas production in Russia and consumption in Europe (ex FSU), billion cubic meters
Source: BP
Of course, as we all know, the only truly global gas market is the LNG market, and here is an interesting report, with data through 2014:
http://www.igu.org/sites/default/files/node-page-field_file/IGU-World%20LNG%20Report-2015%20Edition.pdf
I assume that MT means million metric tons, in regard to LNG volumes?
It appears that one million metric tons of LNG is 49 BCF.
It’s 59 cubic feet of gas per gallon of liquid, 2.5 pounds per gallon of liquid. This is easy to remember : 59 & 2.5
I believe it might be of great interest if you would make your net export “6 country-case” or something alike on gas and coal.
Earlier this month Shell resumed Arctic oil exploration, yet state officials are saying it may not be enough to save TAPS, the 800-mile pipeline and Alaska’s economic lifeline for the past 40 years. Volume on the line, which funnels crude to Valdez in the south from Prudhoe Bay in the north, has declined with North Slope production during the past three decades. Flows are dropping 5% a year and have slid to less than 500,000 bpd from a peak of two MMbpd in 1988. The state has projected North Slope crude production will fall to about 320,000 bpd by 2024; this may turn out to be over optimistic. Any drop below 300,000 bpd will trigger a major change in operations, including smaller-batch shipments and extra pump stations to keep the line running: associated costs are unknown. Shell’s newly approved Arctic wells may not begin production for another decade.
I worked on the Slope (early seismic surveys) and, out of habit, have followed the story of the various reservoirs. This is the tale of a dying elephant or a giant elephant with a herd of siblings. Prudhoe Bay is (was) the largest oil field in both the United States and in North America. It is almost finished.
An excerpt from one of my previous posts:
Prudhoe Bay is (was) the largest oil field in both the United States and in North America. It is almost finished.
I’ve never understood the hurry in using up all that oil. It’s gone and there’s not another Prudhoe Bay to extend the good times. It’s like a lottery winner who blows through the money and then ends up pretty much back where he was before.
And I suppose the Mideast countries have realized that they, too, will be in the same fix if they haven’t figured out how to invest their oil money into something that sustains them when the oil is gone.
“It’s gone and there’s not another Prudhoe Bay to extend the good times”
I disagree. I think North Dakota area or hydraulic fracturing was the next Prudhoe Bay. They both have had a similar economic effect.
“I disagree. I think North Dakota area or hydraulic fracturing was the next Prudhoe Bay. They both have had a similar economic effect.”
That remains to be seen. Production from Prudhoe Bay began in 1977 when the Alaska Pipeline was completed. So we’ve seen almost 40 years of commercial production (so far) and over 17 billion barrels of oil come from the North Slope. Do you expect something equivalent coming from North Dakota?
Hi Doug,
Rather than just North Dakota if we consider all US LTO output in the onshore lower 48 we might surpass North Slope output, with 8 Gb from the Bakken/Three Forks, 8 Gb from the Eagle Ford and maybe 4 Gb from the Permian Basin and other plays for a total of about 20 Gb.
This will depend on oil prices in the future going back to $100/b (by 2020). If oil prices remain at $50/b or less long term, then US LTO output will be much less than North Slope output.
As Watcher likes to point out, I do not know the future oil price.
Rather than just North Dakota if we consider all US LTO output in the onshore lower 48 we might surpass North Slope output, with 8 Gb from the Bakken/Three Forks, 8 Gb from the Eagle Ford and maybe 4 Gb from the Permian Basin and other plays for a total of about 20 Gb.
There’s really that much accessible oil there? And it can be gotten out at $100+ a gallon? I mean, I have tried to follow the discussions, but I have thought with decline rates being what they are, these aren’t especially good long-term plays.
Hi Boomer,
If USGS and David Hughes estimates are correct for Bakken and Eagle Ford and oil prices are between $100/b and $150/b in 2015 $ (rising to $150 after 2020), then the economics will work. Other plays such as the Permian, Niobrara and other LTO plays are a guess, but for the Permian we have seen about a 3 Gb increase in proved reserves since 2008 and my guess is that much of that is LTO, 2P reserves (proved plus probable with a 50% chance of reserves being higher) would be about 40% higher or an increase of 4 Gb of 2 P reserves.
If oil prices rise these are conservative estimates, remember that Jean Laherrere’s Bakken estimate will only be correct if no more wells are completed after June 2015. Existing wells will give us a URR of more than 3 Gb in the Bakken/Three Forks unless there is a near term economic collapse (before 2040) that shuts down all oil output ( a highly unlikely scenario in my view).
Okay, so that brings me back to a reason I started reading this forum in the first place.
If the Bakken is going to provide the equivalent of Prudhoe Bay, why were drillers wanting to move next to communities in other states that didn’t want fracking on their doorstep?
If there is so much available oil in a state that wants them there, why try to drill so many states all at once?
Hi Boomer,
In a lot of those other states they are drilling for natural gas, it is not clear why they keep drilling in Pennsylvania and Ohio at these very low prices, nor is it clear why drilling for oil continues at under $50/b. It may be a game of last person standing.
It’s always a question of oil price expectations. I never saw a company approve a project on current prices. I bet the ones with solid financials are using $80 per barrel. For what they consider very long term projects they may be using $100 per barrel. And a couple of them don’t use the discount factor methods you are used to seeing. They use a method which yields a better answer than a standard pv calculation.
Hi Fernando,
What do you mean by a “better answer”?
More accurate? I have no doubt that with more information a better model could be devised, the information I have access to is very limited, and of course I do not know the price expectations of various oil companies. The fact that they continue to drill new wells suggests that they believe oil prices will increase in the future.
In addition, if they are focusing on the sweet spots, then they may use a higher well profile than the average well profile that I use (which reflects the average wells from 2008 to 2014).
I was thinking more about drilling for oil. Next to suburban communities.
As I have said before, I’ve never understood the urgency in using up oil (especially US oil) as fast as we can find it and pump it. We will hit a point, sooner or later, when we’ll wonder why we didn’t use it more wisely so it would last longer.
If the Bakken has so much oil, then I don’t see any urgency in drilling in places where citizens are trying to stop or slow down drilling projects. There could come a time when we’ll need that oil, but as long as the Bakken is producing enough, why pressure citizens in other areas to let drilling in places they don’t want drilling?
Is it a case of “not in my backyard”? Yes, definitely. But as long as we don’t need that backyard, why drill there?
I think North Dakota area or hydraulic fracturing was the next Prudhoe Bay. They both have had a similar economic effect.
Fracking allowed the country not to think about peak oil for a bit, but North Dakota’s longevity for producing oil won’t be very long in comparison.
Both Prudhoe and North Dakota have reversed U.S. production decline, lowered oil price and have allowed the country not to think about peak oil for a bit.
https://en.wikipedia.org/wiki/Bakken_formation
Bakken- “Various other estimates place the total reserves, recoverable and non-recoverable with today’s technology, at up to 24 billion barrels. A recent estimate places the figure at 18 billion barrels.[7] In April 2013, the US Geological Survey released a new figure for expected ultimate recovery of 7.4 billion barrels of oil.”
“Various other estimates place the total reserves, recoverable and non-recoverable with today’s technology, at up to 24 billion barrels. A recent estimate places the figure at 18 billion barrels.[7] In April 2013, the US Geological Survey released a new figure for expected ultimate recovery of 7.4 billion barrels of oil.”
Okay, you oil experts. Is this accurate or boosterism?
Boomer, no one knows for sure. I just copied and pasted it out of Wikipedia and gave you the link.
Hi Boomer II,
The high estimate is not accurate, the low estimate is also incorrect. The USGS estimated the undiscovered technically recoverable resources(TRR) of the Bakken at 7.4 Gb in April 2013. In December 2012 there were about 3 Gb of proved reserves (4 Gb of 2P reserves) in the North Dakota Bakken and about 0.5 Gb of cumulative output. These need to be added to undiscovered TRR for a total TRR of 11 Gb. Now we need to add in the economic assumptions to see how much of the TRR can be produced profitably to find the economically recoverable resources (ERR). That depends on many assumptions including future oil prices which are unknown. At higher oil prices (above $100/b) the ERR is likely to be 8 to 9 Gb for the ND Bakken/Three Forks. David Hughes has estimated about 8 Gb for the Eagle Ford in Drilling Deeper. See Eagle Ford section of report which can be downloaded at link below. Note that David Hughes makes the same mistake as the Wikipedia article in thinking that the USGS estimate is for TRR rather than undiscovered TRR, I have made the same mistake in the past myself, but was corrected by Robert Rapier.
http://www.postcarbon.org/publications/drillingdeeper/
Somebody has been inflating the Wikipedia pages.
News Flash:
Dead Cat Bounces
Not an Oil post:
Maybe I can get Amazon to deliver fresh eggs to my compound via mini-drone.
A new service from online retail powerhouse Amazon.com will deliver herbs from Maggie’s Farm, Mangalitsa pork from Peads & Barnetts and black cod from Wild Local Seafood — direct to your doorstep with just a mouse click.
Amazon has rolled out its new Farmers Market Direct program in Southern California, in partnership with Fresh Nation, a start-up in Stamford, Conn., that launched in 2013.
Fresh Nation has begun delivering farmers market products through Amazon in Los Angeles, Orange and San Diego counties. Amazon is trying the service first in the Southland and will expand to New York City in a few weeks before deciding whether to roll it out elsewhere.
http://www.latimes.com/business/la-fi-amazon-farmers-markets-20150901-story.html
Fresh Nation was started by farmers market professionals with a single goal in mind: to increase access to fresh local food for people who are not able to attend their local farmers market.
https://freshnation.com/
I would guess first day of month was last night’s close. So mission accomplished on that BS.
Conoco is firing 10% of global workforce.
There are whispers Super Mario may increase the ECB’s QE program from its present 1 Trillion Euros (ending Sept next year) . . . to more.
They would get more out of it if they created the expectation of more QE and drug it out over a long period of time creating lasting downward pressure on the Euro than actually pulling the trigger on more QE. I think they will hint at it but no actual go. Markets won’t like it they need their next fix from somewhere.
Mario can’t blow the load until after Greek elections. Need Dry powder an shit just incase the outcome of elections is not what ECB desires.
Oil will probably have a large red day after ECB concludes it’s post meeting statement.
Just locked in my natural gas cost for the year 11/15 thru 10/16. $3.75 mcf vs $5.35 mcf last year. This is only the “fuel” cost part of the bill. They have a service charge of about $30/month. Location: OKC, OK – OK Natural Gas Company. And, note that every city has a city gate price that is different than the Henry Hub [Louisiana] nat gas futures contract settlement price location.
Oh, been meaning to ask.
RE: Chokes.
The theory is open choke reduces EUR. It’s done for near term survival. Of the driller.
Since it is a less than optimal or even “harmful” procedure, why can’t the royalty owner sue?
Watcher
In Texas, when a mineral owner (Lessor) executes and OGL, he/she has sold the mineral rights for the term of the OGL to the company (Lessee).
A Lessor does not have operational control or even imput on how a well is drilled, completed, or operated. Unless contracted for in the OGL, a Lessor is not even entitled to receive any information from a Lessee except for perhaps minimal production information for royalty payments.
A lessor cannot sue for low EUR because he doesn’t own the minerals. How/she gets his royalty which is a percentage of the EUR whether it is huge or tiny.
Conceivably, anyone can sue for anything, but the burden of proof for damages will fall on the party claiming damage. Most Lesses simply don’t have the deep pockets necessary to file a lawsuit. Contrary to popular opinion, lawyers rarely work for free. Damages have to be proved and most litigation takes years to be resolved.
There are reasons to sue for gross or willful negligence but those issues are almost impossible to prove except for personal injury or loss of life.
thanx
Jeffery Brown or whoever else?
I hope I can correctly express this thought.
Have you ever tried to model the amount of oil that is available for import?
