OPEC publishes monthly production data for all OPEC nations in their Monthly Oil Market Report. The data crude oil production only and does not include condensate. I have found the data to be highly accurate and any errors are corrected in the next month’s report or the month following that. The OPEC data is from OPEC’s “Secondary Sources”.
The EIA also publishes OPEC production data in their International Energy Statistics. However the EIA does not publish crude only data. Their data includes condensate.
All data is in thousand barrels per day. The last EIA data point is December 2014 and the last OPEC data point is April 2015.
Almost 20% of Algeria’s production is condensate if the EIA is correct. Algeria does produce a lot of condensate but I have serious doubts about the accuracy of the EIA data. As you can see from the chart the EIA has Algeria’s production absolutely flat for 24 months, from January 2010 through December 2011. But both the EIA and OPEC agree on one point, Algeria is in decline.
Angola is one place the EIA and OPEC pretty much agree. Angola has declined by about 300,000 bpd since peaking in 2010.
Ecuador has increased production by about 50,000 bpd in the last two years but may be peaking.
Iran may be slowly increasing production in spite of sanctions. At any rate their production of condensate seems to have increased in the last 8 years or so.
Iraq is another place where the EIA and OPEC track each other very close. Apparently they produce very little condensate.
On Kuwaiti production the EIA and OPEC were tracking each other pretty close until early 2012 when a strange gap opened up between them. And the EIA had their production absolutely flat for 23 months up to September 2012.
Since February 2011 The EIA an OPEC have been tracking each other almost exact on Libyan prouction. Apparently they produce almost no condensate at all.
It looks like the EIA has been getting pretty good data out of Nigeria. However the difference between the EIA and OPEC, for the last two years, has been over 20%. Do they produce that much condensate?
Qatar is really a strange animal. For the last 4 years the EIA has them at about twice what OPEC has them. Qatar’s main production is natural gas so they do produce a lot of condensate. But as far as crude oil goes OPEC says Qatar is in decline. But as far as C+C goes the EIA says they are growing by leaps and bounds, or were up until early 2011 anyway.
The EIA and OPEC pretty well agree about Saudi Arabia, except for a year or so around 2010. And Saudi apparently produces very little condensate.
And with the United Arab Emirates the EIA completely goes off the track. They have no change in UAE production since March 2012. That is totally unrealistic. And just as unrealistic is what they have UAE production for all the previous years also. It looks like they have not a clue as to what the UAE is producing so they just keep the data the same until they think they have a better guess.
But the EIA’s estimate of Venezuela’s production is just beyond the pale. The EIA says they haven’t had a production change since January of 2011. How can the folks at the EIA post this stuff with a straight face?
At least the total OPEC chart looks realistic. The EIA has condensate averaging 6.10% for the last 10 years but condensate production has been increasing and averages about 7.2 percent for the last two years. That is if we assume the difference between the EIA and OPEC data is all condensate. But I really don’t think that is a safe assumption.
___________________________________________________________
Note: If you would like to receive an email notice when I publish a new post, then email me at DarwinianOne at gmail.com .
In terms of total petroleum liquids + other liquids (EIA), OPEC 12 net exports fell from 28 MMBPD in 2005 to 27 MMBPD in 2013, as annual Brent crude oil prices doubled from $55 in 2005 to an average of $110 for 2011 to 2013 inclusive.
Based on the 2005 to 2013 rate of decline in the OPEC 12 ECI Ratio (ratio of production to consumption), I estimated that OPEC has already shipped about one-third of their estimated post-2005 CNE (Cumulative Net Exports*).
*Estimated OPEC 12 post-2005 CNE: 250 Gb (total petroleum liquids + other liquids)
Iraq About to Flood Oil Market in New Front of OPEC Price War (5/25/15):
http://www.bloomberg.com/news/articles/2015-05-26/iraq-about-to-flood-oil-market-in-new-front-of-opec-price-war
My comments:
Subject to what happened to consumption, Iraqi net exports probably increased by about 0.2 to 0.3 MMBPD (total petroleum liquids + other liquids, EIA) from 2013 to 2014.
In any case, following is another Bloomberg column from April, 2009 talking about a rising flood of oil from Brazil “Taking market share away from OPEC.” In recent years, Brazil has been a net oil importer, even if we count biofuels as production.
April, 2009: OPEC Cuts Thwarted as Brazil, Russia Grab U.S. Market
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aiSCDyK4CWmI&refer=news
Who knows why the MSM embarked on such a massive disinformation campaign of distortions, half-truths and outright lies to talk down the price of oil.
In addition to the supply side, Bloomberg has tried to talk the price of oil down on the demand side too. Here, for example, is one of many examples:
Here is another:
But Bloomberg is not the most egregious offender, the most detached from factual reality.
For example, look at the graphic CNN used to school us on why the price of oil fell in The Story Behind Oil’s Plunge:
Wow. I missed the $10 Bloomberg story. BTW, your link doesn’t work.
http://www.bloombergview.com/articles/2015-02-16/oil-prices-likely-to-fall-as-supplies-rise-demand-falls
Fixed
I can find no empirical evidence which supports the MSM claims.
Instead, it looks like global oil demand continues to grow at a constant, uninterrupted rate:
Steven Kopits’ 1/20/15 outlook for global supply & demand:
Supply Minus Demand, Explained:
http://www.prienga.com/blog/2015/1/20/supply-minus-demand-explained
Very good analysis.
It offers an antidote to some of what Gail Tverberg and Art Berman are putting out.
And here Tverberg, in discussing the topic of oil prices (beginning about minute 33:45), states in regard to petroleum demand that “It’s headed downward, the amount that the economy can afford.”
Gail Tverberg: “Gail in China: In Her Own Words and Pictures”
This is not to say that Tverberg’s and Berman’s theories are without merit. For me, their theories only work in the context of some sort of Austrian or Minskian crisis theory.
But it is also evident, and becoming more so every day, that we are not currently in the midst of such a crisis. All available empirical information indicates that global oil demand is on the rise.
The empirical data, however, fails to persuade Tverberg and Berman. They remind me of the old Western Coporation advertisement: “If you don’t have an oil well, get one!”
Except in their case it’s “If you don’t have a global economic crisis, get one!”
This of course doesn’t mean the world could not enter into a global economic crisis at any time, with concomitant oil demand destruction. What it means is that it hasn’t happened yet.
Are you suggesting that the world is not in a global economic crisis, whatever that means?
An Austrian or Minskian crisis is a very specific type of financial crisis which involves the inflating and the bursting of a private debt bubble. Examples are the crash of 1929 or the crash of 2008.
US Private Debt to GDP
(from Steve Keen)
In the 1930s and 1940s the private debt structure for the most part was not destroyed. It was kept in place, and what happened was that the economy grew faster than new debt creation so that the Private Debt/GDP ratio came back down to a manageable level.
However, the 1930s and 40s were before peak oil began to show its ugly head. The question is, with resource scarcity, is the economy capable of another round of rapid growth such as that which occurred in the 1930s and 1940s?
Petroleum production soared from 69 million barrels in 1901 to over a billion barrels in 1929….
Spectacular new oil discoveries in Texas, Oklahoma, California, and New Mexico between 1920 and 1930 transformed the problem of petroleum from one of scarcity to abundance. Prolific production led to a chronic imbalance between supply and demand. As stocks increased, the price of crude oil declined from a per-barrel high of $3.50 in 1920 to $1.25 in 1930….
The situation had been further aggravated by the surge of drilling and production activity that followed in the wake of Columbus M. “Dad” Joiner’s discovery of oil on the Bradford farm near Kilgore, in East Texas, on October 3, 1930. Joiner had unwittingly opened a Pandora’s box. East Texas’ yellow pine forests were instantaneously transformed into thickets that stretched 45 miles north to south and 12 miles east to west. Estimated to contain approximately 5.5 billion barrels of crude oil, the East Texas field was the world’s largest known petroleum reservoir at the time, and accounted for a third of the nation’s total oil production….
Overproduction soon glutted an already saturated crude oil market. Crude oil selling for $1.10 a barrel in October, 1930, plummeted to 25 cents in early 1931….
By the summer of 1931…statewide production reached a million barrels a day and crude oil prices plummeted to 10 cents a barrel.
— Nicholas George Malavis, Bless the Pure & Humble
The question is, with resource scarcity, is the economy capable of another round of rapid growth such as that which occurred in the 1930s and 1940s?
I think we might be able to generate some economic movement by finding ways to conserve resources rather than to use them up.
The goal may be to build and reconfigure stuff so that our total energy and resource consumption goes down.
For example, maybe we can find ways to make housing more energy efficient.
Just eliminating corn ethanol should free up land for better uses.
Reducing the amount of beef we eat should allow us to refine our diets for better use of resources.
And so on.
“All available empirical information indicates that global oil demand is on the rise.”
Glen,
could you please provide a reference to sources that supports that claim and which also details developments in total petroleum consumption by region.
And could there be a gap between supply potential and demand?
How do you differentiate between demand and consumption?
If you’re not satisfied with the data provided in the article linked by Brown above, you can go directly to the source materials, such as the EIA’s Short-Term Energy Outlook or the IEA’s Oil Market Report.
You can drill down as deep as you want, to each individual country’s use of each different refined product, as well as overall refinery inputs.
I don’t know if there exists “a gap between supply potential and demand” or not. The Saudi regime always claims it has lots of extra potential to produce oil. But my experience has been that governments sometimes speak with forked tongue.
It looks to me like most of these agencies use demand and consumption interchangeably. A simple material balance would be as follows:
The agencies report all three: global oil stocks, demand and production.
EIA and IEA numbers are forecasts.
Actual numbers may come close, but hard to know before the fact.
Rune,
The EIA and IEA do indeed make forecasts, but in addition to this they present historical data as well.
And in that historical data, can you show me any demand destruction over the past year or two? This is the argument that Berman and Tverberg are making, that there has been demand destruction of late.
Show me recent demand destruction in the historical data.
Glen,
Exactly both EIA and IEA also present actual data.
And I wanted you to show the difference between consumption developments by region, because if you did, you would have discovered that there is a mixed picture out there.
In the US there has been a growth in consumption (primarily driven by the decline in the price) plus a strong stock build partly resulting from playing the spread in the contango curve.
For OECD as a whole consumption has been in decline since 2008 and as per November 2014 as shown by EIA data.
http://www.eia.gov/cfapps/ipdbproject/IEDIndex3.cfm?tid=50&pid=54&aid=2
Can you spot the demand destruction in those data during the recent year and two?
When it comes to other big consumers like China it is well known that they are filling their strategic reserves and China is trying to steer their economy away from Investment/Construction (which according to several sources has been around 50% of GDP) to Consumption.
Construction is very energy intensive activities.
Then there are developments within other big consumers like India and Indonesia that has reduced their subsidies for petroleum consumption.
So my point is that anyone making a claim that demand now is in a general rise should back it up with data.
Rune,
I really don’t know what more to say.
Sure, you can point to some specific part of the world which might have experienced some demand destruction.
But if you do so and still cling to the notion that there has been global demand destruction, you are employing a number of rhetological fallacies:
(1) spotlighting: assuming an observation from a small sample size applies to the entire group
2) Biased generalizing: Generalizing from an unrepresentative sample to increase the strength of your argument
3) Confirmation bias: Cherry-picking evidence that supports your idea while ignoring contradicting evidence.
4) Suppressed evidence: Intentionally failing to use significant and relevant information which counts against one’s own conclusion.
(5) Hasty generalization: Drawing a general conclusion from a tiny sample.
(6) Misleading vividness: Describing an occurrence in vivid detail, even if it is a rare occurrence, to convince someone that it is a problem.
As to your comments as to what might happen or could happen in China and other parts of the developing world in the future, that is pure speculation.
As to the past, however, let me state what has happened one more time: There has been no destruction of global oil demand during the past few years. As this graph from the IEA’s Current Report shows, in every single calendar quater since 2010 there has been a y-o-y increase in global petroleum products consumption.
Glenn,
Try to stick to the subject and if you cannot provide documentation then say so.
I will make it short and sweet.
You claim empirical information indicates global oil demand is on the rise.
Yes data show this to be so as of 2014.
But will this trend continue in 2015?
I do not know and I am not biased in any direction, I simply asked for data/evidence that supported that claim from the person posting it.
The oil market appears now to be in a flux.
So far you have failed to provide documentation that however does not prove your claim wrong.
Rune,
You say, “Yes data show this to be so as of 2014. But will this trend continue in 2015?”
Well that’s not exactly true, because the data for 1Q15 is already out, as the chart I posted in my last comment shows.
And what 1Q15 data reveals is that global oil demand was not “headed downward” during 1Q15.
In fact, just the opposite happened, for not only was global oil demand not “headed downward” in 1Q15, but the upward growth in global oil demand accelerated.
So to clarify things, let’s review by putting things on a timeline:
• April 3: Art Berman said: “The collapse occurred because of the inability of the world market to support the cost of the new expensive oil supply from shale, oil sands and deep water. Demand was progressively destroyed during the longest period of sustained high oil prices in history from 2010 through 2014.”
• April 29: Gail Tverberg, in discussing the topic of oil prices, states in regard to petroleum demand that “It’s headed downward, the amount that the economy can afford.”
May 13: IEA publishes its Oil Market Report which, along with the chart I posted in my last comment, states:
Global demand growth gained momentum in recent months after bottoming out at a five-year low of 230 kb/d in 2Q14 and then accelerating steadily to reach 1 425 kb/d by 1Q15. The 2Q14 nadir coincided with declining economic activity in Japan and much of Europe. Upticks built as industrial and transportation fuel demand rose on escalating global economic growth; momentum peaked in 1Q15 on cold European weather.
The assessment of 1Q15 demand has been revised upwards by approximately 130 kb/d since last month’s Report. Notable additions applied to China, Germany, Saudi Arabia and Turkey.
You can speculate and let your imagination run wild about what’s going on in various places around the world, or what has happened, but it’s not showing up in the empirical data.
Glenn,
I posted a question about developments for 2015. I did NOT make any statements apart from trying to point to that there are a lot of factors in play and hard data could provide some insights into what is going on.
Should developments as per Q1 2015, which by now can be nothing but estimates, be extrapolated for the rest of 2015?
We know demand growth in Q1 2015 partly came from strong stock builds.
Rune Likvern:
We know demand growth in Q1 2015 partly came from strong stock builds.
This simply is not true.
As I stated above, stock builds are reported separate from demand and are not counted as part of demand by any of the major reporting agencies.
As the IEA ‘Oil Market Report’ makes amply clear, stock builds are reported under a separate category called “Stocks” and are not included in any way, shape or form in determining demand. The following material balance applies:
Supply = Demand + Stock Builds
I think Tverberg and Berman offer great examples of what the moral psychologist Jonathan Haidt explains here:
Frans de Waal’s ‘Good Natured’…showed an equally broad audience that the building blocks of human morality are found in other apes and are products of natural selection in the highly social primate lineage. [The book] came out just as John Bargh was showing social psychologists that automatic and unconscious processes can and probably do cause the majority of our behaviors, even morally loaded actions (like rudeness or altruism) that we thought we were controlling consciously.
Furthermore, Damasio and Bargh both found, as Michael Gazzaniga had years before, that people couldn’t stop themselves from making up post-hoc explanations for whatever it was they had just done for unconscious reasons….
Studies of everyday reasoning show that we usually use reason to search for evidence to support our initial judgment, which was made in milliseconds. But I do agree with Josh Greene that sometimes we can use controlled processes such as reasoning to override our initial intuitions. I just think this happens rarely…
Does building stocks add to demand?
Yes, Supplies = Consumption + stock changes.
It looks as IEA equates demand with consumption.
Which is misleading.
In early 2010, Stuart Staniford prepared a scenario chart showing what would happen if the Iraqis were right about their circa 2009 production projection:
http://3.bp.blogspot.com/_D9-JNTtRKgs/S0AwzBBUVqI/AAAAAAAAAMg/I9C6ykZfByY/s1600-h/Picture+117.png
The scenario showed them approaching 10 MMBPD of total petroleum liquids in 2014. The EIA puts Iraqi total petroleum liquids (+ other liquids) at 3.4 MMBPD in 2014.
I never heard of mr staniford, but his Iraq oil forecast was pretty funny.
Stuart tried to differentiate between a forecast and a scenario, but the title of his post was that Iraq Could Delay Peak Oil by a Decade (with, to quote Stuart, the emphasis on “Could.”)
http://www.theoildrum.com/node/6101
Right now it looks like the only thing keeping Iraq from completely falling apart is the presence of Iranian backed Shiite militia forces.
Bush handed Iraq to Iran on a silver platter.
The greatest foreign policy failure of all time for the US.
One could argue Viet Nam was worse, but the region is relative stable now.
The rich continue to get richer and other people are lowering consumption. Not good for an economic growth mindset, but perhaps appropriate for a peak oil future.
I wish economists would realize their explanations of how the world works or should work don’t fit with today’s economic realities.
April changed economic outlook – Business Insider: The May 13 report on retail sales showed that Americans were simply not spending money the way economists had been expecting, especially after the crash in oil prices we saw in the second half of 2014.
Down here on the ground it’s continuing recession for many. The smart ones have pulled way back and are saving money. The stupid ones continue to try and live the grand lifestyle and will have to try to pay off those credit cards and home loans or go bankrupt and possibly foreclose.
Hunker down. It’s going to be a long siege.
“First there’s Mad Max: Fury Road, which depicts the collapse of civilization as a monster car rally. They managed to get it exactly wrong. The present is the monster car show. Houston. Los Angeles. New Jersey, Beijing, Mumbai, etc. In the future, there will be no cars, gasoline-powered, electric, driverless, or otherwise. Mad Max: Fury Road is actually a perverse exercise in nostalgia, as if we’re going to miss being a nation of savages in the driver’s seat, acting out an endless and pointless competition for our little place on the highway.”
-JHK
A good read today
http://kunstler.com/clusterfuck-nation/yesterdays-tomorrowland/
Kunstler (aside being consistently wrong about everything) is the ultimate hypocrite. If he hates the United States so much, he should just move out.
But that often-aped, mindlessly-uttered comment seems to have the (self-defeating) answer embedded in its implication: Move out to where? Another set of potential problems? Away from where one has a natural right to be and to ‘Life, Liberty and the pursuit of Happiness’?
So maybe the answer, at least sometimes, if not usually, is to stay put and do what one can to confront and solve some problems…
Like maybe the US people should just ‘remove’ certain people, like John B, the governpimps and their cronies.
For all his foibles, James Howard Kunstler, whose full name and appearance we appear to know, seems to be doing a decent job, unlike what John B, whose full name and appearance we do not know, seems to be doing. (Which is what exactly?)
More like John B?
Yeah, he’s doing a decent job of constantly putting down the United States, so I’m sure you like that. I doubt if anywhere else would like to take Kunstler. Except maybe Canada.
Where YOU should go is pretty obvious, since you love ISIL and hate the United States. Go join up and you can fight the governpimps yourself, instead of just constantly whining about them. What are you waiting for?
If only Kunstler was alone with his critiques, then all would be just peachy-keen in John B’s bizarre world of fantasy and imagination; or if Kunstler did not have speaking arrangements all over the place, thus with lots of people willing to not only ‘take’ him, but also to invite and even pay him for the pleasure…
No news yet, though, of who has merely taken John B…
(sound of a cricket and tumbleweed…)
But do keep us posted! ^u^
Your Untied States is, in a sense, ISIL, its ‘Eraserhead child’.
Hey, listen, don’t feel bad, we might be willing to consider taking you over here, depending on how much money you have; how large a prepayment before you get here; and your willingness to sign a waiver of all rights to talk nonsense while you’re here.
Looks like you have plenty of company.
http://www.breitbart.com/national-security/2015/05/25/shock-poll-81-of-al-jazeera-arabic-poll-respondents-support-isis/
He does indeed “have plenty of company.”
Can you name any great global hegemonic empire which, once it has lost its productive might, has been able to retain its moral, financial and military might?
From the BBC Country Rating poll:
And my friends here in Mexico, although they don’t have such a negative opinion of the United States’ role in the world, don’t have such a positive opinion either:
Please everyone, simply ignore John B. This is a person who believes that if you put a flame from a Bunsen burner directly beneath a glass of ice water, unless the temperature goes up, no heat is added.
I find that there is some sort of common, curious and odd detachment from reality, context and/or internal (and ethical) consistency with some people, like that Patrick Moore who Paulo mentioned in this section for example:
“People try to commit suicide with it and fail fairly regularly…” ~ Patrick Moore
So, on the one hand, Moore seems to imply, by his own suggestion, that people do in fact succeed in committing suicide, and yet around the same time in the same interview:
“You can drink a whole quart of it and it won’t hurt you.” ~ Patrick Moore
“I’m not stupid.” ~ P. Moore
You might not be stupid, Patrick, but there seems to be something not quite working properly upstairs. I might be inclined to chalk it up to the interview jitters if it weren’t for the other fact that you’re speaking for Monsanto from a previous position with Greenpeace: Another strange inconsistency.
Maybe Monsanto bought you for a price you couldn’t resist… Afterall, ya gotta put food on yer family.
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” ~ Upton Sinclair
Oh, some understand it alright, but maybe it’s about that cognitive dissonance and those damn ethics.
Incidentally, FWIW, that John B seems to think that, I, as one who believes in anarchy, am somehow in support of this USA/Coalition of The Corrupt-spawned ISIL/ISIS/IL State structure/Eraserhead child seems yet another indication of his apparent and bizarre world of fantasy and imagination.
But if only everyone would come on board and Just Believe the way that John B Believes, it could then be ‘true’ and we could all live in John B’s world! (Yay!)
So whatcha waiting for!?
Together, we can make the B in John B, be Believe! ^u^
Be a Believer!
I would say “Anarchy” and “ISIL” are a pretty good match. As for your support of ISIL, you said it yourself in the last thread:
John B says:
25/05/2015 at 5:45 am
If someone is trying to kill you, you have a legal right to kill them first. That’s not murder, it’s self defense.
Of course there will always be the Neville Chamberlains that would rather just bury their heads in the sand, and hope it all goes away.
Caelan MacIntyre says:
25/05/2015 at 6:33 am
Yes, thank you, and ISIL might want to spill over into the US Homeland to do just that– similar to what the Homeland cops are already doing.
It’s rather obvious who’s side you’re on.
What part of the American Military Apparatus (et al.) killing innocent people and their towns, cities and cultures wholesale overseas in the Middle East (and elsewhere, historically) that helps breed ISIL and a desire for defense and revenge back overseas don’t you understand, John?
How does killing innocent people overseas fit into your aforementioned notions of defense and a stable world back home or a stable world in general?
But maybe stability is not profitable, like what that ‘Shock Doctrine: The Rise of Disaster Capitalism’ book might explain.
As far as I am aware, ISIL/ISIS– by definition– is a yet another State, which therefore makes it non-anarchic. (And this is not the definition of anarchy according to Fox News, either.)
ISIL/ISIS/IS may be more ‘American’ than many realize.
Like a really really fucked-up ‘Mom and apple pie’… A Mom that has become murderous with a pie that is poisonous. A Monsanto-Moore glyphosate pie…
For pre-emptive self-defense (an oxymoron) of course.
Like killing the children before they grow up and become ‘terrorists’.
Gotta be proactive when it comes to ‘self-defense’, ay, John B?
What part of the American Military Apparatus (et al.) killing innocent people and their towns, cities and cultures wholesale overseas in the Middle East (and elsewhere, historically) that helps breed ISIL and a desire for defense and revenge back overseas don’t you understand, John?
I suppose you think Hitler, Mussolini, and Tojo were all innocent as well?
What spawned ISIL, is the same thing that spawned Al Qaida, Boko Haram, Hezbollah, The Haqqani Network, The Muslim Brotherhood, and countless other terrorist organizations – Islam.
What you believe is that all those terrorist organizations were created by the United States. You probably believe as well, that all wars were started by the United States, and also that Slavery was invented by the United States, correct?
Basically, you believe that everything bad in the history of the world, was the product of the United States, correct?
You have two or more siblings at home fighting and yelling…
An irritated parent walks into the room and commands, “What’s going on here?!”. The siblings start arguing about who did what when and how, and it all gets convoluted and almost into a fight again and in front of the parent…
So at some point, the parent suddenly commands, “Ok, that’s enough! Just simmer down, smarten up and be ethical with each other and try to get along! Thanks!”
In an escalation from that early part of the day, the kids start bombing each other and their neighbors with water balloons in the middle of the night, and others in the neighborhood across the lake start selling both sides pre-filled water balloons.
That’s probably not the best way to go about solving things.
As for your Islam quip, or any other kind of religious institution, acceptance is one thing, interpretation is another, personal belief is another, etc., and the resulting behaviors are yet another.
The State or Crony-Capitalist Plutarchy are religions. And we see the mess they’re making. That’s in part why we have a blog like this.
Caelan-
Few, even on the “liberal left”, have any understanding or experience with anarchy or anarchist thought.
For most, anarchy is synonymous with chaos, which is actually the anthesis.
A REQUEST
Would you guys who believe in anarchism please give us a short synopsis of what anarchism really is? And please do it on a new thread below where the text is wider.
I need to know before I can argue the point. Wiki defines it as:
Anarchism is a political philosophy that advocates stateless societies often defined as self-governed voluntary institutions, but that several authors have defined as more specific institutions based on non-hierarchical free associations. Anarchism holds the state to be undesirable, unnecessary, or harmful.
Do you agree with the above definition?
Thanks in advance.
Ron
He’s dead right about Mad Max. Where is the fuel for all those vehicles supposed to be coming from?
Kunstler is just making a living and having a good time in the classic and honorable tradition of prophets and hucksters and show men of all sorts. He has found his following and the truth matters but very little or not a whit to those who follow him.
Artistic license they call it. Real estate agents tout EVERY ridge top cabin in my part of the world as having the prettiest view.
Everybody understands.
And insofar as his predictions are concerned – he may be only a few decades or maybe a century ahead of his time. I expect the odds of his doom and gloom scenarios coming to pass are BILLIONS to the Nth of times more likely than Jesus returning.
He is an entertaining character so I read his stuff occasionally myself.
Nobody knows what is actually going to come to pass IN SIGNIFICANT DETAIL.
So reading some Kunstler type stuff is good for the intellectual perspective.
And fires are shutting down tar sands production:
http://www.theglobeandmail.com/report-on-business/wildfires-force-shutdown-evacuation-of-two-oil-sands-projects-in-alberta/article24582336/
Alberta is known for it’s droughts. There have been five periods of drought recorded in the last 120 years. However, apparently the previous two millennia were much drier than the 1900’s.
What this says to me is that determing oil supply is an inexact science.
Since the world consumes almost 100 million barrels per day of total fluids, and the difference between $30/bbl oil and $100/bbl oil is only a couple of million bopd in the oil supply-demand balance, this makes one wonder what the oil price is really all about.
It looks like oil markets are a seat-of-the-pants affair.
this makes one wonder what the oil price is really all about.
Imagine that.
I like how the dissident and unorthodox mathematician Benoit Mandelbrot put it in The (Mis)Behavior of Markets:
Sounds like the “Black Swan”.
Net annual flows to the financial sector now equal an equivalent of annual value-added output of the economy. All net growth of wages and profits after taxes are pledged to, and received by, the financial sector and its top 0.001-1% owners in perpetuity.
This is what I refer to as rentier-socialism in the context of the militarist-imperialist global corporate-state superstructure and supporting institutions.
That is, the more central banks and TBTE banks lever up financial asset prices via QEternity, ZIRP, and NIRP as a share of wages and GDP, the larger and more persistent the rentier claims on labor, profits, gov’t receipts, and overall GDP, and the longer “secular stagnation” and the “slow-motion depression” will persist.
Therefore, the financial sector (and its owners) has (have) become a net parasitic, extractive, debilitating claim on the rest of the economy and on the larger objectives of gov’t social goods to maintain the mass-consumer economy and its institutions of civil society.
Since the 1980s, the US has experienced the largest transfer of income, wealth, and political power from the bottom 90-99% to the top 0.001-1% in the country’s history (there was no opportunity for such a transfer until WW II and thereafter). One has to go back to the Roaring Twenties (followed by the Great Depression, which was actually the third Great Depression by that time), Gilded Age (and the Victorian Depression), Era of Good Feelings (and its depression aftermath in the 1830s-40s), and the revolutionary period of the 1780s-1800s (including the French Revolution and the subsequent Napoleonic Wars era) to find periods comparable to today in terms of inequality, self-satisfied elitism, captured gov’t, and economic stagnation.
https://www.bis.org/publ/work490.htm
http://blog-imfdirect.imf.org/2015/05/04/how-much-finance-is-too-much-stability-growth-emerging-markets/
http://ineteconomics.org/new-economic-thinking/adair-turner-consequences-money-manager-capitalism
By now, even the obvious about hyper-financialization is, well, obvious to the “educated”, vetted, and well-positioned Anglo-American and European professional middle-class intellectuals and technocrats in service to the rentier Power Elite top 0.001%.
It’s easy to capture the working class. Just give them food, entertainment, and be hyper-patriotic and denounce a foreign enemy and they will never understand what’s happening to them.
But it’s not so easy with the middle and managerial class. They have some functioning brain cells so when they try to put 2+2 together and it no longer equals 4, they understand something is wrong. I suspect this is happening.
Glenn, it is like that bell curve for intelligence, and they say that average intelligence– the majority– is not that smart.
So society averages out at average. We can have all the great technology and ideas we want, but somehow it all gets averaged-out/diluted at the peak– the majority– of the bell curve of human intelligence.
So maybe culture is a kind of averaged-out manifestation of 100 IQ, which is not that bright as some have suggested.
Looking around, that seems to make sense. We should be skateboarding on Mars by now, for example, yes? Or have nuclear fusion and nuclear fission waste all taken care of by now, everything all neatly decommissioned? We should be working far less by now, with no wage-slaves, poverty or illusions of democracy. We should be living in a kind of Frescoesque Venus Project World by now, no? Doing art, music, philosophy, leisure, mountain biking and hiking in the trails, swimming in the pristine local waters of happy fish and making love beside a knocked-over tray of tea-and-crumpets?
But we’re not. Not quite.
We are living with climate change and ceaseless arguments about it; with ecosystem despoilment and depletions and Fox News.
In the physical and spiritual manifestation of a 100 IQ world.
Caelan, my observations precisely. Thanks.
We are still stuck in an evolutionarily determined predator-prey situation in which the most successful predatory top 0.001-1% gain disproportionately by manipulation and enforcing of self-serving symbols and beliefs, perpetuating the mythos of meritocracy and perpetual growth of population, resource consumption, and–choose your particular poison–“capitalism”, “free markets”, “democracy”, “freedom”, “progress”, or whichever religious-like basis for meaning, purpose, and motivation suits us this week.
http://www.telegraph.co.uk/culture/hay-festival/11627386/Humans-will-become-God-like-cyborgs-within-200-years.html
But it’s not a stretch to envision an “Elysium”-like future for the “humachine” top 0.001-1% AT THE EXPENSE OF insufficient net energy and resources per capita, production, employment, and purchasing power to sustain the bottom 90-99% of the inferior human ape species.
Intelligent-systems capabilities functioning 24/7 at the speed of light in the dark are now accelerating at such a rapid rate that virtually none of us can hope to compete with, or successfully adapt to, the emerging GLOBAL intelligent-systems division of labor (non-labor) and system of distribution of income and purchasing power, requiring the bottom 90-99% to compete with foreign slave labor AND smart systems, quantum and molecular computer-based Big Data analytics, biometrics, bioinformatics, robotics, ubiquitous nano-electronic sensors, 24/7 surveillance, etc.
The emergent intelligent-systems complex-adaptive techno-economic paradigm is akin to when Neanderthals first encountered modern humans and when Mesoamericans and Polynesians first came in contact with European “explorers”/conquerers/plunderers. The vast majority of the human ape species are utterly incapable of competing for scarce resources and subsistence with the emergent new species (last human invention) of intelligent systems and its accelerating capabilities.
Our techno-scientific advances and innovations are running at least a lifetime, if not more, ahead of our social, economic, financial, religious/cultural/psycho-emotional, and political innovations in order to successfully adapt on a mass-social level.
While the human ape species as we know it will not likely become extinct, what we perceive as “human”, i.e., you and I as we manifest and exist today, is virtually certain to become extinct in the context of the “humachine” evolution in the decades hence. What the emergent predecessor remnant of the “humachine” species alive today decides to do with the vast majority of the inferior human apes on the planet today is an open question. Whether they will be indifferent, compassionate, or ruthlessly and mercilessly resolute in their violence to eliminate the majority of us is not obvious at this point; but human nature and history suggests the latter choice, which will be rationalized as “necessary” and “enlightened” by the remnant “humachine” species who are likely to inherit Spaceship Earth.
Based on the trends that I see, the humachine scenario makes more sense to me than a collapse that hits everyone in the world equally.
A lot of people in the world are no longer needed to support the 1%. And the resources aren’t there to keep all of the 99% alive. So lots of people will be lost and there will be relatively little economic incentive or resource opportunity to save them.
But I think there will be enough resources, technology, and intelligence to support a much smaller, smarter, and enhanced group of humans or human-machine hybrids.
And this is what Yuval Noah Harari says in that article you linked to.
“Most legal systems are based on human rights but it is all in our imagination. Money is the most successful story ever. You have the master storytellers, the bankers, the finance ministers telling you that money is worth something. It isn’t. Try giving money to a chimp. It’s worthless.”
He says what I think — that the world won’t collapse because of debt because debt is an invention. It isn’t necessary to keep people alive.
Boomer II, yes.
Then one is compelled to ask whether the current predecessors of the remnant “humachine” species have the capacity for compassion to ensure a relatively painless demise for the rest of us in comparatively short order. I would consider that an enlightened objective under the emerging circumstances and worthy of evolutionary survival, adaptation, and some form of reproduction (cloning, sexual, Transhumanist immortality, or otherwise).
Then one is compelled to ask whether the current predecessors of the remnant “humachine” species have the capacity for compassion to ensure a relatively painless demise for the rest of us in comparatively short order.
Based on what I see now, I think we’ll let events take their course, coming up with reasons why we can’t help. The politics of poverty in this country indicates that people are more than willingly to say that misfortune is the person’s own fault (or God’s choice).
There will be more walled cities with those inside tuning out what happens outside. And they will be able to do that because they won’t be dependent on what happens outside.
Do I think humans can be ethical and compassionate? Sure. But we are also capable of dehumanizing the enemy in order to kill them. We come up with justifications for our behaviors.
I do hope, however, more people listen to the Pope. He’s saying the right things.
Boomer II said:
What is surprising to me is how many poor and working-class people buy into this ideology (what Reinhold Niebuhr called “the middle-class creed”), since it is clearly not in their interest to do so, and how many affluent people don’t buy into it, since it clearly in their interest to do so.
Among respondents of a nationally representative survey (Gallup Organization 1998) who have annual household incomes of at least $150,000.., 24% responded that the government should “redistribute wealth by heavy taxes on the rich,” and 67 percent respond that the “government in Washington, DC, should make every possible effort to improve the social and economic position of the poor.” Equally striking is the fact that among the respondents with annual family incomes of less than $10,000.., 32 percent resport that the government should not redistribute wealth by heavy taxes on the rich, and 23 percent say that the poor should help themselves rather than having the government “make every possible effort to improve the…position of the poor.”
Reciprocity, Self-interest, and the Welfare State
In Code of the Street: Decency, Violence, and the Moral Life of the Inner City, Elijah Anderson gives a possible explanation as to what causes so many poor and working-class individuals to buy into the middle-class creed:
Racism, the changing economy, unemployment, and changing social values all affect the people in the [inner city] community. But the grandmother, particularly if middle-aged or elderly, often takes an ideologically conservative view and tends to have little tolerance for structural explanations. Given her prior experience in the local community in the days of the manufacturing economy, in matters of idleness and unemployment she is ready to blame the victim, because she feels that there is work to be had for those who are willing to do it and that people can abstain from doing wrong if they want to. It is her belief that the various social problems plaguing the community stem more from personal irresponsibility than from any flaw in the sider system….
It is understandable that the traditional old heads and other decent people of the community should focus on the idea of individual responsibility. These people believe that whatever success they have achieved in their own lives has been the result of personal determination, and thus they are inclined to blame those who have not been successful for not having made enough of an effort. Not to blame the victim would be to make it too easy for those victims of inner-city problems. And it would give the decent people no way of distinguishing themselves from the street people.
Yes, there’s always someone else to blame.
The typical Fox line is that it is the poor, the minorities, the liberals, the environmentalists, the unChristian, the feminists, etc. that are the reason for the US decline and if we’d only get rid of all of them, life would be back to the 1950s and 1960s.
Seems to me oil prices are as subject to investment speculation, whim, and conditions as other commodities.
I’m sure this article link was posted in this forum (otherwise I wouldn’t have known about it), but I will toss it out again.
Oil and trouble | The Economist: GIVE commodity markets credit: they are anything but boring. Between 2000 and 2011 broad indices of commodity prices tripled, easily outpacing global growth and stoking Malthusian hysteria. Jeremy Grantham, a wealthy financier, noted at the time that it was not so much “peak oil” that would undo humanity but “peak everything else”. Yet since then commodity prices have slumped by about a quarter, and roughly 11% since June alone.
It’s not unlike calculating oil reserves. That too is a very inexact science.
I drove through Dilley a couple of days ago on my way back to Mexico. It brought back lots of old memories.
Dilley was ground zero for the United State’s first, but certainly not last, horizontal drilling boom.
It all began in November of 1989 when Oryx Energy completed its Heitz #1 near Dilley. It was the first horizontal well drilled and completed in the Austin Chalk, and on initial potential test pumped at a rate of nearly 3,300 barrels daily and 2.2 million cubic feet of natural gas.
“Winn Exploration Co., Eagle Pass, Tex., tested a horizontal Austin chalk well with a calculated flow of 19,560 b/d of oil in Zavala County’s Pearsall field,” the Oil / Gas Journal would report a few months later. “Texas Railroad Commission officials said 25 Leta J. Glasscock, owned 100% by Winn, is the biggest well completed in the state in recent history.”
Oryx “expects the average successful horizontal well to add as much as 450,000 bbl of proved crude oil equivalent reserves and initially to produce 750 b/d net,” the Oil & Gas Journal reorted in April, 1991.
“The new technology could revive local economies and double this country`s 27 billion barrels of oil reserves-the amount of oil currently under production or that is economical to produce at today`s prices,” gushed the Chicago Tribune. “The new boom could even prove to be the equal of the mammoth 5-billion-barrel east Texas oil field that made fortunes for H.L. Hunt and other Texas oil legends in the 1930s.”
Looking back now, over 20 years later, only a handful of the horizontal wells drilled and completed in the Austin Chalk in the early 1990s are still producing. And after all the hullabaloo, very few of the horizontal wells in the Austin Chalk produced anywhere near 450,000 barrels of oil. Most produced only a fraction of that.
Back in December, 1989, oil-supply store owner Rick Baker waxed euphoric over the coming boom.
“This is going to be good,“ he promises. “You come back in June and you will not believe it. You think Barnum and Bailey can put on a good show, come see what the oil field can do.“
And if one looks at a map just south of Dilley, one can see where old meets new, past meets present, as drilling in the Eagle Ford begins to overlap the old Austin Chalk horizontal play.
I found a couple of studies on the internet on the Austin Chalk horizontals.
This chart of drilling activity comes from this study published by the SPE.
The study is pretty interesting because it talks about the way the Austin Chalk wells were fracked, what the average lateral was, and compares production history and geology of the Austin Chalk to that of the Eagle Ford shale.
This map is also from the above linked study and shows Austin Chalk horizontal wells in brown and Eagle Ford Shale wells in blue.
A second study on the Austin Chalk estimated average EURs, by county, which I have indicated on the map.
The first study then compares production histories from the Austin Chalk to the Eagle Ford Shale.
If the Eagle Ford performs as the Austin Chalk did, the EURs for the Eagle Ford look to be pretty bleak.
The second study found that in the Pearsall Austin Chalk — Frio, Dimmit, Zavala and LaSalle counties — that the first year accounts for 55% of the ultimate predicted recovery.
