In North Dakota it is Mostly Just One County

North Dakota publishes crude oil production numbers for each county. The problem is these numbers do not include confidential wells. Their totals for all North Dakota do include these wells however. I have figured out a way to estimate, pretty closely I believe, each county’s share of those unreported wells. That is take each county’s percentage of total production, then assume they would have the same percentage of confidential wells. It is not exact but close enough.

North Dakota Total

The data is published only as a PDF file and cannot be copied and pasted. Therefore I must input the data for each of 18 counties, each month, manually. That is very time consuming and I only had the patience to do 15 months. But that is plenty for what I am trying to show.

ND by County

All the rest of North Dakota combined produces less than the lowest of the big four.

ND McKenzie

McKenzie County is where most of the action is. It shows no sign of peaking yet. After adjustment for confidential wells, McKenzie County’s adjusted production was up 20.5 thousand barrels per day in March. All the rest of North Dakota combined was up 3.5 thousand barrels per day in March.

ND Mountrail

Mountrail, the second largest producer in North Dakota seems to clearly have peaked. Mountrail County’s adjusted production was down just over 2 thousand barrels per day in March.

ND Dunn

Dunn looked like it was about to take off in February, up over 8 thousand bpd but slowed dramatically in March with adjusted production up only about 1.25 thousand bpd.

ND Williams

Williams County, North Dakota’s fourth largest producer, was up about 3.4 thousand barrels per day in March, less than half its gain in February.

ND The Rest

I think the rest of North Dakota has peaked. Though they were up about 900 barrels per day in March they are still down about 5.6 thousand bpd from their peak in October 2013. And notice their peak was in October, not November when the other four counties peaked just before the bad weather outages in December.

The bottom line is that all North Dakota, except for three counties, has peaked. And only one of them, McKenzie, is still increasing relatively strong. I expect North Dakota to keep increasing the rest of the year but to peak late 2014 or early 2015.

The below chart of is in thousand barrels per day.

Montana

Part of the Bakken is in Montana. Montana peaked back in September of 2006 at 102 thousand barrels per day but the Bakken boom brought a new surge of drilling rigs into the state. That brought on a new surge of production which peaked in July and August of last year at 82 thousand bpd. They are now down 9 thousand bpd at 73 thousand bpd.

Though McKenzie County ND is still going great, it is the only sweet spot left in the Bakken. All increase in McKenzie County and any slight increase in Dunn and Williams Counties must overcome the decline in Mountrail County and the rest of North Dakota and Montana.

The Outlook for the Bakken is not really as great as a lot of the Bakken cheering section would lead you to believe.

And just one bit of news to report:
Russian daily oil production down for fifth month in a row

MOSCOW, June 2 (Reuters) – Russian oil output edged down to 10.53 million barrels per day (bpd) in May from 10.54 million bpd in April, declining for the fifth month in a row in terms of daily production, Energy Ministry data showed on Monday.

In tonnes, Russian oil output reached 44.535 million last month, versus 43.119 million in April.

That is an decrease of only 10,000 barrels per day. May was a 31 day month so the monthly figures show a larger figure for May.

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184 Responses to In North Dakota it is Mostly Just One County

  1. Watcher says:

    Where are the recent drilling permits? All in that county?

    • David Hughes just sent me the following post;

      Ron,

      Here’s an answer to your first commenter on permits. These are permits granted in the last 180 days for the Bakken and Three Forks by county.

      (Posted Below)

      Personally I think that Mountrail has life in it and it does have the highest cumulative production. Well quality is best in Mountrail and a close second in McKenzie. I’m analyzing well quality trends over time among other things for release in September.

      Thanks for your post.

      Dave

      • Watcher says:

        Now that’s a response.

        • Dennis Coyne says:

          David Hughes did a great presentation last October on Shale gas and light tight oil in the United States.

          I will post at the bottom so the chart will show up better.

  2. KLR says:

    Some info about confidential wells: What is a confidential list? – Mineral Rights Forum I was familiar with the term “tight hole” for such a notion, where the operator reserves the right for data to remain confidential for some length of time – the prime example being the test well drilled in ANWR in the 80s, the KIC well I think it’s called. But that just seems to be in regards to data collected, not production values.

    Why do the ND total and total minus confidential numbers only part company last October? Does this mean the operators are trying to mask production declines, or is it just some fluke of the ND data gathering modus – in other words, do discrepancies like these show up whenever you gather numbers, with the breach always manifesting itself 9 months previous to the current date? The fact that the discrepancy shows in all counties 9 in October leads me to believe the latter theory is correct, but perhaps others know more about what’s going on here.

    • HVACman says:

      “Why do the ND total and total minus confidential numbers only part company last October? ”

      From ND’s purpose and limiation on confidentiality:

      “To provide for the confidentiality of well data reported to the commission if requested in writing by those reporting the data for a period not to exceed six months.”

      Confidentiality expires after 6 months, so when a well’s confidentiality agreement expires, the protected production data is then entered into the public database. That means that 6-month-old production data will be complete, but more-recent monthly production data will be missing an increasing amount of confidential production data.

  3. Ovi says:

    Is there any way of telling whether the confidential holes are high producers or just poor.

    • No, there is no real way of telling. But you can get some idea by looking at them after they are released. Go here: Bakken Blog then click on: “ND drilling permits issued week ending May 30”. That will give you “Released from ‘tight hole’ or confidential status” as well as “Producing wells completed” and permits.

      But in more than half the “Released” well data they do not give you any data at all. Some give you “bopd” barrels of oil per day and “bwpd” barrels of water per day. And as you can see many of them are god awful, starting with just a couple hundred bopd and more water than oil. But a few of them are pretty good. However I suspect the ones that they give no production data at all for are really bad. But I have no way of really knowing that. The “producing wells completed” I think, in general, are a bit better than the released confidential wells.

      • Mike says:

        If I may offer an actual operators perspective on “confidentiality;” withholding down-hole logs on a conventional resource wildcat well, even a development well after the discovery is made, is common and is protective of information the operator has paid dearly to obtain and that may benefit it with regards to further leasing in the area of the discovery. Offshore, for instance, where leasing for federal blocks is often very competitive, communications from platforms and digitally transmitted data, offshore to the office, is often encrypted for confidentiality reasons.

        In unconventional resource plays, where sweet spots have all been pretty much delineated and information about little tweaks in technology, for instance frac techniques, gets spread from beer joint to beer joint within days, withholding well logs is a simple matter of checking a box on a form and being lazy, or overloaded with other things more important. I honestly don’t think its very much more complicated than that. There are very few secrets on the tight oil boulevard anymore and given the vast amounts of HBP (held by production) acreage, what would an operator gain, or lose from not sending in its downhole logs or MWD data?

        I don’t know much about any place other than Texas but here, withholding information about production is impossible. When oil gets moved off lease, the State knows about it. It may be taking the State a while to do the right things with that data (lol), but I am told it is working that out. I believe that Mr. Patterson is correct, some of the form filling in almost borders on 5th grade level failures, but good help is hard to get round these parts these days.

        • Watcher says:

          Tiny additional . . . pretty sure I read in a Bakken forum that confidentiality status requires nothing more than filling out a form. There is no evaluation of justification. A request gets the status.

  4. OldTech says:

    There are screen image to OCR tools that will convert an image to text to get around the pdf DRM. One is http://www.boxoft.com/screen-ocr/ and there are others. I would not expect them to be perfect, but they may be better than doing it by hand.

    • Thanks OldTech but I have just been informed, by Ovi Colavincenzo, that Excel already has a “Text to Columns Wizard” already built in. Imagine, I have been using Excel for years and I had no idea.

      And it only took a minute to figure out how it works. It is so easy it’s silly. It is right there, click on “data” then “text to columns” and follow the simple instructions. And to think I have been printing out the data on paper, then entering it keystroke by keystroke.

  5. BAU says:

    Ron/readers; There’s this guy who posted here a few times, he wrote a (paid unfortunately, but guy’s gotta eat right) report on oil depletion / eroi etc. I was checking out his site and there was some extra info there now, what’s your opinion on his numbers? As far as the main idea goes it’s not really far out; decreasing eroi, more energy/$ needed for production, etc. But it’s interesting to see some numbers, which honestly seem very DOOMy to me. (And I’m “into” DOOM)

    What he’s saying (at least what I think he’s saying) is that work put into “getting oil” comes from oil which has an efficiency of 20%-ish , thus there is an amplified decrease in oil/energy available to society etc. And in 2030 the party is over in terms of ROI.

    http://www.thehillsgroup.org/depletion2_019.htm
    http://www.thehillsgroup.org/depletion2_020.htm

    He should spellcheck and pimp the site some though, even DOOM needs some marketing. 🙂

    • Woody says:

      Interesting comment in the explanation of the first graph that oil will increasingly become an energy carrier rather than an energy source. We are already seeing that in the oil sands and steam injection in old oil fields using natural gas for the heat source. Could easily see coal used for this purpose also as it will probably be cheaper, for awhile, to upgrade coal using the heat to extract oil rather than gasification and conversion to oil products.

    • I haven’t delved into it that far but I am pretty much in agreement with his findings. As to the doom date however, I would need to examine it a bit closer before I agreed with his date.

      • Jimmy says:

        Please do delve into it Ron! I can’t wait to see what you parse out of that analysis!!

    • BW Hill says:

      BAU said:

      “What he’s saying (at least what I think he’s saying) is that work put into “getting oil” comes from oil which has an efficiency of 20%-ish , thus there is an amplified decrease in oil/energy available to society etc. And in 2030 the party is over in terms of ROI.”

      Your read it correctly. For petroleum to act as an energy source it must be capable of providing sufficient energy to support is own production process. If it can’t, it becomes an energy sink as opposed to a source. That is certainly not a world shattering concept, but it is one that is usually overlooked. Over the 60 years period we looked at the conversion of the energy from crude into the work input at the well head, it took place at about a 20% efficiency rate. For every one BTU increase in work needed to extract petroleum, the energy remaining for use by the general economy declines by about 5. It is the quintessential Red Queen Scenario.

      Ron,
      If you would like a copy of our report, go to the site, and send me your mailing address. If your in the US we’ll pay the postage. It’s a dollar in the US. Sent one to Russia the other day, and it was $13. I hope the Russians can run their shale operations cheaper than their Postal Service?

      http://www.thehillsgroup.org

      • BAU says:

        hey BW, thanks, appreciate it. And I found the site really interesting. But check it one more time there are some text errors witch distract from the message a bit. I don’t mind but some do and it’s good info you have, rgds.

  6. Allan H says:

    The oil and gas ARC IMS viewer shows that most of the rigs are in the McKenzie County area or nearby.

  7. Brian says:

    Ron, have you tried using something like Tabula to pull the data out of the PDF? It doesn’t allow selection over multiple page boundaries, as I recall, but you should be able to simply select the data from each page in turn to extract it and get it into a more usable environment. Just an idea. Hope it’s helpful.

    • Thanks Brian but I have just discovered that Excel has a “Text to Columns Wizard” already built in. I had no idea. I don’t think my older version, 2003, had it but I now have Office 2013 and it does have it. It looks rather simple so I will be using that from now on. It will really make things easier for all the North Dakota data which is all in PDF format.

  8. Old farmer mac says:

    Ron ,

    Do you know how many exploratory wells have been drilled outside the handful of counties in ND that are producing oil now?

    This might throw some light on whether more sweet spots will be discovered.

    If I remember correctly over a hundred wells were drilled in the North Sea before hitting a good spot.

    • Well I do know of eight such wells.
      Chesapeake Drills Unsuccessful Wells in Southwest ND

      In 2012, North Dakota made oil headlines by taking over as the number two producer in the nation.

      While production continues to ramp up daily, there is one part of western North Dakota were the excitement of oil has gone bust.

      Chesapeake’s attempt to find the southern edge of the Bakken, is being described as the largest failure in drilling in the state since the 1980’s.

      There are a few well sites in western North Dakota that look more like ghost towns than multi-million dollar holes.

      Chesapeake secured leases in a large part of the state, south of I-94.

      They drilled 8 wells, only 3 produced oil — but at minimal amounts.

      So little that all holes have been shut in.

  9. Kam says:

    “That is an decrease of only 1,000 barrels per day.”
    10,000 🙂

  10. Cave Bio says:

    I am usually very skeptical when I see new technology that could harvest hydrogen as a fuel–for those who are ready to sarcastically point out that hydrogen is not an energy source, note I am not saying hydrogen is an energy source. But this idea seems quite interesting. When combined with recent developments in catalysts for the electrolysis of water it presents interesting possibilities.

    http://www.sciencedaily.com/releases/2014/06/140602115839.htm

    • Cave Bio, fixed your typo. However… The article is all transforming hydrogen into a safe liquid fuel. It is not about a cheap way to get hydrogen from water. That is a physical impossibility. That is if you could separate hydrogen from water using less energy than you get when you burn it and turn it back into water then you would be violating the first law of thermodynamics.

      • Cave Bio says:

        Hi Ron,

        Thanks for fixing my typo. I guess I was not clear with my post. There have been other recent developments using catalysts that significantly lower the energy needed to drive the electrolysis of water. While no catalyst can ever turn an endothermic reaction into an exothermic reaction, catalysts can lower the energy needed to drive the process forward.

        The innovation noted in the link I provided allows for the storage of hydrogen. As you know, the problem with solar energy has been storage. This type of innovation, combined with innovations and drops in the cost of the production of solar PV, and the catalysts I noted, are, in combination, potentially significant developments.

        Listen, I know we are currently in a race against doomsday. Perhaps I am grasping at straws, but I hope against hope that we can move fast enough to prevent total collapse.

        Best,
        Tom

        • TechGuy says:

          “The innovation noted in the link I provided allows for the storage of hydrogen. As you know, the problem with solar energy has been storage. This type of innovation, combined with innovations and drops in the cost of the production of solar PV, and the catalysts I noted, are, in combination, potentially significant developments.”