If I am understanding your export models, you are showing that production available for export is reduced by the exporters internal consumption.
But what about oil that is not available for a country to import?
I am making an assumption here that much of the world’s oil import / export is controlled by long term contracts.
So what about oil production that is already contracted from producer to end user? It would seem that this oil is no longer available for another end user to import?
I was thinking about this wrt sanctions on Iran but also for supply contracts to say China as I think I understand that they are trying to lock down production for Venezuela.
So for the US, if a producer has a supply contract to another country, then that oil is not available for import to the US.
Am I making any sense here?
I suppose if a county has long term agreements to buy certain volumes of oil imports, at a specified price, then theoretically that oil would not be available to other importers, but if their demand fell below the volume of oil for which they contracted, they would simply sell the excess oil on the open market, or renegotiate the contract.
But given all of the variables, I prefer to make it as simple as possible, and following are the mathematical facts of life regarding net exports, which are not statements of opinion, but are instead statements about mathematical certainties:
Wyoming ethanol plant to suspend operation
http://www.manufacturing.net/news/2015/08/wyoming-ethanol-plant-to-suspend-operations
“The only ethanol plant in Wyoming will shut down because it can’t compete with lower gasoline prices, an official says. …”
“Wyoming has subsidized ethanol production since 1995, but the 2013 Wyoming Legislature decided to end the tax credit this year.
However, Oldfield told the Torrington Telegram that the loss of the tax credit was not the deciding factor in closing.
“I won’t say that losing the tax credit didn’t hurt us,” he explained, “but we could have survived if petroleum prices hadn’t also dropped.””
Change of subject. oily if not oil.
I have tried REALLY hard to understand all other explanations for things I hear, no matter the topic, if for no other reason than to find the blind spots in my own thinking.
I have read a whole boat load of explanations that supposedly explain the price of oil. So help me Sky Daddy I just can’t get any of them to make as much sense as plain old supply, demand, and price theory as it was taught to me in the Dark Ages in Econ 211,221 and 231.
Keep in mind that the theory is a ”snapshot” theoretical examination of a constantly changing world.
Any grad student teaching this basic course is extremely careful to point out that ”supply” can be manipulated in many ways, some of these being cartels, monopolies, environmental regs, taxes, etc. He will also be careful to point out that so called demand , which ordinarily ought to be called consumption ninety nine percent of the time in real life, can likewise be manipulated in many ways. Easy credit, all the things mentioned affecting supply apply to both supply and consumption.
Physical realities such as depletion affect supply, competition affects supply, substitution affects consumption, no body who thinks at all denies any of this.
Now SOME factors affecting consumption can change pretty fast. A product can be outlawed or legalized, taxes can be raised or lowered, an improving or declining economy can boost or cut consumption sharply and quickly in the case of some goods. But most of the time consumption changes fairly slowly. It took a while for cell phones to REALLY start cutting into land lines.It took a while for electric typewriters to really cut into the market for manuals, and a while for computers to cut into the market for electric typewriters. Such changes in consumption patterns are usually measured meaningfully in years and decades rather than months.
Some factors can affect consumption only rather slowly. A GIVEN cook can substitute pork for beef to save money in extremely short order, or go back to beef just as fast. The producers of beef and pork can adjust production to the price signal but this takes from many months to a few years because multiple factors can be in play all at once. The collective consumer cannot substitute pork for beef effectively in a period of a few months because the necessary pork does not EXIST. Getting pork production up – or down – noticeably takes a year or two, absolute minimum, rather than a few months.
At individual can buy a gas sipper or a gas hog at will but the driving public is NOT collectively able to buy and sell vehicles in such a way as to change the overall composition of the automobile and light truck fleet noticeably from one year to the next- significant change, really noticeable change, takes at least four or five years or longer.INDIVIDUALS can change their lifestyles dramatically in very short order by giving up a car or taking up driving. The general public CANNOT. Significant changes in life style across the citizenry takes a while , a few years at least. Decades most of the time.
Oil producers are not able to change production at the individual company level very quickly for dozens of reasons that have been well explored in this forum so I will skip over this and simply say an oil company can’t move very fast, on average. Changing production at the company level out put either up or down very much takes a year or longer-EXCEPT of course in the case of well heeled national oil companies that have the luxury of just shutting in production by decree or ramping up production by decree if spare capacity is available. VERY few oil companies are exactly ” well heeled ” these days. ENOUGH oil companies,including most national oil companies, are in such a hell of a bind for cash that their actions are dictated by circumstance; they are necessarily REACTING rather than being PROACTIVE.
Even if a company WANTS to cut production based on day to day operating costs exceeding day to day income, the company is is often compelled to maintain production for various reasons.Even the owner of a stripper well, a one horse operator, might find it cheaper to produce at a loss from month to month than to shut in his well, depending on what effect that will have on the well and what it will cost him to close it permanently. If it is leased he may LOSE the well by failing to produce it.
In the sense that there is competition among farmers, given that there are millions of farmers, there is not much competition among oil producers since they are relatively few and some of them control substantial chunks of total production. ( Even the biggest farmer in the USA controls only an exceedingly minute percentage of corn production for instance.)
BUT competition between oil producers is never the less brutal and cutthroat and the bigger guys with deeper pockets are ready, willing, able and EAGER to run the little guys out if they can. Even producers with plenty of assets to weather low prices feel compelled to continue to produce at a loss sometimes, given that the income is immediate and the NEED for the income is pressing, an example being a national oil company that is losing money long term but compelled to provide revenues short term to the government that owns it. Losses can be kicked down the road sometimes, to be dealt with later. Short term revenues are often critical to short term survival. So oil that in total costs maybe eighty bucks to produce gets sold for fifty or less. Cash flow can and often does trump profits.
Now lets take a look at CONSUMPTION from the consumer end. Hardly anybody at all, excepting a few farmers and contractors and government buy physical oil well ahead of the expected consumption date. Hedging, yes, physical possession of hundreds of thousands of barrels, absolutely not. Not even airlines and major trucking companies keep oil on hand in such quantities.
So- the everloving public buys as much as it HAS to have, at any given time, no matter the price. Given that using more than usual requires a change in the lifestyle of the individual, an individual can buy an F250 if he wants one and can pay for it, but the public as a whole is busy as hell and UNABLE to use very much extra oil in the very short to short term. In the medium term, over a few years, the public can use a lot more oil. It CANNOT, over a few weeks or months. Change in consumption takes more time than that.
Now competition virtually guarantees that there will be oil for sale virtually everywhere, barring something happening geological or political to prevent it being produced and delivered.
The public at large, the world at large, will buy so much and so much only, buying maybe a LITTLE more if it is dirt cheap, or a LITTLE less if it is very expensive, in the SHORT term. There is no way to deny this conclusion so far as I can see. By short term I mean weeks, months, maybe up to a year or two, at which point the short term starts shading into the long term.
NOW let us take a look at the supply side of the oil question as opposed to the consumption side. We know the industry is a slow moving, slow changing industry and that competition can be as cutthroat as cutthroat can get.
Solvent producers are sometimes locked into producing in the short term at a loss by technical, economic and regulatory considerations. Insolvent producers are trying to scrape every dime out of the wreckage before appearing in bk court. The big boys hate each others guts but they will SOMETIMES warily cooperate in an effort to control production and therefore manipulate the price. Sometimes they do their damnedest to run each other out of business and the winners scoop up the assets of the losers at fire sale prices.
Substitution and improving efficiency DO impact consumption, but only slowly, not noticeably in a matter of months or a year, but such changes have huge impacts cumulative impacts over periods of five to ten years or longer. Hard times can result in consumption being INVOLUNTARILY reduced dramatically if times are hard enough. A yankee with a job finds a way to buy gasoline enough to get to work but an Italian without a job may have no choice but to give up driving altogether.
What all this boils down to is that the world’s NEED for oil changes only slowly, meaning from year to year rather than from month to month, and that the world’s DESIRE for oil changes only a little faster, because even consumers with the disposable extra income need time to change their ways and start spending that income on oil.
Painting with the proverbial broad brush, oil consumption is bounded by practical considerations up or down in a rather small range , up or down a couple of percent at the most, in the short term.A REALLY bad economic downturn can reduce consumption a little more but the economy is not in a REALLY bad downturn looked at over the last few months compared to a year or two ago.
Producers after failing to increase production of conventional crude over the last ten or twelve years while the price went up five times DID finally manage to increase the production of OIL SUBSTITUTES and non conventional oil enough to supply more than the world REALLY wants starting a little while before or at the same time the price crashed. Reductions in actual consumption due to the economic flu and substitution and improving efficiency and changing lifestyles also cut sharply into per capita consumption over that same time frame of course.
Hey guys, it takes only a LITTLE BIT more production than needed to FLOOD a lot of markets and bring on a price crash.Farmers have been dealing with this problem more or less forever. A GOOD year in the field for orchardists always means a LOUSY year at the bank. Ten percent too many apples,from the producers pov, means the price crashes by half or more wholesale.
The so called demand ( this sentence uses the word correctly which is a rare occurrence ) for oil is even more inelastic than it is for apples and just a couple percent too much ( from the producers pov ) can result and HAS resulted in the price crashing by half.
We don’t need no stinking conspiracy theories to explain the oil price crash.
Basic common sense explains it in a perfectly satisfactory manner. Supply has temporarily out run consumption with the result that the price has crashed and some oil is going into storage.
ENOUGH oil will be coming off the market pretty soon because it costs more to produce it than it is selling for to force the price up again, but the producers are not in a position to close shop like a one horse restaurant operator who can just empty the cooler into a dumpster and lock the door and walk away.
By pretty soon I mean within a year or two max barring the world economy being bedridden. Probably sooner but I am only acquainted with the broad outlines of the industry and know only what I read in forums such as this one about how fast things can change in the oil patch. Obviously enough a year is not enough to get the ”excess” oil out of the market or it would show more signs of being gone already. But production IS turning down pretty fast among some high cost producers and my guess is that prices will go up again within another year.Depletion will be taking some legacy oil off the market too of course. A LOT of legacy oil. But new conventional production in the pipeline for the last few years will also come to market. So how fast production can or will decline is anybody’s guess.
Oil will go up again, probably very quickly in historical terms, but a month feels like forever to people losing their shirts.
But to hell with all the fancy theorizing about the reasons why the price is down.
None of it is needed.
There is simply more oil plus oil substitutes coming to market than the consumer wants at the former, higher price. The consumer will buy it all at the new lower price. When supply shrinks a little , the price will go back up- assuming the collective consumer can pay it and has not yet had time to change his oil consuming ways.
You feed really expensive milk to your little kids only. As the price goes down, the older kids and adults get milk. If the price goes down far enough, the cat gets milk too. My grandparents used to feed some surplus milk to the family pigs on a regular basis when the cows were ”fresh”.When they were ”dry” my parents bought milk at twice or three times the farm price for me and my siblings at the store.
In my opinion, commodity prices/pricing is well understood by very few. People cannot understand why prices can double or triple in a short period. Or, that they can drop by 50% or more in an instant. They think that gasoline service stations are price fixing if they are across the street from each other and have the same price.
I look at it like game theory. Suppose you are playing musical chairs with 20 people. A person without a chair is killed. But everyone knows that there are 21 chairs. How much would you pay to guarantee having a chair? Probably zero. But, take away 2 chairs, now how much would you pay?
When does the owner of an ambulance service say: “Gas just costs to much. I am not going to buy any at that price.”
Exactly my thoughts as well Clueless. It is further complicated by the fact that the participants are contemplating the future number of chairs all the time, and the corresponding current value. The large swings don’t bear any relation to the inherent production cost or value of the product. Media talking heads of course don’t accept this, and will come up with all kinds of reasons behind each swing, as that is what people are looking for.