Glenn. Thanks for the posts. I think these wells could make someone some money someday.
For example, Mike mentioned Austin Chalk wells are pumped about 1 hour in ten. If that can be done off produced gas with little to no water disposal, might not be too bad if the oil price is high enough and down hole repairs are minimal.
We have a few wells like that. High profit margin, OPEX in the $5-$20 bopd range.
Of course, let’s say you are Shale R Us, to again steal from Mike. Right now you have 1,000 net wells producing 100,000 BOE per day. You owe $5 billion or so on those.
Better hurry up and pay off that debt before you are pumping those wells one hour in ten and producing 10,000 BOE per day or less.
Looks like the EFS is just a super sized Austin Chalk and the Middle Bakken TFS is a super sized Upper Bakken, Madison??
Although, I readily admit have no experience with a 10,000’+ wellbore.
I think that causes a lot of things to come into play that we do not deal with from 800′-2,500′.
So I will always defer to those that do. As I have said before, $100,000+ for one down hole failure can mess up the economics. $1,000-3,000 is more live able.
As one of the studies explains, one of the techniques used back in the 1990s was to drill several laterals from the same vertical wellbore, as shown in the attached map near Dilley.
As far as I know, this technique is not being used in the Eagle Ford Shale. The operators in the Eagle Ford are drilling multiple wells from one drilling location, but each lateral has its own vertical wellbore.
I also drove through Giddings the other day.
The Giddings Field is the other major field in the Austin Chalk, besides the Pearsall and Gonzales Fields, and was also very much a part of the horizontal drilling boom in the early 1990s.
Average EURs from the horizontal wells in the Giddings Field are considerably higher than what they were for the Pearsall and Gonzalez Fields.
Glenn- ignoring short term blips, it is pretty simple. To illustrate: assume someone gave you $10 million and said go find and produce some “new” oil. Where would you go and purchase a lease and for how much? How much would you spend to get a rig and drill a hole? Then what would your production costs be, including taxes, royalties, etc.? And how much would it cost you for gathering lines to get your oil off the lease to someplace that a purchaser wanted it? And, the big question, how much oil do you think that you would find? Personally, I would be shocked if anyone one this site, including Watcher, could find enough new oil to sell it for $100 bbl and make a profit. Of, course, my assumption limits you severely since most of the highly prospective areas would require at least $1 billion to get started – deep water, tar sands, etc. If I am close to being right, plan on $100 bbl or more for most of your future life.
You are right on clueless. After spending $10 million dollars on a shale oil site and well the useful energy derived from that well is several times lower and several times more expensive than if the site was covered with PV panels. The shale oil plays have been a very costly mistakes in the energy game, wasting money and time while giving society a costly short term fix of energy. Those wells spend most of their time producing at low rate after a short high pulse of energy output. They will leave society high and dry in a short time.
I bet a few who post here could take your $10 million and turn a profit at $100 oil.
Problem is the current price in the field is $40 to $56, depending on location. That is a much tougher task.
Now if you have ten billion, maybe tougher to make it on $100 oil. The only things of any scale in North America are shale, GOM and tar sands. High entry costs on all of that at $100 oil. Would probably need to go to Russia, Middle East or Africa with that much $$. North America doesn’t have and lower cost stuff left of any scale.
Of course problems abound going to Russia, Middle East and Africa. Another reason for shale boom, low political costs compared to areas mentioned.
Also, one that is not mentioned is desire for all of the company talent to come home. Know a guy who has worked for 25+ years for an IOC. Among stuff he has dealt with, being marched out of the office one day at gunpoint in Venezuela, being given a couple hours to pack one bag and hop on a plane out of Libya, and watching riots from his office window for days in Indonesia.
Makes EFS, Bakken and Permian very appealing. Who gives a crap about the economics. At least you are home. And for the IOC’s, much more certainty. No Macando blow outs, no government confiscations and no kidnapped employees.
Shallow sand said:
I have experienced this in Mexico. But I have also experienced it in the United States too.
Unfortunately, these sort of police state tactics, which are not that uncommon in the authoritarian regimes of Latin America (either of the left-wing variety as in Venezuela or the right-wing variety as in Mexico), are becomming all too common in the United States as well. And, it goes without saying, the police empires always believe they are doing God’s work, as they flush all our civil and human rights down the toilet.
Do you remember the Gibson Guitar raid, and what the Green Utopians — caught up in an orgy of sanctimonious self-riteous piety worthy of any self-respecting priestly caste (and backed up by the long arm of the law) — are capable of?
https://www.youtube.com/watch?v=vLg1iq5BgHs
https://www.youtube.com/watch?v=V5IYGroW1nA
I can make wads of money at $100 per barrel wellhead. And I have the record to back it up. The key in this business is to have the experience to know which investments to make and the ability to manage costs. And I’m pretty sure there are thousand of people like me.
Fernando -Remember the premise – You must find new oil. You cannot buy production or proven/probable reserves. That is just producing/developing oil someone else found.
Nonetheless, if that is what you meant [“I can make wads of money at $100 per barrel wellhead], I will take you at your word, i.e., you can both find new oil and then produce it and make wads of money [with a $10 million budget], and therefore I will believe you. However, if as you claim, thousands of people can also do it, then what I think is wrong. Note that you cannot buy a lease in countries that have Nationalized oil, nor could you make any kind of deal with them with a mere $10 million budget.
I didn’t realize new oil meant an unproven field, a wildcat. Makes it tougher.
How about this then,
Remapping existing fields to find missed opportunities. It is not booked as reserves by anyone, but it exists because of a lack of understanding of the local geology.
I did that in Oklahoma for a while. You remap structure and determine where other operators have misinterpreted geology and buy leases on open acreage and drill. Its not a new field discovery, but you can book reserves that otherwise would have never been booked. Now, it might be reserves for 4 wells, since that’s all the acreage you could get, but it’s still reserves.
Thousands of people do that in the United States.
I’m not an explorer. The statement didn’t say “wildcatting” anywhere. I don’t think exploration is that profitable. But it’s possible to take a poorly managed property, purchase it, and turn a tidy profit.
I think I could bottom feed in the Bakken, buy distressed properties with available locations and make money. But I wouldnt buy right now. Need to keep an eye on the Saudi economy and see how they handle their budget deficit. They seem to be aiming at WTI = 65 until they cripple the competition. But long term they do need 100.
Fernando Leanme says:
Nonsense.
There’s as much serendepity involved in being successful in the oil business as anything else.
In the circles I move in we often quip: “I’d rather be lucky than skillful any day.”
You move in circles. I don’t.
I “move in circles”?
Well you can say that again.
And the reason I move in circles is because I’ve been in the oil business all my working life, and it’s very much a cyclical business.
And, as it just so happens, the cycle at this particular moment just happens to be down. Way down.
That’s why something about your attitude just doesn’t ring true.
If, as you claim, you actually do own interests in producing oil properties, then you just lost one hell of a lot of money. And about right now you’d be licking your wounds, like the rest of us who have skin in this game, and not sitting around spouting banal platitudes about how “I have the record to back it up” and “The key in this business is to have the experience to know which investments to make and the ability to manage costs.”
Glenn, respectfully, I appreciate you stopping along 290 and taking pictures of Giddings, and I-37 of Dilley; you are observant, to say the least. “Skin in the game” does not mean free royalty, i.e., mineral interests. It does not mean post office money. Gimme a break. Skin in the game is working interest, bro’. It’s when you pay 100% of the bills and drill 5 dry holes in a row, with your son’s graduate school money. Fernando does not understand that either; he was an employee of a big company and for all his macho bullshit, he’s never had skin in the game that I am aware of. His job, nothing else. He didn’t spud a well in his career, ever, where his families’ well being was on the line. Right, Fernando? Y’all remind me of two roosters.
Having said that, I had to look up “serendipity” to understand how dumb your statement was, Glenn. I think you have been watching too many episodes of Dallas. Or Clark Gable and Spencer Tracy. In 50 years, and 350 wells, from 1500 to 15000 feet, I have never counted on good luck for anything. I have been blessed to see that maybe 5 times; the rest of the time it was meticulous mapping, on 10 foot contours, on 200 ft. scales, and knowing what’s going on, down to the millidarci and the gas by volume, discounting risk, covering every angle, every possibility of failure. That’s the real oil business. People here should know the real deal.
Serendipity my Texas ass.
Mike
To anyone who owns oil working interests in the USA, since Thanksgiving, it has blown chunks. It is not more complicated than that.
Anyone who claims things have been ok in the USA oil industry since Thanksgiving, that the industry can efficiency itself out of this jam, or that $60 WTI justifies a large return of oil rigs to the field, are full of it.
You just cannot stay in business long term if you are always cash flow negative. However, it is also not a good long term strategy to own a business who’s production is in permanent decline.
I contend that right now the choice for 95+% of US oil producers is borrow more or shrink. Cash flow neutral with flat production is tough to achieve at sub $60 WTI and sub $3 per mcf in the USA.
For the maybe 5% who can achieve that, Yee Haw!!! Nothing like taking on big time risk and headaches to make returns comparable to US Treasuries.
That is the reality I see. If you own working interests, better hope this is not 1986 part II. There are parallels.
The majors have been spending $35-$50 per BOE produced, depending on product mix. At $60 WTI and $3 gas, cash is being burned by the blue bloods.
Let’s say you own 50 barrels per day and are spending $50 per barrel to keep production flat. In my view, you have good production if you can do that in the USA. I calculate the shale guys ranged from $60-$100+ in 2014.
When oil is $90 in the field, you are netting $60,000 per month. You are in the “1%”.
When oil is $40 in the field, you are losing $15,000 per month. You better have held some back to live off of and pay bills.
This also assumes you have no debt. How many US barrels have no debt encumbering them? I bet very few.
That is reality.
What has happened to the capricious goddess fortuna?
You and Fernando have done her in!
Or so you believe.
But you’re not the first to try to do in Lady Luck.
Man’s Sisyphean efforts to master fortuna run though Western civilization like a thread, beginning with Pelagius, then on to the Italian humanists, then to 18th-century thinkers like Vico, Montesquieu, Voltaire, Gibbon, Herder, Turgot and Condorcet, and finally culminating in the American creedo of rugged individualism.
Human individuality, it is believed, can master fortuna. Perhaps Henley expressed the abiding faith in this Promethean individualism best:
In the fell clutch of circumstance
I have not winced nor cried aloud.
Under the bludgeonings of chance
My head is bloody, but unbowed….
It matters not how strait the gate,
How charged with punishments the scroll,
I am the master of my fate…
But a far less exalted view of human capacities, and especially one’s own individual human capacities, might be in order. For tale’s of fortuna’s demise are greatly exaggerated, and this is especially true as the dark clouds of peak oil are gathering overhead.
I won’t dwell on the most gaping hole in your logic – the fact that no independent oil operator has control over the most important factor influencing one’s success in the oil business: the price of the commodity he sells. Instead I will focus on something else you said: that your success as an oil producer was due to “knowing what’s going on, down to the millidarci.”
But here’s the rub: determining reservoir permeability is a very inexact science. So your capacity to know reservoir permeability “down to the millidarci” is a grotesque overestimation of human capacities.
The “gold” standard for permeability, as PetroWiki explains, “is to make measurements on core samples and to determine permeability with the methods outlined in API RP 40.”
But coring is a very expensive and time-consuming operation. And to core every well would be prohibitively expensive. So other methods are used to estimate permeability.
However, as PetroWiki goes on to explain, these other methods are “subject to considerable error.” And in some cases the estimated “effective permeability may be an order of magnitude too small.”
Oh well, so much for knowing permeabiliy “down to the millidarci.”
The Northern humanists, folks like Petrarch, had a far more modest and less confident appraisal of human individuality than did the Italian humanists. As Michael Allen Gillespie explains in The Theological Origins of Modernity, the Northern humanists, like their Italian counterparts, were convinced that human beings “are characterized by their free will”:
If we fast-forward 600 years, we see this less exalted view of human capacities reappear in the writing of Reinhold Niebuhr:
Now any doubts or modesty concerning human capacities have long disappeared, and all that remains is the tribalistic conflict between two sects of Promethean individualism: the Carbon Utopians and the Green Utopians.
Thus we can conclude skinny prose is really hard to read.
Mike, I had to help manage a business under very strict rules. These included a requirement to make profits no matter what happened. Company philosophy was fairly straightforward: either we performed or they sold us. Once the sale was on the typical approach was to request staff cuts, prepare lists of employees we could transfer elsewhere, top management was removed, laid off, given early retirement or offered a horrible job.
Later, as a consultant I helped small company owners decide what to do about their business. Sometimes this involved helping them buy another company or large property to grow it, sometimes it involved selling out and setting up the proceeds for the inheritance, or whatever.
I’m not sure what the bragging is about. But I tend to think I can teach small company owners a thing or two. One picks up a lot of learning when consulting together with other old hands.
I don’t do oil “trusting on luck”. That’s not the way I was taught to get things done. To be honest, I have had to layoff personnel, and the ones who work trusting their luck are the first to go. They tend to get people killed.
$10 million is pocket change
Observations:
1) No ebola impact on Nigeria
2) EIA says the Saudis did NOTHING to cause an oil price fall. OPEC . . . is not impartial on that matter. And now that this is pointed out, EIA will probably change it because that’s a desired American narrative.
3) Angola is a big deal. China has hitched its wagon to Angola in Africa. 1/2 of Angola output goes to China.
And there is this, which we have been noticing in various places:
http://www.reuters.com/article/2014/12/18/angola-china-oil-idUSL6N0U21XZ20141218
JOHANNESBURG, Dec 18 (Reuters) – China will lend Angola’s Sonangol $2 billion to expand oil and gas projects, the state energy company said, helping to cement Beijing’s influence in Africa’s second-largest oil producer.
The Chinese funds will provide welcome relief for Angola, which has been hit by a nearly halving of oil prices since June,
That, boys and girls, is the latest variant of oil production subsidy. When you have to have it, from wherever, you will print the money to get it.
4) Good call by Ron on Iranian condensate. That has been a significant and growing path around sanctions. Anyone still think that policy works?
5) I thought Kuwait was in a big fight with KSA over an oil field’s output. Not really showing on those graphs.
6) Might be some partiality in Qatar reporting. They were funding a faction in Libya that the rest of OPEC didn’t like.
7) Venezuela. Really? The reputation is basketcase but neither measurement shows more than just a somewhat modest 400K bpd decline . . . over 10 yrs? Why do we sneer at them? They are doing over 2 mbpd. Hell, that’s more than uber rich Qatar.
More Nigeria News:
http://www.reuters.com/article/2015/05/25/us-nigeria-mtn-group-idUSKBN0OA16W20150525?feedType=RSS&feedName=worldNews
Venezuela, really. The sheer madness is incomprehensible. The graph shows an educated guess, because the government has kept actual production a state secret since 2003. The proportion of raw Orinoco 8 degree blended with local and imported crudes has increased gradually. I don’t want to get into the details, but the net result is a poorer quality crude which fetches a lower price, even if blended with high quality Algerian crudes. Assuming that graph is right, they still suffer because that crude isn’t as marketable.
They also feel they have to give away gasoline and diesel, and local consumption ranges between 400,000 and 700,000 bopd (again, the actual number is a state secret). But the pdvsa refineries are in really bad shape, so today they import gasoline components from the USA. Those components get blended with local gasoline and then the product is given away.
An unknown amount of this free gasoline is smuggled by both individual runners as well as large trafficking bands allied with the Venezuelan military. The large scale smuggling uses large trucks loaded with gasoline at pdvsa bulk stations, which are driven across checkpoints manned by the military. The trucks’ contents is used to fill large drums, the drums are rolled into a river, tied in long strings of 20 to 30 barrels each, and pulled across the river, where Colombian partners load the drums onto flat beds which are delivered to filling stations.
Thus, it’s hard to tell what’s government cash flow, and what gets stolen by the military and associated gangs.
Then there’s the destruction of the economy. Again, given the complexity all I’ll say is that Venezuela barely produces anything anymore. Agriculture has been decimated by nationalization as well as lack of competitiveness, seeds, fertilizer, spare parts for farm machinery, etc. Local industry is in worse shape.
Poverty doubled from 25 % two years ago to about 55 % in early 2015. Inflation data isn’t reported, but it seems to exceed 100 % per year. Crime has soared, as have human rights abuses. This has caused mass professional flights. The health care system has collapsed, superior education has decayed, and by September local engineering and other technical schools won’t exist as such.
Because the government has dogmatic Marxist irrational beliefs, it sets conditions foreign oil companies can’t accept to make large investments. The high crime rate and government behavior drives service companies to overcharge for services, and well costs have soared.
Meanwhile, in spite of their efforts to stabilize production by drilling the very best acreage in the Orinoco, they are unable to get the job done. And now they are out of money, foreign currency reserves are way down, most of what they hold is gold. Liquid reserves are reported to be $500 million. They haven’t paid their bills for food imports, shippers are refusing to load cargo, and food is getting harder to find.
Watcher said:
In the resource wars, Venezuela, what with its vast oil resources in the Orinoco, certainly seems to be one of the hot spots.
The United States clearly wants regime change in Venezuela, and is using every tactic at its disposal, including moral one-upmanship, to achieve it. Unfortunately for the US’s ruling class, the US has very little moral capital left, and its sermonizing doesn’t seem to be resonating much outside the borders of the US.
China, however, opposes regime change, and has thrown its support behind the Venezuelan regime:
Jorge Castro doesn’t know much about the Venezuelan oil industry. The Chinese don’t worry about a bond default because they have structured a debt deal that’s senior to bonds. This means Venezuela will default and the Chinese think they’ll be fine.
What the Chinese may not have noticed is the reserve destruction that’s taking place, caused by pdvsa development and operating practices.
Regarding Castros comments about the Venezuelan reserves, most of those are 7 to 8 degree API high sulfur high Acid and metals crude. It doesn’t make sense to go for full development until prices exceed $100 per barrel.
The Chinese money is printed (like US money). Its loss is a shrug. They purchase influence with a meaningless substance.
It’s a very good strategy.
The Chinese money is printed (like US money).
Like all money in the entire world.
They purchase influence with a meaningless substance.
If Chinese money is meaningless then all money everywhere is meaningless.
All paper money is fiat money and has the only the value of the faith that is placed in it. That is the only possible way the world’s economic systems can possibly work. People should just accept that fact an quit complaining about it.
Precious metals could work as money many years ago but that is no longer possible. There is not enough gold or silver in the world to cover even a very tiny fraction of all the money in existence.
Money has many functions. It is a medium of exchange, a measure of value, a store of value, and a standard of deferred payment. Pronouncement about money often fail to apply to all of these functions.
Money has always been printed. It’s what there are slots for in cash registers and Excel columns.
But that was when money quantity was arranged to provide sufficiency for economic growth. Since 2009, it has changed from that. Now it is printed with an imagined effect of creating economic growth. It’s cart before the horse and it’s creating the discussion in question — because the common man never questioned where it came from before. Or what it meant. Or what basis there was for it.
Now, 4.something trillion since 2009. That’s about 1/4 of US GDP, printed. The quantity out of the BOJ is mind boggling. The ECB is doing a trillion euros by September — in support of what economic growth?
No, this is not a matter to be dismissed with “all money has always been printed.” The magnitudes lead towards evisceration of morality . . . where government workers declare “I’m not a steward of the taxpayer’s money, I’m a steward of something created from nothingness on a whim.”
The destruction of meaning is leading towards oil exporters making the inevitable choice . . . save it for the grandchildren. We can print all the rubles we need to function and need not have big screen TVs paid for in dollars.
Coined is a new book which I have ordered but not yet received. I did see it discussed on C-Span, It covers some of the history of money – even before money was printed on paper. Also the use of money in other countries. Reviews have been excellent http://www.amazon.com/Coined-Rich-Money-History-Shaped/sim/1455578525/2
The Chinese lend US dollars. I’ve seen the original memoranda prepared by Rafael Ramirez (oil minister) which Chavez had signed “approved”.
The Chinese are raping the acreage they were assigned in a JV called Sinovensa. And they encourage pdvsa to carry on with a very thoughtless development. They are going to be masters of rape and pillage.
Here’s another economic article.
The Big Meh – NYTimes.com: … at this point, the whole digital era, spanning more than four decades, is looking like a disappointment. New technologies have yielded great headlines, but modest economic results. Why?
For one, much of the technology allows more to be done with fewer people, but we haven’t figured out to shorten everyone’s work week rather than to keep some fully employed and then lay off the rest.
For another, investments are going to flashy stuff but not necessarily to what might produce a better world.
I like Krugman a lot, but where I differ from him is that I think he’s still focusing on how to get economic growth going again. I prefer the economics of the no-growth folks.
Paul Krugman said: “The answer is that I don’t know — but neither does anyone else.”
Oh, Paul, some of us, even those without a Nobel prize, do know. It’s called “net available energy per capita, “the law of diminishing returns” and “limits to growth”. You should really read some Joseph Tainter for a start.
I agree. You could argue in the 70s and later that it was difficult for anybody to explain what is going on. No longer.
With IT, anybody with a few brain cells, the ability to read, and access to a computer, can pretty much put the story together. This is not to say that we have solutions, or predicting ability.
What is so hard about admitting this is the end of the line? We do it all of the time…we grow up, we go to school, go to work, change jobs, move, marry, divorce, grow old, grow sick, watch friends and family die. I don’t understand why people don’t realize the same thing applies to civilizations.
I believe Krugman thinks you can go into debt forever with no consequences.
I think that is absurd. Eventually your interest payments will be more than your income stream.
Wouldn’t we be living in a world full of countries with quadrillions of dollars of debt and sipping on pina coladas if that was true?
I think you believe wrong. Although I believe that it errors by not taking into account resource constraints Keynsian economists believe that public debt can be used during periods of sub par growth that are caused by a lack of demand in the private sector to stimulate demand. This is not an unreasonable assumption when interest rates are near zero and the infrastructure is crumbling all around us. That you step on the accelerator during times of low demand and you put on the brakes when the thing heats up. It is just that people tend to hear the first part and tune out the second.
Keynesian pump-priming only works for an economy which is not operating up to full speed.
What makes you believe the US has sufficient energy resources to power its economy any faster?
If increased fiscal spending doesn’t result in increased production, then the only thing it acheves is inflation.
Now grated, the Austrian School does argue that new money creation never results in increased production.
But, on the other hand, the various neo-Keynseian schools, like MMT, make just as grievous an error. They argue that new money creation always results in increased production.
Both positions are partial truths, neither of which Keynes endorsed.
Your probably right.
However, the handful of times I’ve read Krugman he seems to criticise anyone that thinks growing the USA debt is a fool. Since interest rates are so low and we only owe the money to ourselves.
Interest rates are at all time lows but there is nowhere to go but up.
The government has to roll that debt over then they get the new interest rate. Rollover risk is going to make Krugman look like a fool.
The, we only owe the money to ourselves, is bs too. Someone on the balance sheet gets screwed eventually. Pension funds, Mutual funds, iras, insurance companies that ladder bonds, annuities, China, Japan, UK, US Military Pension ( a bunch of pissed off Ex-military running around would be scary), etc. I have no idea what defaulting on the federal reserve would mean. I’ve read the treasury is required to bail them out.
Thanks!
Yep.
The neo-Keynesians have certainly done more than their fair share to vitiate Keynsian economics, uncritically buying into Nixon’s famous line about how “we’re all Keynesians now.”
As Kevin Phillips put it in American Theocracy:
I suppose it’s the fate of any thinker like Keyes who achieves fame and greatness to have their beliefs and principles butchered by those who want to put the thinker’s imprimatur upon their own ideas and who claim to be following in the great one’s shoes.
I believe Krugman thinks you can go into debt forever with no consequences.
I think that is absurd. Eventually your interest payments will be more than your income stream.
No, I think he believes that well used debt now will create enough growth to reduce the debt in the future.
But it is based on growth. Now, he believes that there is useful growth, like switching to renewables and replacing energy inefficient lifestyles with energy efficient lifestyles. I believe that would be a good use of debt, too, but I prefer a model that is about replacement more than growth. I suppose a replacement economy could still look like growth on paper, but not necessarily growth in consumption.
Boomer II,
Krugman is about getting people back to work mostly. If you can figure out a way to do it with zero growth, that’s fine. It would take a pretty big restructuring of the way modern economies function, stuff like reducing a full time work week to 36 hours might help and 8 weeks of vacation mandated for all full time employees. There are many policies that could be implemented which would lead to smarter growth.
The simplest which takes care of two problems (peak fossil fuels and climate change) is a $50/ton of CO2 emissions tax at the wellhead, mine, or border (for imports), with an increase of 10% per year for 50 years.
Krugman is about getting people back to work mostly. If you can figure out a way to do it with zero growth, that’s fine.
As you pointed out, we could have more people working shorter hours.
And to keep people like Krugman happy, we could show economic growth (e.g., more services) without more resource consumption. On paper, having it be about transactions rather than consumption should satisfy the growth advocates.
I just think an economy based on growth tends to reward some of the wrong things. As some people have pointed out, cleaning up after a natural disaster may boost the GNP, but that doesn’t mean our quality of life has improved.
My concern with economics in general is the tendency to measure what is easiest to measure, not necessarily what should be evaluated.
Now we are covering politics the same way. It isn’t about issues. It’s about numbers, even if those numbers are largely meaningless.
Africa’s largest oil producer is staging a dress rehearsal for post carbon life. This article is quoted from yahoo news:
Nigeria’s biggest mobile phone operator MTN has warned that its network faces shutdown due to fuel shortages that have crippled the nation.
The company, the biggest subsidiary of the South Africa-based MTN Group, said it needed a “significant quantity of diesel in the very near future to prevent a shutdown of services across Nigeria”.
“If diesel supplies are not received within the next 24 hours the network will be seriously degraded and customers will feel the impact,” it added on its Twitter account @MTNNG on Saturday evening.
Nigeria — Africa’s biggest economy and most populous nation — has been increasingly hit by fuel shortages in recent weeks because of a long-running row over controversial subsidy payments.
Despite being Africa’s biggest oil producer, Nigeria lacks domestic refineries, forcing crude to be exported and products such as petrol and diesel to be imported.
To keep costs to consumers low, the government sets prices below the market rate and pays the difference to importers.
But the global slump in oil prices has hit Nigeria’s economy hard, squeezing government revenues and devaluing the local naira currency against the US dollar, and oil marketers claim they have not been paid in full.
Fuel depots have closed pending payment of the arrears, with the situation worsening after oil and gas union workers walked out over the sale of two oil blocks.
The crisis comes just days before President Goodluck Jonathan leaves office, handing over power to Muhammadu Buhari on May 29.
Many petrol stations have now run out of fuel, both for vehicles and the generators on which most people and businesses rely because of the woeful public electricity supply.
On Friday, the Ministry of Power said electricity production was at an all-time low of 1,327 megawatts, according to local media reports.
Diesel generators power most of MTN’s base stations and switches across the country but fuel supplies are running low, said the company’s corporate services executive Akinwale Goodluck.
– Businesses hit –
The Lagos Chamber of Commerce and Industry earlier this week warned the crisis could force firms to lay off staff.
The warning from MTN, which has more than 55 million subscribers, is a sign that businesses are now being hit.
Some domestic flights have been cancelled while international airlines have re-routed services in and out of Nigeria to pick up aviation fuel.
Virgin Atlantic flights from Lagos to London Heathrow have diverted to Ghana’s capital Accra and Majorca off southern Spain, while Air France services from Paris have stopped in Dakar, passengers said.
At least three Nigerian radio stations announced on Twitter they would be going off the air to ration fuel that powers its generators.
On Twitter, one user said on Sunday his local church had merged its Yoruba-language and English services because of the fuel shortage.
“Don’t bother to bring your charger to church, we have disconnected all the plugs,” read the note, which was signed: “Yours in Christ.”
Elsewhere Nigerians were facing up to the shortages with customary good humour.
“Boko haram attacked Nigerian Army Base but instead of fleeing in their vans, they surrendered peacefully cos #AintNobodyGotFuelForThat,” one Twitter user wrote.
But many blamed Jonathan for doing nothing to alleviate the crisis, which began before the March 28 election that Buhari won.
Oil importers and marketers claim they were owed 200 billion naira ($1 billion, 910 million euros) in outstanding subsidies.
Last month, outgoing Finance Minister Ngozi Okonjo-Iweala, who has said the subsidy scheme is open to corruption, said fuel importers were paid 156 billion naira.
She accused them of engineering the crisis to make money out of blackmarket fuel sales.
Sydney Mike,
As of this morning the distributors said they will begin supplying fuel immediately.
It’s anyone’s guess how long that will continue. I guess.
A pretty good look at the mechanism of death.
Shipping is everything. If you can’t get maintenance crews or maintenance parts to where they are needed, then phone/internet fails or power fails or anything else fails. You can extrapolate this to parts for oil rigs, too. When oil is confiscated for food shipment, oil dies. It gets even more profound when oil rig spare parts come from somewhere far away who are trying to feed their people. Shipping an oil rig part to a country half a world away won’t look like a high priority item.
And that’s why death is coming.
Shipping is everything. If you can’t get maintenance crews or maintenance parts to where they are needed, then electricity fails or power fails or anything else fails.
And it is a wake-up call to move away from generators that need fuel brought in to run.
Death is not coming within my lifetime, that is certain.
You are immortal !!
LOL
Classic mismanagement: control prices, but don’t pay the necessary (unaffordable) subsidies. Then, be surprised by shortages.
Two easy solutions:
1) decontrol prices, and help only the poor with ration cards. Much cheaper, as the middle class consumes most of the fuel.
2) PV, combined with Tesla batteries. Much cheaper than diesel for the generators which the article says are needed by most businesses.
This is especially classic because Nigeria is an oil exporter. Through mis-management, they’ve turned plenty into scarcity.
Off Topic Warning!!
I wanted to share this with you folks. This is a letter I wrote to Wolf Richter’s site re: Monsanto article. This fine article can be accessed at: http://wolfstreet.com/2015/05/24/monsanto-bites-back-syngenta/
My letter:
Paulo
May 25, 2015 at 10:41 am
Patrick Moore, the goof who wouldn’t drink Roundup, is from BC. I am also a BCer. I wrote him awhile ago and told him I was ashamed he was from our fine Province and that what he was doing was terrible for people and the environment by being a spokesman/shill for Monsanto. (This was a man who started out as a founder of Greenpeace, then went on to promote open net fish farming on the west coast, and morphed his career into promoting pesticide use in food products as well as GMO). Anyway, I sent him the excerpt from today’s article and he replied. I wanted to share that reply with others.
His reply:
“Go fuck yourself, all of that was happening long before that French asshole ambushed me. Glyphosate is less toxic than vinegar or table salt, so go fuck yourself again.”
I included his contact info in case others would like to respond to him as well. Judging by his response, I would imagine he has lost a few contracts and pesticide industry credibility. It would be nice if he was forced in obscurity where he cannot do any more harm.
regards
pmoore@ecosense.me
pmoore@allowgoldenricenow.org
From the linked article:
Moore insisted that Roundup isn’t remotely toxic, arguing that you can “drink a whole quart of it” without it hurting you. However, when invited to put his words to the test by downing a glass of the liquid weed killer, Moore replied that he was not stupid – not once but twice!
LOL! he is right, calling him stupid, would be a grave insult to stupid people everywhere! He is actually a complete imbecile! I mean we are in the middle of the 21st century, you’d think people would have a clue that in today’s interconnected world where all knowledge is public and privacy nonexistent, it would behoove one to think a bit more carefully about what they say publicly…What? did he really think he could say that without someone coming along and asking him to prove it by drinking some?! Jeez!
I saw the interview video…
Pathological almost it seems– and therein is your one major problem in all of this. Questionable personal integrity, ethics.
But founder of Greenpeace? You couldn’t make this stuff up.
Ironically, it goes against Monsanto. Kudos, Pat.
But anyway, does anyone have kids? So we allow potentially-psychopathic strangers to feed our kids with what again? And from whom or where? So-o-o maybe it is not a good idea to get an EV, get locked into payments for it and so go to a job to make money to pay for them and for food produced by who or what again? Dubious/Shadowy strangers/industries? That it is a better idea to produce your own or at least support your locals who can?
Patrick Moore Did Not Found Greenpeace
Patrick Moore frequently portrays himself as a founder or co-founder of Greenpeace, and many news outlets have repeated this characterization. Although Mr. Moore played a significant role in Greenpeace Canada for several years, he did not found Greenpeace. Phil Cotes, Irving Stowe, and Jim Bohlen founded Greenpeace in 1970. Patrick Moore applied for a berth on the Phyllis Cormack in March, 1971 after the organization had already been in existence for a year.
http://www.greenpeace.org/international/en/about/history/Patrick-Moore-background-information/
Thanks for clarifying that.
some interesting banter on this subject from Tamino’s Open Mind blog, which also has some very good posts wrt climate change
https://tamino.wordpress.com/2014/06/27/who-founded-greenpeace-not-patrick-moore/
Wow, one really has to admire the ostensibly high-calibre-traitorousness of this guy, and not just with Greenpeace.
(You could even be forgiven for suspecting Moore as a plant, a double agent, an inside-job hitman for Greenpeace. If so, hats off to Greenpeace. We need more of that.)
Otherwise, this is just one guy.
‘With friends like you, who needs enemies.’
Paulo, your description of ‘goof’ seems a tad charitable, no?
He is a real-life Nick Naylor!
http://en.wikipedia.org/wiki/Thank_You_for_Smoking_%28novel%29
‘Thank you For Smoking’ …worth a watch.
A link to a bearish article on Monsanto with good references:
http://www.truth-out.org/news/item/30879-monsanto-s-worst-fear-may-be-coming-true
Neil Young’s new album is anti-GMO: http://www.democracynow.org/2015/5/22/neil_young_premieres_new_anti_gmo
Anyone know why Monsanto was so cashflow negative in 2014?
Irony is a nice tonic for a hot morning. I’m referring to the dishing of crank Patrick Moore on a peak oil website. Truly extraordinary.
Mike Ruppert was a Crank Extraordinaire. Does that invalidate the peak oil thesis?
For, yes, Moore is a crank–a pseudoexpert–but so aren’t the majority of those who have communicated peak oil to the world.
The lay reader (for example, me) has looked for a consensus on the issue of peak oil–as with GMOs, climate change, and evolution–and found instead a crank tank stocked with bald-headed art critics, Mormon bankers, organic farmers, 9/11 conspiracy hucksters, robed druids, you name it. It doesn’t mean I “disbelieve” peak oil. It means I’m extremely wary of what the pseudoexperts say.
So, yes, Moore is a crank. He has no right to speak about pesticide toxicology. But is drinking your own urine hazardous to your health? No? Then why not drink a quart? What about a quart of the organic pesticide neem? Pretty harmless. Drink away.
That Moore fell for a hoax means a pox on him. But it doesn’t change the fact that glyphosate has been tested, retested, used by millions of farmers for decades, and is for all reasonable purposes safe. The anti-GMO movement is a tribe of hucksters who don’t realize that most of the cheese they eat at their soirees is made with GMO rennet, that they were (probably) vaccinated with a GMO vaccine, or that some of them inject GMO insulin daily to keep themselves alive.
Likewise, it would be nice if peak oil advocates minded their own glass house a little better.
For, yes, Moore is a crank–a pseudoexpert–but so aren’t the majority of those who have communicated peak oil to the world.
NO! Most peak oil advocates are very reasonable. It is the very vocal deniers who are mostly cranks.
Likewise, it would be nice if peak oil advocates minded their own glass house a little better.
Fuck off Jack. Most peak oil advocates are concerned with environmental problems as well as peak oil. We will discuss environmental problems whenever we goddamn well please.
Ron, you’re being very unkind. I never suggested anyone should not discuss environmental problems here.
Peak oil advocacy is LOADED with cranks. In fact, I recall that you gave Chris Martensen a masterful bitch slapping awhile back for his conspiratorial ranting.
Aside from you, Jeffrey Brown, Robert Rapier and a few others, there are few in the public eye worth paying attention to. I stand my statement that peak oil advocacy is tainted by 9/11 conspiracy theorists, Luddites, anti-America ranters, and the like. And that is a goddamn shame.
Mikey, I have been in the oil business for 50 years or more. I live it, breathe it, and feed my family by it. I don’t participate in the political bullshit here, the hidden agendas about climate change, or dying species (been to Africa 11 times); to me, its about understanding hydrocarbons and knowing, without any doubt in my mind, that in 3-4 years, your life is going to change forever without those hydrocarbons. God Bless America.
Mike
You don’t buy the “political bullshit about dying species”…adding that “I’ve been to Africa 11 times”?
You are a horrid human being.
Never speak again.
MikeB, when you speak of peak oil advocates without naming which ones you are talking about, then you are talking about me. I took your remark as a slap at me… me personally because your remark was directed at all peak oil advocates who read this blog.
Ron, I took it the same way you did. It was a cheap shot, and makes me think MikeyB doesn’t really understand the subject. He is being mean and nasty, probably still in denial. He is the one being unkind and disrespectful of others’ reasoned viewpoints, with no constructive counterpoints, and he has the audacity to accuse you of his failures. I won’t bother reading his posts forward.
Thanks for taking notice and sticking up for all of us who are trying to learn and understand. You do good work and I thank you for that.
Jim
The above linked article makes very strong reasons to be wary of GMO foods
supported by peer reviewed articles which are linked to. You have not
addressed many of the concerns in the article such as:
Increased glycophosphate use among farmers using GMOs.
New weed resistance to glycophosphate and Dicamba.
The impending necessity of spraying 2,4-D and Dicamba and Roundup
to curtail weeds.
The toxicity of the new dsRNA technology in the pipeline.
You’re cherry-picking. What about rDNA insulin for diabetics? Golden Rice? Vaccines made from GMO bacteria? The Rainbow Papaya? Florida’s orange groves are on the verge of collapse due to greening disease. A new GMO tree might be the ticket to save the orange, in the same way that Gonsalves’ papaya saved the Hawaiian fruit industry.
BTW: It’s “glyphosate,” not “glycophosphate.”
MikeB, you’re falling all over yourself with your logic. Are you being sarcastic?
Here’s why I am more anti-GMO than pro-GMO: herbicides and patents.
Monsanto has itself to blame for linking GMO plants to herbicide use. I don’t use herbicides and pesticides on my own plants and I prefer to buy unsprayed foods. Now, I don’t always buy organic, and I don’t really have a problem with crops grown with non-organic fertilizers, but I don’t think exposure to pesticides and herbicides is good. If I associate GMO soybeans and corn with Roundup, that’s reason enough for me to avoid them. As I understand it, these GMO crops were invented to sell more Roundup, not necessarily to give us more healthy food.
The other concern I have is agribusiness hoping to replace non-patented seeds with patented seeds. I don’t think having relatively few companies controlling the world’s food production to be a good thing.
I tried doing a bit of googling to see how much golden rice is actually produced; found squat. Please link to some production numbers if you have them.
Right now, golden rice smells like a whitewash campaign to make it seem like gmo’s have this amazing potential, when the bulk of strains created thus far have been pesticide/herbicide resistant crops to sell proprietary seeds and chemicals.
The supposed benefits of golden rice could be addressed with education and more diverse planting/dietary regimens, a strategy that jives better with developing more sustainable agricultural practices rather than promoting the western monoculture model.
Could be. But there are other solutions that don’t make money for Monsanto that Monsanto is not discussing. Brazilian farmers are fighting weeds for example by planting fast growing alfalfa while harvesting wheat (the front of the tractor harvests the wheat while the alfalfa is planted behind). The alfalfa fixes nitrogen reducing the need for fertilizer. One effective way of fighting disease in agriculture is through biodiversity. It requires more labor, but it works and you maintain soil quality. Eco-agricultural techniques kept the population of Cuba from starving in the 1990s when Soviet oil subsidies were cut off. N. Korea did not adopt these techniques and 3-5% of the population starved when their Soviet oil subsidies were cut off.
Peak oil has a direct relation to agriculture. Empirically peak oil causes peak agricultural production.
Another thought on Monsanto.
One of the justifications of Roundup-ready GMO plants is that farmers will use less Roundup.