          Producing Hydrocarbons from Hydrogen and CO2 gas is terribly inefficient as the bonds between Carbon and Oxygen are quite strong and required a lot of energy to break them, no matter how efficient the catalyst are. Catalysts do not allow negative energy reactions to occur (violation of thermodynamics), in the sense that they can liberate energy from chemical reactions that required energy inputs. The theoretical limit for a catalyst is that 100% of the input energy drives a chemical process at 100%. Unfortunately even the very best catalysts never come close. The research you’ve looking at is improving dismal converstion rates into just bad conversion rates. For instance an older method to split CO2 might be 5%, meaning that 95% of the energy is lost to thermal processes. the newer processes might be 25% to 30% efficient.

          The issue is that all these electrochemistry processes that manipulate carbon and hydrogen need lots and lots of electricity to function. where as fossil fuels already provide energy. Even if they found catalysts that are 98% efficient there is still no viable power source to drive the processes. At this point there is no alternate energy source to replace fossil fuels with the same EROEI (or even close).

          “innovations and drops in the cost of the production of solar PV”

          PV farms are less than a drop in the bucket of energy demand. It would take more than a 100 years to scale up PV and storage system to replace fossil fuels, even if every possible economic resource was devoted to alternative energy.

          FWIW: Don’t bet on the world saving itself. Put together your own mitigation program instead and rely on yourself to make the transition.

          • Cave Bio says:

            I get the feeling that many people just don’t thoroughly read a person’s post before responding.

            1)Nothing that I stated suggested a violation of the laws of thermodynamics.

            2) The papers I noted are not published in rags. These are genuinely interesting and potentially scalable results.

            3) Saying it would take 100 years to scale up PV is as meaningless as saying we have 100 years of natural gas.

            Best,
            Tom

  11. Political Economist says:

    Ron, thank you for your harld work putting the data together. The Russian update is very interesting as well.

  12. HVACman says:

    Two comments:

    re: electrolysis catalyst break throughs. The break throughs involve creating less expensive catalysts required in the process to break down water into H2 and O2 via electrolysis, which would make H2 production equipment less expensive. The process currently requires very expensive platinum-based catalysts (kind of like what is used in the catalytic converter in automotive exhaust systems) . Catalysts can accelerate a chemical process by lowering certain reaction energy input thresholds, but do not change the fundamental thermodynamics that govern net input electrical energy requirements to electrolyze water into H2 and O. That is the hurtle that makes electrically-derived H2 inherently uneconomic.

    re: science daily article. This is about a way to STORE hydrogen in the form of liquid formic acid, which increases energy volumetric density and reduces the issue of gaseous hydrogen storage volumes and pressures. This does nothing to resolve the fundamental long-term issue of how to create hydrogen in the first place without reforming natural gas (the electrolysis issue).

    • HVACman says:

      oops – should have been nested under Cave Bio’s post.

    • Cave Bio says:

      Hi HVACman,

      I guess I was really not clear with my initial post. I guess I just assumed it was common knowledge that the current catalysts are expensive platinum based catalysts. Anyway, I have added a few links above about new cheaper catalysts, which I had in mind when I wrote my initial post.

      Best,
      Tom

    • Old farmer mac says:

      It is perfectly true that there is no way to obtain molecular hydrogen that consumes less energy than can be obtained by then burning the hydrogen.

      But the copper clad cast iron laws of physics and chemistry don’t necessarily ALWAYS directly apply as a practical matter in real everyday engineering situations.

      It is altogether possible that machinery such as fuel cells or even internal combustion engines can be built cheap enough to make portable power obtained from H2 economically viable.

      IF for instance the energy cost of obtaining hydrogen by electrolysis of water can be reduced ENOUGH the energy lost in the electrolysis process can potentially be ” recovered” at a big energy ”profit” in actual use of the hydrogen thru increased efficiency. A fuel cell and an electric motor can drive a car or truck far more efficiently energy wise than a gasoline or diesel burning engine.

      IF both fuel cell costs and electrolysis costs come down far enough- this essentially means attacking the problem from both ends- we could someday be hauling potatoes with hydrogen fueled trucks with the hydrogen obtained with wind or solar power from wind and solar farms located where the land is politically dirt cheap and the wind and sun resource is excellent.

      I know virtually nothing about chemical engineering but a hydrogen electrolysis plant would seem to be a potentially perfect way to use any surplus renewable energy or even the entire output of a wind farm or solar farm or even a wind or solar plantation——-if the plant doesn’t cost so much to build it that it must run constantly in order to pay for it.

      It is even possible that there will still be substantial increases in the efficiency of internal combustion engines – if materials suitable for pistons and cylinders can be invented that can withstand higher temperatures in the combustion area that are also cheap enough to be mass produced. Since H2 burns super clean it might go a long way in making such an engine practical by preventing the formation of combustion byproducts that tend to corrode engine components.

      But for what it is worth I think batteries are going to eventually dominate in light transportation and rail and diesel will continue to dominate in heavy transportation for the foreseeable future.The grid is there and battery costs are falling fast. So are the rails and the diesel fueling infrastructure for the trucks.Hydrogen is hard to handle and tanks capable of holding enough to really matter cost both arms and both legs. Fuel cells may never catch up with batteries in terms of costs.Mobile fuel cells just aren’t going to be very common for a long time if ever.Synthetic diesel made from coal or even biodiesel burned in conventional engines may always be cheaper than fuel cells and hydrogen.

      Now compressed natural gas is another matter.The technology is ready and affordable if the cost of natural gas stays lower than the cost of diesel by at least a third or so in terms of energy content. It may be that larger trucks will be running on it in considerable numbers in a few more years. The only thing REALLY holding this up is the lack of truck stops able to dispense it and the fear of truckers that if they buy a dual fuel truck the extra purchase money will be wasted because the price of the gas will go up to the equivalent of diesel.

      There are enough truck stops located on or very close to natural gas pipelines for natural gas trucks to become a practical reality. Most trucks stay pretty close to main highways and most trucks don’t go over a few hundred miles from ” home base” anyway.

  13. Enno says:

    Based on the public monthly detailed production reports from the NDIC, I performed a county analysis, please see below the results.
    A few comments:
    – based on all wells since 2009, I averaged the 1 year cumulative well production (pre peak month + peak month + 11 months, only oil), per starting year. You can see this in the first table.
    What I found interesting is that from these numbers a downward trend emerges since 2011. The average 2011 well (there were 1221 of them) produced 81738 barrels of oil after 1 year, while the average 2013 well (that already reached 1 year production), produced 79443 barrels of oil after 1 year (there were 565 that did).
    – I listed the average 1 year well return since 2009, per county, in the table below. Mountrail has so far produced the best wells, followed by Mc. Kenzy. You can see the total # of wells per county, since 2009, in the last column.
    – From the 4 counties that had at least 500 wells during those years, I show the 1 year production graph, per starting year, in the chart on the right.
    These well & production numbers include confidential wells and their production.

    • Enno says:

      where it reads “bpd” or “barrels per day”, I mean just “barrels of oil”, not per day.

      • Dennis Coyne says:

        Hi Enno,

        Your analysis applies to all of North Dakota, and not just the Bakken (which is true of Ron’s analysis as well, I think), is that correct?

        I only ask because of the title of Ron’s post and you didn’t say explicitly that it was all North Dakota.

        • Dennis Coyne says:

          Oops. My bad, I guess when I see North Dakota I think Bakken automatically.

          • Enno says:

            Hi Dennis,

            Indeed the whole of ND.

            • Dennis Coyne says:

              Thanks Enno. And thank for your cogent analysis.

            • Dennis Coyne says:

              Using data provided by Enno Peters, the 12 month Bakken well average for wells which started producing between Jan 2009 and March 2013 in North Dakota is about 79 kb. I use a slightly different method from Enno and just take the average of all Bakken wells where month 1 is the first month of production.

            • Dennis Coyne says:

              Looking only at the trend from 2009 to 2013 for all North Dakota Bakken and Bakken/Three Forks wells. I used 12 month windows from April to March because March 2013 is the latest date for wells with 12 months of output data. Basically the 12 month well output for Bakken wells dropped from 2010 to 2011 and then has remained steady at about 79 to 80 kb. see screen shot below.

              • Dennis Coyne says:

                I should have said well output dropped from the april 2009 to march 2010 12 month period to the following 12 month period (2009 to 2010 more or less).

            • Dennis Coyne says:

              I have taken a quick look at the 3 month cumulative output and 6 month cumulative output for the Bakken for wells which started production from Jan 2008 to Aug 2013 for the 6 month series and Jan 2008 to Nov 2013 for the 3 month series.

              So far the EUR does not look like it is decreasing and based on 12 month data for wells brought online in April 2013 the EUR also looks pretty steady.

              Part of this is more proppant and more fracking stages mitigating lack of room in the sweet spots which cannot continue forever. I think the EUR decrease will become apparent by Dec 2014 to June 2015, time will tell as it always does.

              • Enno says:

                Hi Dennis,

                Thanks for verifying this. Indeed it looks like the variation I spotted is not statistically significant yet. As you say, we need more data before we can conclude anything.

                • Dennis Coyne says:

                  Hi Enno,

                  I just wanted to filter out the non-Bakken wells because my focus is the Bakken. Your analysis shows that the non-Bakken doesn’t really effect things much, but I just wanted to see what a Bakken only analysis looked like.

                  And again thanks for sharing your data and analysis.

    • Watcher says:

      Any chance the talk above about confidential status for 6 mos is involved here? Confidential declaration may have grown . . . well it must have grown as well count pre month grew. So you’d lose production data, unless you limit your analysis to over 6 mos ago?

      • Enno says:

        Hi Watcher,

        No, the above numbers include the confidential wells and their production. The detailed reports provide a reliable way to closely estimate these.

  14. Dave Ranning says:

    Things are getting interesting.
    How long can equilibrium be maintained?
    Inquiring minds want to know.

  15. KC says:

    Re economic effect of Peak Oil –

    The two scenarios emerging – either

    1) a fast collapse, being perhaps a few weeks to a few years, where governments disintegrate and we fall off the cliff into the next dark age; or

    2) a slow collapse, possibly a decade, possibly a century or more, where governments recognize the predicament and ramp-up mitigation efforts to stem the fall onto a soft-landing…..

    It’s not unreasonable to believe that varying degrees of both scenarios might emerge, among nations, among regions, states, cities, towns , even within neighborhoods.

    Some cities and towns are being proactive now, already having installed networks of interconnecting bicycle pathways, walking trails, light rail, and promoting community local food and community and neighborhood gardening associations. Portland, Oregon comes to mind, among others – Seattle, Denver, Austin, Minneapolis, New York, and Boston, to name a few.

    While some might suggest that the large cities will be the greatest losers, I can see a circumstance where they instead emerge among the strongest. Many of the large cities are also among the wealthiest worldwide, and have the money and resources to execute their own express mitigation efforts even in the event of failure of national or statewide efforts.

    I’ve attempted my own efforts at mitigation, relocating to small-town rural America – a town of 7,000 at least three hours from anywhere in the middle of a high desert plateau, uber fertile with a very productive farming community.

    Yet, I found that even such a community was totally dependent on outside fuel supplies , electric utility, maintenance, goods manufacturing, healthcare, and that is just to name a few, off the top of my head. It doesn’t help that over 65% of population of such communities are dependent on federal and state aid, in the form of food stamps, subsidies to women and infant children (WIC), federal military bases or federally-administered farm land, social security income, and school aid, among too many other programs to count on two hands and two feet.

    I believe that both Ron’s and OFM’s are the most likely scenarios and that they will likely occur simultaneously around the world to varying degrees, depending on the national, state, and local circumstances of wealth distribution, remaining natural resources, propensity to cooperate, populations, preparedness and mitigation efforts.

    Why does it have to be either or rather than both at the same time?

    • Anon says:

      A fast collapse in the US isn’t likely. If the US can’t get to, let alone sustain the 9.6m+ idiocy that the EIA’s consultants have slapped together, it’s not a huge problem *for us.* ~ 8m is still a whole lot of production and the US can buy imports; we buy from a wide variety and buy almost all of Canada’s production, at 3.1m bpd last year. Venezuela, Mexico and Colombia sent another ~ 2m in 2013 and they don’t have alternate buyers. Plenty of waste to cut as well; scrap all the oil power plants, rationing such that wasteful junk like Jet-skis go away, etc.

      At a fundamental “do we have resources” level, the United States is fine. Not for a good economy, but that’s not really what is being discussed if we start talking a permanent downward trend in oil and ~ 20 years estimated to adapt.

      Where it’s going to hurt Americans immediately is in those places with high fixed oil usage and little-to-no disposable income. Non-agricultural rural areas will get hit worst (they have no ability to raise wages to match fuel inflation), then poorer suburbs (same issue). Nevada eats it hard between Las Vegas being a car country mess and it living off of recreational air travel; that state could collapse because no one would live there otherwise, no agricultural or natural resource value and already running out of WATER, ffs.

      What else is going to hurt America is the global depression that would be set off by Asia and Europe running headfirst into a wall. I guess the question becomes how well the US can take that psychologically.

      • Fred Magyar says:

        “What else is going to hurt America is the global depression that would be set off by Asia and Europe running headfirst into a wall.”

        This is what collapse might look like to us, but it is life as usual to billions…
        http://safeshare.tv/w/vwncRciSFb

        Good luck to our children!

        • Perk Earl says:

          Fred, maybe they need a communal ladder to get on the roof of the train. Does someone crawl along the roof saying, “Tickets please, tickets.”