Well I just found this website a few days ago so I guess I’m one of the newer guys here, but I’ll tell you this, most Americans (myself included) do not need to know or care about the price on a barrel of oil. What we really need and want to know instead is the price of a gallon of gas and additional information such as whether or not the price is going to go down, how long can we expect it to stay at a reasonable price, when all the widespread gouging will stop, etc.
This is because driving is an absolute necessity which simply cannot be given up for the vast majority of people. The media seems to think otherwise, but I know I just don’t care if the oil company has to work for a living, how they have to work for a living, or if the equipment they are using is good, not so good or in need of repair. Why do I need to know anything about how the gas company’s refineries operate? Why is it so important to tell me about a ca-zillion something barrels of oil in storage and how it may or may not have any effect on the price per gallon when I fill up my pickup?
The ordinary person doesn’t give a you know what about some gas company having to fix what breaks, or changing over from blend to blend. We only want to know why the media continues to find it so important to keep on writing crap about oil that has nothing to do with the price at the pump! It’s long past time for the reporters to just do their flipping jobs, investigate why the gas companies keep the price of gas at the pump at inflated prices way beyond what is reasonable, and leave all the story telling to the novelists already!
We only want to know why the media continues to find it so important to keep on writing crap about oil that has nothing to do with the price at the pump! It’s long past time for the reporters to just do their flipping jobs, investigate why the gas companies keep the price of gas at the pump at inflated prices way beyond what is reasonable, and leave all the story telling to the novelists already!
I don’t believe this forum has ever been directed at the average consumer. But you have a point about reporters. Maybe they should be reading this to better understand what they write about.
Hello Ben,
Ordinary people also die broke, believe in God, eat at McDonalds and shop at Walmart. I’ll pass.
Here is what is going to happen Ben. The price of gasoline may stay low for a while, the longer it stays low the worse off we will be in the long run. Gasoline will rise in price and it will stay high for a while and be interrupted by recession. After that it will be a race between demand and production. Demand will ease then fall but we are talking a decade here. Eventually there will be little demand for gasoline and little production.
If driving is so important, be prepared to pay anywhere from $2 to $6 a gallon to achieve that driving over the next five years.
Ben you are REALLY good at satire or as ignorant as a fence post.
It costs a hell of a lot to produce, refine and ship oil products and the tax man takes a good sized bite every step of the way.
Nobody is getting gouged with oil products at anything like current retail prices.
Now as to not being bothered knowing WHAT IS GOING ON, NOT knowing something about the hows and whys involved in an industry and not even giving a damn———–
– WELL NOW, that attitude is just about PERFECT when it comes to setting yourself up to get gouged. You can get the holy shit gouged out of you without even realizing it- and you can be getting a world class bargain even as you rant about being gouged.
I filled up today for two ten a gallon. Peanuts considering average incomes and wages these days.
That’s a lot man hours of energy for $2.10
Ben – I guess that you fully understand that the cost of gas to drive a mile today is cheaper than in 1960. In 1960, you could get a gallon of gas for $.20. Inflation [overall consumer price index] now makes that number about $1.70 gal to be equal. But, in 1960, your gallon would get you 10 miles. Today it will get you 20 miles. So, in today’s dollars, and using today’s fuel economies, would be the equivalent of paying at least $3.40 gal in 1960 for transportation.
With respect to a barrel of oil. Connect the dots. In effect, you want to say you do not want to know anything about what a ceder tree costs. You just want somebody to explain the cost of an 8′ ceder 2×4 without discussing the cost of the tree.
And, with gas, the taxes probably average $.50 gal nationwide, not an insignificant % of the total cost.
I will go out on a limb (not very far) and guess that you really do not give a damn about, oil costs, profits, taxes, transportation charges, refining cost, etc. YOU just “want” to pay a price, determined by YOU, that YOU want to pay.
Ben,
As humans have replaced manual work through machines – and machines need energy – oil and gas are the most important inputs into an economy. This is especially true for the US, which is one of the biggest energy consumers and importers in the World. Five years ago the US had energy imports of over 400bn USD per year, which seriously threatened the competitive position of the US economy through a weak currency. You can imagine how urgent the situation was, as the wars in Afghanistan and Irak were an attempt to secure oil imports. However around 2005 policy makers switched strategy by changing the Clean Water Act enabling a method called fracking using enormous amounts of water to pump oil and gas to the surface. Thus the US has been able to reduce oil imports by half. This had serious consequences on the competitive position of the US as the energy imports shrank to below 200bn USD per year and the USD strengthened. Everthing seems to be ok now, except that fracking is a very expensive method and it is still an open question, if fracking can be a sustainable energy source over the long term. There is very much at stake for the US economy and the media attention is justified.
Ben Ramnes, the media covers the price of oil because a portion of the audience does pay attention to that particular item.
The media needs to capture the attention of a number of individuals to justify their advertisement rates. This is why some segments focus on oil prices while others discuss whether Orlando Bloom and Justin Beeber got into a fist fight in Ibiza.
If you stick around we will teach you to worry about oil prices, and you will also learn other factoids.
When oil was being drilled like mad down in Texas way back when when Spindletop was gushing 75,000 bpd, the price fell from two dollars per barrel to the bargain basement price of three cents per barrel.
Just be patient and it will drop in price some more.
The books I have say oil went down to ten cents rather than three during those crazy days but why quibble over a mere factor of three in the price?;-)
They also say water was anywhere from a dollar to three dollars a barrel in the oil field at that time.
Allan S. Christensen’s blog From Filmers to Farmers has a link to this site. Word gets around.
Peak Oil Ass-Backwards (part 1): Peak Oil, Meet Fractional-Reserve Banking
http://fromfilmerstofarmers.com/blog/2015/september/peak-oil-ass-backwards-part-1/
Hi EZ Rider,
It seems perfectly logical to me that the debt spiral cannot continue forever.I don’t know of anybody with a functioning brain who thinks it can, but economists seem to believe that it CAN so continue, at least in theory ,forever. In economic theory I agree. In reality no way in hell. .
We DO know that growth per capita and total growth CAN continue for some period of time even with a fixed or shrinking energy supply- so long as the energy supply is shrinking S L OW L Y. Per capita peak oil is many years in the mirror now and growth has continued right along, helped along by the expansion of credit.
To hell with theoretical considerations, most of us in this forum seem to understand them well enough.
What I want somebody to tell me is how much longer it will be before the music and the merry go round grind to a halt. Been expecting it any time for a LONG time.
Does Old Man Business As Usual have a few more years left? Your guess is probably as good as any, mine likewise.
For now I am guessing another ten to twenty years before the US economy crashes REALLY hard but I would not be too surprised if the whole house of cards crashes THIS year.
ONE thing that might comfort some people and let them sleep better is that fractional reserve banking is not the ONLY banking system possible.
IF things go entirely to hell in a hand basket, debt wise, the federal government that in essence CREATED the current system (Notice I did not say INVENTED it, but rather mean to say put it in place via law and regulation) can toss it out the window if congress and the executive can get together and create a new system.
All the PHYSICAL assets that all that money is owed on will still exist if it disappears. The intellectual and human energy capital will still exist too. The only real question in my mind is WHO will OWN all the physical assets once the dust settles from a nuclear financial collapse.
Money can be created by printing it as well as loaning it, and in my opinion WILL be printed , AND circulated, both electronically and physically. The only real reason I can see why money should not simply be printed by congressional orders is than it might be printed TOO FREELY. Loans have been made too freely too.
If just the money paid to social security recipients alone were printed in the form of twenties and hundreds there would be a HELL of a lot of cash around in very short order..
As a matter of fact, there is no theoretical reason I can see why the federal government has to collect taxes at all, except to keep businesses and individuals very roughly all paying something towards the common expenses of the country. Uncle Sam could collect less taxes and simply print the difference needed to pay his bills. Soon enough there would be PLENTY of actual cash sloshing around to take care of debts being repaid WITHOUT the necessity of eternal growth.
THE problem is NOT money and debt, not in the last and true analysis. Money is only a measuring device and marker system to keep up with the ownership of things real and imaginary, and allow people to conduct trade without having to deal with a clumsy barter system.
The REAL issue is of course RESOURCES.
Money can be finessed, for a while yet at least. PROBABLY.Maybe? Who the hell knows?
And so can resources, because we have ways of doing more with less year after year. The lighting industry in the USA has so far converted less than three percent to the new cheaper and more efficient LED lights. You will be able to buy a VOLT this fall that costs no more than a Camaro which will use less than a third as much gasoline as the Camaro under average conditions.
So barring mismanagement and bad luck we probably have another decade or two.
The bleeding continues in the Canadian oil and gas sector.
Oil giants try to stay afloat with hundreds of job cuts, slashed spending
Major companies in Canada’s energy industry are making another round of deep staff cuts and further shrinking their spending plans as oil and gas players scramble to stay afloat as the year-long commodity rout continues.
Regulator in Canada’s Alberta shuts in 95 Nexen pipelines over “noncompliance”
By Mike De Souza, CALGARY, Canada , Sat Aug 29, 2015 2:02pm EDT
The article is badly written or edited. I noticed the editor is Russian? It shows. There’s no such thing as 95 pipelines in that property. The right word is “flowline”,
Nexen expects Long Lake oil sands shutdown to take two weeks
By Mike De Souza and Nia Williams, Reuters, Tue Sep 1, 2015 10:16pm BST
KSA vs civil war in Yemen.
http://www.janes.com/article/53865/yemeni-ballistic-missile-attacks-continue-against-saudi-arabia?utm_campaign=PC6110_E15%20DF%20NL%20Land%2009_01_15&utm_medium=email&utm_source=Eloqua
interesting times!
Old Lodgeskins speaks:
“Come out and fight! It is a good day to fight. A good day to die!
“Thank you for making me a Human Being…Thank you for helping me to become a warrior. Thank you for my victories…and my defeats. Thank you for my vision and the blindness that helped me to see further.
“Now you have decided the Human Beings will walk a road that leads Nowhere…I am going to die now, unless Death wants to fight. And I ask you one last time to grant me the power to make things happen…”
“Grandfather?”
“….Am I still in this world?”
“Yes, Grandfather.”
“I was afraid of that…well…sometimes the magic works. And sometimes it doesn’t. Let’s go back to the teepee and eat.”
http://www.canyoncountryzephyr.com/oldzephyr/april-may2005/reelwords.htm
‘Let’s go back to the teepee and eat’ translates to business as usual.
No collapse, the ponies are still there to ride.
Except for General Custer, he experienced collapse. The magic didn’t work for George.
Business as usual stopped abruptly on June 25, 1876 for George A. Custer.
The anticipated consequence of the “dumbbelling” of the crude supply and increasing vehicle fuel efficiency.
Refiners face decade long global gasoline glut
Wood Mackenzie, News Release, 24 Aug 2015
On the vehicle fuel efficiency topic… the new Ford F-150 (the best selling vehicle in North America, not just the best selling pick-up) is 20% more efficient than previous year. It occurred to me though that a loyal F-150 owner would probably be replacing his truck when it was more like 8 years old.
So from NRCan’s Fuel Consumption Ratings Search Tool from the Office of Energy Efficiency
The combined consumption of the most efficient 2007 F-150 was 14.8 L/100km.
The combined consumption of the new 2015 F-150 was 10.8 L/100km.
The 2007 F-150 uses 1.37 times as much fuel as the new F-150.
Engine designs have really changed the past few years. The 2007 F-150 has 4.2L, 4.6L, and 5.4L engine options. Note the 2015 F-150 has two engine displacement options – a 2.7L (161 cubic inch) and a 3.5L (213) cubic inch) – those engines would barely run a Ford Pinto in another era. The power of direct injection, variable valve timing, and turbocharging.
F-150 sales in August vindicate Ford’s pickup overhaul
By Alisa Priddle, Detroit Free Press 8:38 p.m. EDT September 1, 2015
The question is how many of these buyers were replacing an older F-150?
