OPEC MOMR October Production Data

OPEC just published their November Monthly Oil Market Report which contains crude only production data for all OPEC nations. The only big surprise was that everyone had declining production except Libya and Algeria, that is according to “secondary sources”.

OPEC Secondary Sources

I find it interesting that Venezuela has, for the last several months, refused to give OPEC their production data.

All charts below are in the charts below are in thousand barrels per day with the last data point October 2014 and is based on OPEC’s “secondary sources”. I have decided to post all OPEC charts in this post.

OPEC 12

OPEC production declined 226,000 bpd. September production was revised only slightly, up 5,000 bpd.

Algeria

Algeria has stopped their decline, temporally at least.

Angola

Not much news from Angola except that production was down 66,000 bpd in October.

Ecuador

Ecuador which had been increasing production since 2010 now seems to have hit resistance. Production was down 6,000 bpd in October.

Iran

Production in Iran was down 7,800 bpd in October. I would love to know what they could produce if sanctions were lifted. My guess would be about 3.5 million barrels per day… or less. Notice they were in decline before sanctions were imposed.

Iraq

Iraqi production was down 18,100 bpd in October but their September production was revised upward by 84,000 bpd.

Kuwait

Kuwait production was down 33,600 barrels per day in October. Their massive infill drilling program that began several years ago has now reached its maximum level and decline has set in. Here is an interview with with the deputy manager of Kuwait Oil Company’s North Kuwait about a year and a half ago:

These goals will be achieved through a multi-year aggressive infill drilling and well maintenance programs aimed at lifting current well capacity by 43%.

I don’t think they got it up to 43% but they did pretty good. They are now sucking the oil out a lot faster now.

Libya

Libya, according to “secondary sources” was the only OPEC nation to increase production in October. They were up 59,100 bpd. According to Platts they went even higher but are now back down again.

Libyan oil production, having hit a recent high of 1 million b/d at the end of October, is now running at around 540,000 b/d, a source with close ties to state-owned NOC said Tuesday.

Nigeria

Nigeria, down 56,300 barrels per day in October is still fighting rebels who are stealing a lot of oil every month but who knows how much?

Crude Oil Theft: Does Nigeria know the actual volume it loses each day?

The federal government does not know; the Nigerian National Petroleum Corporation (NNPC) does not know; our security agencies cannot tell; and even the foreign multinational oil companies either do not know also or are trying to play politics with figures of stolen crude for selfish gains.

Qatar

Qatar was down 18,000 bpd and that is a lot for Qatar. They may be in serious trouble, the same kind of trouble they had in March and April of 2012 when they dropped 55,000 bpd… and never recovered. Now they are down another 43,000 bpd from that April 2012 level.

Saudi Arabia

Saudi production was down 70,000 bpd in October. It is my strong opinion that Saudi is producing flat out, as is every other OPEC nation except Iran. And Iran is producing every barrel they can sell.  <b>OPEC has no spare capacity</b>, and people are catching on to that myth:

Oil Price Slide – The Real Problem

A very significant part of what we have been led to believe is exaggerated. Saudi Arabia’s oil exports were much higher back in the late 1970s than they are now. When they cut oil production and exports in the 1980s, they likely did have spare capacity.

But where we are now, the situation has changed greatly. The population of the Middle Eastern oil producers has risen. So has their own use of the oil they extract. Their budgets have risen, and the countries need increasing revenue from oil taxes to meet their budgets. Some countries, including Venezuela, Nigeria, and Iran, require oil prices well over $100 per barrel to support their budgets.

UAE

UAE production was down only slightly, 2,000 bpd. But September production was revised down 39,000 bpd.

Venezuela

Venezuela production was down 7,900 bpd in October. Their trend line is sloping slightly downward. They could produce a lot more from their very large bitumen patch but no foreign contractor will risk investment in Venezuela. In the past they have had a very bad habit of nationalizing foreign holdings and paying them pennies on the dollar for their investment.

Iraq et al.

Opec, until 2012, had four nations that were increasing production, Iraq, Kuwait, UAE and Saudi. But those four, even with their massive infill drilling programs, and for Saudi, two new fields, seems to have peaked.

Their combined production was down 124,000 bpd in October.

Algria et al.

The other eight is still in a continuous decline though they have had a recent recovery, which was all Libya’ recovery. Their combined production was down 102,000 bpd in October.