        • Yorkshire Miner says:

          Brings back a few memories when I traveled through the Indian sub continent on a motor bike nearly 40 years ago. some of the tributaries in the Delta are so wide you cannot see the other side. Not quiet true, but near enough, you have to imagine a massive delta the size of West Germany with over twice the population, to put things in perspective. It was bad enough then with overcrowding, large barges being pulled by gangs of men along tow paths is a sight I will always remember. The problem is that it is too fertile excellent alluvial soil plenty of water and sun with perfect growing temperatures and it is not unusual to get four crops a year. It is a disaster waiting to happen, all it is it is going to take is a failure of the rice crop such as the failure of the potato crop in Ireland 150 years ago and the consequences do not bear thinking about. The fatalism of the Islamic religion will only add to the problem. I can clearly remember seeing a farmer who had just had his villages wiped out by a typhoon pleading too the world for help what he really wanted was money to rebuild the mosque as they hadn’t got a place to pray. They are also the largest uses of nitrogen fertilizer in the world using nearly 60 tons per sq kilometer. nearly twice as much as Egypt there nearest rival.

          A little bit of imperial history might be in order, when the East India Company took over the running of Bengal after winning the Battle of Plassey in 1757 there eyes must have shone at the mouth watering prospect of being able to tax a population the size France 21 million and a standard of living about the same.

      • Anon, no one is talking about a fast collapse while the US is still producing 8 million barrels per day and imports are still pouring in. We, or at least I am, talking about when US production is less than half that and almost no imports are coming in. And we are talking about a global collapse, though it might start in other countries it will not take very long to spread around the world.

        We live in a global economy. We outsource almost everything we consume. A collapse of worl trade would be a collapse of the economy.

        • Watcher says:

          So consumption in the US can cut by 1/2 to the 8 mbpd domestically produced, and what? Imports still coming in? Well, maybe China will outbid the shipments from Mexico and Ven. And KSA. And the 400K bpd coming from Russia. And Nigeria.

          Remember, China has to add 60 mbpd of consumption to get to US per capita standards. Ditto India. That’s their fair share, after all. No reason for them to accept a lesser lifestyle.

          Pretty much only Canada has nowhere else to send their exports. So the US would be operating on what, possibly, 11 mbpd? Call it 12, because all the domestic drilling will be nationalized and workers will be forced at gunpoint to drill rather than look for another job. That extra 1 mbpd has to be squeezed out.

          That’s what, a 7 mbpd chop? I gotta say . . . jetskis don’t burn that. So what industry is going to get shut down in order to ship food to NYC? NASCAR? Okie doke, but I kinda don’t think they are up to 7 mbpd either.

          The airlines? Maybe. Shut them down. That’s a lot of workers just lost their jobs. All of Boeing. All the airport staff and concessions. All the parking kiosks. That’s rather a lot of tax revs just disappeared, too. And of course civil service rules require finding new work for the FAA staff, so no decrease in expenditures.

          Basically, for the gentle, kindly, congenial scenario of citizens linking arms and singing party songs as they walk to walmart’s grocery shelves to unfold you have to outright and overtly say China and India agree to wave a hand of acquiescence and accept their subordinate position of perpetually weaker economy and consequent weaker programs for the poor than America has.

          Do the math, folks. 17ish mbpd US consumption of 320 million ppl is 0.053 barrels/day per person. 1.2 billion X 0.053 barrels/day/person 64ish million bpd. Up from their present 10. And fast. Right now. They need to get their people properly supplied as fast as possible. Why make them suffer one moment longer than necessary? (and double all that for India).

          THAT is the Great Wall of China, coming soon to a Walmart near you.

          • Patrick R says:

            ‘Remember, China has to add 60 mbpd of consumption to get to US per capita standards. Ditto India. That’s their fair share, after all. No reason for them to accept a lesser lifestyle.’

            Never gonna happen. And the US is going to keep cutting use too; no one is going to have US per capita consumption of recent years, this change is already well underway in the US and elsewhere in the west. The major developing nations are still going up but will reach peak per capita use at way lower levels than what you fantasise as their right. No peoples have a ‘right’ to any resource in particular; we will all only get what we can afford.

          • Jeffrey J. Brown says:

            Copy of a post I made on Econbrowser.com:

            From “A Christmas Carol in Prose, Being a Ghost Story of Christmas,”

            “Are these the shadows of the things that Will be, or are they shadows of things that May be, only?”

            Then there is the “Chindia Factor.” Following is a chart showing normalized liquids consumption for China, India, (2005) Top 33 Net Oil Exporters and the US, from 2002 to 2012 (2002 values = 100%), versus annual Brent crude oil prices.

            On the following chart, note the divergent responses to the post-2005 increase in Brent crude oil prices for “Chindia” and the Top 33 exporters versus the US:

            http://i1095.photobucket.com/albums/i475/westexas/Slide14_zpsb2fe0f1a.jpg

            The $64 Trillion question is what happens in the next 10 to 20 years. At the 2005 to 2012 rate of decline in the ratio of Global Net Exports of oil (GNE*) to the Chindia region’s net imports (CNI), the GNE/CNI Ratio would be at 1.0 in the year 2030, 16 years hence, which would theoretically leave zero net exports of oil available to net oil importers other than China & India:

            http://i1095.photobucket.com/albums/i475/westexas/Slide1_zps9ff3e76d.jpg

            • Jeffrey J. Brown says:

              *GNE = Combined net exports from (2005) Top 33 net exporters, total petroleum liquids + other liquids

          • The Wet One says:

            “Pretty much only Canada has nowhere else to send their exports.”

            And we’re working at fixing that. Our dear neighbours to the south don’t pay enough and we’re not entirely happy about that. There’s no good reason for any bitumen bubble to be suffered by Canada again. No good reason at all.

            • Watcher says:

              Nah, y’all have been had. Your envirowackos are getting checks from Warren whenever they have a chance to stop that pipeline to the coast.

              As for insufficient exports, one sort of doesn’t care. China has no reason to abuse its citizens by not providing the sort of health care and welfare benefits funded by bigger GDP, and bigger GDP only happens with explosively bigger oil consumption. To deny them this is to abuse the poor and they have no reason to allow the US to abuse Chinese poor like that.

              Then add India’s poor to this. India can’t afford it? Maybe India should counterfeit dollars.

              If exports can’t grow, then take from those burning the most, by any means possible.

              • Old farmer mac says:

                When things start getting really tense powerful countries usually start playing hardball for real. The Chinese are testing their new muscles in the areas near their borders already and unless I am badly mistaken they will be able to do pretty much to suit themselves in ” their own backyard” just as we Yankees have for the last couple of centuries.

                There is not much we can do about it. There is not much the Chinese can do about what we do in this part of the world.

                IF we were to decide to export some democracy down Venezuela way the Chinese do not and will never have the navy and conventional arms to sail across the Pacific and stop us. They aren’t going nuke us and we aren’t going to nuke them except in the last extremity other than by accident.

                The gloves always come off at some point when countries are in desperate need of the same limited resources.

                There will come a time when China will just shove the miserable little Philippine and Vietnamese navies aside and take the fish and oil.

                The Japanese may wake up and go nuclear and be able to protect their immediate home waters.

                We are going to stand aside and watch it happen.There is no way we will be able to play world cop forever.

                There may well come a time when our navy will not allow a tanker to sail from Canada or Venezuela to Asia and there won’t be anything the Chinese can do about it.

                A big wide ocean is a hell of an advantage if you want to do what you please locally and the only people capable of stopping you are on the other side of it.

                It takes about five to ten times the resources to cross an ocean and put up a serious fight as it does to fight back in your own backyard.

                Neither side is going to be able to muster that big an advantage in conventional arms.We Yankees have it for now in naval terms but we don’t have the the justification to go and beat up on the Chinese who would without a doubt resort to nuking our navy if necessary.They might even lob a few over to our mainland.

                If things continue as they are the Chinese will be able to deny us naval access to their local waters in a decade or less.They might be able to do so already. Missiles can reach a lot farther than guns.

                Stalemate.

                Rockman is the first person I personally remember using the acronym MAD in a second sense meaning mutually assured distribution of resources between various power blocs. I wish I had thought of it first!!

                In terms of military science all this stuff is first grade in terms of principles and historical precedent.

                • Watcher says:

                  All that doesn’t really work.

                  Shale will rollover soon. US population grows. Canada will never be more than 3-4 mbpd and Ven no more than that, too. So, there won’t be enough.

                  BTW the Chinese said they finished drilling off Vietnam in May. If that was anything other than a dry hole, production rigs would be enroute. They aren’t.

    • Perk Earl says:

      “Why does it have to be either or rather than both at the same time?”

      Yeah, why can’t we whittle down the planet’s life support systems gradually, sharing all available calories equally until everybody dies of starvation simultaneously.

    • The Wet One says:

      I’m pretty sure the fast collapse scenario you provide isn’t in the cards. Even Rome didn’t fall that fast.

      • Wet One, Rome, at the time of her collapse, had absolutely nothing in common with the world today. During Roman times the population was a tiny fraction of what it is today. Their prime source of energy was animal, slave and peasant labor. Today it is fossil fuel. The whole Roman Empire was an agrarian economy. We have a manufacturing and consumption and service economy and we especially have a “just in time” economy.

        We depend on the electric grid for almost everything we do. It heats our homes in the winter and cools them in the summer. We cook our food and light our homes with grid supplied electricity. We refrigerate our food with electricity for the grid. And electricity is required for all the stores where we buy our food. If the grid were to go down, permanently, well over half the the people in the developed world would be dead in less than a year. And every sick person in all the hospitals would be dead within a week.

        The Romans did not have to worry about the grid, or just in time delivery for food, or any of the hundreds of other things we absolutely need to insure our survival.

        I must repeat, times during the rein of the Roman Empire are not even remotely like our situation today. You might site many reasons that you believe there could not be fast crash, but siting the time it took the Roman Empire to collapse is definitely not one of them.

        So if you really believe there could not be a fast crash then you need to come up with some other reason to explain why you hold this opinion.

        • The Wet One says:

          That’s a pretty sound argument.

          I guess I just find it hard to fathom how things can collapse that badly that fast.

          Which raises a thought I had this morning in response to the comments here. Is there anywhere that the nature of the collapse is thoroughly detailed? Over the last several years I’ve come across various doomer predictions for the future, but is there a repository of them somewhere?

          Now that I’m over the shock of the fast crash, TEOTWAKI collapse type scenarios and can probably look at them a bit more skeptically and objectively, I’d kinda like to go back over them and see how realistic they are.

          Clearly, Rome isn’t a good example. Are there any modern examples that are worthwhile? I thought of Syria, but they still have fuel, a partially functioning grid (where it hasn’t been blown to smithereens) and a still functioning outside world. Of course, 1/3 or 1/2 (I forget which) of the population are now refugees in neighbouring lands (which is a bad enough “crash” if you will), so things are pretty danged dire. I’ve heard that starvation looms as well, or is being used as a weapon in the conflict.

          Anyways, my reference to Rome is probably just my hope talking. I’m planning to bring a kid into this mess. I would rather the world not fall down all around my and my future offspring’s head. I just don’t want to believe that the worst is inevitable, even if a decline is inevitable.

          • I just don’t want to believe that the worst is inevitable, even if a decline is inevitable.

            Neither do I, neither do I. But a crash is inevitable, even if we were never to run low on oil. Only the speed of the crash is open to question.

            • Dennis Coyne says:

              Hi Ron,

              I have never heard you say that the worst is not inevitable, I suppose you have never specifically said it was, but the tone of your comments always implied as much (at least to my eyes.)

              I agree that a decline in fossil fuel energy is inevitable, the speed or rate of decline matters a lot.

              Whether this decline is a crash or not is all about the rate that output decreases. Think about a car crash, if you go from 60 mph to 0 mph in 2 seconds, you have probably hit a fixed object with your car, if you do so in 20 seconds, you have probably just pushed on your brake pedal.

              I would not call the second example a crash and I am pretty sure you would not either.

              So a decline is not the same thing as a crash, IMO.

              • Dennis, I see what you are driving at, and I must say I completely disagree. Crash or collapse, call it what you wish but yes it is inevitable. But there could be many mini crashes/collapses along the way. We have already had one, the collapse of the housing bubble in 2008.

                But back to your point, you believe a total collapse is not inevitable, that we could, and very likely will, engineer a soft landing where we will likely have severe hardship but no real collapse of civilization as we know it.

                Well I cannot, in the short space of a reply to your post, refute your belief. But it has been done by others. Those others are Joseph Tainter, Gail Tverberg, Nicole Foss, Dennis Meadows and many others.

                I invite you to watch Dennis Meadows 2012 video where he explains where a collapse was preventable in 1972 but we have now passed the point where it can be prevented and is now inevitable.
                Dennis Meadows Collapse inevitable 2015-2020
                Or you can go directly to the Youtube video and directly to Dr. Meadows presentation here:
                Dennis Meadows – Smithsonian Institution – 2012

                We could have an entire post on this subject later.

                Very important point! The collapse will not happen because of only peak oil. It will happen because the collapse of the whole ecosystem. Finite natural resources are declining but so is everything else. The fish are disappearing from the ocean, topsoil is being depleted, rain forests and all other forests are disappearing, food production is declining, deserts are expanding, water tables all over the world are dropping by meters per year, rivers and lakes are drying up, species are going extinct at over 1000 times what would be expected were humans not the cause, and a few hundred other things. Yes collapse is totally inevitable.

                • Dennis Coyne says:

                  Hi Ron,

                  I realized that I had misread your previous comment
                  where you said “No neither do I.” I failed to realize that you meant that you didn’t want to believe it, that is very different from not believing it, which is not what you meant. I need to read carefully, especially when something that I think you are saying does not match with what I know you have said in the past.

                  I of course am not convinced by the arguments that collapse is inevitable. For every person that argues that this is the case, there are others that argue that a decline is inevitable, but depending on the choices that are made by humans, that a collapse is not inevitable.

                  On ecological destruction, as people become more educated about this, they make better choices, all of the problems you cite can be mitigated and as people move to smaller family sizes (on a World Level the TFR has fallen from 5 children per women in 1960 to 2.53 children per woman by 2010, the trend is that replacement level is reached by 2020 and a TFR of 1.5 by 2040.

                  • For every person that argues that this is the case, there are others that argue that a decline is inevitable, but depending on the choices that are made by humans, that a collapse is not inevitable.

                    No, for every person that argues that collapse is inevitable there are at least a thousand who would argue otherwise. So what’s your point? Are you arguing that these numbers prove something?