A large part of the popularity of the F150 is that it has over the years proven to be unusually reliable and durable. You seldom see one scrapped unless it is very ragged out and very high miles unless it is over twenty five years old.
Older ones traded in on new ones will still be on the road for a long time.
Being real light duty trucks mean they last better than cars and since most of them are mostly used as passenger cars most of the time, it should not surprise anybody that they last a long time.
A while back somebody here published that the f-150 as usually sold had 4 times the life cost and 4-5 times the carbon footprint of my leaf. And at this moment, I can get 3-4 used leafs for the usual f=150 sale price.
and, as you say, both of them are mostly used for the same little diddly errands.
Any country with that kind of priority is a hell of a long way from any sort of energy/economic hurt.
My dead former best hard core red neck conservative friend used to say that anybody who thought the country was experiencing hard times was a xxxxing idiot so long as sugar water (his euphemism for soft drinks) was a buck fifty a pint at any local convenience store and gasoline was only four bucks.
I generally laughed and pointed out in addition that half the ”sugar water” doesn’t even have any sugar in it so it has an even higher profit margin.
After I convinced him of the eventual reality of peak oil, his reaction is that we should basically quit drilling inside our borders and burn up the rest of the world’s oil on credit.
He never quite got it about protecting the environment until he discovered he had pancreatic cancer which progressed to his liver and killed him. THEN after it was too late he started thinking about cancer rates in the USA compared to cancer rates in places with less pollution .
But he sure did understand debt and that most of it is necessarily going to be written off.
OTOH he never failed to point out that any real assets in existence would continue to exist- that the failure of the owner of an apartment house to pay his mortgage does not result in the apartment house disappearing into some unknown dimension.
Yes, interesting times. Not very fun times, for sure.
How the heck can anyone plan when we have oil price action like the last 4 days and the overnight tonight?
In three days oil rockets up $11 bucks, then crashes about $4 today and now down another buck in after hours.
Harold Hamm sold all of his hedges last fall, said he expected oil prices to recover to $90 WTI quickly. Have barely been half that, and below there now. This is a guy who should have had the best oil price forecasters money can buy working for him.
I think maybe the best explanation for why 650+ oil rigs are still running is no one knows just quite what to do. The price has fallen far below where anyone thought it would, or could, and has stayed there since Thanksgiving. Shell shock.
I guarantee in June, 2014 you went to a shale convention and predicted 2015 oil prices would turn out this way you would have been booted out of the building. The industry big wigs can talk their efficiency talk all they want, but this year has been a disaster.
I think these shale guys are so confused and maybe in shock that they are just going to stay the course until they cannot pay bills.
We are in that boat too. This has been an epic bust. For those of you who do not own oil assets, don’t be fooled by those blowing the efficiency smoke. That only goes so far.
Imagine not having enough money to pay your bills so you keep borrowing more and more each month. Then, for some reason you decide to keep adding onto your house, even though you cannot pay for what you have. That has been US shale from day one and now it’s income has been cut in half.
I do not know when it will happen, but at some point, when North American oil production is flat on its behind, OPEC will drop a massive cut and the price will spike. And they will threaten to call it off and open the taps on the first sign North America looks like it is ramping back up.
Why will that not happen??
>>when North American oil production is flat on its behind, OPEC will drop a massive cut and the price will spike. And they will threaten to call it off and open the taps on the first sign North America looks like it is ramping back up.
If the Saudis are smart (and I have no reason to believe they are not) they will cut production, as you say, when many producers are in desperate conditions. The reason being, I would guess, is that (at least in the case of North America) it is better to leave a permanently wounded company as your rival rather than let it be bankrupted and replaced with a new debt-free entity. However, if/when there is a cut, it will likely be fairly modest (in a cruel twist perhaps back to their quota of 30 mpbd plus an alotment for Iran – and even this quote will in short order not be adhered to.
KSA is doing a great job of undermining confidence in highly leveraged marginal oil production. Nobody will want to invest in it and nobody will want to lend to it/buy bonds etc because they’ll be too spooked by KSA potentially pulling the rug out at whim. That’s the plan. They’ll play this strategy as many times as is required to get the USA to stop drilling.
Arceus said:
….it is better to leave a permanently wounded company as your rival rather than let it be bankrupted and replaced with a new debt-free entity.
But if the debt write-downs come too fast and furious, is that an option?
Here’s how Frederick Lewis Allen explains the dilemma in Since Yesterday:
Hoover had tried to keep hands off the economic machinery of the country, to permit a supposedly flexible system to make its own adjustments of supply and demand… But no natural adjustment could be reached unless the burdens of debt could also be naturally reduced through bankruptcies. And in America, as in other parts of the world, the economic system had now become so complex and interdependent that the possible consequences of widespread bankruptcy to the banks, the insurance companies, the great holding company systems, and the multitudes of people dependent upon them — had become too appalling to contemplate. The theoretically necessary adjustment became a practically unbearable adjusment. Therefore Hoover was driven to the point of intervening to protect the debt structure — first by easing temporarily the pressure of international debts without cancelling them, and second by buttressing the banks and big corporations with Federal funds.
Thus a theoretically flexible economic structure became rigid at a vital point. The debt burden remained almost undiminished. Bowing under the weight of debt — and other rigid costs — business thereupon slowed still further. As it slowed, it discharged workers or put them on reduced hours, thereby reducing purchasing power and intensifying the crisis….
The truth was that a major deflation, if it should occur, would be even more damaging to Franklin Roosevelt than it would have been to Herbert Hoover. Under the existing debt structure Roosevelt had now placed, at many new points, the credit of the government itself. He had committed himself to recovery through rising prices and large-scale business expansion, rather than through falling prices and the writing-off of debts. He must keep his foot pressed down on the accelerator, not on the brake. Dark through the road might look ahead, he must drive on. A costly course to take? Perhaps. But it was too late to turn back now.
We have a larger private debt bubble to contend with now than what Hoover and Roosevelt had back during the Great Depression. Wall Street’s record of mismanagement had been spread upon the books of the Senate Committee on Banking and Currency in 1933, and Roosevelt swore that “The people of the United States will not restore that ancient order.” But lamentably Roosevelt’s prediction proved to be false, and they did.
Also, at that time the United States was floating on an ocean of oil and natural gas.
Is the debt bubble now too big for us to grow our way out from under it, the way we did back in the 1930s and 40s?
And will ever-increasingly scarce and more costly energy supplies put a damper on this growth, as Gail Tverberg believes?
Glenn, it’s hard to imagine the political will being mustered to forgive the debt of over-leveraged shale E&P companies. Certainly won’t happen under the Obama administration. Now if Exxon, Chevron and others start going under, that would be a different story. However, if the smaller shale companies go under, that actually would help big oil.
Arceus,
That sounds very plausible to me.
>>And they (Saudis) will threaten to call it off and open the taps on the first sign North America looks like it is ramping back up.
I don’t believe this is the way the Saudis negotiate. They like being enigmatic. And anyway, at this rate, the American E&P plays may not have enough confidence or financing to “open the taps” for many, many years.
shallow sand,
Frantic recovery rallies are a sign of a bear market. If you have still some oil investments it is a good time to get out. There is more to come. Saudi Arabia and Russia lived for decades with an oil price of 20 +/- 10 USD per barrel now they can get on very comfortably with 60 +/- 10 USD per barrel, especially as their currencies are weak and Russia has nearly the same oil price in Rubel than last year. This time it is the litmus test for shale. Can it really be as efficient as the companies claim for? So far the companies have experienced losses in the same range as depletion costs. This is not a real threat for a company except equity gets erased. The real test comes when prices are below cash costs (revenue – depletion – interest expenses). I have been long enough in the commodity business to understand that if revenue falls below cash cost , fire is on the roof. The shale companies are coming into this stage right now. This is also the time when production must be shut down altogether and thousands of wells have to be shut. Welcome in the commodity business. The shale collapse is also dragging down the whole US economy. High yield bonds are already collapsing. The DOW shows awful chart signals: death cross, hanging man and three gaps down. The last time I have seen this with Lehman Brothers. Also the USD gapped down. The US is no safe haven it is at the center of the earth quake. There is a good chance the DOW is back to 10000 by end of this year. Please be careful.
HL. You may be correct, but how much higher are OPEC and Russia able to push their conventional production than they are now?
Given prices have been sub $50 (sub $40 in th field) $60 +/- $10 is not the end of the world, unless you are talking 5+ years. Even having low decline production, there is still decline each year and although $60 is ok re operating it is not for new development. I suspect that is true in most of US, despite claims to the contrary.
If EIA revisions are correct, June was 9.3 million bopd and falling 100K per month. That decline may slow, but looks very possible that by December, 2015, US will be below 9 million bopd.
Gulf OPEC boosted by 1 million this year. Iran and Iraq are both wildcards I agree, but if OPEC cut 1 million at year end, and US and Canada drop 1 million plus, seems like would go along way to helping on price.
People are freaking out about Chinese demand. It may be slowing but it is not dropping. Looks like world wide is set to grow 2.5-3 million bopd in 2015 + 2016 combined. So if North America loses 1 million plus, OPEC doesn’t have to cut much to reap a major price reward IMO. But they need to cut to convince North American oil financiers that they hold the cards regarding price and that they can crash it again if the lending binge resumes.
shallow sand,
In my view the situation will resolve into higher prices over the long term, yet over the short term (up to three years), the situation gets extreme as the US produced too much in a very short time frame , which seriously created some imbalances on the demand and supply side. In addition, the US has created new high cost capacity based on new debt only, which makes the situation even more vicious. There is a lot of inventory now also on the customers side and low prices simply cannot unfold quickly. Many countries and companies have invested and simply cannot reduce newly created capacity. In the contrary in the beginning of a project it is important to pump as much as possible. Change in commodity markets is never smooth, it is disruptive. This time it is not an exception. It is still open how extreme the situation can get, yet given the extreme US capacity addition and the extreme debt level, this can get very nasty. However this is also an extreme opportunity to make good investments with the right timing. The weekly production numbers are out and production is down to 9,2 mill bbl/d, albeit the most reduction coming from Alaska. US net imports up to 5,8 mill bbl/d and just 2% lower than last year. At least the dollar will not be moving up very much in the future. Yet in my view much bigger changes will happen in the next few months. This is just the American way of doing things – and I think it is good for humanity, although it needs some good nerves.
The WSJ reported this morning that Chinese net oil imports were up 9.4%/year in the first seven months of this year, versus same period last year (although there is some question of how much oil is going into their strategic reserve), and US liquids consumption is up by several hundred thousand barrels per day, versus the same time period last year.
Meanwhile, a question I posed previously: “If it took trillions of dollars of upstream capex to keep us on an “Undulating Plateau” in actual global crude oil production (45 and lower API gravity crude), what happens to crude production given the large and ongoing cutbacks in global upstream capex?”
And as we have discussed, revised EIA data are showing a sharper than expected decline in US C+C production.
Given the foregoing, I am puzzled as to why it would take up to three years for a price recovery.
Jeffrey,
It is the low US current account deficit – leading to a high dollar – which will become bigger when US oil production falls. In my estimate at least two millions bbl/d of US production has to come out to make the USD weak again. However, this will take time – at least a year. Then there is the excess inventory of at least 500 mill bbl worldwide, which is nearly 2 mill bbl/d in excess supply for one year. Then there is also demand destruction of fuel oil coming down by 1 mill bbl/d over the next three years. Imagine a super tanker of going towards higher supply and lower demand reversing course towards lower supply and higher demand. This takes time. However there is also a chance that markets will reverse sooner, when natgas prices in the US increase to extreme high levels, which will increase inflation and interest rates, which will in turn speed up the process of oil production decline due to an even faster collapsing bond market. This is my extreme scenario, which has some likelihood, yet requires a complete dollar crash.
A. Saudi Arabia can’t survive with oil at $50 per barrel. Even if it did, the majority of other oil producers can’t. And Saudi Arabia lacks the reserves and production capacity to cover the gap.