But think about that for a bit. Monsanto isn’t in business to sell less of its products. So even if individual farmers use less Roundup on their crops, Monsanto’s goal is to increase the worldwide use of its products. So if they are successful, the total amount of Monsanto herbicides, pesticides, and patented seeds will go up. Collective use will go up, not down.
Boomer, as a company they want the most revenue at lowest production cost. Can they sell seeds and herbicide and make higher profits than just selling herbicide? Seems likely. Does that still hold even if they sell less herbicide? Possibly.
Consensus seldom has value.
“That Moore fell for a hoax means a pox on him. But it doesn’t change the fact that glyphosate has been tested, retested, used by millions of farmers for decades, and is for all reasonable purposes safe”
Mike,
Take the Glyphosate challenge: drink a glass of glyphosate and report back in a couple of weeks. I am sure us PO’ers would be interested in your scientific results, and once and for all we can end this debate. Thanks for volunteering participating in this exciting experiment!
Well, You may be right about the roundup not being all that bad “when used as directed” but when used on a large scale with half of Iowa drenched in the stuff you have to wonder. It can be detected just in air in Chicago.
Also, there are already “super” weeds that have become immune. There were three weed killers in agent orange, one was roundup which is no longer working so they are moving to the second one. Do you really think it will be okay to use agent orange on a wide scale here in the US? Would you live next to a farm using it?
I have no problem with GMO as a technology but it can be abused like anything else.
There were three weed killers in agent orange, one was roundup which is no longer working so they are moving to the second one. Do you really think it will be okay to use agent orange on a wide scale here in the US? Would you live next to a farm using it?
Over my lifetime there have been enough incidences of industrial products being used that later turn out to be health hazards that I now assume all industrial products may be hazardous until proven otherwise.
If it is a product to kill something (e.g., weeds, bugs, bacteria) I wonder if it will also be bad for me, too. And if not for me as an adult, perhaps a fetus, which is much more susceptible to environmental hazards.
There have been too many times where we have been told, “Yes, it’s safe.” Then, “Actually, now that we have more long term data, it isn’t safe.”
I was going to edit my comment. (I have “also” and “too” in the same sentence and was going to take out one.) But the edit function doesn’t work for me at the moment.
Is this a new change?
Oh, it’s working for my above comment. Just not the one I wanted to edit.
No big deal.
fwiw department…
MSDS for Roundup Original
http://greenhouse.ucdavis.edu/pest/pmsds/Roundup.PDF
It is clear from those graphs, that some of the EIA plots are far to straight and boxy to reflect the real data. This article should serve as clear evidence that EIA’s work is questionable. Planners who rely on them may end up disappointed.
The future?
http://www.reuters.com/article/2015/05/25/us-libya-security-idUSKBN0OA1DY20150525?feedType=RSS&feedName=worldNews
Ron: the EIA carries crude oil, condensate and ngl in the data base you linked. OPEC nations produce condensate and also separate ngl streams (the ngl are extracted from non associated gas treating plants as well as the associated gas plants treating gas from the oil fields).
I don’t know the way they do their internal accounting for the C5 plus they recover in a gas plant (this can be fed back to the oil stream). Assuming this c5 plus is fed to the oil, we still have a huge quantity of C2,3,4 which the EIA throws in a broad “petroleum” family.
Goodness Fernando, I know all that. Remember I have been following the EIA and their reporting for almost 15 years and following OPEC reporting for just as long.
Of course they produce a lot of C5 and everything else. Some OPEC countries produce a lot more condensate than others. Qatar produces an enormous amount of condensate as they are primarily a natural gas producer. Algeria also produces a lot of condensate.
OPEC does not count condensate in their quota system so countries could always export as much condensate as they wished to. And of course no other natural gas liquids has ever been included in the quota system as well.
I made it very clear in my post that EIA counts condensate as crude in their reporting and OPEC does not. Some people don’t understand this so I try to make that clear as often as I can.
As far as OPEC accounting goes, every OPEC nation is different. Not one of them reports C5 production or anything else. For years everyone just had to guess at OPEC production. The MOMR reported those guesses as “Secondary Sources”. Then about a year or so ago the OPEC MOMR started calling each nation and asking them their production of crude only. The numbers they give seldom match those reported by the OPEC MOMR’s “secondary sources”. Now the MOMR reports both “Secondary Sources” and “Direct Communication”.
Oh, I know you know. I was pointing out the EIA data you show in the last graph in this post seems to have a rough attempt to account for condensate and leaves out the ngl. But I can’t figure out if they throw the natural gasoline into the condensate stream. I guess it doesn’t matter, the EIA data seems to be a guesstimate in some cases.
Yes, they do throw natural gasoline into the condensate stream. They count as condensate all liquids that condense out of natural gas at above sea level pressures and room temperatures and that includes naphtha.
Not all the gasoline condenses into a liquid in a production system. The separation train at the field tends to run fairly warm (it can be hot if the wells are high rate and flowed for a long time). The primary separator feed can flash and evolve a lot of c5 plus into the gas stream.
This is where it gets tricky. Sone jurisdictions tax molecules at different rates. In OPEC a pentane molecule could be designated as NGL if it is recovered in a gas plant. This can allow them to toss the c5 into a “condensate” stream. Like I mentioned, I don’t think it’s a huge deal, this can’t be more than 25000 bpd.
An interesting piece from kemp here :
http://mobile.reuters.com/article/idUSKBN0O72B820150522?irpc=932
It seems perhaps to back up Steven kopits earlier predictions that demand will rapidly overtake supply towards the back end of the year.
Following the numbers closely enough to know exactly how much oil is being produced is obviously a very time consuming job and even the folks who can devote the most time to it may be wrong by a substantial margin- maybe as much as a full percentage point or more either way.
Ditto for consumption- I don’t think anybody who is saying so in public knows how much oil is going into storage.If I were a Chinese bureaucrat responsible for managing the country’s cash reserves I would be putting some of that cash into stored oil expecting to save money by buying now rather than later.
What I THINK we do know for sure is that the price of oil is highly inelastic in the short term, meaning the price will spike sharply up when there is even a minor shortage and that it will fall just as sharply when there is a minor oversupply. So the price and supply oscillate around a rough mean that balances consumption with production.
Can any of us actually say for sure that production is either increasing or decreasing over the last few months?It seems obvious that production in some high cost areas will be shut in soon if it has not been shut in already. BUT the industry can change only slowly, like a big ship getting started or stopped.
Six months or even a full year may not be long enough for a depressed price to force or allow producers to adjust production in response to the price- except in the case of a producer such as Saudi Arabia which can proactively cut or increase production in order to force price up or down.
When it comes to deliberate cuts or increases intended to influence the price there are VERY FEW players who can manage that trick alone -Russia and the Saudis being the only ones really able to pull it off. Nobody else has a big enough market share except maybe the USA and our government doesn’t control oil production.
If the world wide economy is picking up a bit then it follows that unless somebody is deliberately forcing down the price by dumping oil cheaply , then the price ought to be going up.The flip side of highly inelastic commodity prices is that even a minor increase in demand results in a sharply spiking price – until producers can increase production to take advantage of this higher price.Increasing production noticeablely would also likely take many months once crews are laid off and equipment put into storage.
Nobody other than the Saudis seem to be in a position to deliberately try to force the price down. They are the only country with a big enough market share , money enough in the bank, and an obvious reason for WANTING a low price.A low oil price is a weapon they MAY be using against their enemies the Iranians and the Russians.
I don’t think they have much if any spare capacity but I don’t really have a clue – my opinion is based on Ron’s more than anything since he devotes considerable time to this sort of question.
My opinion is that the folks who trade oil for a living and thus dominate the futures markets are right and that the price will go up rather than down over the next year or so- unless the world economy suffers an economic relapse.
Does ANYBODY really have a clue rather than just an opinion?
The one thing I am fairly sure of is that the price of oil is eventually going up again.. Depletion never sleeps and electric cars aren’t selling nearly fast enough to wipe out demand.
Mac,
I think that plus or minus a percentage point is being extremely generous! I wouldn’t be surprised if it was closer to perhaps 5% either way. These are difficult things to measure at the best of times.
As for whether anyone has a clue rather than an opinion, if there are such people, I suspect that they’ll be far too busy making piles of money correctly forecasting the markets, as opposed to sharing their opinions on peak oil message boards. I for one don’t think I’d be very good at trying to making a living by predicting the movements of a complex nonlinear system.
I am not very well versed in statistics but my understanding is that errors in such figures tend to average out so I arbitrarily said plus or minus a percent or so.
But I would not be surprised if the overall figures are off by twice that amount in either direction—- maybe even more.
We are almost for sure double counting some production and for sure are way off in terms of net energy content in corn based ethanol etc.
Hells bells , if you ask a layman he doesn’t even usually know there is such a thing as condensate and if you were to ask a professional bookkeeper he would insist that you provide your own definition of oil before he would compute an answer for you.
sam,
Oil just broke through 58 for the July contract. Momentum seems to fade very quickly. There is another shoe to drop. We will see how far this goes.
Here is a brief excerpt from an article that blows me away when it comes to the possibilities involving conservation.
https://www.biv.com/article/2015/5/clinging-carbon-economy-bad-business-plan-bc/
”Meanwhile the Drake Landing neighbourhood in Okotoks, Alberta, has surpassed its five-year goals of getting 90% of its space heat from solar panels that store summer heat in the soil through a district energy system.
This is all on top of efficiencies.
Buildings in Germany now use 11 times less energy than they did 30 years ago, according to Harry Lehmann of the German Federal Environment Agency.”
We tend to forget that the Germans are probably the world leaders in conservation and efficiency as well as in moving towards renewables.If Germany were relocated to a place with a sunny climate the naysayers would probably have damned little left to say about their progress with the energy transition.
I have not yet found out anything about this Drake Landing geothermal system other than reading the wikipedia article on it.The cost of such a system appears to be prohibitive at small scale but this might work like a charm in a spot with lots of waste industrial heat that could be diverted into the ground for winter use thus saving the costs of the collectors. Between what could be stored in summer and fed in directly during the winter there might be a lot of small industries located adjacent to residential neighborhoods that would be good candidates for such a system.
I am thinking a centrally located wood burning boiler and district heating would be far more practical than solar collectors – and that the amount of wood needed within reason if the houses are all super insulated.Burning a SMALL amount of wood per household in a place with plenty of forested land is not that big a deal.
I presume the quote about German buildings refers only to brand new buildings compared to post WWII construction but it may refer to the average of ALL German buildings which would include some real energy hogs that have been around for a century or longer.
I gave away another LED light yesterday. Every one I have given away so far has resulted in the adoption of led lighting within a year or two by the recipient. All you have to do is leave on on for a while and screw it out and hand it to the recipient. When he realizes how cool it is he is sold – once he owns one long enough to believe it LASTS.
Thanks Mac
Could mitigate some future difficulties – though there is plenty wide variety of resource constraints ready to cut into BAU.
Drake Landing solar thermal not PV – doable and less costly if you have room enough I guess for a smallish efficient district heat store. http://www.dlsc.ca/
Enjoyed your conversation with WIndian regarding difficult-to-substitute ‘miracle fuels’ down on the farm and in the kitchen. I guess local veggie oil production and methane from ‘wastes’ could become big from rural N America to rural India for highest value uses – food, cooking and essential transport.
best
Phil
Mac, that’s really mind blowing, they managed to get their homes heated using a $135 thousand per house solar power system! The system consumes electricity and has maintenance costs, but I never would have expected a house could be heated for such a low investment. and imagine the propaganda value. I’m going to see if I can peddle this in northern Spain.
Stuck my chin out for that one Fernando.
I should have been paying more attention rather than multitasking when I typed that.
The thing that blows me away is that new German buildings are so incredibly energy efficient compared to ones only a few decades old.
You are dead on. The system cost is totally out of the question. Triple paned glass eight inches of insulation in walls a couple of feet in attics etc etc is the best solution by a MILE at this time.
Hey Fern,
Find me cave in southern Spain because level of delusions through media outlets over here are mindboggling – even if that spanish tspiras comes to power (I forgot his name) – at least I will be toasty warm 🙂
The whole premise of article is basically “let’s talk about new sources of energy, and called them renewables (because gives you fuzzy feeling) , that are actually not really renewables on the top that cost extremely a lot in order to keep basically the same BAU. And BAU basically means for me to keep consuming crap because we are not human beings any more but consumers”
That is the narrative over here, just same old propagandization in order to keep consuming crap but this time using so called “renewables”.
It’s kind like “Hey buddy if you are little short on change by filing the tank of your old Corrolla, just buy 100k Tesla 🙂 “
The Spanish Tsipras (Iglesias) won’t take over. He’s working hard to hide his commie credentials but he left behind a huge collection of YouTube videos in which he displays a rude, violent, resentful image. That pretty much sealed his fate. His party seems to have taken votes from the communists and the socialists, and they seem to have reached their peak.
My old Daddy built our big masonry barn with a southern exposure and the ground floor being more or less a basement with the east west and north sides just about totally below grade. The temperature has never fallen to freezing in there even though sub zero F weather is not unusual here- and it has never gone above eighty even in a hundred degree heat wave lasting a week in mid summer.
Solar collectors and geothermal storage are obviously ridiculously expensive but going underground like Hobbits is most definitely going to be an attractive option , especially for folks who own property with favorable topography.
I will be spending a LOT of time in the bottom floor of that barn if I am ever unable to afford to air condition my study and bedroom.
We don’t see subzero temperatures. I have a small gas fired heater with hot water radiators, which we use about five months. We use the AC about 10 days per month from early July to late September. The heating and cooling aren’t a big deal in Eastern Spain as long as one stays below say 1000 meters elevation. I suspect that as energy costs increase people will move into steadier weather areas. North Florida by the sea….
per the Costs and financing:
http://en.wikipedia.org/wiki/Drake_Landing_Solar_Community#Costs_and_financing
“if this project were repeated it would cost $4 million, as approximately $3 million was for one-time research…”
$4,000,000 / 52 homes = $76.9 thousand.
? priced in Canadian dollars or US ?
$77K seems a bit high, compared to ground source heat pump systems I’ve priced,
but the winters up near Calgary are pretty cold.
Average HIGH in December and January is -1 C (30 F).
And they’re only R-2000 standard, with is “30 % less energy”,
not even super insulation/passive house.
http://www.nrcan.gc.ca/energy/efficiency/housing/new-homes/5087
http://en.wikipedia.org/wiki/Passive_house
“In the United States, a house built to the Passive House standard results in a building that requires space heating energy of 1 BTU per square foot (11 kJ/m²) per heating degree day, compared with about 5 to 15 BTUs per square foot (56-170 kJ/m²) per heating degree day for a similar building built to meet the 2003 Model Energy Efficiency Code. This is between 75 and 95% less energy for space heating and cooling …”
What you should be peddling in Northern Spain is passive haus.
Platforma Edificacion Passivhaus
http://www.plataforma-pep.org
If I read this right, you can visit one/hear about one (not clear to me which) in Barcelona on May 28.
http://www.plataforma-pep.org/archivos/jd-2015-05-28-c21-barcelona-diptico-v1.pdf
some more stuff if you google: passive house spain
I’m too far from Barcelona. I checked the website and I noticed they have the type of design we don’t use much around here.
A more practical approach is to live in a condo, make sure the windows are the double pane type, use roll down awnings to provide shade, and things like that. When the heating bill gets too high we will put wood panels on the outer walls, with a small amount of foam between panel and wall. Energy efficiency doesn’t require moving into exotic housing.
Thats great! All that efficiency gain will free up FFs for those one million folks that reach driving age every week.
Mac, love the crack cocaine dealer approach to LED proselytizing.
Home Depot has a stunning deal currently of a 2-pack of 60 watt equivalent Philips LED bulbs for $5. I bought a pack, loved them, and have now replaced all the CFL’s in two of my flats with the LED’s.
Now, if I turn on every single one of the fifteen lights in my own flat, the total load is 127.5W – about the same as two incandescent bulbs. At my rate of $0.04kWh if I left all lights on 24/7/365, it would cost me $45. per year. Compare to $315. for incandescents.
Of course I typically only have three bulbs or less lit at a time, and probably for less than 6 hours a day, so less than a cent a day for the power for my lighting needs.
Good times.
Yes I’ve done the same thing. It is pretty amazing what the p/n junction is doing these days isn’t it?
It would really be interesting to hear from Paul who used to post on TOD as HereinHalifax, about what he’s up to these days and what the state of the art is in lighting. In my neck of the woods, it would seem that, with electricity costing more than 20 cents per kWh (down by almost half from the >$90 per barrel days), replacing 500W and 1000W halogen floodlamps with LEDs is a no brainer. The savings in electricity pay for the lighting fixture in less than two years, if it’s used for all night security lighting!
Saw a rainbow the other day, right at the end, so the expectation was to see a pot of gold, instead, there was a huge pool of oil.
Might have been the coastline of California, it was someplace special, that I know. The state that wants to be the greenest of them all has to eat crow and humble pie, it’s a free lunch. Buy beer, it’ll help wash it down. Sierra Nevada Torpedo should kill the unappetizing taste.
Math time:
Ten years, 3652 days, 94 million barrels per day consumption, multiply the two numbers and you will have consumed 343,288,000,000 barrels of oil. In forty years you’ll be in for a huge surprise, you’ll be taken aback. It’s been ten years already, so thirty years from now is a more realistic time frame.
1.5 trillion barrels to go that’s left in the reserves, those that can be extracted, then the forty year scenario for oil to be kaput, some left, but not much, nothing to export, you’re on your own, will be what develops. Forty years from now, it will all look a lot different.
The export land model will have run its course.
Well it could be 94 mil of mostly condensate – not sure pain stripper and naptha will help much but for a feed stock for napalm ……… er…..
any ways nothing in nature stays like a straight line like that ( except in EIA reports )
bumpy on up and therefore bumpy on the way down ….. some of those bumps will be thrillers !
Forbin
Bankruptcies stack up in the oil industry
The oil price plunge has triggered a string of bankruptcies, debt defaults and rescue measures to save companies nearing collapse, with almost two dozen oil and gas groups now under stress.
A 40 per cent slide in Brent crude prices from a peak of $115 a barrel last June, has put smaller, cash-strapped producers in financial trouble, according to City analysts, with up to a quarter of a million barrels a day of oil supply at risk of being curtailed.
Even after a rebound in prices from January’s lows to about $66 a barrel, there have been “numerous small corporate casualties” across the globe, and especially in the US and Canada, says a report by Bernstein Research.
It has identified 22 companies “under duress” from lower oil prices, with $33 billion (Dh121 billion) of assets, including eight that have filed for bankruptcy protection and others warning of insolvency or deferred interest payments on bonds.
A dozen of the groups identified by Bernstein had their production assets in North America, with the rest spread across South America, Europe and the Asia-Pacific region. Their total output was put at 383,000 barrels of oil equivalent a day, of which 239,000 b/d was oil and the rest gas.
The fallout from the price slide has yet to match that which followed the 2008-09 collapse, when 61 companies filed for bankruptcy. However, those groups were much smaller than the energy producers which are now struggling to meet obligations to lenders amid dwindling revenues.
Oil prices hit struggling oil companies
Low oil prices are endangering an increasing number of exploration and production companies.
According to a new report from Moody’s Investors Service, the oil and gas industry could see the rate of defaults rise over the next year. The companies in danger of going belly up, not surprisingly, are the ones that already have low credit ratings. Moody’s finds that the default rate for oil drillers with a credit rating of B2 or lower could jump from 2.7% to 7.4% by March 2016.
Moreover, distressed oil companies make up a rising share of overall firms with a poor credit rating – roughly 14.8% of the companies with a B3 credit rating or worse covered by Moody’s are in oil and gas. That is up sharply from the 8% share that oil firms accounted for in 2014.
The credit ratings agency also said that even if oil prices rise to $70 or $75 per barrel, the weakest firms probably won’t be safe. Debt is piling up and banks are starting to restrict capital to drillers that are in the most trouble.
Even worse is the fact that there is no certainty that oil prices will rise. Goldman Sachs just predicted that oil prices will fall once again to $45 per barrel. High levels of crude oil inventories and only a slight fall in production thus far likely mean that the glut will persist.
Goldman Sachs is probably wrong, but there’s going to be a lot of properties chasing hands in the next three years.
Imagine that.
Of course, maybe banks will get backstopped. What a shocking thought.
Anyone know if Kurdish oil production figures are included or excluded from published Iraq pil production stats
Wiki says included.
All oil produced within the borders of Iraq, no matter who controls the area, are include in Iraqi stats.
Apparently things got a little testy over there in Paris last week!
Solar is the new world, coal execs told at Paris summit
‘Glencore’s Hayward told the audience that it is simply not possible to remove coal from the energy mix, particularly in growing countries such as India, which will require a steady, reliable power supply if the economy is to reach its potential. To that, SkyPower’s Adler pointed to the falling costs of storage, arguing that solar and wind could “easily supply” large amounts of cheap and reliable power to countries like India.
Adler’s stance was backed by the chief executive of Acciona group, Jose Manuel Entrencanales Domecq, who remarked that it was “absolutely possible for renewable to provide baseload electricity in emerging markets” provided electricity grids were properly integrated.
The coal industry is evidently feeling the pinch as the world continues its slow but noticeable pivot away from fossil fuels. Hayward said that coal is the best choice for meeting the power needs of countries such as China and India right now, adding that wealthier countries must help developing nations transition from polluting to clean technology.
“Unless what we deploy allows China and India to complete their industrialization in a different way to the way we industrialized then we are simply shifting the deck chairs on the Titanic,” he said.’
Sounds like a grand time was had by all! I wonder what they would have told oil execs? Hang on a minute! This Tony Hayward is the same Tony Hayward who was CEO of BP at the time of the Macondo/Deepwater Horizon debacle! Oh the irony!
This is presumably the same coal industry which has seen consumption grow by 50% since 2003? I do wish these reporters would bother checking some stats on how the energy world has been changing in the last few years before making up stories which fit their worldviews. Solar and wind are at present bit players, and will remain so for many years yet.
Seen good stats on annual coal consumption by country?
Here’s the US lately – if we saw that for oil production we’d call it a peak. The last couple of years maybe show a “dead cat bounce”…
Seen the global coal consumption statistics in the bp statistical review of energy?
Good thought – I’ll check there next.
In the meantime, I found the US EIA stats back to WWII.
I wasn’t aware that America counted as “global”.
I guess you’re saying that I should have said it was “US consumption”. Well, it is data from the US EIA…
Really, the big jump in coal consumption isn’t global, it’s from China. And, coal consumption dropped there recently. It’s not clear if it’s a trend yet, but it did stop it’s relentless growth, and drop for at least one year…
So basically US moved great deal of manufacturing to China/overseas in the last 25 years and currently mainly manufactures “likes” on FB and that was partially responsible that US consumption of coal dropped just 15% from all time high according to that graph!! So where China has to export their manufacturing in order to help? Moving coal consumption in circles around the world does not help.
Most Chinese coal consumption is domestic.
And, if you look closely at US manufacturing, it hasn’t dropped since 2008. US manufacturing is 2.5x what it was in 1979.
People get confused because US manufacturing *employment* has dropped fairly dramatically. That’s because labor productivity has grown: fewer people to make the same amount of “stuff”.
“People get confused because US manufacturing *employment* has dropped fairly dramatically. That’s because labor productivity has grown: fewer people to make the same amount of “stuff”.”
Yes, Nick we are all confused. Labour productivity has really grown up because it manufactures only fake “likes”, fake “tweets”, “trending”, fake “breaking news”, fake food, fake medicine, fake entertainment and judging by last boxing match between Mayweather and Many Packman even fake boxing. I mean those two had sweated less after 12 rounds than even ZZ Top after their concert.
Labour productivity has really grown up because it manufactures only fake “likes”, fake “tweets
It takes about 1/4 as many people to make a car as it did 30 years ago. That’s a large part of why the UAW (and Detroit!) has been decimated.
It is global consumption, Nick. The atmosphere doesn’t care where the coal is burned. Of course, some subgroups will have seen consumption decline. But that’s not the trend we care about at all.
From the BP stat review, global coal consumption has increased by around 12,000 MTOE equivalent. In 2013 global renewables consumption was 280 MTOE equivalent. So coal added more than 400% of the total renewables supply in just the last decade.
Sure.
But, you have to break things down to make sense of them. Especially, in this case, you have to
1) look at china, whose coal consumption may be peaking right now. and,
2) you have to look at trends. Wind and solar are growing very strongly, in China, the US….everywhere. They’re now large enough to make a difference.
Nick,
No way China peaks in coal this year. This year is a blip based on massive hydro production thanks to lots of rain and some large projects completing. China are building 100GW of coal plant currently, with more in planning. Their economy might hit the rocks, but they’re probably not peaking for a decade or two more.
Wind and solar may make a difference, but I very sincerely doubt it’ll be enough. 2C is probably already out of the window, barring economic collapse.
Hi Sam,
Based on BP Statisical Review of World Energy, in 2013 coal consumption rose by 3%, but 75% of the increase in 2013 was increased Chinese consumption. Based on data that Political Economist has shared, China’s coal consumption slowed considerably in 2014, hopefully the World’s coal consumption will peak soon, my guess is around 2020, based on research by Steve Mohr.
http://www.uts.edu.au/staff/steve.mohr
and
http://www.theoildrum.com/node/6782
The new BP review in June should be interesting.
Encouraging news out of China:
“For the first time this century China’s coal consumption has fallen, according to preliminary data from both the Chinese Coal Industry Association and the National Energy Administration.
…News of the coal fall represents a major step-change on two fronts: China’s war on air pollution, and global efforts to peak CO2 emissions.
China burns half of world’s coal and has been responsible for well over half of total CO2 growth globally for the past 10 years.
How did this momentous drop happen? There are six key reasons: 1) record increase in CO2-free power generation capacity and 2) better-than-usual operating conditions for hydropower, resulting in a very large increase in CO2-free power generation; 3) implementation of ambitious coal reduction targets in key economic regions as a part of air pollution action plans; 4) slower growth in heavy industry output, resulting in slower growth in power demand and direct coal demand; 5) ongoing improvements in energy efficiency; and 6) increase in the use of natural gas.
Only one of these six factors – high hydropower utilization rates – is a yearly fluctuation, the rest potentially reflecting long term structural shifts.”
http://theenergycollective.com/lauri-myllyvirta/2187741/it-s-official-china-s-coal-consumption-fell-2014
The new BP Review is likely to show global coal consumption down in 2014. It is likely to decline again in 2015.
But I expect China’s coal consumption to resume growth in the following years. The current coal consumption decline is mostly due to disproportionate decline of electricity use in heavy industry on the one hand and unusual surge of hydroelectricity.
China’s services/residential electricity use continues to grow 5-7 percent. If China’s hydroelectricity has not grown at 20% (an unsustainable pace) over the past year or so, coal consumption might have been flat or grown slightly.
what about US exports of coal?
Yes, they’re significant – IIRC about 50% of the drop in US domestic consumption was compensated for with exports.
Still, that’s someone else’s consumption – probably the UK or China. Another project…
Coal consumption dropped as a result of the gas price drop. When gas prices rebound, coal may be more attractive. I think reality will sink in and they’ll switch the war on coal into a push to build more efficient plants with a secondary subsidized loop. I think they can reach 45 % thermodynamic efficiency.
No question, low gas prices helped. OTOH, that’s only part of the story:
Wind and solar had an impact.
It’s not clear when gas prices will rise, and how much.
And, finally, as you note, the US has shifted policy to reduce coal consumption. I agree – reality is sinking in, and that’s why coal consumption is falling. It’s conceivable that a few highly efficient coal plants would make sense, as Germany is doing, but that’s not a high priority.
Of course, you should stop reading silly right-wing sources, that use phrases like “war on coal”.
The EIA’s Electric Power Monthly was updated today with the data for March. I have a graph of the contributions of Coal, Natural Gas, Nuclear, Hydro and non-hydro renewables as a percentage of the total. Gas is up, coal is down and everything else is up a percentage point or two. I left out other smaller contributors for the sake of reducing clutter.
From the EIA’s Electric Power Monthly I have extracted the contribution of Solar, both thermal and PV. The data for March shows PV production already exceeding the level for the peak of last year. Methinks this shows that greatly expanded PV could do some serious heavy lifting during the mid day hours of the peak air conditioning summer months. If battery costs continue their downward trend, renewables could conceivably start to displace fossil fuels in a big way. No wonder some quarters are so hostile!
P.S. The shape of the curve for PV for last year and so far for this year tells me that a lot of new PV is being installed in very good (productive) locations.
I like to look at the monthly energy review:
http://www.eia.gov/totalenergy/data/monthly/pdf/mer.pdf
Ref. Page 13, you can see that for the first 2 months of 2015, Renewable energy production exceeded Nuclear, and represents an equivalent of 14% of the total Fossil Fuel production in the US.
Thanks John B!
Can I help u get a Nobel Prize in physics? Since u have evidence to disprove the Greenhouse Effect!
Lol!
Nick, I saved my last post for you. You have caught another, much higher gear on the anti -oil, anti- fossil fuel rhetoric. I admire your passion, but you live in a dream world, man. You are not going to change people’s opinion about alternative energy sources on a peak oil blog; are you nuts? Get off the computer and go speak at Lions and Rotary Clubs; take the message elsewhere. Your wasting time, here. I am always astounded at how passionate people are about their opinions, but how lazy they can about delivering the package.
I don’t know if you know squat about the oil business, you think you do, for sure. I don’t know if I do either, actually. But I stuck to what I know, and I stayed out of the battery business. In other words, I did not have to degrade, or diminish one energy source over another like you ALWAYS have to do. If all that stuff works, it will work, and people will sort it out eventually. You’ll win more arguments by talking up your side, and now down the other.
Mike.
All the recommendations are fine, provided they are imposed on the Chinese.
First.
By force.
Life is much simpler after that.
After all, it’s the simpler life being sought, yes?
Mike, I think of Nick as an EV Evangelist: off topic but more easily ignored than the religious ones. As you say, a PO Blog (to my mind anyway) is a place to learn about FF issues, not a place for to talk about cars and batteries.
Nick does rather epitomise the old saying that if all you have is a hammer everything looks like a nail. I eagerly await the day when someone poses a problem that he doesn’t think can be easily and cheaply solved with solar and electric vehicles.
Hi Guys,
Nick is definitely very optimistic, what do you propose? Nick thinks we should use efficiency, demand management, and alternatives to solve the energy shortages that will become apparent when peak oil arrives.
He seems to believe that natural gas and coal are abundant (which is incorrect at current price levels), but my guess is that he is incorrect in the medium term (through 2030).
If one believes that peak fossil fuels and climate change are potential problems, the interesting discussion is what to do about it, in my view.
Dennis,
I agree that Climate Change is very serious. I think it’s valuable to be realistic about exactly what we’re facing, and it seems clear to me that we have far more fossil fuel than is needed to “cook the planet”.
Why is this important? Because we need to be clear that geology isn’t going to make our choices for us – we have to make them, individually and collectively.
On the other hand…the kind of work done on coal by Mohr and Rutledge is very useful, because it makes it clear that on a practical level, coal consumption is declining basically everywhere in the developed world. This is optimistic.
Sam,
The primary solution to Peak Oil is electric transportation.
It’s pretty simple, and it’s pretty clear. EVs are cheaper and better than ICEs.
I don’t think EVs will cure cancer, or create peace on earth…though they might help avoid an oil war or two.
Doug,
Have you read this blog??
It’s all about Peak Oil and related energy issues. Especially the implications of PO: when it will hit, the impact on our economy, etc. Take a look at the Posts shown just below the title about the implications of energy.
So, solutions to PO are right at the heart of this blog. And, of course, EVs are the primary solution to PO.
If you think people shouldn’t talk about anything but the past and present of fossil fuels, and that we should ignore the future, the first person to argue with is…Ron!
funny. Ron shifts data to spot the trend in oil supply. Nick does the same but the other way with renewables growth and you guys get all huffy about it, tell him to go away. Condescendingly accuse him of being a religious crank. Why? Each enquiry is the clear corollary of the other. Ok so you’ve worked all your lives in oil, are interested in understanding its decline, why do you want to close your eyes to its replacement? Why the hostility? Why the attack on the idea and not the data? If you think it’s not happening then engage with the facts don’t just insult the idea. I see more claims here that renewables ‘can’t work’ than evidence that they don’t. Is it a deep emotional attachment to the order that lived your whole lives under and succeeded in? I don’t know, but it is a disappointing effort by clearly intelligent people.
Looks more like prejudice than reason.
Hey, it’s not a problem. I run this blog and until I say something is a problem then it is not a problem.
There are those who think renewables are the answer and then there are those who think renewables will only extend the misery. I count myself among that group.
But this is the place to argue both sides. If a person thinks renewaples are our great white hope then by god let’s hear from you.
There are those who think renewables are the answer and then there are those who think renewables will only extend the misery. I count myself among that group.
I don’t understand the concept of extending the misery. If we are to believe we’ll all be miserable in our life times, shouldn’t we be talking about suicide and not having any more children?
And if we don’t think it will happen in our lifetimes, why not do what we can to extend the amount of fossil fuel we have available to us?
Yes, I think there will be hard times ahead, but I don’t anticipate starving to death in my lifetime. Nor do I think my children and grandchildren are going to die because of peak oil. If I really believed that, I would be looking into ways to end our lives fairly soon.
And if we believe everyone is doomed, should we stop supplying medicine to people so we can hurry up the process? Why bother to prolong anyone’s life?
Boomer, I misspoke. I should have said “increase the misery” instead of “extend the misery. Renewables, if they do succeed in partially replacing fossil fuels, will delay the collapse allowing the population to increase, by perhaps another billion. It will allow even more of the wild species to go extinct.
Therefore a billion more people will die a horrible death and fewer species will survive the collapse.
And don’t be silly. Talking about what we should do if we know society is doomed is nonsense. “We”, that is we who know that civilization is doomed are but a very tiny minority. We have no power to do anything. And I wouldn’t do anything even if I had the power. Hell, I could be wrong.
Renewables, if they do succeed in partially replacing fossil fuels, will delay the collapse allowing the population to increase, by perhaps another billion.
I share your concern about adding even more people to the planet.
You are assuming that renewable energy will allow countries with high population growth to keep growing. I don’t see that happening because I think the countries with high population growth are already in trouble and won’t be rescued with renewable energy. I do anticipate, however, that renewable energy might replace some of their fossil fuel use. Their energy consumption will remain small for a long time. It is Fernardo who keeps talking about refrigerators in Africa. I’m talking about solar chargers for cellphones. Not refrigerators.
Here’s what I think will happen. I think the rich are taking over and will continue to do so. Resources won’t be allocated to keep much of the world alive. So between disease, famine, and wars, we’re going to lose people.
Those who are rich enough to survive will use renewable energy to keep themselves going. Is it fair that the rich will survive when many others won’t? No, but I think that’s what will happen. And those who survive will keep the human population going even if they are fundamentally assholes.
I don’t think all human population will die. And I see renewable energy as a way to keep alive those who survive.
“Nick does the same but the other way with renewables growth and you guys get all huffy about it…..”
I’ll take the credit for that, at least as far as this thread is concerned, thank you very much.
The reason for posting this information is that I live on a rather small island that generates more than 90% of it’s electricity using something called Bunker C Fuel Oil, a product of petroleum. The island I live on is currently spending more on fuel imports than it earns from tourism and other services in addition to exports of mostly bauxite and alumina plus some agricultural exports including sugar and bananas.
Ever since I became aware of Peak Oil I have been trying to figure out how an island such as the one I live on is going to keep the lights on when world oil production starts to decline in earnest, to the point that high prices or shortages make it difficult for small island states to get an enough oil to keep the lights on. I suspect that my perspective could be shared by residents of the rest of the Caribbean excluding Trinidad but, including the likes of Puerto Rico, Hispaniola (The Dominican Republic), and other islands like Hawaii.
The increasing use of renewables to produce electricity in developed industrial economies is of extreme interest to me since, as far as I am concerned, with due respect to the excellent analysis by Fernando, the use of coal is just an exercise of kicking the can further down the road. To me, renewables represent a route to kicking a habit that has us dependent on ships bringing fuels for us to burn, if we are to enjoy the use of electricity and trust me, electricity is really, really useful and convenient. Couple EVs to electricity from renewables and we have a means of getting rid of imported fuels anytime we want to move around, covering distances that would be difficult to cover by walking or cycling.
Am I at the bargaining stage of the stages of grief? Quite likely! One thing for sure is that, I’d much rather be known by the people that I come face to face with every day (as opposed to my cyber buddies), as that guy who is always shilling solar and EVs than the doomer who is always saying that we are screwed!
So I have decided to focus on the things that I see as having a real chance of making things less bad than they would otherwise be. If things turn out as badly as I think they could, I don’t think I could escape being part of the die-off, unless I could figure out a way of hiding the fact that I’ve prepared (somewhat) for life with a lot less oil. When TSHTF it will take a considerable amount of force to prevent starving mobs from taking your food and/or water, not something I want to contemplate.
Posting this from my homestead in rural Jamaica, the realities have not escaped me. While on the main street of the town today, I saw a large cargo truck pulling in and the workers opening the doors to reveal the cargo of sacks of rice or flour or something. Something that provides affordable basic nutrition to scores of residents in the town, many of which are young and unemployed. Who knows where all these people get money to buy stuff. It is not pleasant to contemplate what Peak Oil might mean around here if things get really bad. Got to keep those trucks with the sacks coming. Too many mouths to feed and not enough locally produced food to feed them all.
Here’s the chart with the different sources for electricity, with “Petroleum Liquids” thrown in for good measure. We all know that the US stopped using oil for generating electricity in the seventies but, for many islands oil would replace coal as the top line in the graph.
Island boy, building a high thermal efficiency coal plant is kicking the can 30 years into the future. This buys you time until technology improvements allow you to use something else.
Let me ask you, have you tried to put together a spreadsheet to study your alternatives? A realistic one? I can help you if you wish to try it.
I have posted below, the Electricity Generation by Source for Jamaica. I calculated the percentage for hydro for 2015 and it works out to about 3.3% so 96.7% or so from petroleum products less non hydro renewables which amount to about 6.4% according to the story at the following link:
9.7% of Ja’s energy consumption comes from renewable sources – Pickersgill
As far as Electricity from PV goes, the only recent data I could find was in the following PDF which, puts the total excess bought from licensed suppliers (Standard Offer Contract Suppliers) at about 0.0177%.
http://www.our.org.jm/ourweb/sites/default/files/documents/business_plan/notice_-_net_billing_soc_purchase_price_-oct_2014_nov_21-2014.pdf
I have no idea what is going on “behind the meter” but, I know the college I went to has a 100kW system and the largest system currently operating on the island is a 1600kW system that is set upn to curtail production rather than supply the grid. There are over 300 installation which have been granted licenses under the Standard Offer contract.
Now, as far as building a high thermal efficiency coal plant and kicking the can 30 years into the future goes, the story at the following link gives cause for concern:
Jordan’s second PV tender leads to record low tariffs
“The tender, underway since 2013, included financial bids from 24 applicants (initial number of applicants were 33), ranging from US$0.0613 to $0.1327 per kWh, with the four lowest bids coming in at $0.0613, $0.0649, $0.0691 and $0.0767 per kWh, respectively.”
In a comment further down I linked to a story mentioning PPAs in the US for electricity from PV at 4 to 6 cents per kWh. What happens if 4 years from now electricity from PV can be had for 2 c/kWh? The coal plant would not likely have been commissioned yet and the utilities customers will be defecting like crazy, at least to cover their day time use.
It would appear to me that any investments in fossil fuel burning power plants, are going to end up as stranded investments within the next ten years as renewables eat their lunch. Anybody beg to differ?
Island boy, the analysis for Jamaica would have to be done with data such as the availability of sun light over time. Jamaica is a small island, but it does have mountains. This means sunlight will be variable. Once you have that data we can move forward with an analysis. If you want to be serious about it you do need to think of yourself as being responsible for delivering electricity to the whole island reliably. The bid prices for solar in Jordan are meaningless. Plus I don’t trust a solar power industry source for hard data. I see too much propaganda which is bordering on scams from those publications.
Your wasting time, here. I am always astounded at how passionate people are about their opinions, but how lazy they can about delivering the package.