                    No, better choices and better education will not fix anything. The animals are already extinct and the rest will be extinct long before there can be any mitigation.

                    It doesn’t matter what the fertility trend is, we are already way, way beyond carrying capacity. And because of population momentum it will take many decades for the population to reach maximum and another century for it to decline.

                    And anyway that’s not how human nature works. We will always push against the limits. The industrial revolution brought on the ability for the world to feed many more people. When that ability disappears then the people will do likewise. But it will not happen until then.

                  • Dennis Coyne says:

                    Hi Ron,

                    In Jared Diamond’s Collapse, he lays out all the problems that you mention and still remains cautiously optimistic, see Chapter 16 especially pages 519 to 525.

                    Nothing can be done about the species that have become extinct, the mitigation referred to all of the problems that you mention including protecting existing species.

                    On population I am quite aware of population momentum, if total fertility ratios reach 1.5 by 2040, then population will continue to rise for 25 years and then will be back to 2040 levels by 2090 and will continue to fall from there. By 2140 population would be at half of the 2040 level.

                    In the UN’s low fertility scenario maximum population is 8.3 billion in 2049 and falls to 2010 levels by 2097. The UN’s assumptions are quite conservative, population. A cool population momentum simulator is at the link below:

                    http://www.learner.org/courses/envsci/interactives/demographics/demog1.html

  16. Old farmer mac says:

    HI KC
    ”stem the fall onto a soft-landing…..”

    I don’t expect any locality or nation to have a truly soft landing.My thoughts are that some places will survive with some industry for an indefinite period that can extend out to centuries with a little luck. By then who knows – it is very likely there will still be plenty of coal and enough good ore left – or enough salvageable metal around- to restore an industrial society on a small scale. What people will make of that opportunity in a century or two is anybody’s guess.

    There really isn’t any reason I can see given a couple of decades to adapt that a modern society cannot retrench and get it’s energy mostly from coal and hydro with a little oil and gas and maybe even a few nukes that might have been recently built. Nukes last fifty years or more.

    But the landings of various communities and nations are going to be like plane crashes. Most of them are pretty ugly but pilots have a saying that goes something to the effect that any landing you walk away from is a good one.

    Some of us are likely to walk away although our lifestyles are mostly going to be as wiped out as the crashed planes. I spent my early years in a two room board and batten green oak house my Dad built with his own hands while holding down a full time job. I was about twelve when we got running water and a bathroom in our new house.We were as happy as most people with money.

    Most people on a world wide basis are going to perish when tshtf. But not all of us.

    It could be that not more than a relative handful in a country such as the US will perish in the short term but the population will certainly contract over time.Uncle Sam will probably morph into Poppa Stalin but the people who actually starved or died of exposure in the old Stalinist USSR were the perceived enemies of the regime.

    • KC says:

      Hi OFM – pardon reference to “soft landing.” All things relative…. I don’t mean to suggest that a soft landing @ peak oil might be the same as a soft landing engineered by the federal reserve…. I mean to suggest that such a soft landing in the peak oil scenario might be… “softer” than an outright economic crash and full-scale collapse….

    • Jeju-islander says:

      “It could be that not more than a relative handful in a country such as the US will perish in the short term but the population will certainly contract over time.Uncle Sam will probably morph into Poppa Stalin but the people who actually starved or died of exposure in the old Stalinist USSR were the perceived enemies of the regime.”

      I am in fairly close agreement to this way of thinking, although I certainly don’t think the military government in place will be communist. My most likely scenario for short term collapse is an economic shock caused by the realisation of peak oil. When enough people realise economic growth is impossible because we can’t fuel it, the current market system will crash.

      The big losers in a crash will be the middle classes. They will lose their jobs, their savings, their pensions, and the value of their houses. These people will be angry, really angry. They will be looking for someone to blame. The ‘blamed’ will include the political and banking elite. They will be swept out of power. The ‘not blamed’ will be the military and religion. They will take power. Absolute power.

      It is still easy to assume that the US will be militarily supreme after the ‘collapse’. Do people really think that the Mad Max biker gangs from the inner city stand a chance to militarily defeat the US army.

      • Watcher says:

        Folks with no military experience generally don’t picture this well.

        If you have a collapse and rampant starvation unfolding, every member of the armed forces is going to be getting phone calls or emails from his or her wife or parents begging for help. I can guarantee you 90% of troops will go AWOL in such a scenario. It’s just so obvious that I am frequently astonished that people think the Army will keep order when their parents are starving. It’s just bizarre to hear this.

      • Old farmer mac says:

        I did not mean to imply that Uncle Sam would morph into a communist as such but rather that our government would become an authoritarian one with many characteristics in common with Stalin’s government. Uncle will in his new form have a lot in common with any dictator or emperor of times past.

  17. OldTech says:

    Expect the unexpected!

    I tend to think that collapse will be like the great depression only worse. And it will never end!

    The great depression it was depressing for many. Things were not getting better for many. On the other hand my Dad’s boss in the late 40’s attributed the Great Depression as the reason he got his start and made his own fortune.

    • Dennis Coyne says:

      It is possible it will never end. Consider the possible response by governments to this crisis.

      I do not think it impossible that renewables, efficiency, nuclear, and even coal (though that would be a bad choice) will be ramped up along with investment in rail, light rail, HVDC transmission. All of these investments will create employment, if private industry is unwilling to invest, the government can get things started with public-private partnerships or create state owned enterprises if necessary (though this would be less efficient than private enterprises).

      There is no reason that such a depression would be permanent, though I may be worse than the Great Depression because economists seem to have forgotten what was once common knowledge.
      Paul Samuelson and Milton Friedman would both be amazed with what currently passes for economics.

  18. Verwimp says:

    I am always surprised by the collapse or downslope scenario’s that are written in the comments on this site. Most of the time, I presume, the authors are US citizens. The collapse scenario’s have the USA as main topic mostly.

    When I visit the USA, and I look at it with these European eyes, I see a country that has already collapsed and is still doing so. I am sorry to tell you that.

    – Look at your countryside. From Arizona to Pennsylvania: villages that are 10% to even 60% empty. The amount of abandoned houses is shocking. (The shift to large scale suburbs adjacent to big cities is even less sustainable!)
    – Look at your shops: Almost everywhere the Main Street is more or less abandoned. Sometimes trees are growing through wat used to be shops. (The shift to Big Box Stores takes money away from your local economies.)
    – Look at your small businesses. The most prevalent image of the USA is a sign on a pole, next to the highway, where only the frame and the pole still stand. The advertising and the light tubes have been blown out of it long time ago. The business itself is closed. The building abandoned, sometimes collapsed into debris. Burnt down, whatever.
    – Look at the incredible amount of abandoned gas stations. I do not want to know what the environmental impact is of the now leaking tanks in the ground.
    – Look at what used to be the downtowns of your medium size cities. (e.g. Jackson, Mississippi; Amarillo, TX): You really need to visit the residential areas 0.5 miles away of the heart of the city to believe what you see.
    – Look at what is sold as “Fresh Food” at Dollar Generals, the only remaining store in hundreds of small towns. They have empty shelves where the dairy used to be. Looks like Moscou 1987.

    • Enno says:

      So Peak Oil already happened, Collapse already happened, the life of a doomer is doomed!

    • robert wilson says:

      Verwimp, have you visited downtown Amarillo recently? It may not be the best example as it seems to be doing fairly well.It is true that Amarillo has lost various businesses over the years. Among others Levi closed its Amarillo plant. Boone Pickens moved his operations to Dallas. But unemployment is currently low. I grew up in Amarillo and still love to visit. Have not been back this year. I met Boone when I was in the 9th grade and he was in high school. I played basketball with Boone on a daily basis for two years. He stayed over an extra year hoping to win the Texas High School Championship. Lost the ball and the semi-final game to Kyle Rote at a critical moment. Amarillo came in 3rd place in the 1947 tournament. Did manage to set some Texas records in the consolation game playing against the near 7 foot Marcus Freiberger. Boone played guard opposite Jewell McDowell (who later became All American at Texas A&M). They were flashy.
      http://downtownamarillo.publishpath.com/development

      • Verwimp says:

        Robert, I was in Amarillo three weeks ago.
        – The downtown consists of more parking than buildings. Where are the buildings that once were on the parking lots? My rough estimate is that 50% of the downtown has disappeared. This must have happened when the 1920’s buildings were replaced by 1970/80’s buildings. But then suddenly someone pulled the plug out of that transition and that was it. (Dallas Downtown has the same strange mix of high buildings and empty lots, but not as outspoken as Amarillo.) The parking lots are +/- 30% occupied.
        – North of I40bus, West of R.E.Lee School Park, there is a neighbourhood where at least 50% of the dwellings is gone. I hope the rest is abandoned, because I do not hope people need to live in these circumstances.
        – Thanks for the link. I found a document about the “revitalisation” and “redevelopment” of downtown Amarillo. I learned one is aware of the fact that there is something to revitalise.
        – South of I40 a new neighbourhood/suburb was built. Why? Why was the existing infrastructure of the quarter north of I40bus not redeveloped?

        • B says:

          <a href="http://amarillo.com/stories/091503/usn_downtown.shtml"Downtown Dilemma: How did it happen?

          Thousands of downtowns across the country, including many in the Texas Panhandle, have suffered…many of their storefronts empty, their movie houses long since silent and their department stores gone. They are the byproducts of interstate highways, suburbia and discount superstores….

          The Interstate Highway Act of 1956 dramatically changed where Americans lived and spent money, said [Kennedy] Smith [a Washington, D.C., expert on downtown revitalization] … In 1950, the average city in the United States drew shoppers from about 15 miles, she said. Today, it’s 50 miles. With the advent of the interstate, people flocked to the suburbs and away from town centers.

          It was part of the American Dream, wanting your own acre of land with a house and a yard, Smith said. And retailers followed them. Shopping malls – and later discount superstores – took up shop along highway exits….

          The resulting mix of shopping ease and low prices found at malls and superstores left many of the relics of downtown – the local business owners – out of business….

          And although many have begun to change their philosophies, city planners traditionally have considered new commercial construction as economically advantageous, boosting property and sales tax revenues.

          • Verwimp says:

            I know the story. But “city planners traditionally have considered new commercial construction as economically advantageous” is new and interesting to me. It explains to a certain extent the amount of empty businesses. We here in Europe have a tradition of reusing buildings. Refurbishing them of replacing them. Since we are living on this land for like 2000 years, we have to. If we would just abandon a building and build a new one on another location, our continent would have been completely built up.

            That is a big nuance I learned: The USA has a “throw away attitude”. That starts with plastic plates and cutlery (instead of doing dishes), That goes to houses, neighbourhoods and entire cities. So ruines are not necessarily a sign of poverty. The owner may have just abandoned his property to build a better and larger house somewhere else.

            • Dennis Coyne says:

              When the land is valuable the buildings get demolished or refurbished but if the city is in decline the buildings are often abandoned. I don’t imagine that happens often in Belgium, but perhaps there are small cities in Eastern and Central Europe where things are as bad as Amarillo, I have not visited either place so I cannot really comment.

        • Dave Ranning says:

          I drove through recently, and even spent the night.
          Your corporate strip mall world, something out of The Last Picture Show.
          Kunstler Poster Boy for ‘Merika for sure.

        • Techsan says:

          I too grew up in Amarillo. I last went there, sadly, for my parents’ funerals. My comment to my wife was that downtown Amarillo looks like Beirut.

          Amarillo is hyper-conservative, run by a small number of wealthy families like a banana republic. I know and went to school with most of these wealthy people. The newspaper is hyper-conservative: there will be a detailed story about the drought and fires in the area, but never any mention of global warming. Amarillo has no 4-year university; I heard that they were offered one, but turned it down. Most of the best and brightest young people leave.

          The thought that occurred to me is:

          If conservatism were right, Amarillo would be paradise.

          It isn’t.

    • The Wet One says:

      My mother was recently on a 6 week road trip (yeah I know) through the western U.S. She noted how dilapidated and run down everything looked.

      That was quite a wake up call. I haven’t been through that part of the world in over 20 years other than short trips here and there. I get the feeling that I really don’t know just how bad it is. The outsider perspective is useful that way.

      • Doug Leighton says:

        Is your own Mother an outsider?

        • The Wet One says:

          To the western U.S., yes she is. From what she told me, it’s not like western Canada. Apparently, it’s a lot worse off.

          By outsider viewpoint, I meant non-American, like Verwimp’s which appears to be an western European viewpoint.

      • Verwimp says:

        Thanks for the confirmation. “Dilapidated and run down” are exactly the right words. I get the feeling that even the US citizens living nearby don’t know just how bad it is. They seem to avoid passing through the worst neighbourhoods/villages. Or they just stay at home and watch big city life on TV?

    • Dennis Coyne says:

      Hi Verwimp,

      I guess you see what you want to see, there are depressed areas in the US, and it is more widespread since the recent depression. I have not visited Europe for a few years, but the reports I read indicate that the economies in many European countries are doing quite poorly. There are no areas in Europe that are depressed?

      Certainly what you describe is not what I see where I live in the US. I would not describe this as collapse, collapse is when you have conditions like the Great Depression throughout the world. So 25% unemployment (as in 25 % of people who are actively looking for work can find no employment) would be one measure, we are far from that in the US. I do not buy into the nonsense at Shadowstats, I am talking about government or intergovernment (UN, OECD, etc) statistics.

      • Verwimp says:

        Hi Dennis,

        When I go to the doctor with a severe headache, I do not need a statemant like: “Your heart is doing fine, so do your lungs, your liver, your kidneys and your stomach. So you are in good shape.” I want him to examine my head.

        The USA may have wealthy area’s. I presume they are situated along the Atlantic and Pasific coasts, partly along the Gulf Coast too. In the 19 states I visited I saw wealthy neighbourhoods too. But… Am I aloud to consider that as just “normal”? Am I aloud to consider the tremendous amount of buildings, towns, parts of cities in complete disrepair as “not normal” and thus worth mentioning?