I would worry more about the world economy being able to stay on an even keel when oil shoots through $150 per barrel in the 2025 plus time frame.
“Imagine not having enough money to pay your bills so you keep borrowing more and more each month. Then, for some reason you decide to keep adding onto your house, even though you cannot pay for what you have. That has been US shale from day one and now it’s income has been cut in half.”
This has also been standard US federal government budgeting and financial practice for decades. It’s the American Way!
Is this oil related? That was a question for the censors in 1952.
https://www.youtube.com/watch?t=17&v=V1rbVAXRZ-s
No, but quite metaphorically appropriate for the current times.
About that big gas field found in Egyptian waters, it appears to have created some big waves in internal Israeli energy politics.
They have two big recent finds of their own , one has been developed and is producing but the larger one is stalled due to internal political infighting over who gets the business and the money. It also appears that Egypt was expected to buy most of the gas since Egypt has the capacity already to process it and ship it on to final destination markets.
This article is an AP article and goes into some detail. It was picked up by Yahoo.
http://news.yahoo.com/egypt-gas-sparks-panic-israel-israeli-reserves-174120594.html
Yep. The Egypt LNG business is about to get a shot of steroids.
So Mac you have to change your line “Don’t get stuck In Egypt” with “Don’t get stuck in Wilinston, ND” 🙂
we just never know what new day brings.
http://www.foxnews.com/politics/2015/09/02/ice-war-cometh-russia-makes-play-for-arctic-obama-seeks-more-navy-icebreakers/?intcmp=hplnws
Why aren’t they listening to Roy Spencer and Judith Curry?
Satan’s Best,
More Navy icebreakers? Well, we couldn’t have fewer–the Coast Guard has icebreakers.
For some reason the neocons have gone nuts peddling icebreakers in recent days.
sabre rattling, but of course they don’t want to pay for them
Japan is paying 42.77 today for its oil.
37470/120=312.25 USD per metric ton
312/7.3=42.77 USD for oil in Japan. They want to pay an even lower price, they can wait for lower prices again. Here a while back, they were paying 48000 yen for a tonne of oil.
Go to the bank and buy some yen, for one dollar you get 120 yen.
When the dollar loses value and 80 yen can buy a dollar, redeem your yen for dollars and have a fifty percent gain.
Can’t make a dime on low oil prices, might as well make money on money.
Just don’t buy the Yuan or invest in Chinese stocks…
http://www.bloombergview.com/articles/2015-09-01/alibaba-is-the-canary-in-china-s-coal-mine
Alibaba Is the Canary in China’s Coal Mine
Fred,
Shanghai stock market is still up 60% from last year. The DOW is down 10 % from last year. Due to the shale crash, the US economy is the sick man of the World economy. I am buying aggressively into the Chinese market. The ratio of emerging market bonds and the DOW is soaring, which indicates a much better performance for the World economy compared to the US economy.
I agree that the US economy has a bad case of the flu but that is highly contagious and China depends on a healthy US economy as well. I’m going to bet that there is going to be a major correction in the Chinese stock market in the not too distant future. The Chinese have way too many bubbles that are ripe for bursting and if there is no demand for their exports then I think their economy might even crash.
Fred,
In my view the Chinese numbers are quite encouraging. Housing prices are up to -3,7 % from – 5,9%. Crude oil imports (30 mill tons per month) are up 19 % from last year and up 50% from 2013 (20 mill tons per months)….. Money supply is also up more than 13%, interest rates are down by 2% to 4,60%, so China is on the verge of a boom for the next year.
Heinrich,
China is on the verge of a boom for the next year.
Maybe you are right but I think those numbers aren’t quite telling the real story. Quite frankly I’m just not very bullish on the Chinese economy right now.
But China has managed to blow itself a not-too-little private debt bubble over the last 8 years.
Now granted, China is still not a financial basket case like, for instance, Greece, Spain, the United States or the UK. But it’s getting there.
This is why some (can we say Gail Tverberg?) doubt if China can continue to be the motor of global economic growth as it has been since 2007.
It occurs to me that Churchill’s quote about Russia could be applied to China, to-wit: China is a riddle wrapped in a mystery inside an enigma.
In any case, an item about China in the WSJ:
Huge Purchases by Chinese Oil Trader Raise Prices, Confusion
Traders say Chinaoil’s dominance in the Dubai spot market is distorting prices
http://www.wsj.com/articles/huge-purchases-by-chinese-oil-trader-raise-prices-confusion-1441103201
Maybe I am a bit on the simple minded side since I just can’t get my head around the smoke and mirror explanations for the price of oil being what it is. The plain old plain old economic model I learned about back in the dark ages seems to explain the price just fine to me.
And since producers are cutting back right and left, due to the low price, oil WILL go up, no question, unless the economy gets a LOT worse.
The Chinese are buying because oil is a hell of a lot cheaper now that it will be later on, and they are going to make a very good virtually guaranteed return on the money they tie up buying and storing oil NOW to be burned next year or the year after maybe.
No mystery. Farmers have been dealing with temporary oversupplies and crashing prices followed by short supplies and high prices just about forever.
The oil industry is producing TOO much right now to support a higher price.
NO FURTHER EXPLAINATION needed.
The obvious ( to me at least) fact that a hell of a lot of producers are losing their shirts is more than ample reason to KNOW that some of them are going to be shutting down some production pretty soon.
The only thing wrong with this reasoning is that there is a POSSIBILITY that some new low cost production may come on the market. IF ENOUGH such production comes, the price may stay low.
Hardly anybody seems to think there is that much low cost oil in the pipeline. Hardly anybody in THIS forum seems to believe that even the Saudis have a lot of excess capacity. Every body seems to believe that legacy production is declining at no less than four percent or so per year.
IF all this thinking is in the ballpark oil is going up again barring the world economy getting a LOT worse.
Heinrich
Astute observation on China. Bravo. You should make money on those deals.
It’s the U.S. Bond market that will get hit the worst. The government people will be on the receiving end of the crash this time. It’s going to be fun. No where to run but equities this time. Bunds are still negative rates no?
Cheers
Heinrich Wrote
“In my view the Chinese numbers are quite encouraging. Housing prices are up to -3,7 % from – 5,9%. Crude oil imports (30 mill tons per month) are up 19 % from last year and up 50% from 2013 (20 mill tons per months)….. Money supply is also up more than 13%, interest rates are down by 2% to 4,60%, so China is on the verge of a boom for the next year.”
Copper, Iron Ore and other raw materials are still falling. Copper broke through a 15 year low earliest this week. China is in a bubble. China the only nation that has large new cities that no one lives in. China is also replacing large number of workers with robots. I read an article about a month ago that well over 250K Chinese workers were replaced with robots this year. Next year going to get a lot worse as most Chinese factories are switching to automation.
http://www.techrepublic.com/article/chinese-factory-replaces-90-of-humans-with-robots-production-soars/
Chinese money supply is changing because investors are mass exiting China and demanding foriegn currency. China sold off about $180 Billion in US treasuries in the past 30 days for investor redemptions. This is creating Tightinging in the US because of the bond sell off and increased demand for US cash. Fed is likely to roll out QE this fall.
http://money.cnn.com/2015/06/12/investing/china-funds-outflows/
The global economy is almost certainly in recession now. Layoff in the US surged last month:
http://www.cnbc.com/2015/08/06/us-layoffs-surge-to-105696-in-july-on-military-cuts-challenger.html
I ams sure most companies (US, EU, Asia) now have hiring freezes until this market correction has passed. I doubt we will see a change until the US started QE again.
And the US economy will be immune from this crash?
Glenn,
No. All the red flags are out for the US economy.
Don’t know why you would ask me that? I certainly was suggesting no such thing. I think the economic malaise is a global phenomenon. Personally, I’m of the opinion that the current economic model is no longer sustainable. I see plenty of red flags everywhere I look.
Well I certainly agree with that “the economic malaise is a global phenomenon” and “that the current economic model is no longer sustainable.”
Bretton Woods II is on its deathbed, and when it finally dies there are going to be no winners.
Everyone will lose, China and Germany included.
The question is: Who will lose less?
In my opinion the ones with the lesser losses will be creditor countries like China and Germany. I say this because I know of no great hegemonic empire since the Reniassance that, once it has taken a wrecking ball to its productive might (the way the US has), has been able to sustain its financial, military and moral might.
Without production, there is nothing, at least not under the values and assumptions of Modernity which our current system operates.
“Personally, I’m of the opinion that the current economic model is no longer sustainable.”
What’s the current economic model, is it Watcher’s fantasy money printing syndrome?
Almost.
Maybe could sum it up with heavy borrowing (borrowing/lending creates money) to offset the relentlessly reducing net joules coming out of the ground, managed via zero reluctance to intervene when risks arise.
Hey Watcher,
Didn’t you get the memo about “money for nothin’ and your chicks for free”?
https://www.youtube.com/watch?v=O7GroZ60UYc
If we take a look at the DJIA, inflation-adjusted using the headline CPI, what we see is that it’s been basically flat since 1999.
http://www.macrotrends.net/1319/dow-jones-100-year-historical-chart
What does that mean?
From 2000 to 2014 the Dow rose by 28 percent(CPI adjusted). I think that the scaling of the Y axis is the problem, expands the low end and compresses the high values. The range is greater than 4000 which is similar to the range in the 1929 crash period.
It also indicates that the there are a lot of long term investors in the game holding the base fairly high even during panic sell-offs like 2003 and 2009.
Also their inflation factors are off, looking at the non-CPI adjusted figures, the inflation from 1950 is about 10x when in reality it is more like 20X.
Don’t bother with the Dow; it’s not representative of much.
Look at the S&P 500 (SPX), Russell 2000, and Wilshire 5000 full-cap indices.
https://app.box.com/s/atlq7gj383socxkysr2ij5b3c15z65z5
https://app.box.com/s/sqpdwrin8dt40t3ri6n0n5ksx88gtoqz
https://app.box.com/s/plakr8l4jwug03yf5hr5jwkntqs24ech
By a great many metrics I follow, the SPX has likely entered a bear market, aligning with Oct-Nov 2000 and Jan-Feb 2008.
Moreover, of the many metrics I follow, there are about a dozen or so that are coinciding today that have occurred only twice in US stock market history going back to the early 20th century: 2007 and 1929.
Excepting non-financial corporate debt to GDP, similar conditions occurred in 2000.
We now have a stock market that is exhibiting exceedingly rare conditions that have preceded three of five (1937-38 and 1973-75 being the other two) of the largest stock market crashes in US history.
Crash or not, one can infer that risk is extreme and the prospective future returns 5-7 to 10 years hence will be low to 0%, with the historical precedent suggesting a cyclical drawdown risk of 35-50%+.
Combine the ~0% return from equities with 0-2% for fixed income, and returns to a balanced portfolio after fees, taxes, and inflation/deflation will be effectively 0%.
But pension funds are expecting 6-8%. Do the differential math to understand how much pension payouts and benefits will have to be cut for Boomers in the next 10-20+ years. Ugly.
I will pay steak and beer whoever gives me reasonable explanation why there are 650 rigs still drilling in NA? Explanations like to keep market share, you can get cheap rigs now, and drill now & frac later and I heard them all are all weak, very weak.
Fine print: Assumption is that BH rig report is honest. I know, that after EIA debacle, it is big assumption but that is all info we have.
Edit: actually it is way more than 700 with Canada. I lost track of the current numbers.
Ves. The only thing I can think of is the financiers and the oil companies are using someone else’s money, said groups are making money in either salary and/or fees to continue the charade and the ultimate someone else, 401k owners, pensioners etc have little control over the money and/or have no idea how foolish the investment is.
An example is the mighty COP. Hugely cash flow negative. Borrowing 100% to pay the dividend. Still drilling shale and developing tar sand all over the place. Think how many retires are in that company either directly or indirectly, without any idea they are burning billions of dollars this year.