I’m actually surprised at many of the side topics here.
I’m here to learn about the economics of fracking because I live in an area evaluating the laws and policies of fracking.
Everyone’s speculation about the future after peak oil hits is something I don’t pay as much attention to because there are still a lot of unknowns.
I did not have to degrade, or diminish one energy source over another like you ALWAYS have to do.
Mike, I don’t mean to disrespect you, or your fellow hard-working friends in the oil industry. Oil has done a lot of good for the world. I’ve made some money off of it. When I argue that we’re now realizing that oil has some serious hidden costs, don’t take it personally – it’s not meant that way. It’s just…what we have to deal with.
And, finally…..this is a Peak Oil blog!! Aren’t we here discussing the fact that oil is going away? And, what to do about that??
Mike:
Oil is a diminishing resource.
Its impact is waning.
All Fossil Fuels are finite.
Their dominance will pass.
This isn’t a political point of view.
This isn’t the expression of the hate emotion.
This is a statement of fact.
It is inevitable.
As for you and Doug and others who say that Nick G and the others who talk about what comes after oil are off-topic, then you have an extremely limited interest in the important issues at hand.
If this blog every restricts conversation to solely counting oil barrels, flow rates, distillate fractions, drilling techniques, and API etc., then this blog’s audience (not just the posters, but they and the lurkers) will dwindle to a rather small number.
I haven’t restricted this blog to anything. I get tired of all this renewable stuff but I really do’t mind, I know these guys are really peak oilers and are hoping against hope that they can find a way to keep the crash from happening.
As for after the crash? I would love to hear anyone’s opinion. Got one? Then’s let’s hear it.
Ron,
For the love of reason, I was directing the comment about restricting the blog content to Doug, not you.
From Doug’s upstream post (reply to Mike):
“…a PO Blog (to my mind anyway) is a place to learn about FF issues, not a place for to talk about cars and batteries.”
As far as opinions about ‘after the crash’, you have heard many opinions already on this very blog…I am perplexed that you posed that question as if no one has opined on this subject! I have been reading this blog since you started it, and read the entire TOD since its inception, and a myriad of opinions have been posted, from apocalypse to nirvana and everything in-between.
But, I will answer your question, at a very top level: I tend to be of the same mind as a combination of OFM, Nick, and Boomer, with the realization that there is a disturbing possibility of things could get truly nasty and brutish quickly. That being said, I tend to think that, barring a hopefully low probability nasty fast turn of events such as a maximum exchange between the U.S. and Russia, there may not be ‘a crash’. Rather, a catabolic collapse…a long stair-step down to a lower energy, lower population, lower carrying capacity future, accompanied by pain and suffering, with some areas/regions/countries faring better than others,but not the fast collapse you envision. I agree with Nick G about the great contraction involving moving to carpooling, bicycles, bus riding, etc. and with Mac about the power of Leviathan to impose order and discipline and rationing, along with a good dose of bread and circuses. My 2 cents…I do not own a crystal ball…but nor does anyone else. I will place a solid wager that your prediction of a profound oil supply/price crises by the end of 2015 is not in the cards…and not in the deck for 2016 either. Perhaps by as late as 2025 will the oil supply downward trend be undeniable to even the biggest simpleton. The only thing I know is that FFs are finite, and thief stocks are continuously diminishing, and our way of life will inevitably adapt one way or another.
On the down-slope of FFs, the only alternatives we know of of any significance are solar thermal and PV, wind, hydro, geothermal, biomass, and nuclear fission…along with the inevitability of using MUCH less.
Hi Mike,
A preacher runs into a lot more sinners in bars and cathouses than he ever will in church. There are people in this forum who need to hear what Nick has to say.
I am personally very much in favor of continuation of the present day business as usual economy, including plenty of oil –until we hopefully get to the point eventually we can get by with very little of it- because that day is surely coming.
I bet you can name of a bunch of places personally where the oil fields are worked out- exhausted.I could name off a bunch of places not that far away where some of my family USED to work in coal mines – what is left is too deep and the seams are too thin to get it out.
I used to know several coal miners who moved two or three times to follow the work as given mines were worked out.
Wind Power in US will double in next five years according to DOE.
http://motherboard.vice.com/read/american-wind-power-is-expected-to-double-by-2020
As wind and solar power spread through the US, there will be times when power is in great excess. Industry and storage will need to be designed to take advantage of the cheap power, meaning that costs will drop for manufacturing industry and a new industry of power storage can grow.
I shall obey and limit myself to pro ruling party literature, studiously avoid infection by the other side. Long live our leaders.
Well, if you want to have a clear head, it helps to avoid reading stupid stuff. You can tell that you’re likely to be reading misinformation when your source is using politically laden insider/tribal jargon, like “war on coal”, “greenies”, “AGW”, etc.
Garbage in, garbage out.
Well, if you want to have a clear head, it helps to avoid reading stupid stuff. You can tell that you’re likely to be reading misinformation when your source is using politically laden insider/tribal jargon, like “war on coal”, “greenies”, “AGW”, etc.
You say you can tell when you are reading stupid stuff or misinformation when the writer uses the term AGW? Anthropocentric Global Warming? Really now?
Okay nick, just call me stupid. I read a lot about anthropocentric global warming. I don’t think it is stupid stuff at all.
Ron,
As far as I can tell, Climatologists, and those who listen to them, generally use the phrase “Climate Change”, not Global Warming, or Anthropogenic Global Warming.
Some do and some don’t Nick. I googled “anthropocentric global warming” and got far more scientific references than I can possibly list. But the key term here is “anthropocentric” or “human caused”.
Bottom line the earth is getting warmer and that is what is causing climate change, not vise versa. And it most definitely is “anthropocentric.”
Yeah, it’s not as clear cut as I thought. Still, my experience has been that “skeptics” always call it warming, and sensible people tend not to.
Here’s NASA’s discussion:
http://pmm.nasa.gov/education/articles/whats-name-global-warming-vs-climate-change
Climate Change is a result of increased global warming. Amazingly, the climate scientists use increases in temperature (warming) to indicate climate change. Actual climate change is much more difficult to measure than temperature (energy). However, I surmise that the term global warming fell out of use because it can imply positive changes in some colder regions versus climate change which implies a shift in climate zones which has more negative connotations than global warming.
I surmise that the term global warming fell out of use because it can imply positive changes in some colder regions
And you surmise wrong. Global warming did not fall out of use at all, it is still very widely used. The term climate change is used to cover the many other climate factors caused by global warming.
The term “Global Warming” is still very widely used in scientific circles. From “Live Science”.
Global Warming: News, Facts, Causes & Effects
Global warming is the term used to describe a gradual increase in the average temperature of the Earth’s atmosphere and its oceans, a change that is believed to be permanently changing the Earth’s climate. There is great debate among many people, and sometimes in the news, on whether global warming is real (some call it a hoax). But climate scientists looking at the data and facts agree the planet is warming. While many view the effects of global warming to be more substantial and more rapidly occurring than others do, the scientific consensus on climatic changes related to global warming is that the average temperature of the Earth has risen between 0.4 and 0.8 °C over the past 100 years. The increased volumes of carbon dioxide and other greenhouse gases released by the burning of fossil fuels, land clearing, agriculture, and other human activities, are believed to be the primary sources of the global warming that has occurred over the past 50 years. Scientists from the Intergovernmental Panel on Climate carrying out global warming research have recently predicted that average global temperatures could increase between 1.4 and 5.8 °C by the year 2100. Changes resulting from global warming may include rising sea levels due to the melting of the polar ice caps, as well as an increase in occurrence and severity of storms and other severe weather events.
Wow Ron, I started my comment with climate change is a result of global warming not a cause. It fell out of use in the media, not in scientific publications. They know the difference, the layman does not. Calm down.
Yes sur. Please define stupid for this humble follower?The term “war on coal” sounds just about right. I don’t use the term “greenie”, I believe. On the other hand I get insulted on a regular basis by individuals who call me a “denier”. It sure takes a lot of patience.
I read about two hours a day about climate change and related topics. Today I was reading this
http://www.nature.com/ngeo/journal/v8/n5/pdf/ngeo2414.pdf
http://www.gfdl.noaa.gov/blog/isaac-held/2015/05/13/59-how-not-to-evaluate-climate-models/
Fernando,
I’m talking about tribal thinking – you vs me, us vs them, etc. There are many, many pundits, analysts, etc., who are writing for “their” audience, and not trying to be accurate or realistic. They often work for obvious organizations like the Heartland Institute, but often they’re harder to spot.
If you’re smart, determined and aware of the risks of bad information, you can wade through their narratives and numbers and find the truth for yourself. But, that takes a lot of time to cross check data and think it through. Most people find themselves misled by these authors.
When I see red flags, I know not to waste my time. These red flags include provocative language: “Greenies”, “warmists”, “liberals” (depending on the context and usage), etc.”War on coal” is a good example: it’s used by people who want to suggest that efforts to reduce coal consumption are motivated by hatred, not by a rational desire to reduce CO2 emissions.
I’m aware. I also know there’s a lot I don’t know or I’m not sure about. On the other hand I run into people who are so sure of everything…
Re: the Mauritsen and Stevens paper in Nature geoscience
Did you see the realclimate take?
http://www.realclimate.org/index.php/archives/2015/04/the-return-of-the-iris-effect/
“… In effect, this imposes a tweak that mimics the iris effect – it is not a demonstration that the iris effect emerges from any physical mechanisms.
What they find is that, even though cloud cover is reduced as the climate warms, it does not generate a strong negative cloud feedback. While reducing cloud cover does indeed let more infrared energy out, it also lets more sunlight in. These two effects, while independently large, act in opposite directions. The net effect is the small residual of their difference. For runs with the strongest “iris”, the model’s climate sensitivity is reduced from 2.8°C for doubled carbon dioxide to 2.2°C — still well within the IPCC’s canonical range. ”
As to 50% of science papers being crap, ’twas alway thus (at least 50%).
“90% of everything is crap”
http://en.wikipedia.org/wiki/Sturgeon%27s_law
Sunnv, what m&s have is observations which support negative cloud feedback. Their ECHAM6 model shows 0.5 degrees C lower equilibrium climate sensitivity when the Iris effect is modeled at medium impact (I’m writing this for those who don’t want to read the links).
The negative cloud feedback, if it’s confirmed, has huge implications. I’m not about to state that Lindzen’s theory has been confirmed. However, I see a lot of distorted research priorities, and a very focused effort being made to silence those who dare to challenge established dogma. The paper is important because it may encourage more data acquisition and better analysis. And that’s badly needed in a field where arm waving and politics carry so much weight.
Sam, I am carefully following news in the renewables area, solar in particular and I think these bit players, as you call them, are starting to become something of an annoyance to the established electricity generators. you might find it interesting that:
UK wind power smashes annual output record
The grid operator confirmed late last week wind power generation rose 15 per cent during 2014 from 24.5 terawatt hours to 28.1TWh – enough to supply the needs of more than 6.7 million UK households.
Overall, grid-connected wind farms and standalone turbines met 9.3 per cent of UK electricity demand during 2014, up from 7.8 per cent in 2013.
The data, which follows a string of wind power output records during the second half of the year, came as National Grid also confirmed December set a monthly record for wind’s share of the electricity mix of 14 per cent. In addition, the fourth quarter of the year set a new quarterly record of 12 per cent, breaking the previous quarterly record of an 11 per cent share.”
It will take less than four doublings for wind power to supply 100% of UK electricity!
Then there’s this:
Solar-generated electricity in the UK increases by 840 percent in one year
“Official statistics released by the Department of Energy and Climate Change show that the UK’s 1.38GW of installed solar capacity generated 0.5TWh of electricity in the second quarter of 2012 – an astonishing 840 percent increase from last year when solar contributed just 0.05TWh in the same period.
The incredible figure reflects the dramatic impact the feed-in tariff has had on the solar PV market in the UK, driving a monumental surge in demand and building a market that currently consists of around 4,000 companies.
The energy statistics also show that renewables’ share of electricity generation grew from 9.0 to 9.6 percent. Offshore wind generation saw an increase of 47.7 percent from Q2 2011 to Q2 2012. In the same period onshore wind generation fell by 11.4 percent.
However, production of fossil fuels in the UK fell by 10.1 percent with both oil and natural gas production plummeting by 12.2 percent and 13.9 percent respectively.”
It will be interesting to watch as the situation unfolds in the UK. The influence of fossil fuel interests should wane significantly as UK oil and gas production continues to decline and AFAIK there is no longer a coal industry in the UK so, it remains to be seen which UK interests will be served by stifling renewables.
Sam, I am carefully following news in the renewables area, solar in particular and I think these bit players, as you call them, are starting to become something of an annoyance to the established electricity generators.
They must be or there wouldn’t be so many attempts to thwart them. If renewables are of no consequence, then the utilities should just ignore them, and not try to pass laws to limit their growth. It’s wasted effort and lobbying money to fight renewables if they aren’t a threat or a perceived threat.
Alan,
I look at the decc statistics somewhat frequently, so I’m familiar with our wind generation. Its worth noting that electricity consumption in the uk has been falling every year since the financial crisis. I suspect mostly due to high prices, as we’ve not got that much more efficient in the last decade. So winds share would be increasing even if no new cspacity were being added, as it gets priority into the grid. I suspect it’ll get to twenty odd percent and run into issues which slow it down somewhat.
A s for solar, i don’t think that putting panels anywhere here is particularly productive given the weather. Given that we consumed a few hundred TWh last year I’m far from impressed. You’re right that we’ve no longer got a coal industry, but our sunshine industry is in even worse shape.
The question remains, which UK business interests are going to profit from continued electricity production using ever more expensive, imported fossil fuels or even nuclear power for that matter. I once read something at renewablesinternational.net about the Cost of new nuclear and new renewables. Apparently that new nuclear facility is likely to benefit EDF far more than anybody in the UK. We live in interesting times!
I think the prospects of jobs building or maintaining renewable energy facilities are far better for more young Britons than the prospects of getting a job at Hinkley Point.
Compare buffered prices and then we can talk properly. Nuclear has something going for it that solar and wind don’t, which is that it is a reliable supplier of power even when the wind is still and the sun is down. That makes it more valuable, and worth the premium.
There is school of thought, the 100% renewables crowd, that posits that, if electricity sources are diverse enough and distributed across a wide area, the likelihood of having to rely on the kind of base-load power that a nuke provides trends to zero.
Here’s one idea that could help prevent Britons from freezing in the dark during winter when TSHTF and I don’t take that lightly since, my only remaining sister and her family live there.
Farmers look to pig poo to boost revenues
“For a start, Mr Hart expects to be able to sell the 2.2 million kilowatt hours of electricity generated each year – enough to power more than 175 homes – for about £300,000.
Almost two-thirds of this money comes in the form of a green energy generation subsidy from the government – a perfectly standard arrangement for any new energy source, and one that will be reduced once plant costs come down.
On top of this, Mr Hart should save about £30,000 in fuel bills for the farm, and of course pay no heating costs at home.
In addition, he expects to buy about 200 tonnes less fertiliser every year, saving another £60,000.”
Now, one might say you can’t run and industrial economy on lots of little plants generating 2.2 million kilowatt hours of electricity a year. The 100% renwables crowd would probably say that we have a better chance trying to do that than trying to maintain BAU.
Wind across europe is fairly highly correlated, especially between many of the countries with lots of wind (UK, Denmark, Ireland). You would need a lot of very large and expensive interconnectors, and even then there are going to be times when the wind isn’t blowing anywhere. If you add two uncorrelated noisy signals you’re still going to get noise.
Similarly, lots of small plants burning pig shit is going to be expensive and inefficient. There’s a reason that we ended up with large, centralised power plants. They’re very efficient, and they realise economies of scale. Moving in the other direction is a step backwards in some sense.
This is the extreme difficulty of the 100% renewables proposals. The systems are all going to be way more complex and expensive than what we currently have. With ff generation you don’t need demand side management, storage, massive interconnectors and so on. You can get away with building a few extra gas plants for when one is down for maintenance or whatever.
This is why I doubt we’re going to see a clean green utopia. We’re at a time when resources are becoming more and more expensive to extract, which is going to make systems with extremely high fixed costs (such as the size of machine required for 100% renewables) much less attractive and profitable.
If you add two uncorrelated noisy signals you’re still going to get noise.
But the ratio of variance to mean is roughly 30% smaller. It’s the Law of Large Numbers. http://en.wikipedia.org/wiki/Law_of_large_numbers
With ff generation you don’t need demand side management, storage, massive interconnectors and so on.
That’s not true at all. DSM is widely used, and it’s cheaper than the classic solution of building more generation. But, most utilities are paid for generation, not for “negawatts”. Storage of natural gas, and other fuels, is a big deal.
resources are becoming more and more expensive to extract
Don’t let PO, or the recent Chinese construction peak, fool you – there’s no major trend of that sort. And, wind, solar and EVs are getting cheaper and cheaper.
Law of largr numbers? The number of weather systems we’re dealing with arent large enough to invoke that. Show your working on the 30% figure.
As for resources, i doubt you could name many which are getting easier to extract versus a few decades ago.
The 30% figure is a statistical finding: if you add together two equal normal distributions, the resulting distribution will also be normal, but the ratio of the variance to the mean will be reduced by the square root of 2.
It depends on whether they are partially joined at the hip or not.
I used to work partime as an advisor to a group of exploration risk experts and we used to sweat a lot over the links between the probabilities for different parameters. I think we overworked the math because we didn’t have enough data to chew on.
I think wind in Europe is a bit like that. It seems to be related to highs and lows. When it gets windy it seems to blow all over, when it doesn’t it seems to be calm all over. I know because I have a little app which shows wind vectors in neat little colors.
You say, “There’s a reason that we ended up with large, centralised power plants. They’re very efficient, and they realise economies of scale. ”
The further down you say, “We’re at a time when resources are becoming more and more expensive to extract, which is going to make systems with extremely high fixed costs (such as the size of machine required for 100% renewables) much less attractive and profitable.” Isn’t this “time when resources are becoming more and more expensive to extract”, going to make the production from ” large, centralised power plants”, “more and more expensive”?
Once a PV system is installed, every kWh produced in addition to the amount used as a basis for all the financial analyses, is essentially free. How is electricity produced using resources that “are becoming more and more expensive to extract” going to compete with that?
Then you have stories such as the one at the following URL;
http://www.pv-magazine.com/news/details/beitrag/solar-plus-ecosystem-and-offsite-wholesale-pv-to-takeoff_100019113/#axzz3XqIaXDdH
It includes the following statement, “Kann said that solar PPAs in the U.S. now range between US$60 and $50/MWh, but that he has seen contracts signed around $40/MWh.” Thats 4 to 6 cents per kWh for wholesale electricity, approaching the price of electricity from coal plants. What happens if electricity from PV plants can be sold for 1 cent per kWh or less?
I have seen enough change in my adult lifetime to believe there’s a lot more coming and it could go either way, 100% renewable or maybe not.
The pig farm poop may have a better future as a fuel for large scale pig farms if they get economies of scale. They may also benefit forming alliances to lay poop pipelines to connect farms to a central plant, so they can use three large generators, such as 750 kW Waukeshas. I think the optimum poop fueled plant would have about 2250 kW nameplate capacity. That needs the poop from six large pig farms.
Actually, all sources of power have elements of unpredictable variance.
Nuclear, for instance, can shut down with no notice and take days to restart. That’s why small grids, like Ireland, can’t use nuclear.
It’s unrealistic to demand that any particular energy source be “buffered” – that’s far more cost effective as a grid service, for coal, nuclear as well as for renewables.
Yes, Nick. Plants shut down. Wind turbines are known to blow their bearings. But intermittency is a different problem. It’s more serious.
Yes and no.
Yes, wind & solar have greater levels of variance and unpredictability.
No, that they’re the only power sources that have variance and unpredictability, or that the difference is large enough to make either fossil fuels or nuclear cheaper (when all costs are included).
The grid operators with the most renewables say they are less problematic, because when they blow their bearings it doesn’t take down the whole bunch with no notice. They know when the sun is going to shine and the wind is going to blow. Intermittency is a different problem but it isn’t remotely more serious.
I think there’s a need for renewables advocates to raise their understanding of what intermittency means. Conventional power systems use backup units and spinning reserves, those are proven, work, and we understand their availability extremely well. Wind and solar don’t work that way. As long as you can’t deal with that a bit more professionally you will lack credibility with me. I realize most readers lack the training to understand these concepts, and this explains why we read so much meaningless material regarding renewables. It’s more of a political nearly religious thing, I suppose.
Great Brutain is pretty windy. Somewhere around here I have a link to a blog with the UK wind statistics. Let me see if I can find it….
Here it is
http://clivebest.com/blog/
Look at the little pic on the right, says UK power status. Note he’s plotting against peak demand.
Acciona is a Spanish company with a large wind power division.
http://www.acciona.com
The chairman, Jose Miguel Entrecanales, belongs to a rich hoitty toitty family clan.
Acciona is a Spanish company with a large wind power division.
http://www.acciona.com
The chairman, Jose Miguel Entrecanales, belongs to a rich hoitty toitty family clan. He “began his professional career at Merrill Lynch in London and New York. In 1991 he joined ACCIONA, where he was Corporate Development Director, Finance Director and a Member of the Board before being named Chairman in 2004. Abroad, Mr Entrecanales is an active participant in some of the leading public-private initiatives supporting sustainable development and the fight against climate change. In 2013, Mr. Entrecanales joined the Advisory Board of the “Sustainable Energy for All” initiative led by the United Nations and the World Bank. He has been a member of the executive committee of the World Business Council for Sustainable Development (WBCSD) since 2009, and also belongs to the UN Global Compact and the Corporate Leaders Group on Climate Change.”
A quote from this guy on the viability of renewables is meaningless. It’s like getting a quote from the Pope on the value of donating to the Catholic Church.
Uhhh….really? So we should never listen to criticisms of renewables by retired oil & gas guys??
Yeah, in fairness fernando is playing the man and not the ball there.
I’m retired. My comments aren’t biased. You can call me Fernando Spock. That guy is making a living selling wind power. His comment was a bit goofy, so I figured I would get his background. He’s selling tin.
As Sam said, ad hominem comments only mildly useful.
Occasionally they’re helpful when someone is relying on a dubious “authority”. I often point out that relying uncritically on an authority is a bad idea, and when people do that it can be useful to point out that their authority is primarily a druid, not someone who understands the technical points of the subject. It’s better to rely on actual, detailed, quantitative arguments than authority.
In this case, the first source was a mining executive – that’s not a disinterested source either.
But, ultimately it’s not helpful to focus on personalities – just the facts, ma’am!
There were no facts presented. I find most comments about wind power and how to handle intermittency to be quite unsupported. It’s a really difficult problem. The more penetration the worse it gets.
Given the problems I see I’m trying to sketch solutions to increase coal plant efficiency. So far all I got is cartoons.
Well in my country the intermittency of wind power is routinely and efficiently balanced A. Geographical spread, and B. Hydro.
Hydro is intermittent too but over a much longer scale, and is of course more controllable. Wind production positively improves Hydro production security by reducing depletion of water stock by meeting demand, yes intermittently but also repeatedly, allowing more water storage. Wind is essentially a cheap and reliable extension of our Hydro baseload.
We are slowly winding down our remaining FF generators and replacing them with a portfolio of renewables; principally wind and geothermal. Distributed solar is happening too. But in an volcanically active, pluvial, and windy bunch of islands, solar is just another option… Intermittency is manageable even in a country that will never import a single electron.
I would add that LEDs, insulation, and other efficiency are having an impact on demand. Not an easy time for power companies. The old model is breaking. Perhaps paradoxically zero marginal cost is hard to make a profit on.
Hydro is the perfect complement to wind. Here in Spain all the hydro capacity is used to compensate for solar and wind intermittency.
I see two practical issues when trying to use hydro to cover for wind and solar intermittency, one is suicidal environmentalists who oppose hydro at all costs, the other is the lack of mountains or precipitation. I guess we can put the environmentalists in reeducation camps and use larger budgets to account for Mother Nature.
http://thetyee.ca/News/2013/05/01/Solar-Dreams/
“Moreover there is no way solar power can sustain
“our present wasteful way of living.””
On a peak oil blog (the hammer) does everything look, or most things look, like a nail (oil replacement/decline-mitigation)?
The idea that renewables need to make economic sense is an outdated mode of thinking.
We need de-growth, de-globalization, as soon as possible.
The thing is…they do make economic sense. You just have to expand your definition of costs very, very slightly to include the cost of pollution, etc.
Yes, but what if the economy, itself, doesn’t make any sense?
Nick,
I understand this. I am just saying that a lot of things that don’t make economic sense (mass transit) are pursued for other reasons.
Our entire free-trade regime has got it completely fucking backwards. If you were to price in carbon, globalization would screech to a halt. It simply doesn’t make sense from a carbon perspective to ship parts from all over the globe, assemble them across the ocean, and then ship it back.
We need to break our addiction to consumerism. The best things in life (art, culture, friendship, love, community) are cheap and ultimately fulfilling for healthy, well-adjusted individuals.
Actually, economists are smarter than you’re thinking – they know that some values aren’t found directly in the price, like congestion, pollution, health impacts, etc. Those things are called “externalities”, and it’s well accepted that they should be internalized and accounted for. Of course, actually doing that is hard, because the people who would be affected by change will fight it. But, that’s not economics, that’s politics.
Water shipping is pretty cheap, and it still would be with a good, stiff carbon tax. OTOH, higher shipping costs would certainly cause some localization.
“Water shipping is pretty cheap”
Of course. With slave labour water shipping can always be cheap or cheaper than any other means of transportation. But I guess it is harder to volunteer to make bolts and nuts all day for $2 a day in the name of localization.
Water shipping has much lower fuel costs than trucks. The larger container ships are rather more efficient than rail.
Anonymous. You confuse economic with financial. Transit is economically powerful, ie it allows our most powerful economic invention to thrive and scale; cities, but it is difficult to structure to financially capture that value.
While I believe Fernando has a lot of useful things to say I often disagree with him. So far I have not gotten a good answer from him concerning his opinion in respect to how long we can continue to depend on fossil fuels – which if we ignore climate and environment basically tells us how long it must be before we have A BUILT OUT RENEWABLES INFRASTRUCTURE – or a huge new fleet of nukes – or we just give up and revert to a local subsistence lifestyle making a little iron with charcoal ( slight sarc and exaggeration ).
My own guess is that unless we keep the pedal to the metal on the renewables and efficiency and conservation fronts we are going to be in a hell of a mess collectively within a couple more decades.
But a renewables industry that can support only a minor fraction of the fossil fuel load can extend the fossil fuel supply by some years -and if the renewables contribution is a big one -say twenty five percent wind and solar above and beyond legacy hydro – then the fossil fuel supply will last quite a bit longer. Every year counts.
Every year moves the weights on the balance beam scale a little – a percent or two more renewables, a percent or two less fossil fuel.Nothing succeeds like success. The more successful renewables are , the faster they can grow.
Right now we are getting well over four percent of our domestic electricity from wind and solar in the USA. This means we are saving pretty close to four percent of the quantities of coal and natural gas we buy to generate electricity.This savings will be realized year after year for the life the renewables industry.
And while it is hard to quantify, the general rule is that when the sale of a commodity falls off , so does the price. The PRICE of the remaining quantities of coal and gas we buy to generate electricity as well as for all other uses is thus a little lower than it would be otherwise.
Now we hear all sorts of comments about the problem of storing renewable electrical energy but I have read tons of articles about how the UK imports gas all summer and puts it into storage for the high demand winter season.
So- there should not be a problem idling back gas fired generation for the purpose of conserving gas. Gas can be put into storage to be burnt when the wind is not blowing and clouds block the sun.
The owners of the gas plants are certainly entitled to reasonable compensation so as to enable them to have a viable business model of course.
But electrical utilities are going to have to face up to the same realities as the rest of us. I drive a compact car when I can.A pickup truck if the car will not suffice. And a large truck when the pickup truck will not giterdone.
The proper role in the future for gas fired generation is going to be in large part to just BE THERE to back up renewables. The role of renewables is going to be to conserve gas.
My personal opinion is that anybody who expects gas and oil to STAY CHEAP over the next two or three decades in the face of depletion and growing population is a hopelessly naive technocopian or maybe in plainer language just a fool.
My seat of the pants guess is that societies that have succeeded in reducing their dependency on fossil fuels to a truly substantial extent no later than mid century have a shot at pulling thru the resource and population bottle neck.
Those that don’t- well , they just don’t have a shot at all.
The Wonderful Wonderful Market and the Invincible Invisible Hand might save us – if we help them along by buying them some time. There can hardly be any question that renewable electricity is going to be cheaper at some point than fossil fuel electricity.
But the price signal needed to get the Market and the Hand into harness is not there and in my opinion will make its appearance way to late for a successful market driven transition.
Every year the prices plums, peaches , strawberries etc shoot up like a rocket on the local market as the local supply dries up at the end of the season.Every body knows about this, it happens year after year.
But when supplies of oil, coal, and gas come up short one of these days, the public and the markets are going to be taken by surprise. It will be too late then to manage a successful transition to renewables. The job is too big and it is going to take a LONG time.
The truly conservative approach is to proactively support renewables on the basis of the precautionary principle. We don’t maintain a fleet of aircraft carriers and the Marine Corp and a huge army because we NEED them but rather because we MIGHT need them.If the need arises there will not be time to build them from scratch.
But a renewables industry that can support only a minor fraction of the fossil fuel load can extend the fossil fuel supply by some years -and if the renewables contribution is a big one -say twenty five percent wind and solar above and beyond legacy hydro – then the fossil fuel supply will last quite a bit longer. Every year counts.
That’s why I can’t understand anyone who believes fossil fuels will become more expensive would be opposed to renewables.
Renewables don’t have to support BAU right now. And they may never support BAU (which some of us think is a good thing, because BAU isn’t so great).
But if renewables extend the amount of time we have fossil fuels available to us, that is a good thing if you believe fossil fuels have their value.
We don’t maintain a fleet of aircraft carriers and the Marine Corp and a huge army because we NEED them but rather because we MIGHT need them.If the need arises there will not be time to build them from scratch.
And I agree with this, too. No one who supports a strong military asks that military spending be judged by the standards of a profitable business. People who support a strong military think we need it and it is worth whatever cost we are asked to pay for it.
Renewables make sense at a strategic level because they advance our knowledge and preparation for a time when fossil fuels become less plentiful.
On the other hand it’s important to study which options are better, and that’s not being done historically. For example, there was a rush into ethanol mandates which seemed a bit misguided, and it doesn’t make sense to subsidize electric vehicles made for rich folk.
I think there’s a tendency for the green crowd to lack the hard nosed engineering and economic analysis know how needed to understand option viability and attractiveness. The global warming hysteria also clouds the minds of people who ought to know better (I’m thinking of Obama being led by the hand by a science advisor who clearly lacks the tools to advise the man on a very complex set of coupled problems).
For example, if we wish to focus on reducing energy consumption, the best bang for the buck may be to increase road taxes for vehicles, calibrating them to horsepower and fuel efficiency. Another sensible move is an add campaign to convince people to use energy saving lightbulbs, and to build smaller more compact housing.
Or they can ask local governments to build special roadways, overpasses and lanes for small lightweight vehicles.
http://www.nextgreencar.com/view-car/36521/KIA-Rio-1.1-CRDi-1-74hp-ISG-Diesel-Manual-6-speed/
That ought to be a winner in some cities.
Mac, I don’t give you an answer to “how long can we depend…” because the question is vague and misses the point. We will always have fossil fuels around. The question needs to be something like: how much time do we have before high energy prices cause negative per capita GDP growth? Or something like that. Ask Gail.
HI Fernando,
Only a fool would argue with what you have just said-27/05 300am.
(Except just maybe the part involving climate.That in my estimation at least is a pretty big exception.I do understand that it is POSSIBLE that there may not be a whole lot of increase in atmospheric temperatures for a very long time because it is POSSIBLE that the heat coming in is finding or will find its way into very deep sea waters and that the fossil fuel age will be OVER before it makes its way back to the surface again over many centuries. But in this case the precautionary principle still prevails in my thinking.So long as the things we do to reduce the odds of climate troubles are sensible – then those things are a a win win.
Corn based ethanol is one of the biggest boondoggle mistakes our government has made in many years. It’s the unholy bastard child resulting from the right wing cynically making whoopee at the expense of the uniformed , idealistic, naive mostly leftish green movement which laid down and enthusiastically spread its …. never mind this is no the place for that sort of language.
I AM a professionally trained FARMER -in the true sense of the word- meaning I have a solid science based grasp of the bigger environmental issues involved.Beyond that professional grasp I have never been a big time farmer and never had friends or family who operate on the millions of dollars per year business level. So I don’t have any problems telling it like it is. My salary has never depended on not understanding.
But I also do understand that people who talk about returning to the land and sustainable farming and farmers markets and heirloom seed and organic technique are as deluded as the people who think we can have a solar powered world for the asking.
WE ARE locked into industrial agriculture NOW like it or not with not a snowballs chance in hell of getting away from it due to the size of the population and the politics involved. Industrial agriculture, like fossil fuels, is a ticking time bomb that CANNOT be defused. It WILL explode at some future point barring a miracles on the population, resources, and technology fronts.
Nobody in any sort of official capacity except a tenured academic can actually afford to say what the future holds – but being economically self sufficient in the sense that saying it doesn’t affect my income or social or professional position I can say what the future holds – in general terms.
We are in biological overshoot based on fossil fuels and we are fucking up the environment in countless ways that are not repairable. In a nutshell the doomers such as our fine and gracious host Ron are right. A die off is inevitable barring some miracles in the very near future. But only a fool would ever expect the Secretary of Energy or Agriculture to admit these facts- which again barring miracles are perfectly obvious to any person well informed about the abcs of geology and biology.
Professionally trained farmers are generally well grounded in both these fields but don’t go around holding your breath expecting very many of them to tell you what they really think. They have no desire to be tossed out as social and professional lepers.
The ethanol mandate exists because right wing farmers and politicians cynically and dishonestly took advantage to hopefully make money off the environmental movement- and they made a HELL of a lot of money at the expense of the taxpayer and the environment and the consumer. If I were in a position to do so I would eliminate it instantly.
Corn based ethanol in this country is such a mistake I can’t even find words to describe it. Think of a bartender and a beer industry constantly keeping a customer drinking as much as possible. There is a very serious possibility that the customer will turn into a hopeless alcoholic. In this badly mixed metaphor the customer is the collective driver who would rather die than quit driving – and will insist on more and more ethanol when oil gets to be too expensive and the supply gets iffy.
Down that road lies environmental hell.People are already starving because we are feeding corn to automobiles.
Conservation and efficiency are most definitely and unquestionably by a factor of ten what we should be putting most of the focus on TODAY- that is where the big fast easy returns are – GAURANTEED returns. But politics is a tricky business and convincing the public and the energy dependent manufacturing industries to voluntarily change their ways is trickier and harder than herding cats.Harder than for an old fat guy like me to get a date with a young woman. Harder than diamond. So progress on that front is necessarily slow compared to the need for speed.
In politics if you can’t do what needs to be done you do what you can to STEER events in a direction you think is good for your society. I fully understand that our current system of supporting renewables thru subsidies is badly flawed. But this does not really matter in real terms. Just about EVERY goddamned thing we do is more or less badly flawed. Smokey the Bear was a COLOSSAL mistake. He made it impossible for foresters to manage fires and fire dangers sensibly.
Is a billion or ten billion spent subsidizing renewables wasted? In a sense yes. But nobody outside a few folks like the ones who hang out in forums such as this one worries about the waste involved in building another unneeded shopping center or seven hundred horsepower automobiles or skyscrapers with sealed windows or any other waste of energy and capital.
I simply do not know how long oil and gas will remain plentiful and freely available on world markets. There was plenty around when Hitler started WWII – but he didn’t have it within his borders and one of the primary reasons he went to war was to fix THAT particular problem.
We might as well waste a few bucks per capita per year to subsidize the growth of renewables. We waste many times as much on tobacco , overpriced beer, makeup, stylish clothing , pointless travel, mindless entertainment etc etc etc. None of these things are at all likely to result in any long term benefits.
The very modest amount – in comparison – that we spend on renewables may save our collective butt some extreme hardship.WILL not may in my own opinion.
Gail who? Tverberg ? She knows a thing or two. Nothing new to me or any other regular in a few forums such as this one unless she has added some new ideas to her presentations recently.
The “precautionary principle” is a hill of beans. I call it “I can’t prove anything but please be scared just in case I’m right”. Maybe I need to advocate a precautionary principle to stop all solar power subsidies until we are sure it won’t ruin the economy?
Mac, there’s another issue involved: I don’t see a scientific, engineering, economic, nor political basis for some of what I read. Rants against consumerism and advocacy of tossing economics out the window are fine in cartoon life, but they won’t get humanity anywhere.
You are an engineer who worked a lifetime in the petroleum industry.
ONCE MORE – how long do you think we can reasonably plan on maintaining our civilization on depleting fossil fuels?
I personally having examined the math in general terms – considering population and depletion as the two big variables and reserves as the big question – don’t think we can afford to wait around until one day the Saudis and the Russians announce for one reason or another that they are curtailing sales and raising prices sharply -while the Chinese announce that they have contracted Venezuelan production to go almost exclusively to their country or their ALLIES exclusively in exchange for manufactured goods of Chinese origin.
China if she continues to grow and grow more powerful will be able to play the empire game as well as the major western powers have played it in the past.
Engineers build in safety margins that may never be needed when they design bridges and skyscrapers and boilers. The earth quake may not come , the primary pressure relief valve may not fail.
In more general terms the precautionary principle is the safety margin that big picture systems thinkers take into account.
Engineers build in safety margins that may never be needed when they design bridges and skyscrapers and boilers. The earth quake may not come , the primary pressure relief valve may not fail.
Again, I agree.
Mac, I don’t think those who advocate the precautionary principle understand the difference between a pressure relief valve with a discharge into a flare system and a pressure vessel rated at 20 thousand psi. I think you are a bit out of your territory if you want me to take the global warming material I read and use it to justify spending several trillion $.
Fortunately, EVs are cheaper than ICEs, all told. Land-based wind power is cheaper than new coal (if you just scrub the basics, like sulfur and mercury),
This whole “fixing Climate Change will bankrupt us” meme is an enormous red herring.
I bet wind won’t have 25 % of the world energy market by 2525.
http://www.sciencedirect.com/science/article/pii/S0378775312014759
Excerpt from the abstract:
“Our model evaluated over 28 billion combinations of renewables and storage, each tested over 35,040 h (four years) of load and weather data. We find that the least cost solutions yield seemingly-excessive generation capacity—at times, almost three times the electricity needed to meet electrical load. This is because diverse renewable generation and the excess capacity together meet electric load with less storage, lowering total system cost. At 2030 technology costs and with excess electricity displacing natural gas, we find that the electric system can be powered 90%–99.9% of hours entirely on renewable electricity, at costs comparable to today’s—but only if we optimize the mix of generation and storage technologies.”
And from the conclusion:
“At 2008 technology costs, 30% of hours is the lowest-cost mix we evaluated. At expected 2030 technology costs, the cost minimum is 90% of hours met entirely by renewables. And 99.9% of hours, while not the cost-minimum, is lower in cost than today’s total cost of electricity.”
and
“We find that 90% of hours are covered most cost-effectively by a system that generates from renewables 180% the electrical energy needed by load, and 99.9% of hours are covered by generating almost 290% of need. Only 9e72 h of storage were required to cover 99.9% of hours of load over four years. So much excess generation of renewables is a new idea, but it is not problematic or inefficient, any more than it is problematic to build a thermal power plant requiring fuel input at 250% of the electrical output, as we do today.”
———————————–
This analysis is highly conservative: with even 50% overbuilding, there would be a general surplus of very cheap power. This would reduce the capital cost of their backup power due to the ability to use cheaper, less efficient generators.
And, of course:
“forecasts are helping power companies deal with one of the biggest challenges of wind power: its intermittency. Using small amounts of wind power is no problem for utilities. They are accustomed to dealing with variability—after all, demand for electricity changes from season to season, even from minute to minute. However, a utility that wants to use a lot of wind power needs backup power to protect against a sudden loss of wind. These backup plants, which typically burn fossil fuels, are expensive and dirty. But with more accurate forecasts, utilities can cut the amount of power that needs to be held in reserve, minimizing their role.