        I see what I want to see, indeed: when I visited the Rust Belt in 2012 I expected what I saw (Detroit!). But when I visited Texas and its neighbourstates I tought I would see a prosperous country. That was not the case.

        We have difficulties in Europe as well. Just for that reason it is interesing to visit the USA. To be able to compare. I was happy to go back home.

        • Dennis Coyne says:

          Hi Verwimp.

          You are allowed to say anything you wish. Your previous comment made it sound as if depressed areas was the only thing you encountered in the United States. The United States is pretty large country, with most areas having a very low population density. There are depressed areas all over the US, my guess is that these exist in Europe as well, though possibly not so much in a smaller country (in area) such as Belgium, my understanding is that Southern Europe has not been doing very well lately, have you been to Spain or Greece lately?

          There is no doubt that there are many areas in the United States which are doing very poorly, my point was that this is likely to be true in all places, economic development is never uniform.

          • Verwimp says:

            Spain is really interesting! I visited the country last year. If you ever have the opportunity: do it! The country seems to have broken its neck on a building bubble. They buit/rebuilt everything. Dwellings/appartments, Office buildings, business areas, roads and highways, you name it: it is all brand new. Then came the crash. The result is a tremendous amount of empty brand new, mostly unfinished buildings, business areas without businesses, office buildings where no lights are on in the evening, highways that are completely finished, but not used because the interchanger to connect it to the network is not yet ready (and will never be built). Very interesting!

            I didn’t have the opportunity yet to visit Greece.

            • Dennis Coyne says:

              Hi Verwimp,

              I agree that Spain is wonderful, though my last visit was in 1982, so I imagine things have changed a bit. I have never been to Greece, but have been to many of the Western European countries.

              I have not really visited much of the Unites States except the East and West Coasts, Michigan, Chicago, and Colorado, Utah, Wyoming, and Hawaii. Perhaps I have only been to the places that have not collapsed. Europe is wonderful and probably much better prepared for the coming crisis than the United States.

              Sorry to seem so defensive, the picture you initially painted seemed more negative than what I see, but perhaps that is because we visited different places.

              • Verwimp says:

                Hi Dennis,

                For the record: I crisscrossed DC, VA, WV, OH, MI, KY, TN, NC in may 2012 and TX, NM, AZ, LA, MS, AR in may 2014. I flirted with the borders of some neighbouring states too. 10.000 miles, in a search for the ‘real America’ (That is: staying away from Interstates, visiting numerous towns; and staying away from New York, Los Angeles etc.)

                I look at things with an interest in sustainability. I like to analyse things that go wrong. Therefore NY and LA, cores of prosperity, are not so attractive to me: I can not learn lessons from succes stories. You understand?

                I was highly surprised by Santa Fe: a sort of ‘cosy’ downtown. Very European! Small scale, walkable distances. Relatively high density. Lovely. I was highly surprised by New Orleans too. Despite Katrina I saw an amazing city. Resilient. Fighting back. Vivid. Beautifull architecture.

                I was highly surprised by Phoenix too. I saw hundreds of square miles of fenced suburbs, with clusters of ever the same McDo, Walmart, Subway… And an extremely tiny downtown with only a dozen multistory buildings. No one around after sunset.

                Detroit surprised me too: They are so far down the drain, that they have the feeling of having hit the bottom. From now on things can only improve. There was a strange feeling of hope, despite the horrible condition that city is in now.

                I visited Cleveland, Dallas-Fort Worth, Houston, DC, … From a European point of view these cities have a lack of history; but that is not their fault. One should not expect century old things in the US, that would be dishonest. Nevertheless from a European point of view these cities are clearly prosperous, but a little bit boring.

                This year I visited medium size cities too. Amarillo, Baton Rouge, Jackson. The images I got are never to forget. The abandoned areas, the poverty, the state of disrepair… I went there on purpose. To witness that. And still I was shocked by the magnitude. You see?

                I visited the old Texas oilfields too, and the villages there. I visited the Barnett Shale and Eagle Ford too; to see the difference. To my surprise there is no difference. A town called Tilden, TX, in the heart of Eagle Ford, is still in atrophy. Strange, no? How is that possible?

                I learned a lot about the drought too. Talking to empoyees of the US Army Corps of Engineers is interesting (as is talking to every American: you guys are very open people!)

                Anyway: Your first reaction was quite defensive indeed. No problem. The purpose of my first post was -ofcourse- to trigger feedback 🙂

                • Dennis Coyne says:

                  Verwimp,

                  That is very interesting, I had no idea you had travelled so extensively in the US.

                  An interesting exercise would to try to sample some cities throughout Europe for comparison.

                  Are there areas in Europe that are as run down as what you saw in the US, you would probably need to go to most parts of Europe to get a similar sampling of economic diversity. I am surprised you didn’t visit any of the “success” stories. they may have been less successful than you imagine.

                  For example there is quite a bit of economic diversity just within the 5 boroughs of New York city (I am more familiar with the Northeastern part of the US, I cannot really comment intelligently on the west coast.)

                  And thanks!

                  • Verwimp says:

                    Dennis,

                    Visiting Europe the way I visit the USA is impossible for three reasons.
                    1) Language barriers. I am a native Dutch speaker. I speak French when I really need to, and I speak English quite fluently, but that is it. In three quarters of Europe I can not talk to people. I can not ask explanations for the things I see. I can not talk about how things go and why.
                    2) The density. The USA has a few dozen of cities. When I would visit a few dozen of cities in Europe, I would’n even have reached Paris (250 miles from where I live.) It takes a lifetime to get a proper view on Europe.
                    3) The age: You understand we have a longer history. That makes things really more complicated, less readable. The US is straightforward: Everything you see exists for the really first time. Without a profound study of the local history one can not really understand a European city. With Settlement, Civil War, Dust Bowl, Boom-era, you are done with a lot of American cities. (My own house, a random house in a random street, has the same age as the city of Dallas. It would be a monument on Founders Plaza, You see?)

              • Patrick R says:

                I visited Northern Spain last year (Bilbao, San Sebastián, Barcelona) and was surprised with how there was pretty much no sign of the doom and gloom that is reported fro Spain. These are very successful and civilised cities with sophisticated infrastructure and institutions. I know that northern Spain, like Northern Italy is very different from the centre and south, with different culture and economies, but still, I was surprised.

                These are among the most wonderful cities in the world. And way more sustainable than any Texan town.

                • RalphW says:

                  This is an interesting piece about cultural decline.

                  http://www.bbc.co.uk/news/magazine-27309446

                  Glasgow is the UK city with the shortest life expectancy. This is not explained by medical or ordinary social poverty factors – other similar cities live longer. In Glasgow young men are drinking and drug taking and murdering each other at rate faster than elsewhere, because they have lost their social rank as the traditional breadwinners and they have lost pride in themselves. Orlov reported the same in Russia in the 90s.
                  In India it appears the same demographic take out their frustration by attacking and murdering low caste women.

                  http://www.theguardian.com/commentisfree/2014/jun/04/india-gang-rapes-deep-crisis-men

    • Old farmer mac says:

      There is no question things are going downhill. Globalization is and has been a great bargain for the lesser developed parts of the world but it was and is one of the greatest mistakes we could possibly have ever made in terms of the health wealth and security of the United States and other highly developed countries. It is for damned sure that our bureaucrats and white collar professional class and the rich are richer than ever as a result of it but only at the price of the means of living and the living standards of the working class of this country.

      At first it seems like a great bargain to any given businessman who can import or outsource or whatever to cut his costs.

      Suppose I am a widget maker with one thousand employees and can get rid of every body but my sales and marketing and book keeping staff , laying off forty fifty sixty seventy or maybe even eighty percent of my people and afterwards be making more money than I have ever made before.

      I will still have a three hundred million potential widget customers minus my eight hundred former workers who cannot afford widgets any more and wouldn’t by mine anyway.

      But when a thousand businesses each lay off a thousand employees that is a million out of work and some businesses have laid off ten thousand or more to take advantage of the profits to be made by importing rather than manufacturing.And there have been millions of businesses doing this.

      The end result is that the wages and living standards of the working class are in the pits while the government employees( who as a rule are unlikely to be laid off compared to private sector workers) and the white collar types who cannot be laid off- because their jobs cannot be outsourced- are living relatively large.

      Now we are paying the price of dealing with a working class without work and mostly without hope. This means social workers and cops and jailers and food stamps and such out the ying yang without much hope of things getting any better.

      It means peak oil is several decades closer, that runaway global warming is several decades closer, that almost any environmental problem is worse than it would have been otherwise.All resource depletion problems are advanced towards critical tipping points by decades since the demand for resources is so much greater.

      And while there is useful research going on in developing countries without any doubt most of the scientific research is still getting done in the rich western countries. Nearly all of it would still be happening here in the west except for globalism.

      Now the absolute level of accomplishment is being advanced faster in technological terms because of globalism but without globalism rapid progress would still be happening. We would most likely have twenty or thirty years or more of advances in physics, chemistry, materials, engineering and manufacturing to fall back on to help us solve renewable energy generation and to enable us to conserve energy and to use it more efficiently- these years of progress are not going to be available to us now.

      Pretending these things are not true and making mentioning them taboo for fear of being called names doesn’t change the facts.

      I know dozens of people personally who used to be proud self supporting people who paid taxes and would rather have died than go on welfare who made their living manufacturing furniture and clothing in the small towns scattered through out my part of the country. A few of them are doing ok but most of them are in a pretty tough spot.

      Middle aged people who got only a sketchy education decades ago cannot be retrained to be nurses or to program computers except in rare cases and even if they could there would not be enough openings for them.

      Some people who used to have scornful things to say about my pointing out these things are singing a different tune now –such as a former coworker who is a programmer.His job got outsourced too.The man in India is making about ten cents on the dollar of what he used to make.

      We have a government that just recently put into effect what is in effect socialized medicine- what WILL BE socialized medicine in a few more years.

      Protectionism will probably make a comeback politically sometime in the not so distant future.When it does a lot of small businesses will come into being and some larger ones will return from overseas. The ”next time around ” it is going to be embraced by the left wing of our political establishment rather than the right wing but unfortunately this won’t happen soon enough to make much difference to most of the older people out of work because the good jobs got outsourced.

      The nitty gritty truth of the matter is that we long ago got to the point that we simply don’t need as many people as formerly to manufacture stuff or to build houses or to grow food or do almost anything else.

      Some local guys are growing four times as many apples as their grandfathers did and working at doing so fewer days annually on only double the acreage.

      The one local furniture company still in business is increasing production per employee at a pretty fast rate which is the only real reason it why it is still in business.The owners just installed cnc machinery that takes pieces of wood in on a belt such as a four by four at one end and spits out a finished (ready to be assembled ) highly decorated bed post at the other end. A couple of years ago it took a dozen people using six different machines to make the posts one person makes today. I have close friends in the plant and so I know the cnc machine operator is getting a buck an hour more than he used to. The rest of the bed post people have been moved to other jobs and when somebody quits he is not replaced as a rule.

      What we really need to do is redistribute the work since there is not enough work otherwise to support everybody. Or maybe we need to invent new jobs that actually add something useful to our lives.

      I am not sure how this could be accomplished but for instance more mail carriers working fewer hours getting paid less strikes me as a possible example of something that could be done- except for the fact that we have already twice as many mail carriers as we need anyway. Every other day mail delivery would work just fine and nobody would even notice the change after a year or so.

      Somehow or another we are going to have to find a way to raise the wages of the working class in relation to the incomes of the professional and investing class or we will eventually have our own version of a French Revolution.

      • Old farmer mac says:

        Forgot to mention the obvious in the middle of my rant- eventually enough people are laid off and enough of the income of the remaining working people is consumed in taxes managing poverty and crime that the remaining businesses run short of customers.

        Forgot to add this link too.

        http://www.washingtonpost.com/posteverything/wp/2014/05/27/robot-workers-could-tear-americas-social-fabric/

      • RalphW says:

        I am a middle aged white male computer programmer. I feel like an endangered species. 25 years ago we were like gold dust, and we walked (in my case tripped over into) high paid jobs wherever we wanted.
        Now, several of my friends are living quietly on previous savings and investments, building their resilience and integrating into their communities, without any prospect of being paid for coding again. I do not know how I managed to stay employed as long as I have, At one point I was the only surviving member of a team of seven. My employer hasn’t turned a profit in six years. I haven’t seen a wage increase in 4 years, yet find myself the second highest paid employee in the company.
        We are in a housing bubble. My house (small by US standards) cost 15 times my annual salary when we bought last year, and will have gone up 10% by now.
        In the UK wealth has stagnated incredibly. I have been very lucky (combined with a cautious approach to money) but most of the middle classes are in debt to the point of insolvency.

    • In the Cheap Seats says:

      Verwimp,

      Your observations seem valid to me…the only thing I wish to point out is the fact of many fewer gas stations is a feature, not a bug! Even though traffic has increased over the years (until recently), the increased fuel efficiency has obviated the need for so many closely spaced gas stations. Imagine if the mean. median, and mode of the light vehicle fleet was more like 50 mpg now.

    • TechGuy says:

      “When I visit the USA, and I look at it with these European eyes, I see a country that has already collapsed and is still doing so. I am sorry to tell you that.”

      My understanding is that most of Europe is in worse shape than the US. with unemployment rates approaching 30%, and just as bad gov’t finances with very high debt loads. The US has not had the same level of extreme protest and the frequent riots that occur in Europe. My guess is that the EU is about 3 to 5 years ahead of the US in an spiraling economic collapse.

      • Verwimp says:

        I didn’t want to provoke a EU-US competition here. The point where I started was the collapse scenario’s written down by many others on this site. I read scenario’s of “weeks” and “months”. That all looks really fast forward to me. When I look at the US, I see a nation that gives the impression of still not having fully digested the 1970’s oil crisis. I meet people that are simply unaware of the percentage of empty buildings etc. So I see an evolution that takes decades, an evolution that spans multiple generations. A seemingly painless process. Painless because people don’t even notice. They live in cities where 50% of the buildings have disappeared and they take that as “normal”.