Yes, but let’s look also the following things that are facts:
1) There are 100.000’s of layoffs in the oil industry just in NA. That is just a fact. So financiers are not paying those salaries anymore. And if I am financier why I would continue be be paying salary to an oil exec without his field staff.
2) Oil companies shares are decimated, and LTO stocks are penny stocks. So there is no more critical mass of grandma’s and grandpa’s pensioners buying any of those otherwise they wouldn’t be penny stock. So there is no money inflow there.
Ves. I don’t disagree. However, most of the funds for drilling are coming from debt, not equity.
I am making an assumption that most HY energy debt is purchased by hedge funds and other types of money managers. I do not know if individual investors are able to purchase HY energy debt directly.
For example, HK just engaged in a technical default whereby they exchanged some unsecured debt at less than par, for some new third lien (ie like a third mortgage) debt that has a lower principal balance but a higher interest rate (13%) and with a longer out maturity date.
I doubt that was negotiated with a bunch of retirees and individual investors. Instead, it was negotiated with hedge fund types/institutions.
Public pensions own a lot of private equity investments. Pensioners have absolutely no say in how pension funds are invested.
What happened in the spring was upstream shale oil and gas was quick to issue new bonds or stock to pay off the bank lines and raise more money. That money is being spent now. What I find interesting is that banks might renew credit lines with shale this fall just because they are in first position lien wise, even though shale companies have defaulted on unsecured debt.
For example, let’s say a shale company this spring successfully paid off $500 million of first lien bank line of credit debt by issuing new second lien debt. The bank still has a first lien but no money has been drawn.
Now say that the shale company has about $3 billion of unsecured debt. They renegotiate some of that with investors, who take a haircut on part of the principal but in exchange get in third lien position and get a higher interest rate.
The remaining unsecured debt, which was trading at .35 on the dollar is now trading at .15 on the dollar.
But, of course, the shale company has not yet drawn on the bank line of credit. Should a bank allow a company that has already defaulted on unsecured debt and has probably 2-3 times long term debt to PV10 to be able to draw on the first lien credit line to drill more unprofitable oil wells during the time of a supposed world wide oil glut?
We will soon find out. It will be pretty incredible to see banks making loans for unprofitable business operations, who have already defaulted on unsecured debt, just because they have a first lien.
SS,
Thanks.
I understand the need of the debt to be moved around. Cutting little bit of principal and tweaking and getting higher interest rate but that does not materially change anything on the ground. Costs and you know that very well cannot go down that fast even if at all. You can’t pay employees less than some wage that will only attract totally unskilled people; you can’t play with currency depreciation, electricity is the same, transport cost are the same.. so what has to change in this price environment to convince whoever is buying HY energy debt that this is sound idea?
Sorry Shallow,
my bad. there are some changes in the cost structure. frackers will start using toilet water that is being diverted from irrigation use. great. 🙂
I guess that was the missing link that hedge fund managers knew when they were buying HY paper 🙂
http://oilprice.com/Energy/Energy-General/West-Texas-Fracker-Uses-Toilet-Water-To-Cut-Cost.html
too bad Mike is not here, he would rip them apart on this “innovation” that would give us some chuckle 🙂
SS you have been doing a lot of company analysis and it is presented in such a way that suggests you haven’t done it for decades.
If you had, and more broadly than in just oil, you would see how:
The only thing I can think of is the financiers and the oil companies are using someone else’s money, said groups are making money in either salary and/or fees to continue the charade
All those mortgages from 2008, those made someone money. Once they started to make someone money, increasing volume of them could only derive from less and less strict restrictions. Point being, the motivation was commissions and fees. Not collecting interest. The loan officers made more money the more mortgages they placed.
No one has anything to gain in Shale by explaining how the numbers fail. They only gain if they explain how they don’t.
The bailouts — proving that if you are a big enough failure, you don’t have to suffer. There will be a lot of doubling down.
It’s called financial capitalism. Here’s how the game is played:
Heads I win. Tails I win.
Heads the public loses. Tails the public loses.
Concepts like character, a man’s word, and honor are non-existent in this world.
The first comandment is: Never give your personal guarantee for money you borrow.
The second commandment is: Make sure you have enough political power to ensure a government bailout and immunity from prosecution if things go south.
Back in the early 80s was the first time I heard of it, and I must admit I was gobsmacked.
There was this wealthy real estate developer and founder of Six Flags Over Texas whose son opened a fancy nightclub in Dallas. When the club went belly up and the son couldn’t repay the money he had borrowed to open the club, he proclaimed to the local press: “When I borrowed all that money, I didn’t know I would have to pay it back!”
One of the real pros at playing these kinds of zero sums games, believe it or not, is Donald Trump.
In the early 1990s Trump almost went over the cliff of personal bankruptcy. He advises in his books to never personally guarantee business loans and admitted he didn’t follow his own good advice. The country was in a downturn and was vastly overleveraged. He had also made the extreme error of personally guaranteeing his commercial real estate loans. He was quoted in 1997 in the New York Daily News that his personal wealth was about minus $900 million.
Over the decades, “the Donald,” as his former wife Ivana dubbed him some years back, has avoided personal bankruptcy by borrowing heavily from his very rich father and his siblings when there was no other option, and by playing brinkmanship very well. Even so, his companies have very publicly failed on many occasions.
http://www.forbes.com/sites/joanlappin/2011/05/01/business-illusionist-donald-trump-perfect-for-president/
“I never went bankrupt,” Trump replied.
Before Stephanopoulos could clarify that perhaps Swaile was referring to the Chapter 11 filings of three highly leveraged hotel and casino properties that Trump had a stake in—separately in 1991 and 1992, and then, after restructuring, as a group in 2004 and again in 2009—Trump spoke over him. “Excuse me,” he said. “I never went bankrupt. And let me just tell you: If you look at our great businesspeople today”—he mentioned the leveraged-buyout kings and investors Carl Icahn, Henry Kravis, and Leon Black, and said he could name 25 others—“all of them have done the same. They use, and we use, the laws of this country, the bankruptcy laws, because we’ll buy a company. We’ll have the company, we’ll throw it into a chapter, we’ll negotiate with the banks, we’ll make a fantastic deal. We’ll use those [laws]. But [the bankruptcy filings] were never personal.
http://www.theatlantic.com/magazine/archive/2013/04/whats-the-deal-with-donald-trump/309261/
The ”only thing” I can think of is that one of two things applies.;-)
ONE, the people who are hanging in there are gambling on a major price recovery in the near term, meaning a year or so , and expect to snatch their oil baby back from the jaws of the bankruptcy wolf. Maybe they will win that gamble. This might be a worth while gamble since it means salary while it plays out, plus a possible win. Whereas, if you are an owner, operator, or lender, you lose EVERYTHING, or almost everything, in the case you lose. A loan or investment officer who made the decision to make these loans is most definitely going to be thrown under the bus by management unless he can prove he was forced to do so by higher management, and if his company goes under, he loses his job ANYWAY.
This makes more sense to me than choice number TWO, which is that everybody has gone nuts . People are herd animals and usually see safety in being in the middle or central part of the herd.
The herd always survives, until it doesn’t. The cow in the middle of the herd is seldom picked off by the wolves, the wolves get the outliers and the ones around the edges of the herd. The little guys will just do what everybody else is doing and hope like hell the wolves don’t get the whole herd, them included.
Top management at a bank can’t fire EVERYBODY. Owners fire management in case things get even remotely bad enough to contemplate such actions.Even top management has SOMEWHAT of an excuse in answering to owners when they say EVERYBODY ELSE also made the same mistake I did.
Sarcasm light blinking at random intervals.
These explanations you mention make plenty of sense if you make just one assumption, that ONE being the people making the decisions are convinced the price of oil is going back up again before very long.
IF you believe that then it makes plenty of sense to keep your organization together, rather than letting your people and your current customer base scatter to the winds.
My layman’s seat of the pants opinion is that oil WILL go up again, and soon, in historical terms, a year or so at the most before starting up again. That’s a hell of a long time to a bookkeeper but an eye blink to a historian.
DRAMATIC INCREASE IN CONCURRENT DROUGHTS, HEAT WAVES
http://www.sciencedaily.com/releases/2015/09/150901100551.htm
“Droughts and heat waves are happening simultaneously with much greater frequency than in the past, according to research by climate experts.”
James Hansen described the temperature shift anomaly toward higher temperatures.
“Perception of climate change:
The distribution of seasonal mean temperature anomalies has shifted toward higher temperatures and the range of anomalies has increased. An important change is the emergence of a category of summertime extremely hot outliers, more than three standard deviations (3σ) warmer than the climatology of the 1951–1980 base period. This hot extreme, which covered much less than 1% of Earth’s surface during the base period, now typically covers about 10% of the land area”
“Principal Findings.
Seasonal-mean temperature anomalies have changed dramatically in the past three decades, especially in summer. The probability distribution for temperature anomalies has shifted more than one standard deviation toward higher values. In addition, the distribution has broadened, the shift being greater at the high temperature tail of the distribution. ”
http://www.pnas.org/content/109/37/E2415.full
While some regions are drying out, exacerbated by loss of vegetation through fires, other regions appear to be getting wetter or at least the pattern of rain and intensity has changed. Atmospheric circulation patterns have indeed changed lately and seem to have moved to more stable positions.
NOT OIL
Anecdotal observation on my part. The weather is Sao Paulo has been very weird. Unusually dry, we are enduring one of the worst droughts in recorded history. Reservoirs are at record low levels.
Temperatures have been fluctuating wildly. Yesterday almost 90 degrees today in the mid 50s.
Also anecdotal, heard from my family in Germany and Hungary they are in the mid 90s… not unheard of but a bit unusual as well.
Meanwhile from the mainstream media and those hippy, greenie weenie, commies at Citi Bank:
http://www.cnbc.com/2015/08/18/cost-of-not-acting-on-climate-change-44-trillion-citi.html
Cost of not acting on climate change $44 trillion: Citi
I watch the weather reports most days as well. I also have one of those indoor-outdoor wireless thermometers placed on the side of my house. What I have noticed during my many decades on planet earth is that the overnight temperature is usually 15 degrees or more colder than the daytime temperature during the day. If the absence of sunlight results in that much global cooling, I have to believe that the sun has vastly more impact on the global climate weather patterns over anything man could ever do. Think about this, if the sun ‘went down’ for 30 days, the planet would be 300 degrees colder. Now I also have to bring it up since Coast to Coast has been bringing it up, but we have to keep in mind the leading Solar scientists are predicting lowering energy output from the sun in the future.
Dennis, do you know how to cook a live frog in a pot water? You can’t drop him in boiling water. He’ll jump out. You have to nicely place him in a cool pot of water and turn the heat on simmer.
And you did that temperature study and conclusion all on your own.
The long term energy output from the sun will continue to increase its output until well after all the oceans have boiled away. The orbital mechanics of the Earth orbit would have nudged us toward a new ice age in coming millennia eventually if we had not dumped all the global warming gasses into the atmosphere. There is a small decline that may occur for a while because of sunspot variation. The crackpot right-wingers try to turn this modest possibility into something significant. There is no consensus of scientists that this will happen and even in the most extreme case of a decline from sunspot variation it is very unlikely that it will be enough to save us from a greater than 2 degree C rise and the disasters that will come from that.
I love it. “Others can’t find a trend but we changed the analysis method to something nobody ever uses, sand voila, we found a dramatic increase in drought”.
EIA’s Weekly US Field Production of Crude Oil report for last week says production dropped 119,000 bbl/day. Production is now back to January 2015 levels.
Revised monthly data released 2 days ago shows that oil production in June was below December 2014 level. Next week the EIA will release its new Short Term Energy Outlook with revised oil production forecast.
To note, according to the IEA estimate, U.S. C+C+NGL in July was 540 kb/d below April levels.