Before the forecasts were developed, Xcel Energy, which supplies much of Colorado’s power, ran ads opposing a proposal that it use renewable sources for a modest 10 percent of its power. It mailed flyers to its customers claiming that such a mandate would increase electricity costs by as much as $1.5 billion over 20 years.
But thanks in large part to the improved forecasts, Xcel, one of the country’s largest utilities, has made an about-face.
It has installed more wind power than any other U.S. utility and supports a mandate for utilities to get 30 percent of their energy from renewable sources, saying it can easily handle much more than that.
..forecasts from NCAR are already having a big effect. Last year, on a windy weekend when power demand was low, Xcel set a record: during one hour, 60 percent of its electricity for Colorado was coming from the wind. “That kind of wind penetration would have given dispatchers a heart attack a few years ago,” says Drake Bartlett, who heads renewable-energy integration for Xcel. Back then, he notes, they wouldn’t have known whether they might suddenly lose all that power. “Now we’re taking it in stride,” he says. “And that record is going to fall.””
http://www.technologyreview.com/featuredstory/526541/smart-wind-and-solar-power/
Nick, that shows low quality work can get published. It’s very common nowadays. About 50 % of what I read in science journals is pretty dumb. Some of it is dishonest.
Ugh, not Budischak et al again. That paper has a litany of problems.
1) They use the externality adjusted cost of electricity. That’s nice and all, but in the real world people pay the market price, and will continue to do so. I appreciate why they’re doing it, but it completely undermines the results of the study.
2) There are likely a few specific periods of extremely low wind and sun which are going to be the biggest determinants of which model systems managed to meet demand. Run their best models through a few more years of data and lets see if they still provide 90%+ of power or not.
3) Completely unfeasible levels of buildout, which seems to assume that any and all locations are suitable for renewables deployment.
4) The cost they calculate is to produce the electricity, but not to deliver it. They’re ignoring many system level costs. Interest and other costs appear to be ignored.
5) No transmission losses.
There’s a decent rebuttal to most of the 100% renewables within no time papers here:
http://www2.itif.org/2013-challenging-clean-energy-deployment-consensus.pdf
Even addressing every issue Sam raises doesn’t really effect Nick’s point. The 2008 renewable technology prices the paper is modeled on are significantly too high. They are at least double current 2015 prices for solar and battery storage. And, of course consumers do pay for externalities.
Sam,
They use the externality adjusted cost of electricity….it completely undermines the results of the study.
Is this a problem?
Not really. The purpose of the study is to show what a 99.9% renewable system would look like: especially that it can handle daily and seasonal variation. Ignoring external costs would invalidate the optimization: after all, the primary reason for renewables is to deal with external costs – if the model didn’t include them, it wouldn’t optimize for the result we care about.
But, isn’t that cost too high? No, for two reasons:
1st, countries like Germany have shown that power costs in this range are affordable: much of the impact is eliminated by the optimization towards greater efficiency that it encourages.
2nd, it just isn’t going to cost that much. Costs for PV and batteries have by 2015 already fallen to the 2030 values. This study is preliminary – engineering improvements, efficiencies of scale, and greater optimization will reduce these costs substantially.
3rd, of course – we already pay these costs!! This way, the correct person is paying the cost, instead of taxpayers or health insurers.
Run their best models through a few more years of data and lets see if they still provide 90%+ of power or not.
Always a good idea. That doesn’t really tell us there’s a problem with the study results.
Completely unfeasible levels of buildout, which seems to assume that any and all locations are suitable for renewables deployment.
Could you expand on that? They provide a table of maximum resource available in PJM’s territory.
The cost they calculate is to produce the electricity, but not to deliver it. They’re ignoring many system level costs. Interest and other costs appear to be ignored.
Actually, they include a 12% discount rate, which is very high. They also did not project any increase in fossil fuel prices; eliminated tax subsidies for renewables but not traditional generation; and did not project any technology breakthroughs for renewables; all of which raise the comparative cost of renewable power.
No transmission losses.
Here’s how they addressed that: “We simplify our grid model by assuming perfect transmission within PJM (sometimes called a “copper plate” assumption), and no transmission to adjacent grids. We also simplify by ignoring reserve requirements, within-hourly fluctuations and ramp rates; these would be easily covered with the amount of fast storage contemplated here. In addition, we assume no preloading of storage from fossil (based on forecasting) and no demand-side management. Adding transmission would raise the costs of the renewable systems calculated here, whereas using adjacent grids, demand management, and forecasting all would lower costs. We judge the latter factors substantially larger, and thus assert (without calculation) that the net effect of adding all these factors together would not raise the costs per kWh above those we calculate below.”
That seems plausible.
Hi again Fernando,
While I believe climate change is a real and extremely grave problem, the climate issue is not NECESSARY to my argument that we had best be getting ready for the time when fossil fuels will be too scarce and too expensive to depend on them to maintain our various national economies and the world economy.
My GUESS is that really serious troubles involving anthropogenically caused climate changes are decades away although I might be wrong and what I perceive as ” really serious troubles” may be far different from what others think of as ” really serious”.
The Four Horsemen are quite serious enough to worry the shit out of ME.
I am somewhat of an oddball character in that I have spent days and months on end sometimes just reading whatever interested me most at that particular time- I have read probably at least one serious history book per month for fifty years.
I still polish off at least one serious book every ten days or so – since I do not watch tv or play cards or hang out in bars or whatever it is that other people do when they sit down for the evening. I read.
I do not claim to be other than an armchair historian but I do think I can reasonably claim to have SOME expertise when it comes to understanding why wars happen.
I am willing to bet my last ten tons of stashed fertilizer against a stale donut that there will be HOT wars erupting right and left within the next twenty years – MOSTLY because of various countries running desperately short of critical resources.
I may be wrong . But the consequences of my being wrong are trivial compared to the consequences of my being right but our failing to act.
If we waste a billion here and a billion there on renewables it is no bigger deal than wasting the same billions on more shopping centers football stadiums giant screen tv sets etc etc. We waste billions every year trying to enforce unjust and unenforceable drug laws. We waste tens and hundreds of billions bailing out bankers who should be thrown in jail and personally bankrupted before the banks get a dime in bailouts.
You are an engineer- a man whose work is the APPLICATION of the non biological hard sciences.
My involves the APPLICATION of the biological sciences more so than the physical sciences such as chemistry.
Now here is something that DAMNED few engineers ever seem to understand.
MOTHER NATURE – by whatever name or description you wish to refer to her – is absolutely and totally unconcerned with the CONCEPT of waste in the sense we humans think of it.Nature is not even alive (never mind sentient) in the sense necessary to CARE about anything at all.
Nature is not about GOALS at all. To the extent nature is about ANYTHING clearly discernible it is about successful reproduction. DARWINIAN reproduction.
ONE acorn out of the millions a big oak drops over a century grows into another big oak. The rats that eat stored grain do not consider the grain they eat to be wasted.
We humans have become so successful we compete mostly with each other. The people who want us to pay two hundred bucks for a stylish haircut or ten bucks for a cup of coffee do not consider this waste. The people who build nuclear missiles which hopefully will never be used do not consider these missiles to be waste.
If resources are not expended on renewables they WILL BE expended on something else – most likely something with less potential long term utility for us naked apes.
In the cosmic scheme of things – if there IS such a thing as a cosmic scheme – it matters not a whit whit what happens to humanity and this planet. There must be a billion other planets in this galaxy alone with the potential to evolve life if it doesn’t arrive via stardust.
BUT it matters to ME – because I am a biological computer PROGRAMMED by evolution to care.
My program is telling me that diverting resources to renewables is likely to enhance the likelihood of my genes continuing to exist in generations to come.
If we waste a billion here and a billion there on renewables it is no bigger deal than wasting the same billions on more shopping centers football stadiums giant screen tv sets etc etc.
The football stadium is a great comparison. People may bitch about having to support renewable energy even if they don’t want it, but if they live in towns with stadiums, most likely some of their tax money is going to pay for those stadiums.
Fernando Leanme says:
I’m calling false equivalence on that one.
You are implying that old farmer mac is invoking
Pascal’s Wager:
However, while there may not exist any empirical evidence that God exists, I would argue there does exist considerble evidence that peak oil exists. The existence of God and the existence of peak oil are not equivalent.
We aren’t discussing peak oil (I think).
LOL!
Given the possibility that God actually does exist and assuming an infinite gain or loss associated with belief or unbelief in said God (as represented by an eternity in heaven or hell), a rational person should live as though God exists and seek to believe in God.
Meh, I was raised as a god little Catholic boy, taught to be an altar boy and when I was ‘Confirmed’ at 13 years of age, supposedly the age of reason. I actually started to reason and looking out at the world and the universe concluded that even if ‘God’ really did exist there was no evidence whatsoever that he, she or it, gave even half a shit about most humans. Therefore, there was no reason to suppose he would behave in a benevolent manner toward me or anyone else for that matter, once we departed this mortal coil. So, so much for Pascal’s wager >;-)
I give you Tim Minchin. ‘Thank You God’
https://goo.gl/oqFRn0
Church of God, The Utterly Indifferent
LOL! There was a fundamental flaw in Pascal’s original assumption that ‘GOD’ was actually all loving and benevolent. Looking out at the world should have convinced him that ‘GOD’ whoever or whatever he, she or it was, didn’t give half a shit about the vast majority of humans so why in God’s name would this omnipotent SOB give a flying fuck about any of us when we shuffled off our mortal coils?!
Let me give you: ‘Thank You God’ by Tim Minchin
https://goo.gl/oqFRn0
The “precautionary principle” is a hill of beans. I call it “I can’t prove anything but please be scared just in case I’m right”.
Really?! Ever hear of the Insurance Business?
Wingspread Conference on the Precautionary Principle
January 26, 1998
Last weekend at an historic gathering at Wingspread, headquarters of the Johnson Foundation, scientists, philosophers, lawyers and environmental activists, reached agreement on the necessity of the Precautionary Principle in public health and environmental decision-making. The key element of the principle is that it incites us to take anticipatory action in the absence of scientific certainty.
We believe existing environmental regulations and other decisions, particularly those based on risk assessment, have failed to protect adequately human health and the environment – the larger system of which humans are but a part.
We believe there is compelling evidence that damage to humans and the worldwide environment is of such magnitude and seriousness that new principles for conducting human activities are necessary.
While we realize that human activities may involve hazards, people must proceed more carefully than has been the case in recent history. Corporations, government entities, organizations, communities, scientists and other individuals must adopt a precautionary approach to all human endeavors.
Therefore, it is necessary to implement the Precautionary Principle: When an activity raises threats of harm to human health or the environment, precautionary measures should be taken even if some cause and effect relationships are not fully established scientifically.
In this context the proponent of an activity, rather than the public, should bear the burden of proof.
The process of applying the Precautionary Principle must be open, informed and democratic and must include potentially affected parties. It must also involve an examination of the full range of alternatives, including no action.
http://www.sehn.org/wing.html
Realistically, what they’re really doing is pushing back against the traditional freedom given to business to pollute and cause other environmental harm. Business traditionally has said, when confronted with evidence of risk: “give us *more* evidence”.
Basically, an assertion that the burden of proof should be on the public, rather than the business, and that the weight of evidence has to be overwhelming before the business has to stop it’s activities.
Yeah well, I still think it’s a worthless principle. Or I can apply it in mirror image to their ideas. My mirror precautionary principle would say we stay the course to make sure changes don’t throw us over the cliff. They can choose.
Yeah well, I still think it’s a worthless principle.
Given that you are supposedly an engineer, that is a rather extraordinary statement to make! Thank God you didn’t chose a career building nuclear power plants!
Indeed….while Fernando is not a structural engineer, I will use an analogy from that world- concepts from bridge building.
A bridge is a compromise: a balance between strength and flexibility. It has to carry the load, and it has to move with other forces: wind, tide, current, etc., and deal with entropic effects like rust. There is always a bit of guessing: you hope you have made the right compromises, but you don’t know for sure until the bridge has reached its anticipated lifespan or maintenance intervals.
This is how I see the precautionary principle in this context: like building a bridge without the use of past data, large scale tests, or models you can be certain of.
A prudent man would leave room for a Plan B .
An egomaniac would demand that people listen to him without consideration for the possibility of error.
Sigh. Let me quote myself all over again to see if you get it “Mac, I don’t think those who advocate the precautionary principle understand the difference between a pressure relief valve with a discharge into a flare system and a pressure vessel rated at 20 thousand psi. I think you are a bit out of your territory if you want me to take the global warming material I read and use it to justify spending several trillion $.”.
Sometimes I wonder if we live on the same planet. Your “safety criteria” appear to be out of a religious textbook.
It is absolutely not a worthless principle. It restores balance to decision making, moving back from the ‘anything goes, if the market doesn’t like it they can vote with their wallets and if someone asserts they are hurt by us they can sue us.’ (lots of luck David v. Goliath!).
You want us to call you ‘Fernando Spock’. No way, Fernando…Spock would definitely make appropriate (not endless, but appropriate) effort to find the evidence, run experiments if possible, analyze the factors, and come to the most logical decision possible in a reasonable time. And he would change his mind as he discovered new facts. You might call that commie pinko thinking, but I think not. With great power comes great responsibility. The history of business doing the right thing for the greater good is not flattering to business. Note carefully that I did NOT say ‘business is bad’, just as I don’t buy off on the ‘government is bad’ meme…both are made of us, the people. All human institutions benefit from careful scientific and moral deliberation, openness, transparency, and accountability…and they need to conduct full-cost accounting, including ‘off-label’ effects/externalities. The unfettered market, without any government oversight and laws, would not be able to do this.
well said
I think it’s worthless as stated by Mac.
Go develop a sound risk analysis for the options you think exist. Then show me your preferred path forward delivers the soundest solutions.
I coordinated the work of a team developing designs for integrated arctic offshore platforms, and the associated tanker transport systems. Most of you don’t have the foggiest idea of what trailblazing in that area involves when it comes to risk analysis.
The thing is, we can decide not to build the platform and tankers. But we can’t get off this planet. So I need a fully developed risk analysis for the options. If you don’t show me the meat in the burguer then you got nothing, as far as I’m concerned.
surely you have done some sort of process safety management? before the plant was turned on?
Ezry, near the end of my career I was responsible for signing off on the competence of engineers performing process safety management. I was the fall guy if something went wrong. The system was rigged to have the senior management bypassed and drop the shoe on me. But they had to stop doing things or shut down if I said so. Problem was they kept badgering for dispensations, exceptions, rule changes, or ignored warnings. It’s a very tense set up. I watched the Shell Arctic adventure from a distance (I was consulting in Alaska at the time), and it was a perfect example of management bruising the technical side because the people in charge of assurance were not empowered. It cost them a huge amount of money.
If I can turn my old leaky 1950 house into a warm home using only 1/4 of the fuel it used to need to heat and cool it, then most places can be highly improved in efficiency with some thought, effort and a little money. Payback is less than two years if the house is inefficient to start, which many are.
Boomer II – Do you even understand the concept of overshoot? Clearly not.
Boomer II – Do you even understand the concept of overshoot? Clearly not.
I have said all along that I expect there will be a decrease in human population. But I also believe there will likely be a stabilization at some point. I don’t expect human life to disappear entirely unless most of all life on the planet disappears. If that happens, then what happens to humans will be insignificant in the greater scheme of things.
I expect hard times ahead but not a total life collapse.
Hi Boomer,
I am confident you understand the score – but a lot of other people have not thought it all the way through to the end.
If we want civilization as we know it to survive – if we want to avoid the Four Horsemen of the Apocalypse riding long and hard within the easily foreseeable future on world wide scale – then the CONTINUATION of business as usual is NECESSARY for a good long while yet.
Any real hope of transitioning to a renewables based economy depends on our doing it under business as usual conditions as much or more than any thing else.
Once things get really hard and MOST people are worrying themselves sick about how they are going to live the next month or the next year – or even the next week- it will be TOO LATE. Such resources as remain will not likely be expended on long term investments such as energy efficiency or wind and solar farms.
Having said this much there is a significant possibility – maybe even a likelihood – that a society such as the US might- MIGHT- realize the gravity of the problem once aroused by a few peak resource bricks upside the head – and go on a wartime type footing in order to force the transition.
Whether this will work depends on a lot of factors- the biggest one probably being whether we get started soon enough if we wind up going that route.
Austerity measures free up enormous material and manpower resources when these resources are needed to fight wars.
If we have leaders who understand the fossil fuel depletion problem- and they can get the country behind them – we could put the resources we expend on unneeded automobiles , sports stadiums, air travel , etc etc etc to use building out renewables and on conservation and efficiency.
This may sound VERY strange coming from a fellow who calls himself a conservative – but if I am right, then this is our best and safest and ONLY route to a safe reasonably comfortable future.
I ain’t no stinking republican. Nor am I a starry eyed democrat. I am just a realist.
Rich people will not be rich any more in the true sense of modern lifestyles once fossil fuels are in really short supply. The roads they intend to drive on will not be maintained. The planes they intend to fly on will not fly – because there will not be enough customers to make commercial air travel work. They won’t be eating tropical fruits mid winter unless they live in the tropics. Most of what makes rich people rich these days is as dependent on fossil fuels as the job of the cashier at a convenience store at the corner of two busy highways.
They will have plenty of servants – the ones of them who are smart enough to organize their affairs properly. Not many will do so, in percentage terms.
Any real hope of transitioning to a renewables based economy depends on our doing it under business as usual conditions as much or more than any thing else.
What I mean by BAU is the status quo: our economy continues to operate as if fossil fuels will last forever.
I don’t consider it BAU if we begin the transition to prepare for a decline in fossil fuels.
Right now DC is influenced by declining industries. That, to me, is BAU.
Wanting a change in BAU doesn’t mean I want a total economic collapse.
old farmer mac said:
I don’t find it “VERY strange” at all.
Some of the very best analysis on the peak oil problem comes from conservatives:
• Kevin Phillips, Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism
• John Gray, Al Qaeda and What It Means to Be Modern
• Andrew J. Bacevich, The Limits of Power: The End of American Exceptionalism
There are indeed good conservative analyses of the oncoming devastation from oil scarcity.
Those aren’t among them.
Kevin Philips was way better than a conservative.
Ron: Ecuador’s oil production will average about 542 thousand bopd in May 2015. The source of the information is the Petroleum Regulation and Control Agency. They have a daily tally.
In many nations it’s customary to close daily production at a given hour. They gauge tanks, measure water cut in the tanks, and estimate stock changes. The fields are equipped with LACT units at custody transfer points. These procedures are usually very tight and subject to spot audits by ministry officials. Thus the daily data seldom deviates much from the final monthly close out ( changes can be made if for example the water cut is changed after water cut samples are re analyzed).
Ecuador has a very straightforward system, and I consulted for them a few years ago. At that time the oil measurement system was adequate, well calibrated, and well audited.
I have the dailies for May, and they show a gradual decline, which is to be expected, they produce a lot of water, and it’s possible the well repair activities are curtailed because prices don’t justify pump repairs in high water cut wells.
If you want to I can give you the estimated production for the month for some of these countries about one week before the end of the month.
China oil imports by country
Venezuela is providing something like 400 thousand barrels per day to China.
Chinese imports about 6.5 mbpd.
Angola 14% so 910K bpd. Angola oil production weakening . . . so China printed up a few billion dollars and “loaned” it to Angola to fund oil production support. So did China fund that out of tax revenues, which surely for such an explosive country must exceed expenditures?
Nope. China runs an annual budget deficit (WHY!?!?!?)
http://economy.money.cnn.com/2014/01/15/china-budget/
and borrows it, you guessed it, from the PBOC.
When you HAVE to have oil, you’ll print up the money to get it.
“When you HAVE to have oil, you’ll print up the money to get it.”
Yes. The only discussions on these G-20 gathering is “Who is going to print and How much?” And the only problem with so called “indebted members of certain trading blocks” like PIGS is that they want their portion of printed oil. But due oil scarcity all they are getting is the message “You got to eat less”.
The other less fortunate countries already “eat less” since they can’t print or wage a wars.
That is world economy in a nutshell.
Printing usually devalues your money. It doesn’t help if the seller wants someone else’s money – or other benefits – more.
What does devalue mean when all the other printers are printing too.
I have seen very little discussion of The Fractional Reserve Banking System and the importance of velocity. Currently in the US most money is not printed, it just appears out of thin air. And when velocity slows it can disappear into money heaven, resulting in deflation. The US government prefers mild inflation – about 2 % – which effectively works as a hidden tax. Hyperinflation must be avoided. http://www.learningmarkets.com/understanding-the-fractional-reserve-banking-system/
Oh, I think another message is enroute from those PIGS.
Expunge our debt.
After all, you just printed it from thin air to begin with.
The only really core reason not to do this is the degree to which it would rip the normalcy narrative and pretense to shreds.
But eventually that’s a viable scenario . . . “okay JUST THIS ONE TIME we’ll expunge the debt.”
Hey Watcher,
Just opened the mail box and got a “greeting card” from home insurance. They are increasing my premiums as they phrase it “quite a bit” LOL LOL LOL I love it. 25%!!! Can you imagine? Hey and they even wrote that piece on the note by handwriting I guess as for me to feel that they “CARE” 🙂 LOL LOL
Ha-ha Love it. Hey what should I reply to them: something like this: “But how come? Oil went down 50% since June of the last year and that should trigger price cuts in most of the “stuff”!!!” or something like this: “But men in suite and tie with a bear on TeVee said that inflation is very low 1%-2%” ha-ha LOL
The whole financial system is upside -down. What do you do? Just “smile” and increase the “debt” limit. LOL
Yes, they do. They are mostly repayments for the Chinese loans. Venezuelan ports can’t load the really large tankers used for the China trade, so they have to transfer to the Netherland Antilles. As far as I know they haven’t learned how to transfer oil between tankers in the open ocean.
Reports out this morning of ISIS funding nuclear weapons buys (probably from oil revs).
Pakistan would be the likely vendor. Typical Pakistan weapon yield about 30 kilotons. That’s roughly 2X Hiroshima.
Blast radius maybe 2 miles.
Mountrail county (surely US oil fields would be better tactical targets than a city, maybe, shrug), is 44 miles X 44 miles. Blast radius is not going to shut down too many wells, but certainly some. I imagine the best target would be the train/truck depot, though those would be easy to rebuild in some less efficient spot.
OTOH there is the Houston/Louisiana import complex. Probably impact more bpd that way.
So oil is providing the funding to get that big bomb?
Don’t they, whoever they are, have anything better to do? Like go to work or be a good Samaritan, something a bit more civilized?
Why would they want to have some measly nuclear bomb when they can have it all, missile sites, B-52’s, fighter jets, space satellites, the whole enchilada?
What would it take to overpower an air force base on American soil, gain control of the missile sites and all the nuclear weapons?
Launch the missiles, load the B-52’s with nuclear ordnance and pepper the San Andreas fault with nuclear detonations from the air force base, Warren AFB in Wyoming, do it until the fault fails then half of California teeters and falls into the Pacific.
Nuke Cheyenne, Wyoming with an inexpensive nuclear bomb from Pakistan, take control of the the air force base, take command of the entire US Air Force and nuke the US with its own nukes.
Nuke Washington, District of Criminals, gain control of the Pentagon; just go plain hog wild.
Might have some trouble with the army trying to get in the way, but it might work.
Detroit might look better after it is nuked, so nuke it all.
Or… just go about your daily business, go home, sink into the couch, watch ice hockey and drink beer.
Japan will still get its oil from Saudi Arabia, China will still be peddling cash to buy oil and the US will still remain purdy much intact with a powerful military with which the human condition continues as such.
Back to Peak Oil.
Don’t they, whoever they are, have anything better to do? Like go to work or be a good Samaritan, something a bit more civilized?
A bit left wingy a perspective. “The best thing for them to do is focus their money and power on improving their people’s prospects” — which never quite finishes the sentence, which is “in such a way that they accept long term subordination”.
What have they got better to do? Pursue victory. Victory over people in a superior position to them. Nothing is better than that — though if you’re in that superior position you claim many things are better.
If you were they and refused to accept perpetual subordination and desired to change that configuration just as fast as possible, would you not buy nukes, too?
This is the worst news to me that I’ve heard this year so far if it is true.
If we had to rely completely on renewables, how far are we in overshoot? Populationmatters.org says we have 5,454,000,000 more people than the earth can support if we had to rely completely on renewables. And that is if we allow zero territory and resources for the wild creatures of this earth:
It also assumes that 100% of biocapacity is allocated to humans, since there is no agreed figure for the necessary share needed to conserve biodiversity.
Overshoot Index
If we had to rely completely on renewables, how far are we in overshoot?
I think the question might be better put, “How many more people might we save if we use renewables rather than just using up all fossil fuels and calling it quits?”
It’s never been about saving everyone. It’s about saving some people.
Sounds good. Rephrase it better: It’s about killing people you don’t want to save.
It’s about killing people you don’t want to save.
Not necessarily, though that too. (Wars and shooting unarmed people because they “look” dangerous are about killing people you don’t want to save.)
But in other cases, it’s just about letting them die rather than doing more to save them. There are going to be food crises and natural disasters and diseases that will take people out and it’s likely that unaffected people may say, “We’re sorry, but there’s nothing we can do to help.”
Sorry nothing we can do to help . . . our blockade of your oil imports is autonomous and we can’t get removal of it through Congress because when we imposed it we declared it to be nothing more than new sanctions and subjected it to Congressional approval. It wasn’t a purely executive military action.
Ron,
That’s not quite what they’re saying. Here’s a quote:
“It would take 1.5 Earths to produce the resources necessary to support humanity’s current Ecological Footprint. This global overshoot means, for example, that we are cutting timber more quickly than trees regrow and releasing CO2 faster than nature can sequester it.
Growth in the Ecological Footprint is largely attributable to the carbon Footprint, which has increased to comprise 53 percent of our Footprint in 2010 from 36 percent in 1961.”
If our carbon footprint is 53% of our overall footprint of 1.5 Earths, then if you subtract the 53% you’re left with 47% of 1.5, which is .71 Earths…which is lower than overall capacity.
http://www.footprintnetwork.org/en/index.php/GFN/page/living_planet_report2/
Agreed – it says we need 5 billion more hectares or 2 billion fewer people (not that we have 5 billion too many people).
How did you calculate that?
Row heading “World”, column heading “Overshoot pop’n (m)” = 2097.8, column heading “Gross Overshoot ha (m)” = 5454. In the preamble it states “Ecological footprint and biocapacity are measured in global hectares (hectares with world average biological productivity) per person”.
Yeah, I think you are right. In that case I very much disagree with them. I can well remember when the world had 2 billion fewer people and we were deep into overshoot then. That would have been about 1990 or so. We had already started destroying the biosphere then.
So what you’re saying is that if we were to reduce our footprint to below carrying capacity then our footprint would be below carrying capacity?
That is sort of what I was trying to get at with my comment the other day.
The only thing that will reduce population significantly is a decline in FFs but if we compensate for the decline by adding “renewables” at a comparable rate the only thing we accomplish is greater overshoot.
So I ask Nick and some of the other technocopians, just what exactly is the problem you are solving for with all the EVs and “renewables”?
So, you’re suggesting that we should do nothing, in the hope that the maximum number of people die, as quickly as possible?
Nick, the greater the population the greater will be the misery when the dieoff does come. And it will come.
Wow. I guess Jef’s (and your answer) is yes.
Wow.
———————————————————
Well, the next question is: is Jef clear that “overshoot” as defined by Populationmatters.org, above, is primarily due to our use of Fossil Fuels, and that eliminating FF would put our Ecological Footprint below the threshold of Overshoot?
I’m not asking you, Ron, as you’ve already said many times that you feel that our mass extinctions of other species is the most important reason to expect civilization to collapse.
But, that’s not what Populationmatters.org (and many other organizations that calculate such “footprint” numbers) is saying. Is Jef clear on that?
I’m not asking you, Ron, as you’ve already said many times that you feel that our mass extinctions of other species is the most important reason to expect civilization to collapse.
Really now? Owing to the fact that I have never said any such thing, I wonder how you got that idea. Yes, I have said, many times, that we are driving most other species into extinction. But I have never said that is the reason civilization as we know it will collapse.
I have stated, many times, that the decline of fossil fuels is one of the reasons we will collapse. But there are other reason. But driving other megafuna is something we will do but is not one of the reasons our civilization will collapse. The depletion of the earth’s resources, of which fossil fuels are just one, is the primary reason we will collapse. We are destroying the ocean fisheries. We are destroying the topsoil. We are draining dry almost every fossil aquifer in the world and draining those that are renewable many times faster than they can be renewed. Rivers are drying up. Lakes and seas are going dry. And I could go on and on.
Yes we are driving most of the wild species into extinction, especially the larger ones. But that is not one of the reasons civilization as we know it will soon collapse.
We’ve had this conversation before, and it ended with a discussion of extinctions. I guess it ended too soon, and we didn’t get to what you think is most important.
We are destroying the ocean fisheries. We are destroying the topsoil. We are draining dry almost every fossil aquifer in the world and draining those that are renewable many times faster than they can be renewed. Rivers are drying up. Lakes and seas are going dry
So, you’re most concerned about food-related resources: fisheries; top soil; irrigation water. Is that a fair summary?
Food is certainly the most important of resources because that’s what keeps us alive:
From Energy and Human Evolution:
The Mechanisms Of Collapse
Operative mechanisms in the collapse of the human population will be starvation, social strife, and disease. These major disasters were recognized long before Malthus and have been represented in western culture as horsemen of the apocalypse. They are all consequences of scarce resources and dense population.
Starvation will be a direct outcome of the depletion of energy resources. Today’s dense population is dependent for its food supply on mechanized agriculture and efficient transportation. Energy is used to manufacture and operate farm equipment, and energy is used to take food to market. As less efficient energy resources come to be used, food will grow more expensive and the circle of privileged consumers to whom an adequate supply is available will continue to shrink.
Starvation will be a direct outcome of the depletion of energy resources.
Well, let’s try to clarify what’s most important: your primary concern about food supply is based on depletion of fossil fuels?
Nick – No I am not proposing an accelerated dieoff but you sure are and you don’t even know it.
What I propose is facing reality, doing a thorough assesment of the situation, and powering-down accordingly. No fantasy, hopeiness, no techno-whishes, just the facts mam.
What I propose is facing reality, doing a thorough assesment of the situation, and powering-down accordingly.
I definitely believe in encouraging less consumption. But I differ from you in that I think renewables can be part of that process.
Keep in mind that renewables involve such basic concepts as designing your house to use passive solar. No technology needed.
Renewables involve water mills, which have been around a long time.
Renewables involve sailing ships.
And so on.
Nick, the greater the population the greater will be the misery when the dieoff does come. And it will come.
So you think everyone will die and there’s no point in prolonging it? Shall we get the cyanide ready so lots of people can have a quick death?
Nick–
It is a predicament.
Haber doubled the population of Earth (of homo sapiens).
http://people.idsia.ch/~juergen/haberbosch.html
“Their Haber-Bosch process has often been called the most important invention of the 20th century (e.g., V. Smil, Nature 29(415), 1999) as it “detonated the population explosion,” driving the world’s population from 1.6 billion in 1900 to almost 8 billion today.”
Norman Borlaug and the “Green Revolution” helped, but pales when compared to Haber.
It is a predicament.
It’s a problem, but not a predicament. Fossil fuels can be used to create fertilizer, but so can H2 from renewable power.
It’s a perfect use for cheap surplus power, when wind and solar output is high and demand is low.
The only thing that will reduce population significantly is a decline in FFs but if we compensate for the decline by adding “renewables” at a comparable rate the only thing we accomplish is greater overshoot.
So you don’t want renewables because they might keep a portion of the population alive?
So I ask Nick and some of the other technocopians, just what exactly is the problem you are solving for with all the EVs and “renewables”?
EVs, and Renewables reduce costs, pollution, and are more sustainable.
https://www.youtube.com/watch?v=v2coC2VpyeY
It’s a Jevons Paradox. http://en.wikipedia.org/wiki/Jevons_paradox
http://co2now.org/ will show you how successful it has been.
Emissions stabilized.
http://www.climatecentral.org/news/co2-emissions-stabilized-in-2014-18777
You understand that stabilized here means that the amount emitted didn’t increase from last year, not that the amount in the atmosphere didn’t increase. At this rate we are still on course for a 4+ degrees Celsius rise by the end of the century, even without taking full account of all positive feed backs – see India, Houston, Spain, Philippines, Alberta etc. in May 2015 for a small foretaste of what that might look like, except all day, every day over the whole world. Peak emissions should imply peak fossil fuel use (except for a bit of change between coal and gas) and that hasn’t happened, so I doubt the final figures are going to look quite the same.
China’s Coal Use May Have Peaked Years Ahead Of Schedule
As we reported last year, the Chinese government said in November it would cap coal use by 2020. That announcement came quickly after the breakthrough CO2 deal Chinese President Xi Jinping announced with Obama in November that “China intends to achieve the peaking of CO2 emissions around 2030 and to make best efforts to peak early.”
http://thinkprogress.org/climate/2015/05/27/3662681/chinas-coal-use-peaked/
Thanks, Obama
Shortly there after it was exposed that China simply has stopped accounting for hundreds possibly thousands of small coal operations in order to meet those benchmarks. The article, which I am still looking for also mentioned that there are an unknown number of small community coal operations that have never been monitored or accounted not to mention the tens of millions who burn coal directly for cooking and heat which increases in times of economic strife.
Jack Alpert on overshoot, “degrowth”, “energy slaves”, conflict, “civilization death spiral”, etc.:
http://www.skil.org/
Hey BC, thanks for the link. This is one set of videos that I have not seen or even heard of before. I just finished watching the first one, 10 minutes. This is one guy that flat out does not believe renewables are going to save our ass.
The link didn’t work for me.
charlie
Sorry for the off-topic post, but I have a question that the guys over on PeakOil dot com can’t (or won’t) answer.
My question relates to this link: http://www.spr.doe.gov/dir/dir.html
We see that according to the SPR, the SPR is currently nearly full — 651 million barrels stored.
But my question is, what are the 1400, 1797 and 1000 million barrel oil movements in May, June and July all about?
If the SPR only holds 750 million barrels, why is the SPR moving around all that rather large quantity of additional oil?
Does anyone know?
Northwest Resident is referring to the below chart:
I haven’t a clue as to what it is all about. That is an awful lot of oil. The total fill barrels, whatever that means, for all three months comes to six times the total of all SPR storage barrels.
One of the posters over on peakoil.com suggest it is a spreadsheet error, that the numbers posted for May, June and July were perhaps intended to be 1.4, 1.797 and 1.0 million barrels of oil instead of the billions posted. That would explain it. Maybe.
Or maybe it’s what they expect to add as fill during the month. In barrels, not millions. As to why they have to add? Maybe they are doing a well work over and lost crude, or maybe it’s to make up for shrinkage .
http://portal.ransquawk.com/headlines/venezuela-and-russia-agreed-to-usd-14bln-in-oil-deals-with-investments-to-double-output-according-to-president-maduro-27-05-2015
Wow, those sanctions are just strangling, aren’t they?
The U.S. Sanctions are against seven individuals who are serial human rights abusers. The USA denied them entry visas and froze their bank accounts. There are no sanctions against Venezuela the country.
The seven sanctioned induviduals aren’t that important. But the move by Obama was really smart. It promote dozens of regime collaborators and mid level government officials to turn information over and become state witness for us investigations. These are confidential and are being carried out by several U.S. Attorneys. Most of the charges will involve drug trade, money laundering, racketeering, plus some cases of kidnap, murder, etc. The main target is Diosdado Cabello, Maduro’s number two, who runs a mafia known as “Cartel de Los Soles”.
The Russian investment deals are vaporware. They sign lots of memos and agreements but there’s no progress in projects to build large pipelines, steam injection or upgrader plants. And this means nothing much can happen. Once I hear they started the engineering I’ll let you know. It will take them 5 to 7 years to complete a project once it starts for real, so let’s wait to see what happens in Venezuela.
The sanctions in question are those on Russia.
Fernando Leanme says:
The United States — in its bid to be the world’s policeman — is accusing the Maduro regime of drug trade and money laundering?
Unbelievable!
Really, you couldn’t make this stuff up.
• Bloomberg: “HSBC Judge Approves $1.9B Drug-Money Laundering Accord”
• The Guardian: “How a big US bank laundered billions from Mexico’s murderous drug gangs”
• PBS: “The Salinas-Citibank Affair”
• Bloomberg: “FBI Says Cartel Used Bank of America to Launder Money”
• Huffington Post: “Banks Launder Billions of Illegal Cartel Money While Snubbing Legal Marijuana Businesses”
The USA government isn’t accusing anybody yet. Federal investigators are investigating Venezuelan officials. There will be sealed indictments. When said officials step where the law can grab them they will be arrested. The pressure on the different drug and money laundering gangs within the Venezuelan regime is ratcheting up. Meanwhile the economy keeps going into hyperinflation and recession, and Maduro keeps making his typical animal sounds on national TV.
Fernando Leanme says:
So let me get this straight. “Federal investigators are investigating Venezuelan officials,” but you already know “There will be sealed indictments”?
That’s what I thought, but it’s nice that you confirmed it. The verdict is already in, and all that’s left to do is to conduct a show trial in a kangaroo court.
Meanwhile, Anglo-American bankers who launder untold billions of narco dollars are given a little slap on the wrist.
Yes, I know there will be sealed indictments. The key domino was Leamzy Salazar, who used to work in Diosado’s security detail. Salazar skipped and turned witness a few months ago. Once the collaborators who are located outside Venezuela realized they were exposed they contacted the U.S. Federal attorney offices. These are mostly bankers who helped with money laundering.
There’s a massive amount of information in Spanish about what’s going on, but it gets very little coverage in the English media.
I also know the Obama administration sent a high level diplomat to visit Maduro a few days ago. Maduro was given a limited amount of information about what the USA state department knows, and was briefed on the U.S. Legal and justice system, which isn’t necessarily guided by Obama, Kerry, etc. The visitor suggested to Maduro he should clean house and start by arresting Diosdado. I understand Raul Castro, who seems to be guiding Maduro, wants the Venezuelan government out of the drug business, but Diosdado has a lot of power within the military structure in Venezuela. So they are in a standoff. I think the Cubans may get tired and have Diosdado murdered, but that guy is protecting himself very well.
I’ve been busy the last two weeks, but I’m going to try to write a post about Rosnefts business in Venezuela. The problem I have is the requirement to write only open source material and keep the confidential information in my head. I think I can write a fairly decent two page post with an overview.
Here´s the post about Venezuela, Rosneft, the heavy oil….
http://21stcenturysocialcritic.blogspot.com.es/2015/05/venezuelas-heavy-oil-scam.html
Hi Glen,
It is an unfortunate truth in the USA these days that our big banks are not only too big to fail but too big to actually even seriously prosecute them.
I know tons of small business men who cut little corners here and there in violation of the rules – knowing that if they get caught and prosecuted they will be paying a small fine – which is no more to them than just another small tax bill.
A hundred million bucks is pocket change to a big bank, beer and cigarette money. Just another business expense, the same way it is just another minor expense to me if I get caught without a particular tax sticker on my truck across the nearby state line.The sticker costs a great deal annually , I seldom cross the line, the fines over the years have totaled up to much less than the stickers.My conscience is NOT bothering me. I AM playing by the rules -If I get caught I am polite and sign the ticket and mail in the fine.
I can’t remember any major executive of any large bank being JAILED in recent times in this country for BANKING crimes.Surely there must be at least ONE , but my memory is not what it used to be.
All the major federal agencies are so thoroughly stocked and staffed with banking people that the banks are the defacto owners of these same agencies.
Our government is not exactly RIDDLED with corruption from end to end and corner to corner but we do have a spreading cancer in our banking system. I doubt anything will be done about it any time soon if ever. The consequences of this corruption could eventually include the fall of our own government.
But compared to OUR government- It is perfectly obvious to anybody who takes an objective look at Venezuela that the government there is BEYOND HOPE.