  19. Dennis Coyne says:

    Hi all,

    David Hughes, who shared some data with us near the top of the comments (via Ron) did a presentation last October (link below, 1.6 MB PDF).

    https://gsa.confex.com/gsa/2013AM/webprogram/Handout/Paper226205/HUGHES%20GSA%20Oct%2028%202013%20-%20Short.pdf

    In slides 20 to 35 he covers the Bakken and there is great info on the Eagle Ford in slides 36 to 49.

    For the Bakken he expects 4.5 Gb of oil and for the Eagle Ford about 6.5 Gb of oil for a total of 11 Gb of oil.
    Peak is 2016 at about 2.2 million barrels per day (about 1 MMb/d for Bakken and 1.2 MMb/d for Eagle Ford) see slide 49 and chart below. Note that Jean Laherrere estimates 5.5 Gb total from the North Dakota Bakken and Eagle Ford (2.5 Gb and 3 Gb respectively) so about half of the estimate by David Hughes.

    My estimate is similar to Hughes but I have the Bakken at 7 Gb (note that proved reserves and production for the North Dakota Bakken is about 3.9 Gb as of Dec 2012) and the Eagle Ford at 5 Gb.

    My knowledge of these matters is far less than either of these gentlemen, so clearly their estimates are better than what I have come up with.

    • Notice that he has the Bakken peaking at the end of this year.

      • Dennis Coyne says:

        Hi Ron,

        There are three different scenarios presented with peaks from 2015 to 2017, the most optimistic of the three is below. I also wonder if he is adding in the 3.9 Gb of produced oil and proven reserves to the 3.5 Gb USGS F95 (95% probability that it will be at least this large) estimate for undiscovered technically recoverable resources. That adds up to 7.4 Gb, but Hughes may have similar reservations about USGS estimates that Jean Laherrere does. The optimistic scenario is slide 34 of the presentation and in the chart below.

        • Anon says:

          To go back to peak’s roots briefly (Hubberts call on US production), note how little production and time is gained by making a huge, %-wise, revision to resources.

          Especially with the known characteristics of shale exploration – best stuff hit first and hard – playing with out months for 50-100k more is mostly academic.

          Which is what happened with Hubberts US prediction. The 1970 case had *50 billion* more barrels originally in place in the US than the 150 billion 1965 case, and it bought five years out of a century of production.

          • Dennis Coyne says:

            Anon,

            I absolutely agree. Whether the Bakken and Eagle Ford eventually produce 5 Gb, 11 Gb, or even 15 Gb(this is as high as I think it might go with low (5 to 10%) probability, will make very little difference to the date of the peak, but it may have a small influence on how rapidly output declines from the peak.

            In the grand scheme of World output of crude oil with an estimated URR of 2700 Gb (from Jean Laherrere), the difference between 5 and 15 Gb of crude oil output is not very significant.

            As I side note I was looking through some of Jean Laherrere’s past papers and in an early 2013 paper found at link below
            http://aspofrance.viabloga.com/texts/documents
            entitled “Oil and gas forecast 1900 – 2010 – February 2013”

            I noticed that his estimate of crude minus extra heavy oil is based in part on a Hubbert Linearization(HL) of World C+C minus extra heavy oil.
            Jean Laherrere uses 1983 to 2011 for his HL which gives a URR of 2200 Gb, when the years 1992 to 2013 are used the result is 2500 Gb. This extra 300 Gb would make more of a difference than 15 or even 50 Gb from LTO. It will not change the date of the peak by more than a couple of years, but it may have some effect on the slope of the decline curve.

    • Enno says:

      Great presentation, thanks for sharing.

  20. Abandonings go on all of the time and never stop. Ancient ruins are a testament to that fact. Here in America, the number of abandoned farms is staggering, nobody wants to live there these days, albeit a few have returned, it is not what it once was, modern machinery has transformed how people live. Farmers live in town and drive to the farm, it’s a commute for them these days. Cars are a tool for them, gas a minor expense. A 400 horse power tractor pulling a 60 foot cultivator with knives to apply anhydrous and an air seeder to seed the crop gets work done in no time, the efficiency of modern methods is only hampered by poor working conditions due to weather. The diesel fuel and auxiliary inputs, the fertilizer, herbicides are well worth the investment, there will be a crop to harvest. What was modern farming in 1970 is obsolete today in 2014. The application of anhydrous ammonia when the field is seeded guarantees germination of the seeded crop.

    The modern life with refrigeration, electricity, hot water, natural gas for heat, air conditioning, flip the switch and you’re at home is the preferred style these days. No cows to milk, no feeding the chickens, no eggs to gather, no crops to plant, none of it. You go home at night and cook a bag of frozen food in the microwave, then eat it and then go to sleep to wake up the next morning to do it all over again. Amen.

    A struggle for the legal tender, as Jackson Browne wrote and sings.

    Everybody’s gone away, say they’re going to LA. Not a soul I know around, everybody’s leaving town. Some gotta win, some gotta lose, Good Time Charlie’s got the blues. – Danny O’Keefe

    Who wants to live in the middle of Iowa when you can trail blaze the Rockies in Colorado?

    It’s the Oregon Trail and the Grapes of Wrath all over again.

    Nothing lasts forever. The post-modern era won’t either. Back to the Stone Age in a heartbeat is a frightening possibility. The end of oil as we know it will cause a stock market crash that will make October 29, 1929 a ticker tape parade.

    Probably better off. The serfs during feudal times were required to work approximately 3 months during the year, the rest of the time they had to themselves. A good king knows better. Hunting and fishing will make a triumphant return and golf will become a thing of the past. No marching off to work and stuffing the highways with millions of cars, no more super duper living high off the hog, just plain old dirt poor scraping out a living the best you can. Space flight just isn’t going to be in the cards. You’ll have to park your private jet and take a passenger train powered by steam engines. You’ll be digging with a shovel, not digging the music.

    Two million American farmers and 300 million American people getting things done the best they know how won’t go on forever, it will change. It is unsustainable.

    It took 28 years to pump a billion barrels of oil out of the formations in North Dakota, now it takes 3; that is a 9 fold increase in oil production. Can’t really argue with success.

    Had the production remained at 131,000 barrels per day for all of North Dakota, nary a word would be written or spoken about the Bakken. Plenty of oil now, so it is a big deal. One billion barrels of oil is burned and consumed in 12 days, so it takes all of North Dakota’s oil fields to produce one billion barrels of oil in three years time to supply the demand that is burned and used in just 12 days. Doesn’t look like it is going to last all that long at that rate of consumption, it’ll take some kind of awakening to alarm people of the fact that oil cannot be consumed at such a rate, it is unsustainable.

    The demand has to decrease and the supply has to decrease, will decrease, is decreasing and what can be done about it is not much. What will happen? Price increases and rationing will have to become a reality. Trucking gasoline into a war zone at 400 dollars per gallon will have to stop sometime, the sooner the better. Another one of those things that is unsustainable. Wars are expensive and drain treasuries, so it is more economical to deal with peace and dispense with the war business altogether. Good luck with that.

    Can’t drill for oil until the leases are signed and the permit is issued. Leases expire and if the mineral acreage is leased for oil exploration, you file for a permit, you drill before the lease expires. Those rigs are going to be busy, the leases were signed, all mineral owners have been contacted, the i’s and t’s are dotted and crossed. Besides, when you are striking oil that is producing a thousand barrels, some are 2000, some are 3000, per day and more, it is going to pay something. MacKenzie County seems to have the most oil, so that’s where the drilling will take place. Doesn’t take much of a leap of logic to figure out that no brainer.

    Back to the salt mine.

  21. Giant says:

    With peak getting closer and the oil producers’ costs going up, it seems to me that gasoline prices should start to rise. I have noticed it creeping up lately, but I am surprised it is not at $4/gallon.

  22. B says:

    Energy historian: Lift U.S. ban on oil exports

    A report Thursday from a respected oil historian argues for lifting a long-standing ban on U.S. oil exports in order to keep down gasoline prices for consumers. It’s a view sure to raise eyebrows and comes amid a broader national debate about exporting America’s new energy bounty.

    The report by IHS Energy, led by influential author and energy consultant Daniel Yergin, comes as the Obama administration is weighing whether to lift the export ban put in place in the wake of the 1973 Arab oil embargo and during a past era of ill-fated price controls to protect consumers from higher pump prices.

    The report, shared with McClatchy before publication, points to the skyrocketing U.S. oil and natural gas production that’s resulted from new drilling techniques shorthanded as fracking. It argues the ban has outlived its purpose.

    “You have this relic of an age long gone,” Yergin said in an interview Wednesday. The export ban, by his estimate, makes oil and gasoline more expensive than it otherwise would be. That’s because U.S. refineries are generally configured to handle heavier grades of crude oil. The lighter-grade oil coming from new production areas in Montana and the Dakotas can be sold for more abroad and would add to the international supply, thus potentially lowering global prices.

    “The benefit to consumers of a crude oil free-trade policy is an estimated 8 cents per gallon reduction in the price of gasoline and transportation fuels,” according to the 120-page report.

    The report said savings to consumers could be as high as 12 cents a gallon and that U.S. oil exports could reduce world oil prices by $3 to $5 a barrel over a 15-year window. It estimates the broader economy would grow between 0.7 percent and 1.2 percent faster over the period than otherwise would be the case, as a result of the cheaper gasoline prices and additional consumer spending power.

    “The benefits of this in terms of investment would flow through to the entire economy in a pretty significant way,” said Yergin, who won the Pulitzer in 1992 for his book The Prize: The Epic Quest for Oil, Money & Power, which dissected the history and geopolitics of oil….

    “If low prices for U.S. domestic (light) crude endure — and that risk is growing — investment in crude oil production will slow or even decline,” the report cautions. “Export markets are needed to sustain U.S. crude oil production gains that cannot be absorbed by our refineries without significant and costly changes to the U.S. refining system.”

    The likely export markets, said IHS analysts, are Asia and Europe.

    There’s also this news from Continental Resources
    Continental ‘applies for crude export permit’

    US shale player Continental Resources has applied to export some of its crude as an industry push intensifies to loosen a decades-old ban on most oil sales abroad, the company has confirmed.

    Steve Bradley, vice president of oil marketing for the company, told a Houston conference that US regulators have not yet denied its permit request to the US Commerce Department, according to Dow Jones.

    “For the government to sit on something is actually a positive sign,” the news wire quoted Bradley as saying.

    “Until they say no, we think we’re in play.”

    A Continental spokeswoman confirmed an application but said the company declined to discuss commercial terms….

    Consulting firm IHS in a study this week concluded that allowing more crude exports would help boost US output by 1.2 million barrels per day and attract $746 billion investment between 2016 and 2030.

    • Dave Ranning says:

      Just trying to keep the ponzi going:

      • Dave, I love it, I love it, I love it. Hits the nail squarely on the head. I am going to send this to all my republican friends. And I am going to send it to my democrat friends also… so they can resend it to everyone they know.

        • Doug Leighton says:

          Ditto that, trouble is, I don’t think I have any Republican friends.

          • Dennis Coyne says:

            Hey guys,

            Let’s not bash the Republicans, the extinct Republicans of the Northeast were not bad and OFM would consider himself a conservative (and possibly a Republican, though maybe not as much these days) and he is eminently sensible.

            Also, though I agree with Jason Read’s the sentiment, it is a pretty Marxian comment.

            • Dave Ranning says:

              And that makes it less valid because—-?
              Marx would put it under alienation of labor, one of his great insights.
              And of course class struggle, which seems to have ruffled the feathers of our Free Market friends with Thomas Piketty’s best seller, Capital in the Twenty-First Century.
              Marx was too much of an optimist, and thought we are blank slates formed by the environment.
              We know that not to be true.

              • Dennis Coyne says:

                Hi Dave,

                It does not make it less valid, but Marxism carries a lot of baggage and tends to be associated with totalitarian regimes.

                • Woody says:

                  Dennis,

                  How do you get Marxism out of the quote? Put some time into understanding how the current Central Bank financial system works and you will discover that the quote is right on the money.

                  Perhaps inserting Central Bank Crony Capitalism would make the quote more understandable?

                  • Dennis Coyne says:

                    Hi Woody,

                    I understand the financial system quite well.

                    Without financial markets, the capitalist system does not function very well.

                    That was pretty much what the 2008 crisis was all about.

                  • Woody says:

                    More like that is what the financial system would like you to believe. The problem is a solvency issue that still has not been resolved but doesn’t involve the end of the financial markets just who benefits from the current system.

    • HVACman says:

      So let me get this straight. Does Yergin think it makes more sense in the long term for the US to export domestic LTO to overseas refineries that are set up to process it, and for US refineries to import heavy oil that better suit US refineries? Does he have stock in some crude oil tanker fleets?

      North America (US and Canada) is in the unique position of finding most of our projected “future” production dominated by extra-heavy bitumen from Alberta and extra light crude from the US shale plays. Seems to me in the long term, it would make more economic sense if the existing refineries US and world-wide figured out ways to be more flexible with their inputs. Oil markets will become more volatile, not less. Unless a refiner signs long-term contracts from specific suppliers, they are the mercy of both the economic and political winds for their crude supplies.

      Anyone with enough refining experience to explain the relative challenges of refining very light oil vs heavy crude, both for the US market and the world market? Does it actually make long-term sense to export US LTO overseas in exchange for imported heavy crude? Will shipping costs long-term remain lower than the increased costs of refinery modifications?

      • Watcher says:

        Sort of the wrong question.

        There is nothing wrong with exporting excess. When US imported crude drops to zero, then it’s appropriate to export crude, regardless of API, and

        not until.

        • Dennis Coyne says:

          Some would argue that in a free society the producers of oil should be able to sell oil to whoever they choose.

          • Watcher says:

            Oh heavens there are all sorts of ways to address that.