IEA numbers in mb/d:
Apr15 May15 Jun15 Jul15
13,24 12,96 13,01 12,70
EIA’s U.S. oil production estimates: weekly vs. monthly vs STEO (August 2015)
Houston, the EIA has landed.
OPEC oil output in August falls from record on Iraq disruption: survey
Wed Sep 2, 2015
http://www.reuters.com/article/2015/09/02/us-opec-oil-idUSKCN0R21Z020150902
OPEC oil output fell in August from the highest monthly level in recent history, a Reuters survey found on Wednesday, as disruptions to flows on Iraq’s northern pipeline halted supply growth from the group’s second-largest producer.
Largely stable output from Saudi Arabia and other Gulf members of the Organization of the Petroleum Exporting Countries indicated they are not wavering in their focus on defending market share instead of prices.
OPEC supply fell in August to 31.71 million barrels per day (bpd) from a revised 31.88 million bpd in July, according to the survey, based on shipping data and information from sources at oil companies, OPEC and consultants.
Despite calls from some members for an emergency meeting, even OPEC delegates who favor supply cuts do not expect any to be agreed, leaving a surplus which OPEC’s own numbers indicate is at least 2 million bpd on the market.
“I really see no chance for holding a meeting before the scheduled Dec. 4 meeting, which will reach no concrete agreement to drastically cut production,” said a delegate from one of OPEC’s African members.
“We know that the present oversupply is more than 2 million barrels per day.”
The decline in OPEC output from July’s level was the first since February based on Reuters surveys. Even so, OPEC has boosted production by almost 1.5 million bpd since the November 2014 switch in policy to defend market share.
July’s output from OPEC’s current 12 members was revised lower but is still the highest since Reuters records began in 1997.
The biggest drop in August came from Iraq, one of the main drivers of the rise in OPEC output this year.
Exports from southern Iraq edged about 40,000 bpd lower to just above 3 million bpd, according to Iraqi officials and shipping data seen by Reuters.
Shipments from Iraq’s north via Ceyhan in Turkey by Iraq’s State Oil Marketing Organisation and the Kurdistan Regional Government posted a larger fall because of halts in the flow along the pipeline from Iraq, shipping data showed.
Top exporter Saudi Arabia kept output largely stable in August, sources in the survey said, following a decline in July. There was no significant change in the other major Gulf producers, Kuwait and the United Arab Emirates.
Nigerian exports rose in August according to loading schedules, although Royal Dutch Shell said on Aug. 27 it shut two pipelines and declared force majeure on Bonny crude exports, which could have a larger impact in September.
Algeria posted a small increase after starting production at two fields and output in Iran, eager to reclaim its traditional spot as OPEC’s second-largest producer if and when sanctions are lifted, also edged up slightly.
Libyan production declined in August. Supply remains disrupted by unrest and negotiations to reopen closed oil facilities have yet to succeed.
EMISSIONS ‘FAR ABOVE’ 2C TARGET
http://www.bbc.com/news/science-environment-34135202
“It is clear that if the Paris meeting locks in present climate commitments for 2030, holding warming below 2C could essentially become infeasible, and 1.5 degrees C, beyond reach,”
“According to the analysis, the commitments made so far would see temperature rises of up to 3C, with greater impacts on sea level rise and the frequency of extreme weather events.”
Since CO2 emissions are primarily tied to fossil fuel (NG, oil and coal) burning I suppose this is an “oil” comment? It’s certainly an issue that concerns me.
I’m with you Doug.
I know some of the posters here dismiss AGW climate change but I’m not in that camp. I’ve been trying to pay attention to things and I understand the IPCC reports as basically risk analysis. It seems to me that we are well on our way to blowing through the lowest risk, RCP2.6 scenario.
http://co2now.org/Current-CO2/CO2-Trend/acceleration-of-atmospheric-co2.html
I’ve been trying to pay attention to things and I understand the IPCC reports as basically risk analysis.
Exactly! If for some reason, the scientific consensus on climate change ( yes, there is one) goes against anyone’s deeply held ideological world view, then I strongly suggest they follow the money and take a really hard look at what the big insurance companies are saying. Those are the guys who supposedly know a thing or two about risk analysis! After all they make their livings from it…
And for the oil guys who still think this kind of comment is irrelevant or a direct attack on their personal integrity, I apologize but you couldn’t be more wrong!
There is no way to separate what happens to the future of this planet and our civilization form what happens to the oil industry and whether you like it or not and whether you give a damn about the science of climate change or not the fact remains we live on a finite planet with finite resources and finite waste sinks. Continuing to burn fossil fuels and venting CO2 into the atmosphere is no longer a viable option and anyone who disagrees is fractally wrong.
Disclaimer: I have been following the Club of Rome scenarios (No, they are not predictions) for a few decades and we have been on a business as usual path with no sign of getting off that path for the last 40 years or so. The consequences of continuing on that path are very clear and they are based on a deep understanding of the hard sciences. I could talk about the mathematics of complex dynamic systems and tipping points in all the major ecosystems on the planet. Suffice it to say we needed to get off that path a long time ago.
Side note: while I don’t think there is much hope of a soft landing for the majority of humanity, I still have not given up all hope and do think that alternative sources of energy along with a better stewardship and understanding of our natural systems is the only possible path forward if any of us is to make it through the bottle neck. I won’t apologize for talking about technological and cultural disruption brought about by things like EVs mobile phones, big data, cloud storage, Uber, etc… etc… If the oil guys don’t think this stuff is going to impact their industry and they don’t think it is relevant to discuss such things on a peak oil site, then tough noogies, because I find this kind of discussion highly relevant. If Ron chooses to fold this site and a few of the oil guys are offended by my remarks and leave. I will very much miss them and this site but I have been reading the writing on the wall for a long time now.
So in closing I’ll leave you with with this quote from the Club of Rome site, I direct it at all the oil guys… It isn’t about climate change, it’s about peak resources, damn it! Just look at the fucking mess the economy and the oil business are in right now! The problems are systemic.
“We must leave oil before it leaves us”
Fatih Birol, Chief Economist EIA, 2008
Peak Oil represents the point in time when roughly half of the ultimate available oil has already been used.
Many scientists and experts believe that we are very close to the peak of conventional oil today. We may have already passed the peak.
If this site goes by the wayside, and I sure hope it doesn’t, I wish everyone and I do mean everyone here, all the best!
I also hope that in my small way I have contributed to this conversation.
Godspeed!
Fred Magyar
[youtube http://www.youtube.com/watch?v=FvIrlaXU28A&w=560&h=315%5D
please delete. editor won’t let me do it
https://www.youtube.com/watch?v=FvIrlaXU28A
Even if America were to move away from fossil fuel reliance at Obama’s desired pace—or even faster, for that matter—it would still maintain quite an appetite for them for a good length into the future. In addition, the typical delay between exploration and pumping for an offshore oil well can approach a decade, and will likely approach two decades in the case of the relatively infrastructureless and harsh weathered Arctic. This means that Shell’s current exploits are unlikely to come to fruition until much closer to mid-century, and the oil supply situation is likely to have changed in the meantime.
It is therefore not hypocrisy to guide America and the world away from fossil fuels while ensuring that our still very fossil fuel dependent economy does not run out of domestically sourced—and therefore more secure—energy over the course of this transition. Arctic offshore reserves are some of the last substantial reservoirs of these fuels within the United States, and ensuring that they will be ready when needed—though hopefully needed in far lesser amounts—appears prudent.
It should also be noted that Obama was placed in a difficult position from the start in that Shell and other energy companies had already paid the U.S. government billions to secure their Arctic offshore leases under the Bush administration. Even if the President had wanted to, reneging on these contracts would have meant the return of large sums of money, which had more than likely already been budgeted and allocated.
Finally, alongside his allowance of Arctic offshore drilling, Obama has also closed additional Alaskan territory to developers and increased the safety measures that must be put in place in order to drill for offshore oil. This approach has ultimately led to vocal complaints from both environmentalists and industry. As a result, David Bolton, deputy assistant secretary for oceans and fisheries with the State Department, said, “Maybe that means we’re in the right place, given that people on both sides are unhappy with us.”
But, energy security aside, the administration’s Arctic energy approach is still not in the right place. The widespread discussion of climate change hypocrisy is blinding the country to Obama’s true Arctic failings: Inadequate focus on regional infrastructure and development, which, in turn, leads to local environmental and economic insecurity in the face of offshore oil exploration and drilling.
Arctic projects must be carried out responsibly so that the region’s environment and living spaces are protected while benefits accrue to locals. The government has made much of the fact that it has upped its safety requirements since Shell’s disastrous 2012 oil exploration effort, and it is definitely a positive that the company must take additional steps to secure its equipment and operations and have an extra rig nearby in case of a blowout. But these measures cannot make up for the overall lack of infrastructure in the region. There are simply not enough ships, deepwater ports, communications capabilities, or disaster response resources to reasonably undertake large-scale Arctic energy ventures in the face of their many risks.
http://thehill.com/blogs/congress-blog/energy-environment/252559-obamas-incomplete-arctic-energy-approach
Fred Magyar said:
If for some reason, the scientific consensus on climate change ( yes, there is one) goes against anyone’s deeply held ideological world view….
And for the oil guys who…like it or not and whether you give a damn about the science of climate change or not the fact remains we live on a finite planet with finite resources and finite waste sinks….
If the oil guys don’t think this stuff is going to impact their industry and they don’t think it is relevant to discuss such things on a peak oil site, then tough noogies, because I find this kind of discussion highly relevant.
Well you’re certainly standing ready with tar-brush and gold leaf today, herding all those “oil guys” into a discrete group and painting it with the brush of evil.
Maybe you should consider giving that Platonic realism a rest? It’s about as far from empiricism as one can get.
This is what’s so amazing about these debates. All sides to the debates believe they are operating in the tradition of Ockham and Hume, when in reality they’re operating in the tradition of the German romantics and idealists.
Hannah Arendt said it best in The Life of the Mind:
[I]t is true that without Kant’s unshackling of speculative thought the rise of German idealism and its metaphysical systems would hardly have been possible. But the new brand of philosophers — Fichte, Schelling, Hegel — would scarcely have pleased Kant. Liberated by Kant from the old school dogmatism and its sterile exercises, encouraged by him to indulge in speculative thinking, they actually took their cue from Descartes, went hunting for certainty, blurred once again the distinguishing line between thought and knowledge, and believed in all earnest that the results of their speculations possessed the same kind of validity as the results of cognitive processes.
Fred, you almost always say what I’m thinking. Thanks, allows me to be lazy and ineffective.
My own little addition- another huge and really real threat to oil prices is the very rapid rise of cost- effective EV’s.
How does the oil guy answer when the vehicle maker says his EV’s outsell the other guy’s ICE?
Sure, not yet. My bet-soon.
Fred, Mac and others, I would be surprised if Ron is disappointed with the current conversation here at his site. He started this site because he wanted to continue some of the conversation at TOD. The drumbeat was a regular daily news blog regarding energy that wasn’t totally tied to oil. Other regular TOD contributors would post on subjects relayed to energy and how it ties to daily life.
This site has become the best replacement for TOD over the last two years. Thanks again Ron for all your hard work here.
Does it not concern you thought that the IPCC models are seriously flawed and that they are quite literally incapable of predicting future “warming,” “cooling,” or any weather change whatsoever? Let me ask you this, why can’t the climate scientists reverse the supercomputer inputs and outputs that went into the IPCC models and predict what the weather was 100 or 1000 years ago? Anybody technologically savvy knows that computer simulations can be run forward and backwards. So why is it impossible for the predictive climate models to “predict” what has already happened in history? There’s a real simple answer — the programmers know attempting such a simple and menial task would demonstrate all their models’ flaws and exaggerations and therefore prevent the climate scientists from continuing to deceive the world.