Actually one of the above eight, Ecuador, has increased their production about 70,000 bpd over four years. But that increase has stalled in the last six months and I expect them to plateau for a year or so then start to decline. And Ecuador’s slight increase has been lost in the almost 3 million barrel per decline in the combined production of the other seven since their peak in January 2008.

OPEC on Non-OPEC

Thought I would add this. This is OPEC’s opinion of what Non-OPEC production will be next year. They have Non-OPEC production up 1.24 million barrels per day next year. Americas up 1.14 mbd of with the US supplying .94 mbd of that and the rest from Canada. They have Latin America up .13 mbd. I suppose that is mostly Brazil.

They have FSU down slightly with Russia down .03 mbd. Not much at all but at least they think Russia has no gain left in them. I believe most of their guesses are just copied from the IEA.

 

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291 Responses to OPEC MOMR October Production Data

  1. Chris says:

    China-U.S. Move to Curb Global Warming Loosens Climate Logjam in Developing World

    I think this is an indirect confirmation of imminent peak oil…

    • Political Economist says:

      The mainstream media makes it a big deal. In fact, the “commitments” are roughly consistent with long term global warming of 3 degree C or higher. We will all be “cooked”.

      • Nick G says:

        IIRC, the IPCC doesn’t acknowledge PO, or PO-lite.

        How much difference does that make to the model?

        • Sam Taylor says:

          Depends how big of an effect you think peak oil will have. I reckon it’ll save us from above 2c, but maybe that’s a perverse form of wishful thinking.

          • Nick G says:

            No, I’d say Climate Change is a much, much bigger problem.

            Oil is expensive, dirty and risky. We have better and cheaper alternatives. We should kick the habit ASAP.

          • Political Economist says:

            Peak oil perhaps can save us from more than 3C, if only the “fast” climate feedbacks (like water vapor) can considered. But if slow feedbacks (vegetation change and albedo effects) are taken into account, according to James Hansen, 3C eventually will take us to 6C or more.

            • Dennis Coyne says:

              Hi PE,

              Let’s assume for a moment that a doubling of atmospheric CO2 causes an equilibrium climate response of 3 C, this would coincide with a transient climate response of about 2 C. The change that Hansen is talking about at 6C is the Earth System Sensitivity.

              The CO2 levels are unlikely to remain at 560 ppm they will gradually decrease as they are absorbed by the ocean and sequestered as calcium carbonate over a thousand year time frame, so temperatures may rise above 3C for a few hundred years, but 6C is unlikely. In addition there is considerably less ice than during the last glacial maximum, so any ice albedo feedback will be considerably less than the period from 10,000 BP to 250 BP(before the present).

  2. Notice from BlueHost.com 1:15 PM Wednesday, November, 12

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  3. Old farmer mac says:

    This link if nothing else proves that OPEC ministers have as low an opinion of the intelligence of the public as carnival barkers.

    But nevertheless … this Saudi official is presenting the official Saudi position on oil markets.

  4. The EIA came out with their Short Term Energy Outlook earlier today. Points of interest from their predictions for 2015, everything is all liquids:

    US liquids production will be up 1.9 mbd to 14.95 mbd.
    Total Non-OPEC liquids will be up .95 mbd to 56.98 mbd. Which means:
    Non-OPEC liquids, less US liquids, will be down .14 mbd.
    Russian liquids will drop .05 mbd.

    Looks like everyone is predicting 2014 to be the peak year for Russia.

    • Ilambiquated says:

      US is up 1.09, not 1.9 according to the table

      1.09-.95=.14

    • Nick G says:

      So, they’re projecting 2015 crude at only 237k bpd below the peak of 1972 (9,637M bpd)!

      Even after adjusting for BTU content and excluding ethanol, total liquids still have to be higher than 1972.

      I haven’t been able to find an EIA total liquids data series back to 1972. Have you seen it?

    • Synapsid says:

      Synapsid the broken record here:

      Does anyone have any figures on Libyan oil exports nowadays? I only see material on production.

      Thanks.

      • Watcher says:

        Sguy, there was a ransquawk this morning announcing the pipeline from the Sharsomething oil field in Libya was “blocked”. No other info. Typical of Libya.

        Qatar and the UAE are fighting a proxy war there. It’s unlikely much data from there is legit.

        • Synapsid says:

          Watcher,

          Thanks.