Mismanagement may be a bigger problem than corruption -I am not on the scene and don’t pretend to know but the level of corruption is breathtaking to say the least.
Anything that hastens the end of the regime in power there is almost for sure going to be a net plus for the people of that country.
I am not an Obama fan but the administration is actually doing ok considering the problems it inherited .Obama is not a commie intent on destroying the country from within.
The first and foremost task is keeping the country safe and secure long term and Obama is actually making a serious effort to do so according to the rules of the game of international power politics.His administration is also doing FAR more to support the growth of renewable energy and to preserve the environment than a republican administration would be doing.
If it weren’t for the fact that we need bananas we wouldn’t be messing around with banana republic countries to such an extent. If we didn’t need oil we wouldn’t be fighting very many wars in Sand Country. When asked why he robbed banks some famous gangster replied with a grin ,” Because that’s where the money is at.”
Ya don’t want to take TOO close a look at the making of sausages ( We make our own from scratch starting with a hand raised live hog, take my word on this , lol. ) or laws or international policies -else you may upchuck your last meal.
Now as far as the USA playing world cop- I am not too happy about that myself.
But if we do not – who will replace us in the power vacuum that will exist if we give it up?I SERIOUSLY doubt the next self appointed world cop will do any better.
If there is going to be a puppet regime in Venezuela I am of the OPINION that the people there will be better off if it is a YANKEE puppet rather than a CHINESE puppet. Of course being a Yankee myself , southern variety, I am prejudiced in this respect.
So far as I can see truly decent honest and ethical governments are so rare as to be easily numbered on the fingers, with none of them in control of a country big enough to play the cop- even if willing to do so.
Bottom line – We live in a Darwinian world. It has been getting a bit more civilized on average over the decades and centuries though and maybe we will eventually all be living under more or less decent governments.
But I am not holding my breath.
old farmer mac,
All I am hearing from you is cognitive dissonance.
You say it’s a “Darwinian world,” and by that it’s pretty clear you mean a Darwinian world in Dawkins’ “red in tooth and claw” sense of the word.
But then, almost in the same breath, you turn right around and imply the United States’ motives in Venezuela are altruistic, that they’re other-serving, that they’re to serve the people of Venezuela.
“The first and foremost task is keeping the country safe and secure long term and Obama is actually making a serious effort to do so ,” you tell us. “Anything that hastens the end of the regime in power there is almost for sure going to be a net plus for the people of that country.”
You conclude with “If there is going to be a puppet regime in Venezuela I am of the OPINION that the people there will be better off if it is a YANKEE puppet rather than a CHINESE puppet.”
So let me get this straight, we live in a Darwinian world, red in tooth and claw, with the exception of the United States, which of course has to go down to Venezuela and clean up its corrupt government in order to help the Venezuelan people?
Probably no one has ever said it more eloquently than Edward W. Said in Orientalism:
Even with all its terribe failings and its appalling dictator (who was partly created by U.S. policy two decades ago), were Iraq to have been the world’s largest exporter of bananas or oranges, surely there would have been no war, no hysteria over mysteriously vanished weapons of mass destruction, no transporting of an enormous army, navy, and air force 7000 miles away to destroy a country scarcely known even to the educated American, al in the name of “freedom”
You have a lot to learn about Venezuela. Why don’t you take a vacation and go visit it? Stay at the Marriott and make sure you have a secure car service with two bodyguards.
Fernando,
Why?
Why should I care what happens in Venezuela? Isn’t that the Venezuelans’ problem?
Maybe the United States should stay home and tend to its own house before it goes sticking its nose into other people’s business.
Or do you buy into what Obama is peddling when he declared Venezuela is a “national security threat” to the United States?
As Cristina Fernández noted in her speech to the Summit of the Americas last month, when she heard the news that Obama had declared Venezuela a “national security threat” to the United States she broke out in laughter.
To think that Venezuela, or for that matter any country in South America, could represent a threat to the national security of the United States “is ridiculous” she added.
“How could any country on our continent threaten the greatest military, economic, financial and scientific power in the world,” she continued, “with a military budget of $640 billion a year, when for example Venezuela has a military budget of only a little more than $2 billion a year?”
The threat exists because Venezuelan officials are engaged in the drug trade. The declaration was needed to allow the government to deny visas and freeze the seven individuals’ bank account. I think you just don’t know much about Venezuela, and the ignorance shows.
Hi Glen again,
You are twisting my words into something far different from what I actually said and you know it as well as I do.
I made no mention of altruism.
I do not believe that our government is much interested in altruism unless it costs damned little or nothing.
( Some particular agencies within the larger government are basically in the altruism business of course. We do offer food aid , medical training and supplies etc to some extent. )
Our government is primarily interested in the welfare of this country, the safety of this country, the prosperity of this country .I might even go so far as to say with some justification it is mostly interested in the welfare safety prosperity of the top one percent who seem to mostly control who gets into office and top management slots..
Is that clear enough for you? Does that sound like cognitive dissonance to you ?
Now there are many things that can happen in a place such as Venezuela. Some better , some worse.
I am of the opinion having followed history for the last half century that ON AVERAGE a country allied with this one is way the hell ahead of countries allied with the old USSR etc.
A regime IS in the interest of the people of Venezuela. Damned right I hope that whoever winds up in control of the country is a friend of the USA. It is possible of course that any new government will be even more hostile to us.
It is perfectly true as an Englishman might express it in dry humor that we have NOT gone out of our way to be nice to our southern neighbors for the last couple of centuries.
If you do not understand that the world IS a Darwinian place then I am afraid you are blinded by your own personal biases.
The evidence that this is true is so overwhelming that only a left wing intellectual or somebody under their intellectual influence could possibly believe otherwise.
When the cards are down everybody worries first about his own family , then his own tribe or community, then his country , and maybe after that the rest of the world.
KFC and McDonalds and Guvmint Motors are no doubt not the best things for Venezuelans but they would for damned sure be better than the government they have now.
Life and international politics are not entirely black and white, the winners on one side and the losers on the other. Venezuela will hopefully have a choice as to her future.
If the people there decide to go with the Chinese when they get free of the current regime maybe the Chinese will treat them more equitably than we would. Maybe.
Maybe they will be unaligned. That might be best for them but sooner or later most peoples and most countries are going to have to take sides.
History is NOT over.
old farmer mac,
You keep harping on the fact that the “world IS a Darwinian place.”
You then ascend to the pulpit like any good southern preacher spreading the faith, sermonizing that:
If you do not understand that the world IS a Darwinian place then I am afraid you are blinded by your own personal biases.
The evidence that this is true is so overwhelming that only a left wing intellectual or somebody under their intellectual influence could possibly believe otherwise.
You do realize, I hope, that there is a great deal of disagreement between evolutionary biologists as to what this “Darwinian world” looks like?
Examples of the disagreement:
• Scientific Dogmatism
In retrospect, it is hard to fathom the zeal with which evolutionists such as Williams and Dawkins rejected group selection and developed a view of evolution as based entirely on self-interest. Williams ended Adaptation and Natural Selection with the phrase “I believe that it is the light and the way.” Here is how Dawkins recounts the period in his 1982 book The Extended Phenotype:
This passage has all the earmarks of fundamentalist rhetoric, including appropriating the deity (Darwin) for one’s own cause. Never mind that Darwin was the first group selectionist. Moreover, unlike The Selfish Gene, The Extended Phenotype was written by Dawkins for his scientific peers, not for a popular audience!
Beyond Demonic Memes: Why Richard Dawkins is Wrong About Religion
• In this light, especially given history’s tendency to recycle great issues, I am amused by an irony that has recently ensnared evolutionary theory. A movement of strict constructionism, a self-styled form of Darwinian fundamentalism, has risen to some prominence in a variety of fields, from the English biological heartland of John Maynard Smith to the uncompromising ideology (albeit in graceful prose) of his compatriot Richard Dawkins, to the equally narrow and more ponderous writing of the American philosopher Daniel Dennett (who entitled his latest book Darwin’s Dangerous Idea).1
Darwinian Fundamentalism
The people who appropriate their deity Darwin for their own purposes — as if their interpretation of His holy writ is sure truth: the one true faith — very much remind me of something James Madison wrote during the religious debates of the 18th century:
[T]he assessment bill requires the courts to determine what is Christian. But how will they do so? Which Bible should they use — Hebrew, Septuagint, or Vulgate? Which translation? How will they decide which books are canonical and which apocryphal when Catholics, Lutherans, and other Protestants disagree? How should they interpret Scripture? What doctrines will the courts admit as Christian? What clue will guide them through this labyrinth?
old farmer mac,
I would add that, by your comments on this thread, it looks like your notion of what the “Darwinian world” looks like and my notion may be fairly similar. We’d have to compare notes a bit more to see just how similar they are, but you obviously do not buy into the naive individualism of a Richard Dawkins.
The intent of my above comment was to point out that there are various visions of what the “Darwinian world” looks like, and one shoud be aware of that before one enlists Darwin to his cause.
Well, it doesn’t look like anyone has taken up Ron’s request for a short synopsis of anarchism. I am probably not well qualified to do so as I have just started to look into this. It seems like almost everyone has a different opinion about it. They does seem to be a meaningful distinction between economic and political anarchism but they do overlap. I see some overlap into what I understand socialist democracy also.
Noam Chomsky is a good source on this as I believe he self descripes and also Gar Aperovitz and Richard Wolff.
Chomsky…
”
Well, anarchism is, in my view, basically a kind of tendency in human thought which shows up in different forms in different circumstances, and has some leading characteristics. Primarily it is a tendency that is suspicious and skeptical of domination, authority, and hierarchy. It seeks structures of hierarchy and domination in human life over the whole range, extending from, say, patriarchal families to, say, imperial systems, and it asks whether those systems are justified. It assumes that the burden of proof for anyone in a position of power and authority lies on them. Their authority is not self-justifying. They have to give a reason for it, a justification. And if they can’t justify that authority and power and control, which is the usual case, then the authority ought to be dismantled and replaced by something more free and just. And, as I understand it, anarchy is just that tendency. It takes different forms at different times.
Anarcho-syndicalism is a particular variety of anarchism which was concerned primarily, though not solely, but primarily with control over work, over the work place, over production. It took for granted that working people ought to control their own work, its conditions, [that] they ought to control the enterprises in which they work, along with communities, so they should be associated with one another in free associations, and … democracy of that kind should be the foundational elements of a more general free society. And then, you know, ideas are worked out about how exactly that should manifest itself, but I think that is the core of anarcho-syndicalist thinking. I mean it’s not at all the general image that you described — people running around the streets, you know, breaking store windows — but [anarcho-syndicalism] is a conception of a very organized society, but organized from below by direct participation at every level, with as little control and domination as is feasible, maybe none.”
http://www.alternet.org/civil-liberties/noam-chomsky-kind-anarchism-i-believe-and-whats-wrong-libertarians
Alperovitz has some cool ideas along the lines of worker co-ops, etc. He is involved in The Next System project. I encourage you to download the report on this webpage…
http://thenextsystem.org/#about
Richard Wolff is also interesting and much of his stuff crosses into what I believe is anarchistic economics.
http://www.heathwoodpress.com/alternatives-to-capitalism-richard-wolff/
Then there is Mondragon in Spain. I’m sure Fernando will have something to say about this.
http://www.mondragon-corporation.com/
This is likely my mistake ezrydermike. I thought there were some believers in anarchism on this site who would like to defend their belief, or at least explain it. Perhaps Boomer. But apparently not. So if there are no defenders of anarchism then it is a moot point.
no worries. There are some very good aspects of what I believe it represents….smaller, local, distributed, representative, challengeable and changeable.
All of these aspects seem to be some part of the potential solutions to many of the problems we are facing as we stumble towards self destruction. For example, distributed solar fits in.
Of course, I may not even be close to what others think. I used to have this image of street protesters in black clothes and masks breaking windows, but I have found that there is much more to it than that. Although, that does appear to be that.
Have you ever noticed that in a so-called free society that we need permits, licenses, registrations and documentation to do almost anything? And we have to pay for the privilege.
I thought there were some believers in anarchism on this site who would like to defend their belief, or at least explain it. Perhaps Boomer. But apparently not. So if there are no defenders of anarchism then it is a moot point.
No, I’m not a defender. I believe humans will always organize at some level: family, tribe, kingdom, country, etc.
I know about as much about anarchy as the rest of you. I do know that anarchists don’t all favor a back-to-nature approach. Some are techno-anarchists.
Ron-
Anarchism is a belief that one does not need exterior authority for society to function.
This does not mean authority is not delegated, but organized horizontally.
(Hierarchies always have the sociopaths rise to the top)
Anarchism comes in may flavors, from anarcho communism (Kropotkin), Individualism (Steiner, Godwin, Tolstoy, Thoreau), Communalism (Bakunin), Syndicalism (Chomsky) http://www.alternet.org/civil-liberties/noam-chomsky-kind-anarchism-i-believe-and-whats-wrong-libertarians etc.
We actually have had large number of people living for long periods as anarchists.
The Ukraine during and after the Russian Revolution (Lenin finally put a end to it), and Catalonia during the Spanish Civil War (both the Soviets, and the Fascists joined to end that) .
Anyway, one should take note- the young politically literate left are mostly anarchists.
It is a deep and complicated history and thought process.
“Primarily it is a tendency that is suspicious and skeptical of domination, authority, and hierarchy. It seeks structures of hierarchy and domination in human life over the whole range, extending from, say, patriarchal families to, say, imperial systems, and it asks whether those systems are justified.”
-Chomsky
Well I don’t know what kind of anarchism that Bakunin advocated but I will give you the opinion of one who was once a true believer then later changed his mind.
“When law enforcement vanishes, all manner of violence breaks out: looting, settling old scores, ethnic cleansing, and petty warfare among gangs, warlords, and mafias. This was obvious in the remnants of Yugoslavia, the Soviet Union, and parts of Africa in the 1990s, but can also happen in countries with long tradition of civility. As young teenager in proudly peaceable Canada during the romantic 1960s, I was a true believer in Bakunin’s anarchism. I laughed off my parents’ argument that if the government ever laid down its arms all hell would break loose. Our competing predictions were put to the test at 8:00 A.M. on October 17, 1969, when the Montreal police went on strike. By 11:20 A.M. the first bank was robbed. By noon most downtown stores had closed because of looting. Within a few more hours, taxi drivers burned down the garage of a limousine service that had competed with them for airport customers, a rooftop sniper killed a provincial police officer, rioters broke into several hotels and restaurants, and a doctor slew a burglar in his suburban home. By the end of the day, six banks had been robbed, a hundred shops had been looted, twelve fires had been set, forty carloads of storefront glass had been broken, and three million dollars in property damage had been inflicted, before city authorities had to call in the army and, of course, the Mounties to restore order. This decisive empirical test left my politics in tatters (and offered a foretaste of life as a scientist).”
Steven Pinker, “The Blank Slate” page 331.
I’ve read the Blank Slate.
(a very good book)
What Pinker ignored, in his youthful exuberance of Bakunin, was the society in which that emerged, vertically organized and anonymous, where cheating is possible (actually, under capitalism, encouraged).
From real experiences in Catalonia and the Ukraine, where horizontal organization prevented cheating and theft, this was not an issue.
Causality is the issue.
This is not a simple issue.
Pinker operates in the tradition of Hobbes. And like Hobbes, he very much has a dog in this fight, and is an apologist for a single class. I would not expect disinterested inquiry from him.
I liked David Sloan Wilson’s critique of Hobbes in Evolution for Everyone:
For a great critique of Pinker, there’s this from the International Sociaist Review (ISR):
Steven Pinker on the alleged decline of violence
The anarchists, nihilists, romantics, idealists, Marxists, etc. at the ISR of course have a dog in this fight too, operate in the same cultural tradition as their ideolical enemies, and have their own creation myths, just like their ideological enemies.
Nevertheless, for those who operate in this cultural tradition, which we all do, the best critiques often come from across the ideological divide.
And one of the best critiques I’ve come across which debunks the notion that societies can self-organize without a hierarchy of priests and rulers (and there are any number of ideologies which are based on this concept, including many on the right such as classical economics) is this documentary film from Adam Curtis:
PINKER has more brains in his little toe than every body you have mentioned favorably in this discussion taken in the aggregate.
I’ve not heard anyone dispute Pinker’s intelligence.
What I’ve heard them disputing is what Pinker uses that intelligence for.
Pinker is an apologist for Western empire.
The article from the International Socialist Review hits its target dead on:
It is easy to understand why Pinker’s invocation of an “escalator of reason” that has lifted the more enlightened Western powers toward an atmosphere of sweetness and light appeals to the many intellectuals who identify with these powers, as does his naming of the deficiencies that he alleges have held other peoples back from rising with them. But such a propaganda windfall for the imperial bloc could only be purchased with a denial of reality. Indeed, it is in the ideological and error-ridden narrative with which Pinker sustains this denial for more than eight hundred pages that the book’s real appeal lies.
Pinker’s apology is a masterstroke of lying by omission. He carefully cherry-picks his information so as to omit important parts of the historical record, parts which are included in more balanced analyses such as Azar Gat’s War in Human Civilization. These more even-haned analyses don’t attempt to whitewash Western imperialism by shying away from talking about how life aint so grand for most of those who live in one of the colonies of the affluent liberal democracies:
[T]he hard record seemed to support no particular peaceful inclination on the part of liberal democracies. Although liberal/democratic countries have indeed been found to have fought fewer inter-state wars, they fought more ‘extra-systemic’, mainly colonial wars, against non-state rivals. As a result of their far-flung colonial empires and consequent ‘colonial wars…France and Britain fought far more wars and war years than non-liberal great powers, such as Austria and Prussia/Germany in the nineteenth and twentieth centuries. The USA, too, after her largely forceful expansion across the North American continent during the nineteenth century, fought extensively during the twentieth century, arguably on the frontiers of her own ‘informal empire’.
“Our perception of the United States has been that of democracy inside and an empire outside: Dr. Jekyll and Mr. Hyde,” wrote Caros Fuentes in The Buried Mirror. “We have admired democracy; we have deplored empire, which has constantly intervene in our lives in the name of manifest destiny, the big stick, dollar diplomacy, and cultural arrogance.”
Folks like Pinker play an important role for the fans of empire. Here’s how the psychologist Andrew M. Lobaczewski explains it in Political Ponerology:
Even a small-time gang of hoodlums has its own melodramatic ideology and pathological romanticism. Human nature demands that vile matters be haloed by an over-compensatory mystique in order to silence one’s conscience and to deceive consciousness and critical faculties, whether one’s own or those of others.
Perhaps no one has ever summed it up more succinctly than Cortez’ devoted companion, Bernal Diaz del Castillo: “We came here to serve God and the king, and also to get rich.”
Glenn, your ideology is showing.
In the mind of the scientist, ideology carries no weight whatsoever. But in the mind of the ideologue, ideology wins over science every time.
Whenever I see any kind of critique on an ideological web site, like the International Socialist Review, I never bother to read it. They have a socialist ax to grind and any critique will always have their ideological or socialist bias.
In other words, any scientific review found on any ideological web site is not worth a bucket of warm spit.
Ron Patterson says:
Spoken like a true Positivist. I suppose it’s always easier to spot the sins of others than it is one’s own.
To make a statement such as yours, it’s pretty clear you’ve never delved into the philosophy of science, tomes like Stephen Toulmin’s Cosmopolis or Michael Allen Gillespie’s The Theological Origins of Modernity or Nihilism Before Nietzsche.
Also flying beneath the radar are books like those written by the historian of science Naomi Oreskes. Here , for instance, is an excellent review of one of her books, The Rejection of Continental Drift: Theory and Method in American Earth Science:
Naomi Oreskes has written a fascinating explanation of why the American geology community rejected, for half a century, what is the most important unifying principle in geology and arguably of science in the 20th century: continental drift. This book is brilliant storytelling, the history of science at its best.
Of course we all know the right answer. Continental drift seems so intuitively obvious now, the cornerstone of so many of our planet’s processes, that it seems incomprehensible any intelligent person could have rejected Alfred Wegener’s explanation, first published in 1912. The mystery deepens when we read that the concept was suggested earlier by an American geologist (Taylor) and that several highly respected American geologists did in fact accept it enthusiastically, as did the great majority of geologists in Europe, South Africa, and Australia.
Oreskes lays out for the non-specialist the history of related geological concepts as well as the drift controversy per se. She thoroughly punctures the myth that continental drift was rejected simply because Wegener had not proposed a causal mechanism, even though her citations show that this was used as an excuse after the fact. She explores and convincingly presents the deeper reasons. Her conclusions are not complimentary to either the American psyche nor to the scientific method. (Lord Kelvin’s arrogant parochialism, rejecting all field data and bullying geologists with his theoretical calculations based totally on a naive model of simple heat conduction, seems particularly shallow.) Remarkably, the author manages to present a sympathetic side to the human dilemmas of the story, while not at all mitigating the really profound implications of a story that goes far beyond geology – the weakness, even fragility, of the scientific method.
This masterfully told story suggests a paraphrase of arch-conservative William F. Buckley’s critique of capitalism and capitalists: the trouble with science is scientists.
All of Oreskes’ books are pretty much on the same theme, documenting the histories of science and scientists gone bad.
I have replied to Glenn below where the format is wider.
The acceptance of continental drift is attributed mainly to Tuzo Wilson, a Canadian geophysicist and geologist who achieved worldwide acclaim for his contributions to the theory of plate tectonics based to a large extent on newly available oceanic magnetic survey data and geophysicist Jack Oliver is credited with providing vital seismologic evidence (supporting plate tectonics). Prior to this there was no creditable mechanism/data to account for the phenomena. Not embracing a theory owing to questionable supporting evidence is hardly an indictable offense.
The famous lexicographer, Bryan A Garner has been a critic of Pinker’s latest book. https://twitter.com/bryanagarner/status/208760719733305344
Doug Leighton says:
Prior to this there was no creditable mechanism/data to account for the phenomena. Not embracing a theory owing to questionable supporting evidence is hardly an indictable offense.
From the above review cited above:
She thoroughly punctures the myth that continental drift was rejected simply because Wegener had not proposed a causal mechanism, even though her citations show that this was used as an excuse after the fact. She explores and convincingly presents the deeper reasons. Her conclusions are not complimentary to either the American psyche nor to the scientific method.
For another take on anarchy, I highly recommend the book A Paradise Built in Hell: The Extraordinary Communities That Arise in Disaster, by Rebecca Solnit.
Solnit is worth reading.
Disclamer: I’ve done political actions with her husband.
Unsure what it’s about, but I read some things some time ago about Somalia, and how external State intervention was probably not a good idea for its outcome…
Actually, this is one of the articles.
A quote from it (my bold text):
I’m surprised, and disappointed, that Caelan MacIntyre didn’t take you up on your invitation.
I am too.
Maybe it’s because it’s the end of the month and he’ll be moving to another place June 1st., so he’s a little preoccupied at the moment. But he indirectly appreciates your disappointed sentiment, in part because, as it is said, ‘misery loves company’, and he feels similarly almost every day with regard to how his fellow species is mucking about.
If control over one’s own production is the only metric, that could easily be accomplished in the United States, and many other Democratic Countries by simply starting your own business.
The fact that there has never been an Anarchist Country in the history of civilization, doesn’t bode well for the idea.
Imagine a Country of self-employed individuals, with no Government, or authority to “provide for the common defense”. The entire Country could easily be conquered by even a small band of organized hostiles with a common goal.
You are totally illiterate on the subject.
No, actually I have some first hand experience with Anarchists. Remember this?
https://www.youtube.com/watch?v=N-LB94Kwlws
You are truly illiterate.
John B says:
There’s a book you might like which takes issue with Rousseau’s creation myth which imagined a noble savage corrupted by society.
As the authors of Ancient West Mexico: Art and Archaeology of the Unknown Past explain:
But the left’s creation myth began to be discredited beginning in the 1970s, as the authors go on to explain:
“It has been said that democracy is the worst form of government except all the others that have been tried.”
Winston Churchill
It is all well and good to study anarchy as a form of government. It is good fun.
Anyone that wants to try it is a loon! There is NO evidence it would work.
Just like anyone thinking we can change monetary systems to something else (the gold standard, eliminating fractional reserve banking, etc ) would seamlessly work.
People rooting for anarchism are silly. I made these mistakes when I was younger.
I now believe that we are in the situation we are in because of the laws of mathematics. Nothing else.
None of us are smart enough to model that.
The universe is math.
Hey, we finally agree on something. Must be the mathematical law of averages.
Lol!
John B, I wish you and your family well. I’ve made my point.
thanks!
What Is Anarchism? Noam Chomsky on Capitalism, Socialism, Free Markets (2013)
In practice Chomsky has tended to emphasize the philosophical tendency of anarchism to criticize all forms of illegitimate authority. He has been reticent about theorizing an anarchist society in detail, although he has outlined its likely value systems and institutional framework in broad terms. According to Chomsky, the variety of anarchism which he favors is
“… a kind of voluntary socialism, that is, as libertarian socialist or anarcho-syndicalist or communist anarchist, in the tradition of, say, Bakunin and Kropotkin and others. They had in mind a highly organized form of society, but a society that was organized on the basis of organic units, organic communities. And generally, they meant by that the workplace and the neighborhood, and from those two basic units there could derive through federal arrangements a highly integrated kind of social organization which might be national or even international in scope. And these decisions could be made over a substantial range, but by delegates who are always part of the organic community from which they come, to which they return, and in which, in fact, they live.”
On the question of the government of political and economic institutions, Chomsky has consistently emphasized the importance of grassroots democratic forms. Accordingly current Anglo-American institutions of representative democracy “would be criticized by an anarchist of this school on two grounds. First of all because there is a monopoly of power centralized in the state, and secondly – and critically – because the representative democracy is limited to the political sphere and in no serious way encroaches on the economic sphere.”
https://www.youtube.com/watch?v=yccBBzSHFAM
Chomsky is one of my favorite intellectuals.
But he is certainly no peak oiler.
For instance, in this video beginning at minute 15:57 he says:
Correct me if I’m wrong, but would not a peak oiler argue that these “enormous resources” which Chomsky speaks of, and especially if we speak of natural resources, do not exist?
sounds like he is talking about the money in the system that is looking for a place to go and doesn’t see that using it to hire people to fix the place up would be beneficial. I’ve heard about lots of corporate money basically just being stashed and of course there are billions of accumulated wealth that the 1% have that is essentially just being used for 2 Guicci bags and diamond dog necklaces, etc
Noam is not energy literate.
sounds pretty knowledgeable in 1998, around 14 mins in..
https://www.youtube.com/watch?v=HYnn06qYpzU
Some anarchy takes place every now and then, the old mob rule.
The French know anarchy.
“At the Place Dauphin, the mob had made a fire, and before it several men, women, and children were roasted alive. The countess PERIGNAN with her two daughters, the daughters first, and the mother after, were stripped of their cloaths, washed with oil, and roasted alive, while the mob were singing and dancing round the fire, and amusing themselves with their cries and sufferings. After the repeated prayers of the eldest girl, not more than 15 years old, that some one would with a sword or a pistol put an end to her horrid existence, a young man shot her through the heart, which so irritated the mob, that they immediately threw him into the fire, saying, he should suffer in her place.”
From the forgoing melancholy account of that deplorable state to which human nature is degenerated in France, one useful lesson offers itself to mankind :—Revere your Laws—instantly punish those who, under the mask of popular freedom, would destroy Constitutional Liberty; and remember, that the first step to the ruin of your own peace of mind, is a denial of that Power which gave it the activity of thinking, and of discrimination.
London Times, September 12, 1792
There’s a lot more to the ideologies which grew out of French and German romanticism and idealism than merely their destructive — or what Michael Allen Gillespie called their “demonic” — side. There’s also a constructive side. After Good Friday and the crucifixion always comes Easter Sunday and the resurrection, with the promise of a second coming in the future, when God will establish his rein on earth. It’s a resurfacing of the Judeo-Christian salvation narrative, but in secular form.
A wonderful example of this is Hayek and Milton Friedman’s brand of libertarianism, with its equation of “capitalism and freedom.” Hayek and Friedman, just like Hegel and Marx, followed Judaism and Christianity in seeing history as a moral drama whose last act is salvation. The difference is that, for the romantics and idealists who operate in the Fichtean tradition (e.g., Friedman, Hayek, Hegel and Marx), the human will and freedom are the absolutes, whereas in Judaism and Christianity the will of God is absolute.
As Greg Grandin explains, Friedman, Hayek and like-minded souls threw their unbridled support behind the Chilean dictator Augusto Pinochet, whose dictatorship they believed was a necessary, but temporary, evil in order to achieve the brand of absolute freedom they found desirable:
And as Carlos Fuentes notes in The Buried Mirror:
Naomi Klein’s book The Shock Doctrine is a pretty good overview of the evils done in the name of “free markets” in the 20th century.
Isn’t Naomi Klein the commie cartoon character who used to have a radio show? I used to listen to it.
Jon Stewart interviewed the author of this book last night.
Move: Putting America’s Infrastructure Back in the Lead
http://www.amazon.com/Move-Putting-Americas-Infrastructure-Back/dp/0393246809/ref=sr_1_1?ie=UTF8&qid=1432819403&sr=8-1&keywords=move+book
Huge jump in the US weekly crude oil production this week.
That’s a 209,000 barrel per day jump in lower 48 production in one week.
I really don’t believe it.
Could this be due to some new platform/field coming online in the Gulf?
No, nothing that big ramps up that fast. Remember, this production number is created with an algorithm, it is not an actual measurement of oil.
Looks like they hit a gusher! ‘u^
Totally wierd
“Alaska North Slope crude oil production dipped significantly during May as circumstances forced a cutback in throughput on the trans-Alaska pipeline. The reduction stemmed from tight storage capacity at the Valdez oil terminal, coupled with tanker scheduling challenges, said Michelle Egan, spokeswo….”
http://www.petroleumnews.com/pntruncate/244131498.shtml
Gulf of Mexico federal offshore peaked in December.
U.S. crude oil production rose to 9.56 million barrels per day, its highest in 44 years.
http://www.cnbc.com/id/102712526
40,000 barrels short of the all time peak in 1970
http://www.oedigital.com/component/k2/item/8426-bracing-for-bankruptcy
“While most oil and gas operators and service companies are reducing expenses to keep costs down, some companies are beginning to falter due to financial distress.”
“Our efforts to negotiate additional financing to fund business activities and pursue identified strategic alternatives were further impeded when oil prices plummeted and production growth faltered, creating additional obstacles to our restructuring efforts,”
http://www.oedigital.com/component/k2/item/8634-resetting-the-industry
Total is no exception. In 2015, we will accelerate and deepen the major group-wide cost-cutting initiative launched last year. We plan to reduce operating expenditure by US$1.2 billion; the capital expenditure by 10% from $26 billion in 2014.” Total has also announced that it plans to reduce its exploration budget by 30%.
More details on the Russia/Venezuela oil investment.
http://rt.com/news/262625-venezuela-russia-oil-investment/
http://www.reuters.com/article/2015/05/28/us-venezuela-russia-idUSKBN0OC2YF20150528
$14 billion to double Ven’s oil production. The money is not pure, it’s total. $1.8 billion has already been invested by Rosneft and so the additional is to be $14B – 1.8 = $12.2, and not in dollars.
Rosneft sees its own production in Ven going from 30K bpd to about 160K over the next 5 yrs. And they are expanding their ownership stake in Petromonagas from 17 to 40%.
Those sanctions are just crippling Russia, aren’t they?
I figured that was coming. At the Victory Day Parade in Moscow, Maduro was front and center, right along with Xi Jinping.
Did you see this?
I know very well there is no just milk & honey over there but look at the key words of the projects in the text: “high speed train”, “hydro power”, “and agricultural financing fund”. Compare that to “projects” like Tesla’s for extremely wealthy, “tweets”, “likes”, shaq burger among the recent IPO’s for debt slaves and SpaceX (WTF is that – I guess that one goes to the wealthy column).
Gotta love all the smiles…
It’s not a funeral?
I wrote a little analysis about Rosneft’s experience in Russia here:
http://21stcenturysocialcritic.blogspot.com.es/2015/05/venezuelas-heavy-oil-scam.html
my blog is mostly intended for family and friends, so I try to keep it non technical. In this case I wanted to highlight Maduro’s outlandish claim that Venezuela would double production. The JV structures are intended to be shared 40 % foreign investor and 60 % pdvsa. But ExxonMobil decided not to enter the JV structure, this left BP, the minority holder of 16 2/3 of the shares, as the only participant. What Rosneft is doing is buying up what could have been ExxonMobil’s shares to take the conventional 40 % foreign participation.
The 160 kbd in 5 years converts to 325 kbd the Rosneft/PDVSA JVs would increase joint production. Thats a very challenging project. But it’s very very far from doubling Venezuela’s oil production, which is probably about 2.3 million bopd. To double Venezuela’s production they need to invest around $160 billion to $200 billion USD.
That’s a rough number, because the landscape changes so fast. For example, their gas supplies are dwindling and they need to develop offshore gas, but we aren’t seeing real movement in that direction. The country also suffers from a huge electric power shortage, and other problems. Right now, building a simple treating plant for 8 degree API oil is a very difficult task. Building an upgrader is impossible.
To All
This needs to be settled. There seems to be a misunderstanding, especially among global warming deniers, that the term “Global Warming” has fell out of favor and the term “Climate Change” has replaced it. This is absolutely not true. The term “Global Warming” is still very widely used in scientific circles. The term “Climate Change” has simply been added to cover all the other climate phenomena caused by global warming.
And in case you doubt this then just News.Google Global Warming. You will get dozens of articles that just came out in the last few hours to the last few days. And if you go back a few days earlier you will get hundreds of such articles.
So I hope we can put the silly myth to rest that the term “Global Warming” has fell out of favor because it absolutely has not!
Intergovernmental Panel on Climate Change was established in 1988, so climate change term isn’t new.
It’s not that the term “Global Warming” no longer exists. It’s just that “Climate Change” is the preferred term, because of the reasons that you stated. At least that’s been my experience in listening to the various arguments.
The Warmlist: http://www.numberwatch.co.uk/warmlist.htm
John, sorry but one cannot have a “preferred term” for two terms that mean two entirely different things. Global Warming simply means what it says, that the globe is warming. This warming is far more noticeable at the poles and arctic and antarctic regions.
Climate Change, on the other hand, simply refers to other phenomena caused by global warming. That is droughts, floods and other weather phenomena.
It’s like this. All pigs are animals but all animals are not pigs. Likewise global warming is climate change but all climate change is not global warming.
Bottom line the terms are not always interchangeable. They are two terms entirely, just like pig and animal, sometimes they are interchangeable but most of the time they are not.
And your web site is just stupid. Only a global warming denier would ever consider posting such stupid shit is that.
The source of this is solar radiation. The difference between the incident radiation and that which is either reflected or re-radiated is changing, with the net effect that there is more energy added to the system. The first order effect is that taken over-all, the temperature of the system increases. But you have to be careful about that because the increase in temperature is not uniform. It is a complex non-linear system. This is where the modeling comes in and where all the contention comes from. But anyone who denies these basic facts simply doesn’t understand 19th century physics.
Looking at the “hits” graph on this site, it looks like the term”Global Warming” has peaked, and is in decline. However, “Climate Change” looks to still be increasing. So perhaps we could say that “Climate Change”, is the more popular term. And that “Global Warming” use is declining. That’s what I meant to say.
https://www.skepticalscience.com/climate-change-global-warming.htm
And FTR, I’m not a Global Warming “Denier”, I just happen to think that it’s vastly overstated. As evidenced by the lack of correlation between the GCMs and empirical data. Data trumps theory for me.
Ron, all,
Both terms have been used in the literature since the 1980s, with climate change slightly more common if I remember a google quote correctly.
I mentioned these two some time back:
The Carbon Dioxide Theory of Climatic Change, by Gilbert Plass, May 1956, Tellus;
Climatic Change, Springer journal published 1977–2015, still going.
As someone noted–oh, Kam– the “CC” in IPCC stands for “climate change” and the IPCC dates to 1988, warts and all.
Synapsid, be that as it may, my point is that the terms are not always interchangeable. They clearly mean two different things. Climate change is caused by global warming.
Sometimes climate change is caused by colliding continents, opening of seaways, deforestation, closing of seaways, global cooling…
…..big volcano eruptions.
You are right Fernando. And when a continent moves from a polar region to near the equator, or vice versa, that should cause some pretty severe climate change also.
The climate change caused by continental shifts occurs extremely slowly, slow enough that life can migrate and evolve to adapt to new conditions. Climate changes can include rainfall changes as well as temperature changes. Rainfall is an extremely important factor as it determines how much and what type of life can exist in a region.
The phase changes of water, especially the formation of ice and snow cover or packs is a critical result of climate, as the American west is finding out and other areas in the world. Year snow pack can mean the difference between arid and badland.
Volcanic eruptions usually do not change climate, merely cause a year or two of lower temperatures. The eruption would have to be extremely massive or a series of eruptions over a long period of time to cause a climate change. Climate is usually measured in periods of three decades or longer.
The current climate changes are moving faster than the rate of migration of plant and some animal species. They are changing far faster than the evolutionary adaptation time scale and are measurable in years not centuries and millennia. That is what links the global warming due to atmospheric changes with climate changes, both are moving rapidly.
The confusion and ability of certain factions to confuse concerning climate change is due to the complexity and local variability of weather on this planet. Much like eddies in a river where water can be moving in any direction at a given time as compared to the general flow of a river.
We all know that energy changes in the global system is the driver for climate changes. In the case of recurrent glaciations, energy is depleted by orbital distance/angle changes then rises again. This is amplified by albedo changes as ice formations occur.
In the case of gaseous forcing, the energy rises, stabilization not occurring until well after the input of those gases stops and the effects of induced natural feedbacks also subsides. From paleontological data this can be millions of years.
In our current case of gaseous radiative forcings, the rate of gaseous intrusion is rapid and the natural forcings are also following rapidly. As Fernando pointed out, deforestation can also play a role in changing radiative forcings and the hydrological cycles. Deforestation has been occurring for thousands of years now with much of it in recent history. Just one more factor of change in a larger set of changes.
Clearly, the problem is the high rate of change along with the eventual slower changes (ocean level rise as an example). The focus on climate change is a human foible, the focus should always be on life change. Their is population change in species, extinction of species, blooms of species, migration changes and redistribution of species. Those are the more important things.
I would like to see the global warming term retained and the climate change term reduced with environmental change and biological change terms increased in use and importance. Climate change just describes the changes in humidity, wind, storm strengths, rainfall patterns and temperatures. All just physical measurements that have little meaning since the total variation in climate and weather across the globe is very large.
What needs to be brought to the forefront is the biological changes caused by warming. Those are much more important. The words we choose focus our thoughts and actions. To constantly focus on non-living changes apparently has little effect on our psyches and misses the point, this is a living planet. A dead world can have climate changes.
Ron,
No, they aren’t interchangeable. I was addressing the often-heard “They changed the name from global warming to climate change so that…” nonsense.
I find climate change more useful in terms of talking to people about current weather extremes.
If they are having unusual weather, be it hotter than normal, colder than normal, wetter than normal, drier than normal, and so on, then they are likely to relate to the concept of climate change because they are experiencing it themselves.
Whenever scientists overstate a “problem” and the result never happens, they lose credibility…probably forever.
Climate scientists are just carrying on a more than 120 year old tradition of being Chicken Littles…Google about the Climate Change Timeline – 1895-2009
Actually it is quite the opposite. The scientific establishment is quite conservative. The climate is a complex non-linear system. This means that change is likely to be abrupt and dramatic not gradual and incremental, however conservative bodies to not like abrupt and dramatic so they wrestle with trying to implore people to act regarding a threat that is gradual and incremental.
Until there is order inside man, until he sees and understands that he is responsible for the whole world and would never delegate his responsibility to it to another, to a politician, government will be necessary.
The luxury and ease that most modern people cry out for can only be be brought about by pillaging nature systematically and for this we need government, both to set up the mass infrastructure, and to quell dissent against corporations when peoples locally, seeing the destruction to the world, demand action.