Now I do realize the climate scientists will shout and proclaim “we actually can do that!” or “The IPCC already did that.” Seriously? In reality the scientists are too scared to even attempt it. They will say “why don’t the DENIERS reverse the program?” Well, that’s because the UN IPCC protects the raw climate data and protects the programming of the computer models so that no one in the world can duplicate their efforts.
In light of that, I really have to ask myself, have any of these scientists ever wondered, for just a second, why no parallel conclusions have ever been confirmed? In real science, raw data is released to others so the original conclusions can be confirmed through independent studies. But with the IPCC, everything is done in secret, behind closed doors! When vaccines and medical cures are investigated, dozens of independent labs are REQUIRED to prove the integrity of the studies. Dozens more are required to do blind studies! But all of this integrity in science gets thrown out the window when it comes to climate change. We are supposed to take the scientists at their word, undisputed and unconfirmed. By behaving in this way, the scientists end up depending on false and carefully controlled narratives where they are the judge and jury. That is not, nor ever will be real science!
The Intergovernmental Panel on Climate Change (IPCC) does not carry out its own original research, nor does it do the work of monitoring climate. The IPCC bases its assessment(s) on published literature, which includes peer-reviewed (and non-peer-reviewed sources).
Matt,
No.
Models produce scenarios, not predictions. You do not understand the purposes and benefits of risk analysis.
You also seem to be uncomfortable with science, and don’t seem to understand the scientific method. Your ignorance does not become you in this forum.
Please take your agenda elsewhere.
CANADA OIL INDUSTRY SAYS PRICE DROP MAKES NEW PIPELINES ESSENTIAL
https://ca.finance.yahoo.com/news/canada-oil-industry-says-price-drop-makes-pipelines-223318033–finance.html
“Canadian companies have long complained that the industry suffers major lost revenue because their oil, Western Canadian Select, is at times sold at a discount of up to $40 per barrel to Western Texas Intermediate crude.”
For Russia, Oil Collapse Has Soviet Echoes
Russia’s currency and economy, already squeezed by Western sanctions, have been sent into virtual free fall by slumping oil prices. The International Monetary Fund predicted in July that Russia’s economy would shrink 3.4% this year, the most of any major emerging market.
Bakken Formation ooip 500 billion to 900 billion barrels.
One percent is five billion to nine billion recoverable, that which can be extracted, leaving 99 percent still in the ground.
Must have some value, can’t possibly be worthless.
Bakken Formation ooip 500 billion to 900 billion barrels.
Likely total BS.
According to Wikipedia on the Bakken formation:
Various other estimates place the total reserves, recoverable and non-recoverable with today’s technology, at up to 24 billion barrels.
Mr. Patterson
…And with the ever-astute Frugal providing me with a much needed laugh at the end of the day, (I do hope Dennis can incorporate this data in his prognostications), I sincerely wish you all the best in your family affairs … I thank you for all the time and effort you have put into this blog … And I hope you can recognize that you have provided us all – posters and lurkers alike – an invaluable venue in which to learn.
Gerard
http://www.undeerc.org/News-Publications/Leigh-Price-Paper/pdf/TextVersion.pdf
Here is where the 500 to 900 billion barrel ooip estimate is projected.
Here is a cornucopian oil site:
There Is No Shortage of Oil
An Era of Endless Energy Is at Hand
http://akdart.com/oil4.html
There you have it, oil will last forever and there is really nothing to worry about at all. Pollyanna is the editor and publisher, so the bias is readily evident.
Time to ramp up production another ten percent and burn it faster. 99 million bpd is the goal to reach.
Three trillion trees and umpteen grass biomes will take that CO2 and sink it into their leaves.
Let’s desertify the entire planet. More concrete and less soil. Humanity can do it. Three cheers, hip hip hooray! hip hip hooray! hip hip hooray!
Time to get to work on it, make it happen fast. We need 60 billion people to make it happen even faster and everybody can observe the dumb look on everybody’s faces.
If you want to be a Cornucopian, then you’ll have to move to Cornucopia.
If you are a Cornucopian from Cornucopia, then 60 000 000 000 friends and neighbors should be one big happy family, no problems, just fun in the sun. There’s room for everybody over in Cornucopia.
“You might say I’m a dreamer, but I’m not the only one. The world can be as one.” – John Lennon
Have a nice day.
I think the link below will take you to the original cornucopian oil site from which all the others take their cue. It is, as Michael Klare put it, “a dazzling vision of a future in which growing numbers of people enjoy the benefits of abundant carbon energy and unlimited growth.”
“The Outlook for Energy: A View to 2040”
http://corporate.exxonmobil.com/en/energy/energy-outlook
Humanism trumps naturalism, subjectivism quashes empiricism in this “dreamy landscape in the new pro-carbon version of the planetary future.”
Big Energy as the Good Samaritan of our world was articulated by Rex Tillerson in a June 2013 address to the Asia Society Global Forum. “Approximately 1.3 billion people on our planet,” he said, “still do not have access to electricity for basic needs like clean water, cooking, sanitation, light, or for the safe storage of food and medicine… [which means that] the need to expand energy supplies has a humanitarian dimension that should inform and should guide our energy policy.”
http://www.tomdispatch.com/blog/175940/tomgram%3A_michael_klare,_perpetuating_the_reign_of_carbon/
Not to be outdone, the green cornucopians like Klare get into a bidding war with the carbon cornucopians like Tillerson. I’ll see your 18 TW and raise you another 20 TW.
In this debate of wrong vs. wrong, error vs. error, I often wonder which side is the more oportunistic, which side has the best demagoguery.
Mike finally figured out who has overrun this site, and it sure ain’t the carbon cornucopians.
In this debate of wrong vs. wrong, error vs. error, I often wonder which side is the more oportunistic, which side has the best demagoguery.
At the end of the day ‘Nature’ really doesn’t give a shit!
Having said that, I very strongly believe that there are already too many people using too many resources on this planet.
If the the 1.3 billion people who currently still do not have access to electricity, clean water, sanitation, refrigeration etc.. etc… expect to get any of that from fossil fuels for the long term, then all of us may as well just throw in the towel now, because that just won’t work! The only option those people have is small scale distributed solar.
If holding this opinion makes me a cornucopian then so be it!
Fred Maygar said:
At the end of the day ‘Nature’ really doesn’t give a shit!
Well that’s certainly what the New Atheist boys’ club would have us believe, at least some of the time.
Then their humanist side asserts itself and they do a quick 180.
Richard Dawkins gave a great demonstration of this in a recent PBS interview. One must guard against whiplash from the cognitive dissonance.
http://www.pbs.org/faithandreason/transcript/dawk-frame.html
Dawkins first tells us that “Darwinian natural selection” is “the process that has brought all living things to be the way they are.”
The “whole beauty of the Darwinian explanation for life is that it’s self-sufficient,” he adds. “Nothing extra, nothing extraneous needs to be smuggled in. It all works and it all — it’s a satisfying explanation.”
But no sooner than having said that, Dawkins then asserts that “we can override biology with free will.”
We can “depart from the dictates of selfish genes” and “build for ourselves a new kind of life which as far as I am concerned the more un-Darwinian it is the better, because the Darwinian world in which our ancestors were selected is a very unpleasant world,” Dawkins tells us. “Nature really is red in tooth and claw.”
Dawkins apparently believes in immaculate conception, because he makes no effort whatsoever to explain — using his “self-sufficient” Darwinian explanation which requires “nothing extraneous to be smuggled in” — how this free will, which he says can “override biology” and the “Darwinian world,” evolved or came into being.
But no sooner than having said that, Dawkins then asserts that “we can override biology with free will.”
Not quite sure how you might have come to that conclusion. I very highly doubt that he ever said anything of the sort. Dawkins defers to his friend, philosopher Daniel Dennett on that subject and I agree with Lawrence Krauss, in the link below, it doesn’t matter all that much.
FREE WILL – Lawrence Krauss and Richard Dawkins
https://goo.gl/3SdsEo
You might want to take in a short talk by Dennett on consciousness depending on how far down the rabbit hole you are willing to go with this whole topic.
Daniel Dennett at ZURICH.MINDS: Consciousness Explained
https://goo.gl/Qf9zvK
What?
PBS is now profaning the holy words of Saint Dawkins?
Tell me it ain’t true!
We need 60 billion people to make it happen even faster and everybody can observe the dumb look on everybody’s faces.
The Scream, 1893 by Edvard Munch
Super Mario just lifted oil and everything else.
This is capitalism and free markets.
The “Super Mario” reference:
http://www.theguardian.com/business/live/2015/sep/03/markets-european-central-bank-mario-draghi-inflation-live
Does this mean the ECB, under the aegis of QE, will now begin buying bonds issued by business corporations, as was previously hinted?
While they’re at it, maybe they could buy up some of the bonds issued by the companies heavily invested in drilling shale oil and gas wells?
Central bankers will buy everything if the TBTE banks deem it necessary, including the kitchen sink and that spare one from the 1930s in the corner in the barn. 🙂
QE is primarily intended to liquefy banks’ balance sheets and to fund incremental deficit spending to prevent nominal GDP from contracting, as well as the secondary effect of pumping up financial asset prices in an attempt to encourage a so-called “wealth effect”, which empirical work has repeatedly shown to be a weak effect, if not a dubious notion.
Moreover, with net flows to the financial sector effectively absorbing all annual US GDP output, the bigger the bubble, the larger the net flows to the financial sector, which primarily benefits Wall St. and the top 0.001-1%.
Japan is a classic example of more than 15 years of ceaseless QE, and the only demonstrable result was the sufficient funding of GDP spending to prevent the decline of nominal GDP and private GDP at the level of the Asian Crisis, but it cost them gov’t debt of 230% of GDP.
The US is headed down the same path, only we are demographically behind Japan by 10-11 years, give or take.
Maybe you’ve already seen it, but there’s a very good post on Michael Pettis’ blog which tries to connect some of these various dots.
He seems to think China might also be headed down the same path as Japan, with no Chinese banking or financial crisis required.
“If we don’t understand both sides of China’s balance sheet, we understand neither”
http://blog.mpettis.com/2015/09/if-we-dont-understand-both-sides-of-chinas-balance-sheet-we-understand-neither/
Even the supposedly mighty, unstoppable China runs into Limits:
https://www.washingtonpost.com/world/asia_pacific/mixing-doves-and-heavy-weapons-china-marks-world-war-ii-anniversary/2015/09/02/1b046008-5028-11e5-b225-90edbd49f362_story.html
Even the military cannot escape the Limits.
NOT OIL (in the strict sense)
Solar panels installed in 12 schools to cut gov’t’s electricity bill
The state-run agency says three more schools and select government offices are to be outfitted with solar panels under phase two of the project.
The institutions are the Kingston High School, Rose Hill Primary and St Hugh’s High School, and the main offices of the Scientific Research Council, the Office of Disaster Preparedness and Emergency Management and the PCJ.
The PCJ says all 18 systems are expected to generate 344,000 kilowatt hours of energy per year.
It says after all the systems are operationalised the government expects to save an estimated $16 million annually on electricity bills.
The actual amount of oil saved will depend on the heat rate of the generators used but, just using an arbitrary converter I found using Google, 344,000 kWh works out to just over 200 boe. A spreadsheet I have put together with documented solar PV installed in Jamaica, has a figure of almost 7,500 kW, which should generate 15,041,294 kWh per year, saving more than 8,800 boe. Add the 20 MW utility scale plant now under construction and by early 2016, we should be looking at more than 27,500 kW, generating more than 55,191,000 kWh and saving more than 32465 boe.
Not the sort of news that those suffering from low oil prices will be happy to hear although, those numbers hardly make a difference to anybody, except the consumers of the electricity/oil. Those consumers will be very happy to be seeing these savings when the price of oil goes back up, as it most certainly will.
All: I will be totally out of pocket until late Saturday. Moving. No internet.
Ron