          I agree about how trustworthy any data are, but one lives in hope. Sometimes.

          • Watcher says:

            Keep in mind there is now also a developing narrative of a “need” for higher prices, so we’re going to hear a lot orchestrated stories of booming economy and lower supply. They won’t be lies, they’ll just be massaged.

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  6. The Wet One says:

    Ok, this article is tangential to the topic at issue here. However, there is an interesting observation that can be made from the comments on the article: http://www.theatlantic.com/business/archive/2014/11/can-quitting-your-job-help-stop-war/382648/?single_page=true

    So many in the comments decry the economic actions of this man, undertaken for moral and principled reasons in powering down and reducing his consumption. He’s being pilloried for not being maximally economically productive and consuming, despite sincerely undertaking his less economically intense lifestyle for moral, and at first glance, admirable reasons.

    If that is the actual underlying attitude towards word and personal economic decision-making (I don’t know that it is, but it’s an example of what at least some people think), it’s going to be an incredibly tough slog to get the average Joe’s ideas about economic BAU to change.

    This guy voluntarily cut his own salary by 75% so as to not fund wars he didn’t agree with. He’s being pilloried as a moocher (which I kinda see) and would prefer he work. Some people would rather he move out of the country and make $100,000 somewhere else than stay at home and protest his government’s actions by working less and living more of his life for himself.

    There’s a remarkable pro-BAU mental bias underlying these comments that must be noted from a Peak-Oil problem aware perspective. How will this mindset be overcome if anything is to be done to avoid the hard times predicted here? In my view, this is more evidence that nothing will be done. Nothing about Peak Oil and nothing about climate change either. The dominant mental framework simply doesn’t allow for it. BAU uber alles.

    • Ert says:

      Perfectly reasonable life-style – then only when everyone reduces income and consumption, we can reduce energy and resource consumption as society. With the time gained it is possible to do a lot more for oneself – which reduces the need for part of the ‘lost’ income.

      I do this myself since 1,5 years – and can only say that I gained greatly. It is not anymore clear to me why people work to earn money and spend it for things that may ‘safe time’ because they work so much, that they don’t have any time ‘left’ (cooking you own food, doing/fixing stuff yourself, biking to work instead of having/using a car if its possible. taking time to read/rest).

      • wimbi says:

        Totally agree with all that. I quit TV- BIG plus. I quit reading depressing articles in NYT, another big plus, and, by gum, am seriously considering quitting reading this excellent chat group, way too much chat about oil prices, and not by a long shot enough emphasis on the FACT that we simply gotta get off the stuff, and the real price-the biosphere- is out of sight too much. No possible argument against that.

        Except it’s so entertaining sometimes.

    • Nick G says:

      He didn’t have to take a pay cut to not pay taxes. He could have just donated most of his salary to charity.

      I’d say he’s definitely a moocher. He’s taking advantage of tax deductions to save but not pay taxes, and he’s having fun when there’s a lot of work that needs to be done in this world. Having fun may be understandable (even sensible, maybe), but it’s not saintly.

    • Nick G says:

      As for resource limits: this guys not doing much to help with that. He’s just dropping out.

      If you’re not part of the *active* solution, you’re part of the problem.

      • Sam Taylor says:

        There are two types of people in this world. Those who divide people into false dichotomies, and everyone else.

        • Nick G says:

          I like that quote.

          Okay, point taken: I should have characterized his actions, not his character.
          So: instead of “He’s a moocher”, I should have said: “He’s mooching”.

          Doesn’t sound as good.

        • Ilambiquated says:

          No, there are three kinds of people, those who can count, and those who can’t.

          • Sam Taylor says:

            There are 10 kinds of people, those who know binary and those who don’t.

      • Ronald Walter says:

        Actually, he isn’t burning much oil doing what he is doing, so he is really letting his share of consumption be available for military purposes, it is a lose lose for him.

        Besides, it is permanent war now, so it is hopeless to protest war. Everybody just has to sue for peace and it can be over. Fun just isn’t important when there is war to make. It’s the War Olympics, something like that.

        Ever since the Winter Olympics in Sochi ended, all of the fun ended too, snafu set in and it all ended up fubar ever since. Fun is over.

        Somebody send the poor guy a pair of shoes so he doesn’t end up in the hospital with a flesh-eating bacteria. It does happen. Other than that, leave him be, he can live his life the way he wants. Not much of a plan there, but why should it matter to anyone? Unless, you think he should be forced to work.