            1) It’s a national resource, not a corporate one. In fact, North Dakota may be about to assert that it’s a state resource, not a national or corporate one.

            2) Can the producers of fighter aircraft sell to whoever they choose?

            3) Ditto other sorts of technology. Lots of regulations on exporting technology, even if it’s not in fighter aircraft form. (Unless you’re France, in which case you can export an aircraft carrier to Russia.)

            4) Doesn’t even have to be all that military. Linear and angular accelerometers beyond certain accuracy/capability in navigation are export restricted. (Oddly, this was to slow down spacecraft development of competitors).

            Nothing unique about crude.

            • RalphW says:

              US Imperial exceptionalism at its finest. Global free trade trumps sovereign national interest, except when it is oursovereign national interest.

            • Dennis Coyne says:

              Hi Watcher,

              There are good reasons not to sell specific items of military hardware to other nations. Do we restrict the export of coal, copper, lumber, and so forth? Let the crude be exported, if it causes shortages the law can be changed. Generally the free market will allocate resources most efficiently unless there are externalities, so if oil companies think it will be more profitable to ship there oil somewhere else, let them do it.

              It is doubtful this will change things very much, currently the excess light oil (over what can be used in US refineries) is shipped to Canada, Canada ships their heavy oil to the US.

              The ban on exports has very little effect on things, maybe such a law could be passed in exchange for a fee on carbon emissions(which could be used to reduce the income tax burden), that would be a big win in my opinion, though unlikely to happen.

      • DrTskoul says:

        Refineries built for heavy crises have a ton of capital associated with converting the heavy crude molecules to light ones. Introduce too much light crude in them and they will have to idle units that they won’t be able to fill. With the margins associated with refinery economics, such idling of capital will put a refinery out of business. Similarly a light crude optimized refinery , will need a lot of additional capital to process heavy crude.

  23. B says:

    World needs to invest US$40T to meet energy demand: IEA

    Meeting the world’s energy supply needs by 2035 will require US$40-trillion of investment, as demand grows and production and processing facilities have to be replaced, the International Energy Agency said.

    More than half of that amount will be needed to compensate for declining output at mature oil and gas fields, and the remainder on finding new supplies to meet rising demand, the Paris-based agency said in a report Tuesdsay. The world will increasingly rely on countries that restrict foreign companies’ access to their oil reserves, as North American shale output tails off from the middle of next decade, it predicted.

    “Declines and retirements set a major reinvestment challenge for policy makers and the industry,” said the IEA, which advises 29 of the most industrialized nations on energy policy. “In the case of oil, the focus for meeting incremental demand shifts towards the main conventional resource-holders in the Middle East as the rise in non-OPEC supply starts to run out of steam in the 2020s.”

    While a boom in shale oil is pushing U.S. production to its highest level in almost 30 years, diminishing the biggest crude consumer’s reliance on imports, this output surge is forecast to fade, restoring the importance of supplies from the Middle East and the Organization of Petroleum Exporting Countries.

    • Anon says:

      That’s convenient. When the ridiculous IAE forecasts don’t verify (Saudi at 12.5, Iraq at 9-12, Brazil at 5+, etc…) they can cite lack of investment.

      I mean theoretically if you throw enough money at Monterey, you will get oil out of it. The oil won’t come close to paying for what was spent in dollars and probably not in energy, but hey, investment!

  24. Ed Auden says:

    IEA backing off.

    “NPR’s Business News starts with the outlook for oil. This is a change of course – the International Energy Agency has released a report on global energy investment. And this group predicts the United States will have to rely more heavily on Middle East oil in the coming years, as North American sources start to dry up a little bit. U.S. energy production has boomed recently, much of it coming from oil and gas extracted from shale. But the IEA says U.S. production will start to lose steam around 2020, and that would put more bargaining power back in the hands of OPEC countries, such as Saudi Arabia.

    This is quite interesting, given that in 2012, the IEA forecast that the U.S. would overtake Saudia Arabia in oil production by 2020, and would be a net oil exporter by 2030. The International Energy Agency (I.E.A.) is a watchdog organization considered the world’s leading energy analyzing institution. This new stance coincides with a similar about-face from the U.S. government’s EIA (Energy Information Administration), which suddenly downgraded its assessment of the Montery Shale “tight oil” fields by 96%.”

    http://integralpermaculture.wordpress.com/2014/06/03/new-energy-report-from-i-e-a-forecasts-decline-in-north-american-oil-supply/

    • Perk Earl says:

      “But the IEA says U.S. production will start to lose steam around 2020, and that would put more bargaining power back in the hands of OPEC countries, such as Saudi Arabia. This is quite interesting, given that in 2012, the IEA forecast that the U.S. would overtake Saudia Arabia in oil production by 2020, and would be a net oil exporter by 2030.”

      Yes, shocking turns of events. I’m also reminded of a series of articles at one time suggesting post war Iraq would scale up to 12-14 mbd! There seems to be a history of early exuberance transitioning later to a much smaller view. E.g., Monterey shale oil recent reduction of 96%. This way when shtf due to oil descending from peak, TPTB can claim the news is a surprise.

  25. Philip Backus says:

    Hey Gang, Check out this post. I have a very good command of English and though I read it several times I really don’t see how this is a game changer in any way. It seems to me simply a “known known” as Mr. Rumsfeld would say. Perhaps I missed something but all I get from this is that today’s Natgas weather forcast for Europe went from cloudy with 100% chance of rain to mostly cloudy with a 100% chance of rain. Here is the link
    http://www.zerohedge.com/news/2014-06-04/mapping-europes-last-best-hope-against-russias-gas-stranglehold

    • Watcher says:

      It’s from Stratfor, a private geopolitical consultant of no particular quality. Nothing new in it.

  26. This story is spreading fast: New Energy Report from I.E.A. Forecasts Decline in North American Oil Supply

    B and Ed Auden make reference to this story in their comments above and William Tamblyn sent me the above link this morning. This is big news. The IEA is backing off, they now say US production will peak then decline. This is just the first of many such stories you will see in the very near future.

    • Philip Backus says:

      Ron, This truly is big news. To my knowledge this is the first time any Gov. agency or MSM outlet has issued a warning in this area that bears at least some semblence of reality. Strange timing though as I was considering asking you about weather you thought MSM would publish news of the Bakken and EF peaking after they do so. When I first read of the write down of the Monterey play(or should we say write off?) I had doubts that they would as promised publisize this “in about a month” but here it is though packaged in language that will not cause panic or even much concern to average Joe. You have presented what I feel is compelling evidence of the near term peaking of the big shale plays and though I know it would take a while for that event to spread into the economy I wonder if the public perception of this will be cause for preparitory belt tightening or even a bit of panic. My take is that average Joe will retreat to the couch and continue keeping up with his beloved Kardashians until the power goes off and he is left staring at a blank screen, his faith in the Fossil Fuel Fairy still undiminished.

      • Anon says:

        I’m fairly sure Joe Sixpack still thinks we get a lot of our oil from Alaska and them Saudis. Remember “drill baby, drill?” People were – and are – arguing over the local environmental damage, not that the oil industry thinks Alaska is finished. Are any of these people even aware that the Petroleum Reserve was written off in 2010?

        Without prompting, you probably would get no poll result you could graph on even basic stuff about oil. Basic in the industry/analyst/relevant government agency sense.

      • Well actually the EIA kinda backed off a few months ago when they published AEO 2014. It was just that the shale oil cheering was still so loud that nobody noticed. The EIA published a “High Case”, “Low Case” and “Reference Case”. The high case was quoted in many places, predicting we would reach zero imports in 2037. Few, if any, mentioned the reference case or low case.

        But the reference case had US crude oil plateauing in 2016 and beginning to serious decline in 2020.

        • Dennis Coyne says:

          Hi Ron,

          I am thinking that you doe not agree with that reference scenario, unless there are big contributions from the Gulf of Mexico by 2025 or LTO from areas other than the Bakken, Eagle Ford and Permian Basin are larger than USGS estimates the curve beyond 2023 or so it quite optimistic. Also the peak is likely too high by about 1000 kb/d. We will top out between 8 and 8.5 million b/d in the 2016 to 2020 time frame.

          • Dennis,

            I don’t think the reference scenario is that far off. I do think the peak will be a little lower and perhaps a few months sooner. And I also think the decline will begin sooner than 2020 and be quite a bit steeper.

            But the more important thing, by far, will be what happens in the rest of the world.

            • Dennis Coyne says:

              Hi Ron,

              I agree with both your points. If more oil is available from the Gulf of Mexico (from projects that come online over the next 5 years) and from the Permian and other shale plays besides the Bakken and Eagle Ford, then it is possible that a peak of 8 to 8.5 MMb/d is possible. A scenario I created in April which compares the AEO 2014 LTO forecast with a very optimistic (and unrealistic IMO) scenario for US LTO is shown below.
              The LTO other (red line)includes the Permian Basin and all other US LTO plays and is very optimistic, the blue line which is the sum of Bakken and Eagle Ford output is more realistic and the green line is the sum of the red and blue lines. Reality will likely lie somewhere between the blue and green lines in the chart for US LTO. Note that between 1953 and 2040 the North Dakota Bakken and Eagle Ford Scenario as economically recoverable resources (ERR) of 12 Gb, which is close to David Hughes estimate of 11 Gb, the “other LTO” contributes 11 Gb, which was intended as a very optimistic scenario to attempt to reach the AEO 2014 LTO scenario. The “other LTO” is more likely to be about 6 Gb and even that may be too optimistic.
              The point of the chart was to show that the AEO 2014 LTO scenario is not realistic.

              • Dennis Coyne says:

                There are a couple of updates to this US LTO Scenario below. The first incorporates new data, including year end 2012 reserve data for both the Bakken and Eagle Ford which has caused some changes to the Bakken(Bak) + Eagle Ford(EF) model. The second reduces the “other LTO”model from 10 Gb to 6.8 Gb to make it a little more realistic.

          • Anon says:

            Well, unless the EIA had any particular information of big new net production coming in the Gulf, you can back off 500k or so. That’s not increasing with the high deep water decline rates, and there is no real reason that would change.

            Question is then about Eagle Ford and the Bakken. That’s difficult because while the graphs of production versus well are excellent, the QUALITY of the wells is unknown. My suspicion (hardly unique) is that well quality is declining as everyone wanted to drill the most promising production first. If that is the case, the decline rates will be difficult to overcome by sinking new marginal wells at the same pace.

            So how good are the 2014 & 15 wells versus the 2011-13 ones?

            • Watcher says:

              Newer wells have more frack stages.

              Almost nothing is kept constant. Less sweet spots can be more productive than sweeter spots.

              Of course, traffic jams are more common now than before, too.

              Almost nothing is constant.

              • Dennis Coyne says:

                Hi Watcher,

                That is correct, nothing stays exactly the same, but through 2014 using a constant average well profile for the 2008 to 2014 period matches output remarkably well.

                The increased number of frack stages and higher amounts of proppant being used are no doubt counteracting the tendency for EUR to decrease as the sweet spots become fully drilled and either the well density increases or companies move to less productive leases. Eventually technology will lose this battle (to keep EUR from falling) also the increased number of frack stages and increase in the amount of proppant will increase average well costs and bring down profits.

                As long as the approximate average well profile is close to the actual wells and we match the changes in average well costs (approximately) in our model, it becomes somewhat less “silly”.

                • Watcher says:

                  The silliness coefficient will map linearly to the “production restriction coefficient” determined by NoDak Industrial Commission decree.

                  • Dennis Coyne says:

                    Hi Watcher,

                    It is certainly true that if your guess that the NDIC will arbitrarily restrict production, it would be pretty difficult to model that.

                    It is just a guess where the assumptions are laid out and you see where they lead, better assumptions lead to better models, but invariably the assumptions are incorrect, how far off they are determines the level of silliness.

                    There are no perfect models.

            • Dennis Coyne says:

              I have tried to reply twice and it hasn’t worked.

              Well quality has not decreased so far see my replies to Enno on page 1. We can only guess about 2014 and 2015, my models assume new well estimated ultimate recovery (EUR) starts to decrease in July 2014 and reaches a maximum rate of annual decrease of 7.5% per year in 12 months. For the Bakken the average new well EUR decreases to half of the present EUR by 2024. This gives a match to the USGS mean undiscovered technically recoverable resources(TRR) of 5.8 Gb for the North Dakota Bakken Three Forks, then we add oil produced to Dec 2012 and proved reserves as of Dec 2012 (with a total of 3.9 Gb) for a TRR=9.7 Gb.

              Using point forward economic assumptions, the economically recoverable resources(ERR) for the Bakken Three Forks are 9.1 Gb from 1953 to 2073.

              A similar analysis for the Eagle Ford (except that we do not have recent USGS undiscovered TRR estimates) gives a TRR=6 Gb and ERR=5 Gb.

              So the total ERR for the North Dakota Bakken/Three Forks plus Eagle Ford is 14 Gb to 2073 and 13 Gb to 2040, a more optimistic estimate than David Hughes (who estimates about 11 GB) or Jean Laherrere (who estimates 5 Gb). Below I present my updated scenario (with the “other LTO” unchanged from earlier estimates. Note that a more realistic estimate would fall between the green and blue lines, the “LTO other” scenario is very optimistic (unrealistic) a more realistic ERR for “LTO other” would be 6 Gb rather than 10 Gb, so a 19 Gb URR for US LTO might be realistic. Note that the AEO 2014 scenario suggests 44 Gb of LTO from 2011 to 2040, a bit on the optimistic side.

              • Dennis Coyne says:

                Farther down the thread I present an alternative to the chart above with a lower “other LTO” scenario.

                The second June 2014 scenario is pretty realistic, but the timing is just a guess so “other LTO” could take longer to come online (or might never be produced at all).

  27. Old farmer mac says:

    I have been noticing a good number of references to peak oil in the mainstream press over the last year or two compared to the years before that going back a few more years. Most of them are carefully couched in terms that are apparently intended to protect the author and publication from being accused of being alarmists but a reader with his antenna out and listening for bad news can find plenty of hints that things are not going well.