The common understanding of “anarchy” and the example Ron gives are the natural and only outcome in a society where there is not order inside the people. Order is not the opposite of disorder, in the same way love is not the opposite of hate.
Krishnamurti: How is one to have complete order?
http://www.jkrishnamurti.org/krishnamurti-teachings/listen-audio/how-is-one-to-have-complete-order-part-2-of-4.php
There is the text of that marvellous talk at the bottom.
I tried to organize an Anarchist Party, so I called a worldwide meeting. But the effort failed when those in attendance failed to agree to pledge allegiance to my Anarchist Creed, refused to sign the Anarchist Manifesto, and wouldn’t pay the party dues I wanted to collect. They didn’t even buy the nice fish net t shirts I had ordered, and I ended up with a surplus of 2000 lapel pins with a large A on top of my photograph. I’ll never do that again. Next time I’ll organize something for clapping seal types, I guess.
Did anyone see the massive jump in production in the EIA report?
That seems to be really out of the world.
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W
Maybe somebody at the EIA is trying to kite the market making funny statements. Saddam used to make money trash talking to make the market swing.
Hi Ron,
Anarchy can be boiled down to legitimate authority (and no illegitimate authority).
(Thus, free-association, as opposed to coerced association which can involve relatively-clueless young (and older) men and women toting contrived/illegitimate/go-to-their-heads authority and high-powered police/military issue. What could possibly go wrong?)
Caelan,
What kind of drugs are you on? I would like to try them…..LOL!!!
Anarchy is absolute foolishness. It may be fun to theorize academically. But trying it would be extremely dangerous if you were wrong.
Boltzmann Brain IV,
Caffeine at the moment.
And in a free society, we can take what we bloody well please.
But if we don’t ‘go to anarchy‘, after the dust settles, anarchy, more or less, may come to us, (if we’re still around). It’s in our blood.
The State, relative to the band or tribal society, is a very recent (and complex– think J. Tainter) phenomenon and, I am fairly certain, a temporary/short-lived one. Good riddance.
“Morpheus: That you are a slave, Neo. Like everyone else you were born into bondage. Into a prison that you cannot taste or see or touch. A prison for your mind.” ~ The Matrix
Your writing style is difficult to follow.
You can communicate more effectively if you write in simple and easy to read sentences.
Caffeine is good! Enjoy your coffee and your day!! LOL!!!!
I understand your writing style just fine. Probably has something to do with my open mind.
I am on a peak oil website and I don’t have an open mind????
I think implementing anarchy would be foolish. If you were wrong, it would have disasterous conseqeunces.
The consequences are already disastrous.
Just pay attention.
Cytocrhome,
I don’t know, life doesn’t seem so bad to me.
Where is this disaster from our non-anarchical (is that a word?) systems that you are referring to?
If you are referring to the collapse from Peak Oil, yeah, that is going to suck ass.
But that isn’t because we aren’t implementing anarchy.
Moving to anarchy would be an extremely risky gamble. I am unaware of any successful versions of it on a large scale.
Common sense would also suggest it isn’t the smartest idea. And how on Earth can you think that anarchy would solve all our problems?
Is human nature going to suddenly change without government rule! That is absurd.
Catalonia and the Ukraine on a large, and long scale.
One thing the communists and the fascists agreed on, was squashing the anarchists, because they both realized it was the greatest threats to their legitimacy.
Ukraine? They weren’t/aren’t an anarchy.
They are pawns at the moment between Russia and NATO.
I am not even bothering to do a google search on Catalonia. But I doubt they are an anarchy.
Cytochrome C, my advice would be to give up this anarchy nonsense (unless you live in North Korea…but you wouldn’t be typing this if you were).
We have no choice in our genes, or the political system we grew up in. And there is no way in hell anyone is going to choose anarchy to change it.
It’s beer o’clock!!!
Boltz-
You are historically challenged:
The Free Territory (Ukrainian: Вільна територія vilna terytoriya; Russian: свободная территория svobodnaya territoriya) or Makhnovia (Махновщина Makhnovshchyna) was an attempt to form a stateless anarchist[1] society during the Ukrainian Revolution. It existed from 1918 to 1921, during which time “free soviets” and libertarian communes[2] operated under the protection of Nestor Makhno’s Revolutionary Insurrectionary Army. The population of the area was around seven million.[3]
It worked quiet well until the Red Army but an end to it.
Most are born into bondage:
Caelan,
I’m not at all convinced that primitive society was less violent and coercive than affluent liberal democracies.
Azar Gat, in War in Human Civilization, concludes that
However, Gat cites a couple of caveats.
First, if one happened to have lived in one of the colonies of the affluent liberal democracies, to have belonged to one of the “subject races,” then one is subject to a high level of violence and coercion:
Second, Gat is a materialist, rejects realist theory, and argues that the ultimate cause of all human violence and coercion is for reproductive opportunites and/or to control material resources. “The main change to human existence brought about by the Industrial Revolution was a steep and continuous growth in per capita production, a dramatic break away from the ‘Malthusian trap’ that had characteried earlier human history.”
These productive surpluses facilitated the rise of large, powerful states in which “the death toll of human violence actually decreased under the state,” he concludes.
But here’s the rub. “[T]he new stage consisted of a massive harnessing of non-animate energy — other than the limited muscle power of people and domesticated animals — to drive machines,” Gat notes.
What happens when the production of that non-animate energy goes into decline.
Of course primitive societies were far more violent than modern day societies. When all else fails, look at the evidence.
Constant Battles: Why We Fight
Steven Pinker has also documented this in a couple of books
I seem to recall reading some time ago, some rather convincing critiques opposing certain facets of Steven Pinker’s work, but when I get a chance, I’ll look into it if no one else does, and respond accordingly, perhaps under a subsequent POB article.
In the mean time, just off the cuff, I am thinking of the so-called Green Revolution (GR) and the State society in general, and how their draw-downs and erosions, etc., have yet to fully play out:
The coercive, organized, large-scale, centralized, day-in/day-out ’embedded’/simmering violence/violent undercurrents of the State (think prison industrial complex, police brutality and police shootings too) doesn’t necessarily mean less violence or that it somehow magically disappears in humans, and, like the GR, may have yet to fully play out and show itself, such as in increasing societal/ecological damage and collapse, where the violence and/or results thereof become more evident and palpable. We already seem to be seeing some ‘approaching wavefronts’, such as with the Middle East’s ISIL/ISIS/IS and more closer to home stuff like Ferguson and Baltimore.
Of course violence and the capacity for it can be transferred to other systems more effectively with the State, such as to the animal kingdom or the climate, with those forms of violence potentially boomeranging back so spectacularly as to smash us real good.
The differences between historical band/tribal society violence and State society violence may be the differences between a small regular pot and a larger pressure-cooker. Just because we might see less steam doesn’t mean things aren’t cooking.
I seem to recall reading some time ago, some rather convincing critiques opposing certain facets of Steven Pinker’s work…
Well I am sorry but that doesn’t tell me very much. What facets of his work did these critiques oppose? What was their evidence? Who were these critiques? What were their credentials? I wrote the below several years ago and posted it on another blog… on the same subject:
___________________________________
A graph at the top of Page 57 of “The Blank Slate” by Stephen Pinker shows nine bars, eight of them representing the percentage of male death cause by warfare in South America and New Guinea. I have converted the bars to percentages of deaths because I cannot post the chart itself. The figures may not be exact but they are as close as I could glean by just looking at the bars. The names represent indigenous tribes.
Jivaro 59 percent of males died as a result of war.
Yanomamo (Shamatari)39 percent of males died as a result of war.
Mae Enga 36 percent of males died as a result of war.
Dugum Dani 30 percent of males died as a result of war.
Murngin 29 percent of males died as a result of war.
Yanomamo (Namowei) 25 percent of males died as a result of war.
Huli 20 percent of males died as a result of war.
Gebusi 9 percent of males died as a result of war.
US & Europe 20th C. 1 percent of males died as a result of war.
Pinker’s next two paragraphs:
The first eight bars, which range from almost 10 percent to almost 60 percent, come from indigenous peoples in South America and New Guinea. The nearly invisible bar at the bottom represents the United States and Europe in the twentieth century and includes the statistics from two world wars. Moreover Keely and others have noted that native peoples are dead serious when they carry out warefare. Many of them make weapons as damaging as their technology permits, exterminate their enemies when they can get away with it, and enhance the experience by torturing captives, cutting off trophies, and feasting on enemy flesh.
________________________________
That was from “The Blank Slate” I haven’t read his latest work on the subject: The Better Angels of Our Nature: Why Violence Has Declined But I have read Constant Battles: Why We Fight twice. The original subtitle was “The Myth of the Peaceful Noble Savage. I believe it is the very best book ever written on the subject.
One question: Are you a Jean-Jacques Rousseau fan? That is do you believe in the myth of the peaceful noble savage? Because if you do, then that tells me all I need to know about why you question Pinker’s work.
Ron, there are Pinker critiques on the net. Just do a Google Search for them.
And I’ve already made many points on my own.
I also see possible contradiction with you with regard to your concern for nature vis-a-vis the ‘State’s’ apparatus against it; as well as a bias vis-a-vis your granddaughter and her ostensible policing authority.
I’ll leave you with one example link about Pinker’s more recent work, and a quote from its conclusion:
Reality Denial : Apologetics for Western-Imperial Violence
“Steven Pinker’s The Better Angels of Our Nature: Why Violence Has Declined is a terrible book, both as a technical work of scholarship and as a moral tract and guide. But it is extremely well-attuned to the demands of U.S. and Western elites at the start of the 21st century, with its optimistic message that the ‘better angels’ of their nature are taking charge, and its lament over the other peoples of the world, whose ‘inner demons’ and cultural backwardness have prevented them from keeping-up…
The Better Angels of Our Nature is an inflated political tract that misuses data and rewrites history in accord with its author’s clear ideological biases, while finding ideology at work only in the actions of his opponents. Pinker fears that readers will find his book ‘Whiggish and presentist and historically naïve’, but this secular theodicy is animated by the spirit of Dr. Pangloss more than anyone else, and with its deep commitments to an elitist, Western-imperial point of view, it transcends even Voltaire’s character in the fantasy that everything done by the Holy State and its minions is leading to the best of all actual worlds.
Small wonder, then, that the message of Better Angels pleases so well the editors of the New York Times and the large U.S. permanent-war establishment. It is regrettable that despite its manifest problems, the book has bamboozled so many other people who should know better.”
Caelan, I went to your web site where the critique of Pinker was posted, “Global Research”. Something just didn’t look right. So I clicked on “Environment” to see if they had an agenda. There I saw something I recognized as the HAARP antennas. So I clicked on that link:
The Ultimate Weapon of Mass Destruction: “Owning the Weather” for Military Use
The US military has developed advanced capabilities that enable it selectively to alter weather patterns. The technology, which was developed under the High-frequency Active Auroral Research Program (HAARP), is an appendage of the Strategic Defense Initiative – ‘Star Wars’. From a military standpoint, HAARP is is a weapon of mass destruction, operating from the outer atmosphere and capable of destabilising agricultural and ecological systems around the world.
Are you kidding me? Caelan, these people are fucking nutcases! They want you to believe that the US military is controlling the weather with HAARP. And you want me to take their word about Steven Pinker? I wouldn’t take their word about the time of day without checking my watch first.
Ron,
That’s just one site, and there seem to be plenty of others, as well as those that feature the same essay from Edward S. Herman and David Peterson on. (Just for fun, you may wish to go on each site and find out what their agenda is and report back on each one.)
Setting aside your possible approach of shooting the messenger, or shooting the soapbox (the site) upon which the messenger (the author) stands, I wonder if the State argument for less violence is a bit along the lines of arguing for the forcing of tigers into cages in zoos with other tigers on the outside dressed as game wardens here and there carrying tranquilizer rifles at the ready: Sure, the tigers on the inside might be ‘less violent’, but that is not their natural state. It’s artificial, manufactured, like The Matrix…
“Agent Smith: I hate this place. This zoo. This prison. This reality, whatever you want to call it, I can’t stand it any longer…
Did you know that the first Matrix was designed to be a perfect human world? Where none suffered, where everyone would be happy. It was a disaster. No one would accept the program… The perfect world was a dream that your primitive cerebrum kept trying to wake up from. Which is why the Matrix was redesigned to this: the peak of your civilization.” ~ The Matrix
I am not arguing that humans were necessarily less violent in the past anyway, just that zooing/caging them up illegitimately and unethically by coercion/force/violence by other humans is not only unethical, undemocratic, contradictory, reckless, violent and stupid, but may prove increasingly dangerous over time, and appears to be proving so already.
See also my quote-comment below.
Caelan, I think I see where you are coming from. But let me state emphatically that Pinker’s Data was correct. Well it was not really his data, it was the data of dozens of other anthropologists who have studied primitive tribes. And Steven LeBlanc’s Data in Constant Battles was correct also. That was his own data. He was once a Noble Savage believer like I think you are but the data changed his mind. From his book:
It took more than twenty-five years and a great deal of additional fieldwork for me finally to change my initial naïve view of the past, and humans in general. My take on warfare is now very different from what it was. Though these new ideas about conflict seem exceedingly obvious to me, I arrived at these conclusions not by means of abstract theory, but by being forced to look at warfare based on conclusive evidence found on the ground. The central importance of warfare throughout known history came to me slowly, prompted by archeological fieldwork in a number of different region and reinforced as I tried to reconcile theoretical positions that became increasingly impossible to accept.
Steven LeBlanc, “Constant Battles: The Myth of the Peaceful, Noble Savage” page 3
So you think that former state was better than the “artficial” state we have today. Well today people live a lot longer and their chance of being killed in battle is dramatically reduced.
But today’s civilization does have its drawbacks. Our population explosion is destroying the world. But then that’s another story.
”The State, relative to the band or tribal society, is a very recent (and complex– think J. Tainter) phenomenon and, I am fairly certain, a temporary/short-lived one. Good riddance.”
I must come down on the other side of this one. Getting rid of the state, of Leviathan, might be a good thing if a place like ” The Shire” actually existed and we could move there. I would go in a flash.
But even in Middle Earth there were powerful enemy states.
The state , Leviathan , is not apt to EVER go away unless somebody seizes total control of the human genome in every individual and rewrites it to eliminate the inborn competitive nature that in large part makes us humans – or at least naked apes. Chimps fight wars and conquer territory too -just on a smaller scale.
Organization confers power and to a large extent it also confers material abundance. People will always organize into larger groups so as to out compete their neighbors – whether the neighbors live on the other side of the mountain or the other side of the sea.
The super tribe, the country or nation or nation state or Leviathan, choose your own term, is an invention of Darwinian evolution.
It is not going anyplace as long is it confers evolutionary fitness.
Read my most recent comment just before this one.
The key here might indeed be along the lines of the second-half of your last sentence: ‘…as long is it confers evolutionary fitness.’
I have my strong doubts and the evidence appears to be flooding in to boot… Well, above the boot.
I am talking, in part, about violence that is ‘suppressed’, ’embedded’, ‘contained/pressurized’, carried over (like debt), fed-back/looped and/or transferred, etc..
‘Leviathan’ may prove to be as violent as it is big (if ethically-based anarchic/networked-tribal dynamics can’t get a handle on it first.)
Leviathan is of course quite capable of the most extreme violence imaginable and furthermore has a demonstrated history of committing such violence.
It is possible that the various Leviathans will all destroy each other and leave the world in a stateless condition.
This is extremely unlikely – there are always survivors and winners in wars – even if the victories are Pryhrric. It might happen if we experience a flat out nuclear WWIII but even then it is unlikely.
But Leviathan would simply arise again. The advantages of large scale organization are so great as to GAURANTEE this result.
Hunter gatherers cannot compete with simple farmers and simple farmers cannot compete with organized raiders. Raiders cannot compete with kings with many times as many men. Organization is now as important a part of our existence as our upright posture and opposed thumb.
‘Leviathan’ may rise again, but for most of our history and future may always be a flash in the pan, or petri-dish if you will, unless/until we can figure out how to get it right– and ethically-so.
But, or so, getting it right may turn out to be something different, like maybe some kind of hyperdemocratic/anarchic ethically-based hybrid between Leviathan and the early hunting and gathering bands. Perhaps like Permaea.
LOL!
Early hunter and gathering bands?
We are not going back to a hunter gatherer lifestyle voluntarily. I can guarantee you that.
If we did you would have to be very careful not to step on all the dead bodies while you were picking your berries.
The transition to that wouldn’t be more ethical than what we have now. It would be tragic.
What jump? Record U.S. oil output due to revisions, not rigs, EIA says
Robert Merriam, EIA’s manager of petroleum supply statistics, cautioned against reading too much into the figures, since they are based largely on forecast models and historical data rather than real-time information – unlike data on inventories or refinery operations.
“At the end of the day, the crude production numbers are a modeled number. We don’t and no one really has real time information,” he said. “There’s a long delay.”
They need to hire somebody to rewrite their model.
I have a question that I do not think I have seen addressed about US shale finances.
In reading balance sheets I see deferred income tax liability. This number is significant for many of the shale companies.
Could someone explain the significance of this liability?
Shallow, I once also looked this up. Instead of paying income taxes in the current year, certain companies can deduct certain capital expenditures from these taxes. In the future these capital expenditures cannot be deducted anymore from any future income taxes, and therefore income taxes are delayed to the future. This liability reflects those delayed taxes. In my understanding, therefore these liabilities are probably much less than accounted for, as these companies can perform this trick in most years, thereby continuously delaying these income taxes. This is in my mind the only accounting trick that actually undervalues the book value of certain shale companies. I’d love to hear from an accountant about this.
Enno. I believe this is the result of companies being able to elect to deduct IDC’s (intangible drilling expenses) in the year incurred, rather than amortizing them over a period of 10-20 years. Intangible drilling expense examples are the cost to drill the hole and frac the well, which I presume make up a large portion of the total well cost for shale oil and gas wells. Tangible drilling expenses, such as casing, pipe lines, tanks, etc., cannot be expensed, but must be depreciated. However, there is a bonus depreciation provision as well as Section 179 expensing election, which also allows some of these expenses to be expensed in the year incurred, as opposed to being depreciated of 7-10 years.
What I think is happening (but I am not for sure) is that the companies have two sets of books. One set states earnings for SEC reporting purposes. In that set, the shale companies do not show the IDC expenses nor the depreciation expensing elections. Instead, they are taking those over 7-20 years.
The second set is for income tax purposes, where the companies take the IDC deductions and depreciation expensing elections in the year the well is drilled and completed, thereby greatly reducing actual income taxes paid.
The problem, of course, is that earnings per share, which is the common metric investors use in evaluating a company, are wildly inflated while the company is drilling and completing a lot of wells. I will try to illustrate this with an example:
Well drilled and completed in 2015.
Intangible drilling expenses $7,000,000.00
Tangible drilling expenses $1,000,000.00
2015 net production 100,000 BOE x $40.00 per BOE = $4,000,000.00
less LOE at $5 per BOE 500,000.00
G & A at $1 per BOE 100,000.00
Production and Ad valorem taxes 400,000.00
Net before capital expenses and income taxes 3,000,000.00
Assume IDC and TDC are amortized over 10 years
using straight line method 800,000.00
Net income for income tax purposes 2,400,000.00
Assuming a federal income tax rate of 35% and state income tax rate of 5%, there would be income tax due federal and state totaling $960,000.00.
However, if intangible drilling cost is expensed in 2015, the company shows an income tax loss for the well of $-4,100,000.00. There is no income tax due. The $960,000.00 is not charged against the earnings for SEC purposes, but is thrown onto the balance sheet as deferred income tax liability. For SEC purposes, the company shows $3,000,000.00 in earnings for the well.
The problem, of course, is this means the company can never stop drilling. All of the income tax deductions are being taken up front, so when they stop drilling, there will be a tremendous cash crunch. Production will be falling, but there will not be any remaining deductions to take for drilling and completing the well. There will be a big income tax bill due. The only way to defer the big income tax bill is to keep drilling. Further, instead of EPS being wildly inflated once drilling ceases, EPS will be wildly deflated, as the IDC and accelerated TDC will keep showing up year after year as a charge against earnings on the “SEC books”. It could make it appear to investors that the effective income tax rate for the company is much higher (my guess 60-70% in extreme circumstances).
If the IDC expensing election goes away, these companies look to be in serious trouble, assuming I have described this correctly.
I ask if anyone can shed further light on this issue or point out any flaws in my example, please do so. However, I think this is the explanation.
Investors really need to know how oil tax accounting works. I have been dealing with it for almost 20 years, and it still confuses me at times.
Additional comment: This issue will exacerbate the cash flow crunch if and when the banks and investors finally cut the shale companies’ liquidity off. So you decide to sell assets to raise cash, but 40% of the proceeds could very well be paid in income tax. Cannot ever reduce Long Term Debt.
No kidding. Try to add on the tax book requirements in foreign jurisdictions. I’ve worked in areas with service contracts providing for a guaranteed net income after local income taxes. That required working the tax books backwards.
Great post Shallow.
I do have a few comments where your story may need to be slightly adjusted, although again I also see these are very muddy waters and would like to get comments on this :
I agree with you up to the point where you say
“For SEC purposes, the company shows $3,000,000.00 in earnings for the well. ”
For earnings, I belief both the (deferred) tax, as the DDA (amortization) are deducted from the operating earnings. Therefore, in the case you describe I think the reported earnings for the well are : 3.0m – 0.8m – 0.96m = 1.24m$.
However, indeed the income taxes are deferred, so the company has more cash on hand, which they can use for more drilling. Once they stop drilling, indeed a big cash payment on the taxes could happen. I guess they rather keep on drilling than paying the taxman.
On the amortization: I do think that most of the drilling costs are not amortized over a period of say 10 years. Instead, they are amortized using the “unit of production” method. (see e.g. http://www.investopedia.com/articles/fundamental-analysis/08/oil-gas.asp#ixzz3bXcDjV53)
Basically this means that the amortization happens based on the produced BOE vs the total (developed) proven reserves (BOE) at the beginning of the period.
And I think that this is the major issue: high b values in the hyperbolic type curves (high EURs), and optimistic down-spacing projections, result in high proven reserves. This directly leads to lower DDA costs for each period, and directly increases the profit reported. The input from management on these parameters is crucial.
So there you have it :
– a direct way for management to influence the reported earnings for the period. You don’t want to put anybody in such position, especially not as their bonus will depend on those earnings.
– The Red Queen : drilling avoids the immediate payment of income taxes, and relatively higher reported earnings (lower DDA costs due to increases in developed proved reserves).
Shareholders should follow Warren Buffetts advice, and calculate their own “owner earnings” instead.
Enno: You may be right. I tried to put in my post a disclaimer that I am not entirely sure of how the accounting works.
I gladly welcome any shale company accountants to explain this and point out any errors I am making.
Second additional comment regarding deferred income tax liabilities.
Example CLR (using rounded numbers and estimating PV10 value of reserves, all categories, based upon comments from 2014 10K regarding potential write downs)
Debt $7 billion plus.
Value of PV10 all categories $7 billion
Remaining basis in assets ( I have no idea, but just assume) $2 billion
Cannot sell company for cash for PV10 value and pay off debt because there will be $5 billion of ordinary gain subject to recapture tax, so $2 billion of tax liability federal and state, using round figures of 35% federal and 5% state.
Only thing that works is to be paid in acquirer’s stock. But is acquirer able to obtain a stepped up tax basis, or in a buyout for stock, does the acquirer have to take the former’s tax basis?
Of course, CLR has an enterprise value of around $24 billion dollars. Why, I honestly do not know. I really have a hard time figuring out how they ever will be able to have enough cash to begin making significant debt reduction payments, given not only the steep decline in production but the income tax ramifications of taking the IDC expensing election, thereby deferring tax liabilities to future years.
Still being valued at over $100,000 per flowing BOE. Really cannot understand how this is still going on. And the analysts who tell us low oil here to stay for a long time have buy ratings on companies like this?
Thing is CLR looks better than most, outside of maybe EOG, COP, MRO and QEP. The rest are in worse shape. Sorry to keep saying it, but I continue to be completely baffled that the wall street folks do not understand these companies. I might understand if the analysts were calling for $100 oil in the near future, but it appears to me they are universally not calling for that.
If and when these companies are cut off from borrowing, it will all end quickly IMO. They will never pay off the long term debt. Will be interesting to see how cash flow neutral looks, as theses companies claim they will be the second half of 2015.
shallow sand,
here is a good article on deferred tax liabilities:
Effective Tax Rates of Oil & Gas Companies: Cashing in on Special Treatment
July 30, 2014
http://www.taxpayer.net/library/article/effective-tax-rates-of-oil-gas-companies-cashing-in-on-special-treatment
From 2009 through 2013, large U.S.-based oil and gas companies paid far less in federal income taxes than the statutory rate of 35 percent. Thanks to a variety of special tax provisions, these companies were also able to defer payment of a significant portion of the federal taxes they accrued during this period.
According to their financial statements, 20 of the largest oil and gas companies reported a total of $133.3 billion in U.S. pre-tax income from 2009 through 2013. These companies reported total federal income taxes during this period of $32.1 billion, giving them a federal effective tax rate (ETR) of 24.0 percent. Special provisions in the U.S. tax code allowed these companies to defer payment of more than half of this tax bill. This group of companies actually paid $15.6 billion in income taxes to the federal government during the last five years, equal to 11.7 percent of their U.S. pre-tax income. This measure, the amount of U.S. income tax paid regularly every tax period (i.e. not deferred), is known as the “current” tax rate.
Four of the companies in this study – ExxonMobil, ConocoPhillips, Occidental, and Chevron – account for 84 percent of all the income and paid 85 percent of all the taxes for the entire group. These four had an ETR of 24.4 percent and a current ETR of only 13.3 percent. The smaller firms paid an even smaller share of their tax liability on a current basis. When the top four companies and those with losses are excluded from the analysis, the remaining companies reported a 28.9 percent ETR on U.S. income, but only a 3.7 percent current rate. They deferred over 87 percent of their tax liability.
Many of the companies deferred more of their federal income taxes than they actually paid during the last five years. Occidental Petroleum reported a total federal income tax bill of $5.4 billion from 2009 to 2013, of which it deferred payment of $4.5 billion, or 83 percent. Continental Resources deferred $1.1 billion of its $1.2 billion in total federal income taxes. As a result, most of the companies accumulated large amounts of deferred tax liabilities during this period. The net deferred tax liability of Devon Energy more than doubled from $1.9 billion in 2009 to $4.8 billion in 2013. Apache Corporation’s net deferred tax liability grew from $2.6 billion to $7.9 billion during the last five years. In some cases, the amount of total deferred tax liabilities grew to equal a significant portion of the company’s entire net worth, as measured by its shareholder equity. At the end of 2013, ConocoPhillips reported total deferred tax liabilities of $22 billion, equal to roughly 42 percent of its total shareholder equity. Denbury Resources reported total deferred tax liabilities of $2.6 billion, equal to roughly half its reported shareholder equity of $5.3 billion in 2013.
The federal income tax of this group of companies is dramatically less than the income taxes they paid to foreign governments during the same period. Foreign income taxes totaled roughly 46.2 percent of their total foreign pre-tax income. And because the tax codes of foreign governments generally do not allow the deferral of tax payments the way the U.S. code does, these companies paid out 99 percent of the entire amount of $254.2 billion in accrued tax liabilities to foreign governments.
and a table
Thanks AlexS.
I notice in your table Apache deferred much tax, but they took a big write down in quarter one, which I think may have directly affected deferred income taxes. Deferred income taxes on the balance sheet dropped from 9.499 billion as of 12/31/14 to 6.611 billion as of 3/31/15.
Could someone explain how big reserve write downs affect deferred income tax liability? Also, what is the actual cash effect, if any?
Very interesting to see most of the big shale drillers paid almost no income taxes from 2009-2013, yet still had to borrow like gangbusters.
SS – Virtually every single public company will have 2 sets of books: One for SEC/GAAP accounting purposes and one to compute the actual taxes payable that year to the federal/state governments. There are differences in computations going both ways. Some things must be deducted for SEC/GAAP accounting, but which are not deductible for tax: For example, reserves for bad debts, fair market value write downs and reserves for restructuring charges. And, as pointed out above, there are things that are deductible for tax purposes, but not for SEC/GAAP reporting. For example, accelerated depreciation, intangible drilling costs (IDC), certain computer programming expenses, research and development costs.
With respect to SEC/GAAP the income tax expense, computed on SEC/GAAP earnings, IS DEDUCTED AGAINST EARNINGS PER SHARE. So, if an energy company has SEC/GAAP pretax earnings of $3 million and using the tax rates in effect would owe 35% ($1,050,000) in taxes, then that is the amount that is subtracted, and earnings are reported as $1,950,000. BUT, when they do their tax return, assume they had $3 million of IDC, so that their taxable income on the tax forms is zero. What happens on the SEC/GAAP books is that instead of recording $1,050,000 of “current” taxes payable on the Balance Sheet as a “current liability,” it is recorded as “deferred” taxes payable and as a “long term” liability (that is, due in more than one year).
In future years, SEC/GAAP pre-tax income will be reduced by an annual amortization of the IDC. So, the SEC/GAAP tax expense will be lower than the amount of actual taxes payable, because the amount of IDC amortized has already been deducted for tax purposes. So, a portion of the deferred taxes is moved up to current taxes payable.
Of course, if a company is growing and drilling more wells each year than they did in previous years, the current years’ IDC will likely be large enough to offset the amounts deferred taxes that are becoming current, so that you really do not see the individual well IDC deductions turning around. That is, as long as they keep growing, you may not see any net current taxes due, and the deferred taxes keep growing, but at a slower rate. If they sell properties, then all of the deferred taxes with respect to those properties become immediately due for tax purposes.
Great feedback!
Clueless. Thank you for your post! Am I correct that if liquidity stops flowing to a company and it stops drilling, income tax liabilities could exacerbate a cash crunch?
Yes. The drillers, kind of have a cash float. Like American Express, when it used to sell billions of Travelers Checks. They got the money upfront, but paid it out later when the checks were cashed, in some cases years later. Insurance Companies [Warren Buffett’s Berkshire-Hathaway, e.g.] have a cash float. They collect the premiums before the losses occur and are paid. The drillers can go years without paying taxes, primarily due to deducting IDC. But, if they stop, then taxable income, and thus income taxes actually payable, goes up, while generally SEC/GAAP income would be declining.
This thread has potential to lead somewhere.
I am not familiar with how the US (petroleum) tax code is structured, but from what I understand there are several taxations taking place.
1) At the wellhead. If this is monthly, bimonthly or quarterly may vary amongst the states.
2) Corporate taxes.
What I am trying to understand is how double taxation is avoided. And how the unit amortization method is applied.
Rune: I am going to attempt to give a simple explanation, and I may not do your question justice because taxation of US oil & gas is very complex.
1. Severance taxes. These are “taxes at the well head. ” Most states impose what I will refer to as a “severance” tax. It is a tax that consists of a percentage of the gross proceeds from the sales from the individual well or lease. In North Dakota, for example, there are two taxes, but they are basically in the form of a severance tax. If $1,000 of oil and/or gas is sold from the lease, and the severance tax rate is 10%, $100 is withheld by the crude oil purchaser from the proceeds due the owners of interests in the well or lease, and is paid to the taxing authority of the state. Typically crude oil producers pay the interest owners on a monthly basis, and therefore these taxes are in effect assessed “monthly”. The interest owners never have these tax funds in their possession, it is withheld directly from the crude/gas sales proceeds.
2. Ad valorem taxes. These are taxes imposed by the county in which the well is located. They are similar to real estate taxes that are imposed on an annual or semi-annual basis. For example, if a well produces a certain amount of oil per year, that amount is plugged into a statutory formula and the county tax assessor sends a bill to each owner in the well or lease for the amount generated by the formula calculation. Separate bills typically are sent to each royalty owner. As to the working interest, typically a bill for the entire working interest is sent to the operator. The operator pays the entire bill, but then bills any non-operated working interest owners for their proportionate share. Again, these taxes are usually assessed on an annual basis, and are paid in either one or two installments each year. These taxes are usually calculated based on past production. Depending on the state, it may be that the tax on flush first year production (lets say 2014) is not actually paid until the taxes assessed for 2015 tax year are due and paid in 2016. I have often wondered if this is another cash crunch that could hit shale oil producers in the event liquidity is shut off.
3. Federal and State Income taxes. These taxes are assessed at the entity level. After the vast number of various deductions are subtracted from gross income, the net income is multiplied by the applicable tax percentage, which is set by federal and state statutes. A federal income tax return is filed for the entity and income tax is paid with the return. Also, a state income tax return is filed for the entity and state income tax is paid with the return. The tax returns are filed on an annual basis, usually due by March 15 for corporations, April 15 for MLP’s, LLC’s and other “flow through entities”. Typically, the entity is required to estimate the tax liability for the upcoming year and pay same on a quarterly basis. What I am describing is the general rule for subchapter “C” corporations. The corporation, not the shareholders, pay the tax.
However, if dividends are paid to shareholders, the shareholders pay income tax on the dividend income received. This is the double taxation that you may have heard of.
On the other hand, if the entity is in the form of a Master Limited Partnership, Limited Partnership, Subchapter “S” corporation or LLC, the entity typically does not pay federal income tax. Some states do impose a tax on these “flow through” entities, however. With these entities, all income and deductions “flow through” to the unit holder or “shareholder” who then pays income tax on the net income at ordinary income tax rates. (In the US, dividends from Chapter “C” corporations are taxed a preferential (lower) rates.
The above is leaving out thousands of pages of tax laws, that are very nuanced, containing many exceptions, and can be very complex.
The point I and others are making is that drilling and completing wells receives substantial tax preferential treatment. Further, this treatment is not easily understood when looking at SEC 10K and 10Q, because this treatment is not fully reflected in the reports, or at least not in a manner that is easily ascertained. What results, as long as many wells are drilled in a continuous manner, is large tax deferral, that as clueless notes, the companies “float” on, as long as drilling/completing wells is maintained.
Take note of my example. It is correct, I think, except the company does reflect that it has paid the federal and state income tax, for purposes of reporting earnings. However, it really has not paid this amount, and therefore, this amount is shown as a deferred tax liability.
The problem arises when the company stops drilling. Because it has not, for tax purposes, recognized CAPEX for each well over a number of years, but mostly in the year incurred, for income tax purposes, there is little to no CAPEX deduction left to take against year 2 and future profits.
So the company that stops drilling is faced with lower production and earnings, but actually pays more in federal and state income taxes than it did in earlier years when it was drilling many wells and producing more barrels.
The big concern, of course, is what happens when the company that stops drilling needs to pay debt principal (and interest) with earnings, but is limited due to a much greater income tax liability.
As to the Unit method for calculating depletion, I do not see how this comes into play with the company that originally drilled the well. In my view, there is no cost depletion to take if the company expenses all intangible drilling costs in the year the well is drilled an completed. It would seem the unit method of determining cost depletion would only come into play if the IDC expensing election is not taken, or in the event Company B purchased a well or lease from Company A, at which time Company B receives the tax basis for the amount paid for the well or lease. Part of that basis is allocated to tangible lease hold equipment (tanks, casing, etc.) and is scheduled. The intangible part (oil/gas in the ground) can be subject to a reserve estimate, and then cost depletion is taken over time. I do not know enough about cost depletion to say much more. I will say that percentage depletion does not depend on the amount of estimated remaining reserves, but is a flat percentage taken each year, and is limited to 1,000 BOE per day per entity. Percentage depletion is intended as a simplified tax break for smaller producers. One must elect either cost or percentage depletion.
Ultimately, what is reported as EPS for SEC/GAAP is usually not remotely close to what happened on the federal income tax return. In my view, companies are forced to drill to avoid the double whammy of lower production/earnings coupled with increasing tax liability.
I wonder if any of the TBTF banks are figuring in all the income tax aspects into “break even”?
Sorry this is so long winded. Maybe someone can simply this post, and again, point out any errors I have made.
Question for SS – In the United States, at any given time, there are hundreds, if not thousands, of lawsuits against oil & gas producers by royalty owners. The problem usually seems to be, what is the value at “the wellhead,” when virtually nothing is sold at the wellhead. So there are costs that are incurred to get the product to a “market” such as a gas processing plant or a railhead, or to some other gathering place. On the other hand, I do not recall ever reading about a severance tax lawsuit. And, my understanding is that % severance taxes are also based upon the “wellhead” value. My question is: “Why is that?”
With respect to cost depletion. All geological and geophysical costs are capitalized [3D seismic, etc.] Also all lease bonus payments are capitalized – $20,000 per acre, etc. These costs are recovered through cost depletion. I believe that delay rentals are expensed as incurred.
Clueless. When I refer to “well head” I am referring to what is actually produced. I’m not sure I understand what kind of royalty/mineral owner suits you are referring to.
I think there is a misconception that the crude producers always bear transportation costs and sell oil directly to refiners. Many times, this is not the case. XTO will sell to the CVX pipeline subsidiary, etc, at a discount to WTI and the pipeline sub bears the actual cost of transport,
for example. Doesn’t always happen like this I do admit. I am sure it can get complicated.
I think that Clueless is primarily referring to litigation over the deduction of post-production costs on gas wells, in regard to royalty payment calculations.
For info regarding the dispute in Texas, search for: Heritage Resources V. Nationsbank.
But Clueless makes a good point. Arguably, the best market value number at the wellhead is the dollar amount that is used for severance tax calculations.
Shallow, thanks a MM.
That was very elaborate and thank you again for taking the time.
Short version, is it right to say that the effective tax rate is somewhat higher than only applying the wellhead taxes.
The wellhead taxes are apparently the dominant tax portion.
To me the US petroleum taxes have been an enigma wrapped in a mystery.
The reason is how the investment (CAPEX) is recovered.
In Norway (all petroleum extraction is offshore) the rules are (what I believe) simpler.
I will try to illustrate this with an example of a field developed with a CAPEX of $1.200 Million.
The CAPEX is recovered linearly over 6 years from the point in time the investment was made.
Then there is an uplift (to harmonize with alternative investments) which now is 22% (was 30%) of the CAPEX subject to only corporate tax spread over 4 years (5.5% of CAPEX per year). The profits (earnings minus OPEX) are taxed at a corporate tax rate of 27% plus a special petroleum tax of 51% (economic rent), the total tax rate 78%.
So to illustrate this let us say that the owners (companies) grosses $500 Million per year over the first 10 years of operation and that OPEX is $100Million annually which is deducted before taxation.
In the year 1- 4 the company pays an annual tax:
{($500M – [$1.200M/6 = $200M] – [$1.200 M * 0.055 *0.27 = $17.8M] – $100M (OPEX)} * 0.78 = $142.1M
Year 5 and 6 is without the uplift;
Total tax: $156M
From year 7 total taxes become:
[$500M – $100M (OPEX)] * 0.78 = $312M
The structure allows for a fast recovery of CAPEX (the investment).
(there are some exceptions, ifs and buts, but what is described is the overall structure), which is important to keep financing new developments.
Taxes are paid bimonthly.
It is this CAPEX recovery in the US petroleum tax structure I have tried (and asked a lot around) to understand .
Note that the structure used in Norway also makes the state have skin in the game both when it comes to development costs, CAPEX and OPEX. If the development becomes costlier, the state loses out on tax revenues and also the owners loses out due to lower profits. This is “misery sharing” and makes all involved cost focused.
Rune: To summarize, the US taxation system at the state “severance” level and county “ad valorem” level is pretty straight forward, after one gets past how the calculation is made and the many legislated exceptions, breaks, etc. The former is withheld every month and the later is billed every year.
The federal and state income tax of the corporations is incredibly complex. The bottom line, I believe, is that drilling is greatly encouraged by the Federal Tax Code. I presume this is largely because the United States desires to encourage new domestic production, but that new domestic production is generally not competitive with that of other countries. Therefore, taxes, through a very complex system, are deferred, and will continue to be deferred to a large extent until either the company slows or stops drilling, or until a lease or well is sold.
One other thing to note, even though federal and state income taxes are levied on the corporation as a whole, calculation of depreciation and depletion is done on a well by well or lease by lease basis. I believe you have referred to that before. These units are then aggregated on the federal income tax return. The state income tax returns generally “piggyback” off the federal return.