    Some of us may remember Greenspan’s now famous remark about ” irrational exuberance”. This is the sort of thing I am talking about now.There are a lot of little birds out there quietly singing a warning song to those with will to listen and the eyes to read between the lines.

    Talk of peak oil by way of reduced demand for instance is one of the little songs that can be interpreted in different ways.

    It is true that a country such as the US could cut consumption a great deal thru greater efficiency and still grow but this is not the sort of message about growth that bau supporters usually broadcast.This sort of message is an early warning of real trouble down the road and is going to be interpreted as such by a person paying serious attention.

  28. Old farmer mac says:

    This link is to a fairly long article in Der Spiegel which is most definitely not an American neocon type of publication.

    It goes into some depth in terms of the security situation in Europe considering the behavior of the Russians recently.

    History ain’t over folks.

    http://www.spiegel.de/international/germany/ukraine-crisis-shows-up-cracks-in-nato-a-970248.html

    • Watcher says:

      This is pre oil scarcity, cold war geopolitical thinking. It is horribly outdated.

      The reality that Moscow drains hundreds of billions of euros from its enemies in return for some liquid that they burn immediately so that they have to buy more . . . in old normal thinking gets balanced by “yes, but they buy things from the west”.

      Well, they do. They buy iPads. They buy Mercedes. They buy Hollywood DVDs.

      There is a profound difference in what we might call “urgently important”. Russia will get along just fine without Hollywood. The west has to have oil to eat.

      They have a compelling hand of cards. There is a lot of running in circles praising Putin’s chess playing vs Obama’s, but this is just silly. Obama’s maneuvers have not been stupid. They have just be inferior, because he has weaker pieces on the board.

      There is nothing that will be done about this.

    • Jeffrey J. Brown says:

      And CNE (Cumulative Net Exports) depletion marches on.

      What happened to the major net oil exporters that hit or approached zero net exports from 1980 to 2010 (excluding China), what I call the Six Country Case History, is clear.

      Following are annual net exports (millions of barrels, total petroleum liquids) for the Six Countries divided by their remaining CNE by year, also shown as a percentage. Note the accelerating rate of depletion in remaining CNE:

      1996: 1,000/7,326 (14%)
      1997: 952/6,326 (15%)
      1998: 1,007/5374 (19%)
      1999: 972/4367 (22%)
      2000: 825/3395 (24%)
      2001: 730/2570 (28%)
      2002: 674/1840 (37%)
      2003: 541/1166 (46%)
      2004: 367/625 (58%)
      2005: 184/258 (71%)
      2006: 69/73 (95%)
      2007: 4/4 (100%)

      In other words, in 1996 they shipped 14% of remaining CNE. In 1997, they shipped 15% of remaining CNE, and so on.

      My premise is that 1995 is to the Six Country Case History as 2005 is to the (2005) Top 33 net oil exporters, i.e., a major inflection point in production, net exports and ECI Ratio in both cases.

      Normalized values for Six County Case History and (2005) Top 33 (estimated values for CNE shown for Top 33, based on seven year 2005 to 2012 rate of decline in ECI Ratio):

      Six Country:
      http://i1095.photobucket.com/albums/i475/westexas/Slide2_zps55d9efa7.jpg

      (2005) Top 33:
      http://i1095.photobucket.com/albums/i475/westexas/Slide3_zpse00789d2.jpg

      Based on the seven year 1995 to 2002 rate of decline in the Six Country ECI Ratio, estimated post-1995 CNE were 9.0 Gb (billion barrels). Actual Six Country post-1995 CNE were 7.3 Gb.

      Based on the Six Country Case History, it seems likely that we are maintaining something resembling Business As Usual as a result of an accelerating rate of depletion in the remaining volume of Global Cumulative Net Exports of oil.

  29. OldTech says:

    I still vividly remember discussions that I had in the late 70’s and early 80’s of an soviet attack in Europe (I worked in the defense sector: chemical weapons, war games, …). The Der Spiegel article describes what sounds like act II. And like then an encounter implied nuclear because we were ‘no match’.

    However keep in mind that in reality that was not the case. We, the west, were far more capable than the soviets. Our intelligence enhanced soviet capabilities often with outright fabrication. And we lapped it up and our defense budgets grew.

    As a post script I also remember a conference on war gaming in which an aiforce Colonel asked what enemy could we use to justify the defense budget now that the soviets were no more. The answer was terrorism. That was in 1989.

    • Old farmer mac says:

      There is no doubt in my mind that the intelligence community in collusion with certain politicians and the MIC worked together to obtain as much funding as could possibly be had for less than honorable ends.

      This is always the way of things in politics.

      But I read a great deal of military stuff as part of my every evening of my life habit- tv and music and bars and such are not for me.

      If the soviets had invaded we would have had a hell of fight on our hands and might not have been able to stop them short of using nukes from rolling a good long way into free Europe even with all the stuff we had on hand.

      There is a larger envelope or box to consider here, this being that overwhelming force deployed either offensively or defensively can stop a war before it ever gets started. In the offensive case it means surrender after a day or two or a week or month or immediate capitulation versus as much destruction as the aggressor feels like imposing.

      In the defensive case it means the aggressor takes a good look and just stays in his own yard.

      It could be that I cannot see past my own personal interpretation of history but to me the old USSR was a military empire run by people as bad as Hitler or Idi Amin or any other historical tyrant I can think of right off the bat.

      The soviets weren’t interested in going home at the end of WWII.

      They are not really interested in staying home right now as I see things just looking at the bare facts such as ”annexing” territory.

      One of the primary reasons I will always be a ” conservative” ( not a republican or a neocon or a tea partier) is that I have yet to get personally acquainted with the first real dyed in the wool liberal who is willing to face up to the brutal side of the reality of human nature. Real negotiations require that the parties involved share certain common values.IF one party believes in non aggression but the other one ” cares not a fig” the non aggressor has no choice other than to maintain the ability to fight.

      A current day American president knows he would be voted out of office over almost any mismanaged or ill conceived little adventure that cost the lives of a few thousand American troops.An attempt to ” annex ” territory would probably be met with impeachment with plenty of support from both sides of the aisle.

      But if Putin gets away with his recent adventures he will be a hero in Russia- values are different there.

      It is simply impossible to ”negotiate” with a person or country that understands that you have no ability to fight or any intention of fighting even defensively. Once you start paying the weregild the levy just gets higher as time passes.

      We have aggression built into our genome just as surely as we have any other behavioral trait.IF our leaders happen to believe at any given time that it is strongly in their personal interest and the interest of their followers to fight we will fight.

      We have been acting this way since the earliest recorded history and almost for sure for a hundred thousand years before that and there is no indication we are about to change.

      I cannot pretend to know how much smaller a MIC we could have maintained thru the Cold War era without the temptation being more than the old soviets could have withstood. But they weren’t interested in staying home – had that been the case they would have gone home long since.

      In any case the price of the MIC at that time was a bargain compared to having some officer on the phone to his headquarters reporting the lead elements of Warsaw Pact armored columns were within sight of the Fulda Gap.

      • ziphius says:

        “A current day American president knows he would be voted out of office over almost any mismanaged or ill conceived little adventure that cost the lives of a few thousand American troops.An attempt to ” annex ” territory would probably be met with impeachment with plenty of support from both sides of the aisle.”

        America has been constantly busy since WWII with “little adventures”, the most recent being the backing of a coup in Ukraine which is in Russia’s backyard. I don’t think the average American realizes how provocative this is to Russia. For example, I don’t think the average American realizes that the Soviet Union lost 20+ million people fighting Nazi Germany while liberating Ukraine and that they essentially won WWII for the allies. I find the ignorance and ingratitude shocking.

        What I also find shocking is US media coverage of these “adventures”. For example when the pro-Russian government of the Ukraine cracked down on protestors there was a huge outcry and saturation coverage in the media but there is no coverage whatsoever of the current regime’s use of air power and artillery against pro-Russian eastern Ukraine. This is hypocrisy on an epic scale.

        • clifman says:

          “This is hypocrisy on an epic scale”

          20th &early 21st Century US policy & media summed up in 7 words…
          (with a pass given for WWII, as Hitler really was a madman)

  30. Old farmer mac says:

    ”This is pre oil scarcity, cold war geopolitical thinking. It is horribly outdated.”

    There are still plenty of people alive in Germany and Japan who actually participated in resource wars and plenty of people in Russia likewise. I have one uncle left who was a mortar man from the first landings to the final surrender of Germany.

    Forgive me for being blunt but this remark indicates a head in the sand attitude to a problem that has plenty of potential to explode into a war between major powers.

    The rest of your comment makes pretty good sense.

    • Doug Leighton says:

      Mac,

      At one stage of my life I was based, for a very short time, at the University of Tokyo: You’re talking crème de la crème dudes (them not me!). These guys are the intellectual elite of Japanese society, the great thinkers and in most cases highly traveled scientists. Every professor, department head, whatever, I spoke to, claimed America started WW II in order prevent Japan from having its just supply of natural resources: Translation, Oil. That was really long ago and perhaps the younger generation think differently, perhaps. In any case, it’s amazing how “history” conforms to the eye of the beholder.

      Doug

  31. Frugal says:

    Statoil to Deepen Cost Cuts to Make Extra $5 Billion in Cash

    Statoil faces escalating costs and declining returns, and needs to significantly improve cost and resource efficiency,” the company said in the documents, which outline its ambitions.

    Another major international oil company dialing back capital spending.

    • Jeffrey J. Brown says:

      I’m frequently reminded of Stephen King’s book and movie “Thinner.” The premise is that an overweight guy runs over the daughter of a gypsy, and the gypsy puts a curse on him, causing him to lose weight, no matter how much food the guy eats.

      Only by consuming vast amounts of food every day is the guy able to reduce his daily weight loss.

    • Watcher says:

      That’s to fund dividends.

  32. Doug Leighton says:

    You guys (and gals) are over the top on all this going-to-war dialogue. True, we went to war in Iraq but that was for a perfectly good reason, oil: I actually don’t have the faintest idea why all that stuff went on in Afghanistan. Maybe that was so girls, who have no reason whatsoever to be educated, can go to school. Ridiculous! Certainly nobody lifted an eyebrow while the Pol Pot were butchering millions in Cambodia did they? That never even made the papers; and why in hell should it? Where is Cambodia anyway? And, did anything happen while thousands were chopped up into stew sized bits with machetes in Rwanda? A couple of those hard hitting newspaper editorials did the trick: And credit to our great free press that was too. And, I even agree, within reason, people should be told about this kind of thing happening — as long as the stories aren’t too gruesome. Ukraine? I say, why get involved in another big mess. What does, it’s-the-right-thing-to-do even mean anyway? We’ve got a beautiful golf course just down the road that absolutely has to be watered regularly. Priorities man, priorities.

    Now, let me see, someone mentioned the South China Sea: yes, that may be different; there’s that oil thing again isn’t there?

  33. Dennis Coyne says:

    Hi all,

    Below I present an alternative US LTO scenario with economically recoverable resources(ERR) of 19 Gb (4 Gb less than my previous scenario). Of this 12.6 Gb is from the North Dakota Bakken/Three Forks and Eagle Ford combined, the rest I call “other LTO” and includes the Montana Bakken, Permian basin and all other US LTO plays and the ERR is 6.7 Gb.

    There is no way to really know what these “other LTO” plays might produce but consider that the USGS mean estimate for undiscovered technically recoverable resources(TRR) for “continuous” oil formations (the term the USGS uses for LTO plays) is 13 Gb.

    For the North Dakota Bakken Three Forks the undiscovered TRR (UTRR) is 5.8 Gb and for the Eagle Ford the most recent UTRR estimate is 1.7 Gb for a total of 7.5 Gb. We subtract this from the total US UTRR estimate (13 Gb) to get an “other LTO” USGS estimate of 5.5 Gb. One rationale for a higher “other LTO” scenario of 6.7 Gb is that previous USGS estimates of the Bakken (in 2008) proved too low and the most recent USGS evaluation of the Eagle Ford in 2011 also proved too low.

    In 2008 the USGS mean UTRR estimate for the Bakken was 3.65 Gb. Since that time about 3.2 Gb of proved reserves have been added to the North Dakota Bakken by December 2012. In addition, from Dec 2007 to Dec 2012 there were 0.5 Gb of oil produced in the North Dakota Bakken. So in total 3.7 Gb of oil was “discovered” (added to proved reserves or produced) from Jan 2008 to Dec 2012. In April 2013 the USGS issued a new report where the total Bakken UTRR was estimated at 3.65 Gb with 2.9 Gb in the North Dakota Bakken.

    If we make the generous assumption that no proved reserves were added from the Montana Bakken and that the USGS expected no UTRR discoveries in the Montana Bakken in their 2008 assessment, then if the 2008 assessment was correct we would expect the more recent estimate for the North Dakota Bakken to be zero. The 2008 assessment should have been 7.4 Gb rather than 3.65 Gb, the earlier estimate was 50% too low.

    Likewise for the Eagle Ford the most recent estimate by the USGS (2011) the UTRR=1.73 Gb. Since Dec 2010 2.4 Gb of proved reserves have been found in the Eagle Ford and 0.4 Gb of oil has been produced for a total of 2.8 Gb. Even if we make the very generous assumption that there will be no more discoveries of reserves after Dec 2012, the 2011 assessment would still be too low by over 1 Gb or about 38% too low.

    The bottom line, USGS mean estimates are quite conservative, at least in the cases of the Eagle Ford and North Dakota Bakken. The 5.5 Gb mean USGS UTRR estimate for “other LTO” may also be too conservative, if it were 45% too low as was the case for the Bakken and Eagle Ford the actual UTRR might be around 10 Gb.

    The ERR for the “other LTO” below is 6.8 Gb. If the USGS estimate is too conservative (as has been the case for th Bakken and Eagle Ford), this guess may be about right, it is likely to be closer to reality than my previous scenarios where “other LTO” had an ERR=10 Gb.

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