Our family company income tax return is routinely over 100 pages and costs several thousand dollars to have prepared. I can only imagine what a major shale producer’s looks like.
Another note, there are many proposals to do away with IDC expensing, percentage depletion, etc. Some producers have argued in favor of this, with the rationale that less tax breaks will cause less investment, which will reduce production, and therefore increase the price. This, of course, is probably too much an American-centric view. Elimination would likely greatly reduce new production. I tend to doubt the shale boom would have occurred to the extent it did without the tax system that is in place.
In closing, I have never figured in federal and state income taxes, nor county ad valorem taxes into my elementary school break even calculations. They should be obviously, but doing so accurately is tough.
Kind of like OPEX, which I have demonstrated can vary immensely, one probably needs the actual lease operating statements/company books to do this accurately, plus be an expert in oil and gas taxation. My question, are the TBTF’s figuring in all this?
I truly think that these companies/wells are so front loaded, not only regarding production, but concerning income taxation, that there is no way long term debt principal will be paid to any extent absent higher oil prices than we have seen to date, except for maybe a brief period in the summer of 2008.
Followed the accounting. Got nothing to add, particularly.
Seems intriguing that all of these companies have accounting staffs with more specific-to-shale-oil focus/tax spreadsheets/experience than clueless or SS or me or anyone here, and there is no question that they ALL see that they can never pay back the debt.
ALL meaning all the companies. They all know. They all still borrow.
They likely know something else that lets this go on. Maybe the same sort of thing that drives US debt to 18 Trillion today. And China to keep borrowing every year.
That something else is out there.
They are not personally liable for the debt. If management had to guarantee even a small part, I doubt the money would get borrowed.
If I was making $500K or more in an upper management job, I would want to keep the party going. I think you have posted this thought many times Watcher.
The banks keep floating the paper to pay off their first lien credit lines, and make massive underwriting fees on the bond issuance.
Don’t be too sure the ones buying the paper know the whole story. We are hyper focused on it, and I’m still in the discovery phase given the complex accounting.
Are you sure the pension fund manager is locked in? He is probably more worried about his T time.
How about your retail stock broker? Think he follows WTI daily, knows the OPEX per barrel for a 5 year old shale well, or understands the tax deferral issues we have been kicking around? He is more worried about generating enough commissions and fees to put in his pool.
All these guys think CLR is to XOM as AAPL is to MSFT. Its new tech in the oil patch. Plus now is the time to buy, the sector has been beaten down. Heck, an 8% bond. How hard is that to sell to a client in this ridiculously low interest rate world?
Crap mortgages were rated AAA less than 10 years ago. The late 1990’s internet bubble ring a bell?
Don’t assume everyone is smart just because they are in finance. Many are just good salesmen. Quite a few have blown me away with how little they know about the investments they peddle. But they could sell sand to Saudi’s in the middle of the desert.
I have read The Blank Slate. It is without a shadow of a doubt one of the most important books EVER written in that it chronicles the recent sea change in our understanding of our intellectual and social natures.It does for the head what Darwin did for the body in terms of our understanding.
The entire academic establishment coming before the arrival of the evolutionary psychologists is being swept away. This process will take some time of course.
We have not yet even finished fighting the battle about our physical origins. The preachers have a vested interest in the old theory of Adam and Eve ya see.
The people who don’t like Pinker simply don’t understand biology at the most basic level.
Pinker is pretty close to an intellectual god compared to his critics who have a vested interest in tearing him down.
They compare to Pinker the same way a witch doctor in his mask shaking his rattle and dancing compares to a modern doctor with real training and expertise in biology and medicine.
He is not the ORIGINATOR of evolutionary psychology but he is one of the foremost people in the field..
When it comes to writing books accessible to lay men he IS probably the best.
The whole edifice of biology is built on evolution.
This situation will continue to exist until his detractors are all dead in academia- that will take a few more decades. Soft science types seldom have to admit they are totally wrong. It will take a long time after that for semi educated people they train as actual workers to die.One throwback teaching psychology to teachers to be in 2015 means there will be teachers in classrooms still following his teaching for forty or fifty years.
Not to worry, though.
When the Ponzi scheme all comes tumbling down, the taxpayers will be there to pick up the pieces and bail out the bankers, as they’ve done over and over again since the Reagan Revolution.
In Bad Money Kevin Phillips lists 12 different times since 1982 that the tax payers have come to the rescue and bailed out the banks for their profligate lending practices.
From Kevin Phillip’s Bad Money
Glenn, this is not a religious blog. Please do not quote the Bible in any attempt to prove your point.
Ron,
To set the record straight, I was lampooning the Biblical account of the prodigal son. It was satire.
I’m a skeptic, an agnostic, and don’t buy into any religion, including the secular varieties like Positivism.
old farmer mac said:
He [Pinker] is not the ORIGINATOR of evolutionary psychology but he is one of the foremost people in the field..
You can say that again.
Pinker has all the tell tell signs of someone like Billy Graham who was catapulted into overnight rock star status because certain rich and powerful people took a shine to what he had to say.
Glenn, in all honesty, comparing Pinker with Graham is the very stupidest thing I have read in many a day. Absurd beyond belief. And of course it is purely ad hominem, you are attacking the man and not his work by saying he is just like a fundamentalist backwoods preacher.
And I don’t mind saying that trying to make such a comparison says something very profound about your intellect. And it ain’t pretty.
You may throw more mud at Pinker if you like but this is my last response to you, on Pinker or any other subject. I have better uses of my time than replying to someone who resorts to such ignorant tactics.
Ron,
It seems I’ve hit a raw nerve.
But you still haven’t addressed one key question, and that is, “Why does Pinker omit the parts from his analysis about the untold violence committed by the Western imperial powers against countries outside their little club?”
Pinker, just like Billy Graham, is yet one more evangelist of the United State’s national mythology.
SS . . . two different motivations to examine.
The finance people at the companies . . . yes, keeping the company functioning keeps the salary flowing. So they sell bonds and credit line requests to banks.
The bond dealers probably don’t know or care that the bonds won’t be redeemed. They just want their commission. And the customers that buy them don’t have time to study.
The channel that IS curious is the bond fund managers or bond index fund managers. They SHOULD be studying.
A goodly % of those have concluded there will be a bailout of shale bonds. They’re probably right.
I have always seen this as being equivalent to shifting capex to OPEx and viceversa. It’s the result of USA medieval tax law, which is copied by other countries. I would have put everything, capex plus Opex in a single pot and given the entity the ability to write off half in the first year, half in the second year. With thirty year tax loss carry forward provision indexed to the GDP deflator. That would put about half a million tax lawyers and accountants to do more useful work.
A hair raising story about the pollution in India, from the point of view of an ex-pat with kids:
NYT: Holding Your Breath in India
http://www.nytimes.com/2015/05/31/opinion/sunday/holding-your-breath-in-india.html?action=click&pgtype=Homepage&module=opinion-c-col-right-region®ion=opinion-c-col-right-region&WT.nav=opinion-c-col-right-region&_r=0
I posted a similar article a few weeks ago about an ex-pat in China, with kids. Some children attend a school that is within a hermetically sealed dome, with air filters used to treat outside air:
http://www.nytimes.com/2015/04/16/magazine/how-do-you-keep-your-kids-healthy-in-smog-choked-china.html
There was a recent documentary on Chinese pollution, “Under the Dome.”
https://www.youtube.com/watch?v=T6X2uwlQGQM
Ladies and gentlemen, we have a leading candidate for stupidest article of the year, an item posted on Peakoil.com:
Data will replace oil as source of energy: Alibaba’s Jack Ma
http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20150528000121&cid=1204
😀
Do you guys suppose it is POSSIBLE something really critical was lost in translation?
I read this article twice and it is BEYOND stupid – to me at least.Incomprehensible is the word that comes to mind first.
I can’t make heads nor tails out of it except that the speaker thinks future technologies will inevitably displace current technologies with the result that those who do not keep up are going to lose out. Nothing new there at all.
The speaker appears to be an intelligent man so it seems at least possible he is talking about something that just doesn’t translate. ???
Maybe he thinks these new data driven technologies will be the SOURCE of our energy in the future.
Wind ,solar , geothermal etc all do work and will work much better in a totally connected world.
Jack Ma has 1,000 times as much money as all the usual suspects on this site combined, so I would hesitate to write him off as stupid. Of course his talk was high-level, therefore vague.
Here’s an example: Somebody is driving across town, and Uber tells them that they can give someone else a ride — someone who just happens to need transportation that is approximately the same trip at the same time. The driver gets some spare money, the rider gets a cheap ride, and now they are transporting two people in one car rather than 2+ cars (because an ordinary taxi driver would have extra driving at the endpoints). Significant oil is saved, all by data.
Then there is Jevons’ Paradox.
Jevon’s paradox is over-rated. Given free gasoline, free electricity, free food, I will drive no more, use no more electricity, eat no more. In all these cases, I am satiated. Moreover, there are other costs: driving takes time, frustration, energy; eating too much leads to being fat and having health problems.
I once looked at electricity use per capita: New York and California (high-income) have low per capita electricity use; highest electricity use was Kentucky (low-income). China may use more electricity as income rises, and Jevon’s paradox may apply to them, but we in the West have it pretty good.
Here, here!
I agree that Jevons Paradox has a very limited effect for people that have to work for a living…for those that have a ‘Jay Oh Bee’. There are only 24 hours in a day, people…most folks have to work…and folks get tired…there is only so much one can consume per unit of time. Techsan has the right of it: there are non-budget/financial limiting factors for any activity: time, the need for sleep, and fatigue.
In fairness, yes, there are plenty of Americans who are abandoning their efficient cars and buying a big pickup or SUV now that gas is cheap.
It is important to determine the Jevon’s coefficient for each case: given an x% decrease in price, what will be the y% increase in consumption? But, the Jevon’s coefficient y/x is always less than 1, usually much less.
That’s the mindset of the new Chinese capitalist class
While I am not a technocopian true believer I do recognize that the possibilities are both mind boggling and within reach of current day technologies.
http://www.alternative-energy-news.info/makani-energy-kite/
This machine – a tethered wind generator kite – could obviously be built for relatively little money compared to a conventional wind turbine on a big expensive tower. And the wind DOES blow far more consistently a few hundred feet higher up.
Such kites should be affordable once put into mass production- if they are indeed eventually mass produced.
Software once written is essentially free thereafter.Research and development likewise mostly a one time up front cost.
There are millions of places such kites can be flown on a thousand foot tether that would endanger nothing more expensive than a cow – and cows are born destined to eventually be turned into hamburger in any case.
If we make the decision to do so we most likely COULD cut back on oil consumption fast enough to offset depletion without peak oil murdering the economy outright. It is true that HVDC power lines cost a fortune – but so did the interstate highways and all the other freeways. With adequate long distance transmission we could use a LOT of wind in lieu of gas and oil as the fossil fuel supply shrinks.
Gas and oil as Fernando points out occasionally are going to be around a long time -just in lesser quantities.
Power kites have always been one of my little energy gadget games. Mine and LOTS of other people, since the payoff is obvious.
I played around with the generator on the kite and didn’t like the problems, so went to a yo-yo kite, which simply winds and unwinds a windlass driving an alternator sitting on the ground. This thing is far simpler than the one shown, and costs next to nothing in comparison.
There can of course be many kites on one alternator shaft. Each kite with enough wits to avoid all the other kites.
Another idea is to make the kite, a glider look-alike, out of hydrogen-filled tubes as structure members, so it could be much easier to get up in light winds. BTW, not any new idea.
No way anybody is gonna use helium in powerkites. Anyhow, it’s easy to put the hydrogen in many bubbles so as to inhibit flame propagation.
I had my head in the middle of a hydrogen blowoff once and didn’t even get singed. Entirely my carelessness- real loud. Bark way worse than bite.
Hi Wimbi,
I suppose you say helium won’t be used because it is too expensive.
I don’t see any problem with hydrogen since losing a single kite would not be that big a deal and as you say there are techniques for fireproofing. Just keeping oxygen out is all that is necessary.
A small hydrogen leak in a kite in the wind would never be much of a fire danger- it would blow away in the wind very quickly and there would never be a flammable accumulation mixed with air.But using hydrogen might require the use of novel materials to keep it from leaking right thru the air frame components.
My guess is that solving the cost problem associated with this type of kite will prove to be easier than solving the problems associated with yo yo kites. First off this design is vertical take off helicopter style using the generators as motors. A tether cable conductor is apt to be much lighter and much less troublesome than a yo yo cable and winch arrangement imo.
Well, OFM, my method of answering that sort of Q is to do it and see. I always pick stuff I can do right here and right now on my own resources. I looked at several power kites and have decided to go for the yo-yo because I see easy ways to do it right now.
I plan to have a hydrogen balloon on a slip ring to lift the kite and its rope up to get to the wind, then I can pull the balloon back down (or blow it up!) when it has done its job.
Look up dyneema ropes- fantastic strength/weight ratio.
Ground mounted alternators are FAR cheaper than flying ones- or those on big props on top of a huge tower.
Problem. Have not finished three other projects already in the works and grinding slowly toward their first tests. Kite will have to wait.
The Baker Hughes Rig Count is out. Oil rigs down 13, gas rigs up 3. Texas down 4, California down 3, North Dakota down 1.
I think that it is somewhat interesting that vertical rigs are down 72.5% for the year, but horizontal rigs are down only 46.1%. I know that there are a lot of factors, including how much each well expects to produce. But, it might be the effect of smaller, more conservative companies [more closely held than large public companies?] reacting more quickly and decisively. The larger companies having access to more borrowings may not be facing the facts correctly. Just a thought, with no real way of actually determining from the raw rig count numbers.
clueless,
Vertical rigs are mostly conventional rigs and horizontal rigs are generally shale rigs. In other words the US is converting towards 100 % shale. This is especially true for natgas production, which is already 60% shale. In my view this has huge consequences on the production cycle of gas and oil production, which will lead to unknown boom and bust cycles as the decline rate of shale is almost ten times higher.
In the event anyone is still lurking on this thread, the 4 qtr. average seasonally adjusted annualized rate (SAAR) of the YoY change of real final sales per capita as of Q1-Q2 has decelerated below the historical “stall speed” prior to recessions.
Moreover, the sum of real per capita after-tax profits and disposable personal income and total gov’t receipts has similarly decelerated to a rate from a peak that historically was followed by the average 4-qtr. average of real final sales being ~0%, i.e., recessionary, for 4-6 qtrs. thereafter.
Then subtract from real final sales per capita the accelerating rate of so-called “health care” spending, and the SAAR 4-qtr. average is slower still.
A caveat here is that the historical “stall speed” that has averaged ~1% real per capita since after WW II might now be significantly slower given the dramatic deceleration of the average rate since 2007 at ~0%.
Finally, with the dramatic deceleration of real final sales per capita to ~0% since 2007, the US economy is much more vulnerable to any number of shocks, including weather, drought, natural disasters, labor actions, energy, and geopolitics. In fact, consumer prices have accelerated YTD in recent months to 2.3-3% annualized, which is above the post-2007 trend of ~1.75% for core CPI, suggesting that the seasonal acceleration of consumer price inflation will drag on growth of real final sales against more challenging YoY comparisons going into the summer-fall, reducing demand and implying a deceleration of CPI later in the year.
Therefore, the plunge in the price of oil since last summer-fall is consistent with the US and world economies decelerating to “stall speed” and perhaps the onset of recession (or recession-like conditions) beginning in Q4. That implies ~0% probability that the Fed will hike rates, whereas they will more likely resume QEternity later this year to fund the increasing deficit/GDP.
BC,
Corporate profits are in the ditch. Which is a big deal. People who believe US equities can only travel in one direction, up are sadly mistaking. All those massive corporate buybacks done since really the beginning of QE depend on corporate profits to service that debt. Market is going to laugh at Fed’s QE and head south anyway. At which point full faith and credit of the FED and the US will come into question. Fed can print all the dollar it wants to. It can’t make corporations profitable. These companies doing all the buybacks, in order to service the debt will have to become net sellers of their on stock and they will be selling into a market with no buyers. Guess the SNB will have to up it’s already bloated holdings of US equities.
Total agree with you on more QE is on the way once they put the all is well narrative to rest later this year.
Market is going to laugh at Fed’s QE and head south anyway.
Why do you suppose it hasn’t happened already? What will change to make the market come down significantly?
I’m not one of those who believe the market will always go up. In fact, I don’t trust the market. But if it is being propped up by air, what will change perceptions enough to have it fall?
Massive buybacks are still going on. This is what in reality has pushed the market to the heights we currently see. These buyback are funded with borrowed money. Corporate USA is buying stocks instead of investing in CAPEX that will produce future sells and profits. They either have to roll over the debt when it comes due or they become sellers of their own stock. With insufficient profit from lack of investment it’s a matter of time before it catches up. Fed can make money as cheap as possible to borrow which will drive stocks up. One thing they can’t do is make corporations profitable. Most of the valuations in stocks of companies we see currently are whats called paper gains.
So those profits are not realized until companies sell. So while on paper things look great stocks are near all time highs. Underneath and hidden from sight is a ugly reality. This is a ticking time bomb and it will end in tears for many investors.
These buyback are funded with borrowed money.
Companies like Apple make enormous profits. They don’t need to borrow money.
There are many companies that are profitable. The problem with them is that they don’t invest the money.
S&P 500 Companies Spend Almost All Profits on Buybacks – Bloomberg Business
As Activism Rises, U.S. Firms Spend More on Buybacks Than Factories – WSJ
There are more immediate reasons to be decreasing fossil fuel use than global warming.
Holding Your Breath in India – NYTimes.com
http://peakoilbarrel.com/opec-according-to-the-eia/comment-page-1/#comment-519209
Yes, I remember that article, too.
The reason we need to be cutting back on fossil fuels are (1) pollution and environmental damage, (2) declining supplies, and (3) climate effects, in that order.
Anyone who thinks environmental laws have been unfair to the coal industry should look at places like China and India (and early industrialized cities in the US and England) to see what the air becomes when there are no or inadequate restrictions.
Climate change and global warming are not the most pressing reasons to be reducing fossil fuel use and we needn’t get bogged down in those discussions to avoid dealing with realities that are happening right now.
Yes, but my perhaps too subtle point was that while it’s not realistic to expect people to scroll through several hundred comments to see if something has already been posted, it might at least be a good idea to see what was posted today about 9 comments up the thread at 9:05 AM today:
Jeffrey J. Brown says:
29/05/2015 AT 9:05 AM
A hair raising story about the pollution in India, from the point of view of an ex-pat with kids:
NYT: Holding Your Breath in India
http://www.nytimes.com/2015/05/31/opinion/sunday/holding-your-breath-in-india.html?action=click&pgtype=Homepage&module=opinion-c-col-right-region®ion=opinion-c-col-right-region&WT.nav=opinion-c-col-right-region&_r=0
Sorry. After I posted it, it occurred to me that maybe I first saw the article link here rather than Facebook. Usually I keep track of where I learn about an article, but today I’ve been jumping on and off-line to such an extent that I wasn’t keeping track.
“…already all the interviews with [Steven Pinker] and reviews I’ve read are fairly infuriating…
———
“You shock me Nick. He never said we have only a few only several hundred million years to live…” ~ Ron Patterson
“Let me reassure you, Ron, I haven’t lost my usual rigorous approach.” ~ Nick G
“This is what I mean by re-interpreting her work to fit your narrow narrative.” ~ Rethin
Caelan,
The Blank Slate is a brilliant book. Ron is on the money on this one. Pinker absolutely nailed it! The criticisms Pinker received for this book are due to the fact he got it so CORRECT.
Humans generally don’t like the idea that we are survival machines dancing to the beat of our genes.
Your quote:
Menand writes ‘[t]he insistence on deprecating the efficacy of socialization leads Pinker into absurdities that he handles with a blitheness that would be charming if his self-assurance were not so overdeveloped.’
End quote:
Sorry, I think I just had a bowell movement. Anyone that speaks with that kind of difficult language is obfuscating or attempting to confuse.
Simple and clear language is the best way to communicate. And if your message is good, you have nothing to hide.
IMO, one of the only ways to make the situation we are in any worse would be to voluntarily become anarchists.
I offer this quote also because one concern read about Pinker was that he apparently used examples of people that were already ‘farming’, thus not precisely hunters-and-gatherers. And, as suggested, when there is agriculture and its accompanying localized, less mobile lifestyle, given an invasion, there is therefore a greater impetus to remain and fight for such things as food and shelter, rather than to flee.
While I’ve already written about this in other comments; if humans had a propensity for violence in the past, where did it go? Did it just magically disappear? The answer seems to be that it got merely displaced, and perhaps displaced into forms that Pinker may be somewhat blinkered about.
But even so, placing tigers in a cage, as per my previous metaphor, and then calling them less violent, misses the fact that they have been removed from their natural context. Do you see any problems with that?
The coercive State is a zoo, a cage, a prison, Plato’s Cave, The Matrix, call it what you will.
If you are happy in your prison, Boltzmann Brain IV, getting shitfaced with your carbonated/alcoholized piss in potentially-substandard surroundings with matching entertainment, that’s your prerogative, just don’t impose it against their will on those who don’t want it. That’s anarchy.
We’re All Anarchists – Most Just Don’t Realize Yet
“Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.” ~ Benjamin Franklin
“Anarchism is founded on the observation that since few men are wise enough to rule themselves, even fewer are wise enough to rule others.” ~ Edward Abbey
We’re All Anarchists – Most Just Don’t Realize Yet
But that title says it all. How do you anticipate you and other anarchists are going to help the world’s population to realize they are anarchists?
Further, how are you going to facilitate change in the world and avoid violence in the process?
One can be philosophically against any sort of statehood, but getting the job done has not be accomplished so far.
Permaea
😀
I went to the PERMAEA website and see that it is a work in progress.
Here’s a site which I think is a good resources, particularly in that it doesn’t try to promote one vision of P2P organization over another. Therefore you can have people who heavily favor technology networks talking to people more interested in low-tech forms of organization. What the site allows is a broader discussions of the concepts involved.
P2P Foundation
Caelan,
I am happy in my “prison”.
Don’t you worry. LOL!!!
It is easy to find things to criticize in this world. We are lucky to be here at all.
It is extremely unlikely that you have discovered a system that would fix all the issues and that transitioning to it would simply work. Everything has trade-offs.
I wish you the best. I enjoy discussing ideas. Nothing personal.
That’s nothing new, and I have ‘freed your quote through hypertext’ as part of my response.
As long as some people’s prisons, and notions thereof, remain with them and not coercively-projected outward onto others and the rest of the world (otherwise, it becomes, as you say, ‘personal’), then perhaps the rest of us may have less to concern ourselves with, and the more we can enjoy and extend our good fortune in being here.
Caelan,
Hang in there.
Pinker is a partisan in this ideological battle.
Caelan,
Are you familiar with Scott Noble and his work? He is an anarchist film maker from Canada who IMHO has produced some of the most incisive and hard-hitting documentary films around. Here’s a link to his website:
METANOIA
Is there a reason you are more attached to the term anarchy rather than peer-to-peer? The peer-to-peer concept comes from Internet and digital networking, which perhaps you are opposed to.
But peer-to-peer doesn’t come with the baggage that the term anarchy comes from. And peer-to-peer is a form of organization, much like you would find with Wikipedia (though there are some who criticize that site because some editors and contributors are more equal than others).
What has given energy to the P2P movement is the technology that allows a lot of people to contribute widely and simultaneously. It isn’t so much about small villages who don’t use any forms of electrically powered communication tools to stay in touch with each other. If one believes in peak fossil fuels, but doesn’t believe in renewables, then the P2P concept falls apart as soon as the energy runs out.
The reason I called Noble an anarchist is because that is what he calls himself.
Anarchism will return us to our basic survival mechanisms as a species – cooperation, equality and peace.
From that article:
Once we begin – as a global community – to conceive of states, as well as capitalism, as unnecessary and indeed harmful constructs, we can start to build alternatives from the bottom up.
That’s the hard part.
Occupy Wall Street had the right cause, but the movement didn’t expand and grow. Why not?
The recent 10% rise in South Korean oil imports seemed surprising given the stagnant economy. It seems the volume of oil in storage has increased. From a year ago I noticed this article where the Korean government was planning such a move.
South Korea to offer tax incentives, ease restrictions in bid to become oil hub
http://www.platts.com/latest-news/oil/seoul/south-korea-to-offer-tax-incentives-ease-restrictions-26750065
and here is a photo of an underground tunnel at Yeosu that some of this oil is stored in.
I suppose the South Koreans have decided the best way to spend their oil money is to buy it now while it is relatively cheap – compared to what it will be costing them later.
“A group of more than 120 CEOs and other institutional investors who manage more than $12 trillion in assets sent an open letter to seven of the world’s wealthiest countries on Tuesday, asking them to make bold commitments to reduce greenhouse gas emissions during the U.N. climate talks later this year. The reason, the letter said, was because of the uncertainty surrounding how bad climate change would be and how it would affect their businesses.
“As institutional investors responsible for managing the retirement savings and investments of millions of people or managing endowments, we believe climate change is one of the biggest systemic risks we face,” the letter read, urging the countries’ financial ministers to support a long-term global emissions reduction goal that limits warming to a 2° Celsius.
The letter was sent to the Group of Seven (G-7), which is made up of the finance ministers of the United States, the United Kingdom, Canada, France, Germany, Italy, and Japan. Among the letter’s signatories were managers of some of the world’s biggest investment and pension funds, including the California Public Employees’ Retirement System, the New York State Common Retirement Fund, and the AFL-CIO.”
http://thinkprogress.org/climate/2015/05/28/3663604/ceos-institutional-investors-climate-change-letter/
the letter…
http://www.iigcc.org/files/publication-files/InvestorCEO_letter.pdf
Fernando has posted a piece on Venezuela on his own blog.
I can’t vouch for the details being accurate as he interprets them but overall his description of the situation there rings true to me. He goes into some detail about the way Venezuela arranges working partnerships with foreigners..
All I can say is that I am not surprised that nobody is investing in Venezuealan oil to any serious extent. The companies that are investing token amounts now seem to be just keeping a foot in the door waiting for the political situation to improve.
They are not investing more because they are offered ONLY joint ventures – meaning that any disputes are settled EXCLUSIVELY in Venezuelan courts.
http://21stcenturysocialcritic.blogspot.com/2015/05/venezuelas-heavy-oil-scam.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+21stCenturySocialCritic+%2821st+Century+Social+Critic%29
A joint venture with an international arbitration clause in Stockholm is fine. The JV structure allows them to reduce project efficiency so it works more like they do in a communist country (slow, less safe, less environmental restrictions). It also has other hairs, but it’s not out of the question. The lack of arbitration is an indicator of extremely high risk.
Well, we’ll see how it all plays out.
But, as the NY Times reports, there’s trouble in the US’s neoliberal paradise too:
The people who signed it are investment fund managers for the California state retirement system, other retirement groups, some churches, and investor funds. There seems to be a full press by the climate change team to get something done in Paris. It will fail. India, China, USA, Russia, and other large players won’t abide by a treaty. Everybody else knows it. So the Paris meeting will be another gabfest with a Kyoto like result.
Saw four whooping cranes on Thursday. They’re a long ways from overshoot.
Everything is fine out there.
So far, it’s a tough row to hoe right now.
Got about 250 plants of collards, 200 cabbages, 250 pounds of potatoes planted, hundreds of onions, plenty of radishes, about 280 lettuce plants, 250 kohlrabi, 250 kale plants, carrots, peas, broccoli, 40 or so brussels sprouts, artichokes, oregano, cilantro, chives, the raspberry patch is growing in leaps and bounds, got about ten new cherry trees planted, the hops are growing good, will double the cabbage, kohlrabi and kale planting in the next two weeks or so. The other good stuff like tomatoes, peppers, eggplant, muskmelon, water melon, cucumbers, squash are going to be in the ground soon. The garlic is going gangbusters.
The whole thing will produce enough to feed hundreds of people, so I am not going to starve. The garden will be in overshoot this fall and the winter will kill it off, sorry to say. The brussels sprouts are good down to 14 degrees F, so they can stay in the ground until the middle of November or so. The same goes for kale.
Whooping cranes can fly, so they’re on the move from the south to the north.
They don’t need a drop of oil to survive, can do without a bank account and there is plenty for them to eat.
If they can make it on their own, so can humans.
In 1895, when there were very few roads, it would take two weeks for an ox cart filled with supplies to travel one hundred miles. Now, it takes an hour and a half to travel the 100 miles and you can drag a trailer with the ox in it.
The ox can take a much needed break.
Erik Raude
The whole thing will produce enough to feed hundreds of people, so I am not going to starve.
Didn’t see any protein growing so maybe you will.
There are deer meandering around the area and that means I won’t starve.
I have taken my reply to Glenn’s post down here where I have more space.
While it is true that Continental Drift was rejected for half a century the theory was never rejected for ideological reasons. It was rejected for the lack of proof. Then in the late 1960s the Glomar Challenger began to provide, not only evidence of seafloor spreading byt also an explanation of what causes it. Then there was an absolute landslide of scientist supporting the concept.
Why? Evidence of course! It is all explained here Glenn: The Scientific Method
What possible reason could you have for pointing out that, at first, science rejected Alfred Wegener’s theory. The reason is obvious, you wish to show that science is often wrong and therefore ideological theories, which are based on ideological dogma, should carry as much weight as true scientific theories. That is absolute bullshit. Scientists are often wrong. So they try to produce evidence. If the evidence is forthcoming then their idea gains acceptance. If not it is cosigned to the dustbin.
“It was rejected for the lack of proof.” (As per my comment above), EXACTLY. To suggest otherwise is moronic. As soon as creditable evidence was available plate tectonics was embraced, not before, and rightly so.
When I was studying geology and geophysics in the 1960s we were, of course, exposed to Wegener’s hypothesis together with many competing ideas. Wegener was controversial and not widely accepted until the late 1960s, as I recall, when numerous discoveries, but especially oceanic paleomagnetism, provided strong support for drift, and plate tectonic theory, in its current form, was borne.
I was exposed to Wegeners ideas by a geologist who used to play jaialai with my dad in Cuba. I think it must have been around 1965. He had worked with Gulf Oil, and mentioned the hypothesis seemed to have a lot of merit. He also showed me how the continents stitched up if one used the edge of the continental margins. So I grew up thinking that it was common knowledge.
About that same time or a little later I made the foolish mistake which fortunately cost me nothing of calling a geology instructor an idiot- indirectly – for denying continental drift. The theory was not yet quite accepted on a general basis. Dates are fuzzy this many years later.
My argument had EVERYTHING to do with matching up coastlines down to soil and stone profiles etc . I was taking a course in probability theory at that or maybe a bit sooner and the math instructor was using this evidence as an example of the usefulness of his subject matter.
I can’t remember the odds he computed but basically it amounted to the fact that if you understood the math then you had to believe in a ”billions to one odds against it” coincidence to reject the proposition, never mind the missing explanation.
A somewhat analogous situation prevailed in biology for the century or so before Darwin. There was simply too much evidence accumulating to deny the EXISTENCE of biological evolution. Never mind the missing explanation.
Ron,
I know that everyone has their sacred cows, and it’s quite obvious that I have gouged one of yours.
But not everyone embraces Positivism as fervently as you do, and some outright reject it.
Even “the older Wittgenstein changed his mental strategy once he recognized that objectivism, and the tool of logic that accompanied it, was too simpleminded, too narrow, too limited for the larger meanings of life,” observes Daniel Yankelovich in Coming to Public Judgment. “Wittgenstein’s change of mind illustrates that objectivism is not a narrow technical assumption; it is a world view deepy entrenched in our culture.”
But even more surprising is to see that great Messiah of naturalism and mechanical determinism, Richard Dawkins, make some Kantian rumblings. In this PBS interview, for instance, he states:
As to your claim that “While it is true that Continental Drift was rejected for half a century the theory was never rejected for ideological reasons. It was rejected for the lack of proof,” Oreskes debunked that mythology, and she marshalled the evidence to do it. For convenience sake and so people can readily see what I am talking about, I will cite again the review of Oreske’s book from above, with the pertinent part bolded:
“While it is true that Continental Drift was rejected…” Continental Drift was not rejected, it was one (of several) hypotheses awaiting supporting evidence and when the evidence arrived the hypothesis was elevated to a theory, one which is now accepted by almost all earth scientists. Is that a difficult concept for you?
Doug L,
Well put, Doug. You’re describing what happened; I had a grand time watching it happening, week by week and month by month as the theory gelled and the concepts were applied faster and faster to more and more aspects of our old planet.
The review Glenn S is quoting is saying that Oreskes looked at reasons for not adopting the idea of continental drift, reasons other than just waiting for supporting evidence. Of course there were such reasons, and I remember Meyerhoff at the AAPG grimly hanging on against plate tectonics long past its acceptance as being compelling. It seems there are still biologists who don’t accept the theory of organic evolution, too. That’s all part of the process; what matters is how well the theory works.
Speaking of Pinker and Bakunin:
On this date:
1814 — Russia: Anarchist theorist Mikhail Bakunin lives, Prjamuchino. [New style calendar; May 18 by the Julian calendar.] Conspirator, rival of Marx, assassin of God.
“It clearly follows that to make men moral it is necessary to make their social environment moral. & that can be done in only one way; by assuring the triumph of justice, that is, the complete liberty of everyone in the most perfect equality for all.
Inequality of conditions & rights, & the resulting lack of liberty for all, is the great collective iniquity begetting all individual iniquities.”
— Mikhail Bakunin
Opec under siege as Isil (ISIS/IS) threatens world’s oil lifeline
http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/11638709/Opec-under-siege-as-Isil-threatens-worlds-oil-lifeline.html
Daniel Yergin is quoted in the article warning about the return of triple digit oil prices if the spread of ISIS is not checked.
In the past, as a general rule oil prices tended to trade at about twice Yergin’s predicted oil price within one to to years of his oil price prediction*, a phenomenon I called the “Yergin Indicator.”
However, when Yergin is talking about a return to $100 oil, I’m not sure if we should expect $200 oil or something below $50.
*For example, his late 2004 call for a decline to a long term oil price of about $38.
History ain’t over.
IF -IF the IS manages to take over very much more territory and starts seriously threatening to interrupt the flow of oil it is a cinch that American troops will be on the ground in Sand Country once again.
It won’t matter who is in the White House or which party controls congress. The survival of business as usual for the easily foreseeable future depends on the free flow of Sand Country oil.
A minor oversupply combined with a relatively minor weakness in the world economy was enough to halve the price. People don’t buy more than they NEED even if it is CHEAP.
CONVERSELY, it will take only a minor shortfall in supply to put the price back in the hundred dollar class and not at all a big shortfall to send it well above a hundred dollars.
Anybody with money to pay for it will pay two or three times as much for as much as he NEEDS.
We tend to think that the price of oil primarily controls our short term behavior as drivers but this is not actually the case. Gasoline and diesel fuel are MINOR components of the total cost of driving in most cases. Depreciation, repairs ,interest, maintenance, insurance and taxes combined cost several times as much as gasoline it for most drivers.Seat time alone is worth a lot of money.
You have to drive a hell of a lot, or drive a real gas hog, to burn enough gas for it to really matter compared to the total of all these other driving expenses.
And truth to be told, with the exception of oversized suv type vehicles and oversized pickup trucks the real gas hogs are just about gone. We have a ninety seven Buick that seats six comfortably and will effortly cruise up long interstate grades fully loaded at seventy.It gets twenty nine mpg on a trip with the cruise set at sixty two. My ninety nine Escort gets thirty seven on a trip. Comparably sized older Japanese cars often get another two to five mpg.
Ten gallons of gasoline at four bucks for forty bucks to go three hundred miles – about average for most drivers per week is only about a hundred sixty bucks per month.Compare that to the total of insurance taxes interest lease or purchase payments repairs parking maintenance -gasoline is only a minor part of the cost of driving.
I doubt if Obama would commit US troops just for oil. US imports of OPEC oil have dropped to less than 3 million barrels/day. That could be made up with increased Ethanol production, and conservation measures.
Also, even if ISIL does take over the oil fields, they will probably continue to sell oil on the world market in order to finance additional conquests. So there may not be any shortages at all. At least in the short term.
The Obama Admin. recently stated that ISIL was an Iraqi problem, not an American problem.
http://www.foxnews.com/politics/2015/05/28/white-house-isis-strategy/
“I doubt if Obama would commit US troops just for oil”.
Not sure I agree with this.
An oil disruption in the middle east, combined with Putin/NATO problems would make the world oil export situation scary to say the least.
You might be right though.
I am not even an armchair expert on ISIL but it seems unlikely the movement is going to sell anymore oil than necessary to fund its own expansion- considering that most of the customers are infidels.Taking oil off the market to raise the price might get them more followers in other oil exporting countries.
Obama will not imo deploy American troops if he can avoid it but he may not be ABLE to avoid doing so.
A really big oil price spike resulting in severe economic troubles here and in other western oil importing countries would force his hand.It is easy enough to find reasons for such actions when they are perceived to be politically expedient.
Beyond that he is a lame duck now. Such a decision, if it must be made , may well fall to his successor.
All our Sand Country adventures over the last few decades have had the effect of allowing the continuation of business as usual. Whether this is a good thing is debatable. Whether the price of it has been justified is debatable.
The consequences of our not having pursued these adventures cannot now be known with any degree of certainty. But they would certainly include a couple of very deep recessions and a notably different middle eastern map.
As I see things we are paradoxically in desperate need of the CONTINUATION of business as usual – since business as usual is the ONLY hope of our managing a transition to renewables. If Old Man BAU croaks tomorrow we can forget about putting any truly significant resources into further technical development of renewable technology and the actual grand scale roll out of renewables infrastructure.
There won’t be much money or political will left for long term projects. Just about every dime will be devoted to short term troubles.
Our knowledge of the physics and engineering needed to build out renewables has of course been greatly enhanced by the efforts of people working on the problems specifically for the purpose of building renewables.
BUT if there had been no NEED for them- and no build out as a result- the basic research would still have been done -just not as quickly- by lots of other people in other industries. Industries build on each other in the same way that scientists in various fields incorporate the work of scientists in other fields into their own field.
The R and D going into building super strong but light weight commercial aircraft will be applied to the construction of wind turbine airfoils and automobiles. The software written to control various other industrial processes will be applied in part to controlling renewables.
If BAU lasts another decade or two the progress made in renewables technologies will be sufficient to just about guarantee a successful transition is possible. If it doesn’t- it’s probably back to an eighteenth century lifestyle for most of humanity.If we are lucky.
Selling oil to infidels may not be perceived as such a bad thing if ISIL can then use those funds to purchase a nuclear bomb. And you can bet they won’t hesitate to use it.
http://www.express.co.uk/news/world/579390/Islamic-State-will-buy-nuclear-bomb-next-year
Obama is wrong to suggest that ISIL is only Iraq’s problem. He is in denial. What we really need is another Harry S. Truman. Although I don’t think we’ll get one until after NYC is completely destroyed.
Technical progress is a constant – like time. That’s not something I worry much about.
Check the Iraqi oil field map and the ethnic map right next to it, have to scroll down the page. I wouldn’t focus on the site itself, it’s a bit extreme, but the maps are pretty good:
http://www.oilempire.us/iraqoil.html
ISIL / Daesh is said to be growing by over 1000-2000 fighters per week.
Estimated size of 70,000 in Iraq/Syria, and perhaps 70,000 outside the region.
ISIL
Fred,
You seem to me to have the closest perspective on Brazil of all the regular posters here.
Can you comment on this?
http://theweek.com/articles/557427/brazils-economic-catastrophe
I read a while ago that Brazil was poised to develop some increased level of off-shore oil resources…but that requires big financing.
More importantly, does Brazil have a national plan or at least an awareness of sustainability, including regarding population growth? I am afraid one response to economic hardship could be to cut the forests down and export the wood even faster, and grow sugarcane monoculture even faster.
Best hopes for Brazil and all of SouthAm.
John Michale Greer made this premise a big plot vehicle in his book ‘Twilight’s Last Gleaming’.
Inertia, including intellectual and institutional inertia, is one of the most powerful forces…
http://theweek.com/articles/557433/navy-risking-everything-fatally-flawed-technology