        Arbeit Macht Frei! Get to work, you, you, you… untermenschen!

        Gotta round up people for not working and striving to their full potential and get them working, and if it takes a concentration camp, if that is what has to be done, then it is the only way to get the work done, the solution.

        Just who in the hell does he think he is, quitting his job and becoming a burden on society? No good lazy good for nothing bum, that’s all he is. There’s gulag for him somewhere in the taiga. Having fun is one thing, but having fun all of the time is Verboten. Can’t let it happen and it is not going to happen, especially here, in the real world, at Camp Work you work, fun is what you do at the Funny Farm.

        Does the bum think he’s free or something to be able to choose what he would like to do for a change? Liberate him to a ball and chain, that’ll teach him to think he can be free and have fun. Vagrancy is not much of a goal to pursue, but more power to him.

        Bigger problems in this world other than one person quitting their job, a tragedy, yes, but a million people quitting their job, a statistic, not really viewed as a problem, just the way it is.

        Here’s an idea: let the guy live his life the way he wants.

        Too many brain cells dedicating too much time to an issue that takes up too much precious time.

        Thomas Jefferson, a revolutionary, independently minded, told the King of England to take a hike, traveled over to France, sat around writing papers and documents, did it until the day he died. Wore fancy clothes, everything was cool for Thomas Jefferson. After he died, two weeks later his creditors took possession of Monticello. Old Thomas Jefferson ran out of luck, he died broke. Even if the harder he worked, the more luck he had, it finally ran out. His money was gone long before his luck ran out, however. He lived his life the way he wanted to live. I’ll bet he had some fun now and then. Nothing wrong with that. At least he had nice digs where to have some of the fun. He didn’t walk around in his bare feet all of the time, he had some brains. He wrote words about life, liberty, the pursuit of happiness, words that are not allowed to be mentioned these days. Don’t utter the word ‘freedom’, even in a low voice. You’ll be in big trouble if you do.

        When my son was in the first grade, six years old, I asked him one day what he said when he wasn’t on the school playgrounds.

        “You know what I say when I’m not on the school grounds?” he said to me.

        “What?” I asked.

        At the top of his lungs he yelled, “I’m having goddamn f’ckn’ fun.”

      • superkaos says:

        I am sorry but that they way to hell is paved by “active solutions”. Read Overshot, by William Catton. He in fact argues that it is time to do less, not more, to be more homo sapiens and less homo colossus. I think he is right.

        • Nick G says:

          Catton knows very little about modern energy problems. Most of his analysis is drawn from agricultural societies that over expanded, like the Roman Empire.

          The fact is that the Roman Empire was a ponzi scheme – ag based societies simply can’t grow quickly, so the Romans stole from their neighbors in an everwidening circle of exploitation. When that circle reached it’s limits, the ponzi scheme collapsed.

          That’s typical, but it tells us very little about modern societies.

          • Sam Taylor says:

            Replace conquering your neighbours and appropriating their surpluses with exploiting fossil fuel reserves and the parallel is kind of strong.

            • Nick G says:

              And, of course, wind, solar & nuclear are all cheaper, cleaner and more available than oil.

              • Sam Taylor says:

                None of them compete with oil. They compete with gas and coal.

                • Dennis Coyne says:

                  Hi Sam,

                  I think some creative thinking may be required.
                  At the current relative prices in the US, nothing competes well with oil.

                  In Europe liquid fuel prices are considerably higher and there is quite a bit more public transportation, which is more fuel efficient and runs on electricity to some degree.

                  Do you think transportation choices will not change as liquid fuel prices gradually climb?
                  The average consumer will be priced out of the market and fuel will be used for trucks(for the last few miles from the railhead) and tractors on the farm.

                  It will not happen overnight, it will take 20 or 30 years, but once the peak in oil output is clear to all (by 2020 or so), consumers will see the writing on the wall.

                • Nick G says:

                  Well, actually, they’re all cheaper than oil. Wind, for instance, produces power at about $.07/kWh. With $.05 for transmission & distribution, that’s $.12/kWh.

                  The Leaf gets more than 3 miles per kWh, so that’s less than $.04 per mile. Compare that to $3.50 per gallon and 22MPG (the US fleet average), which equals about $.16 per mile.

                  4 cents per mile, vs 16 cents per mile.

          • Nick G says:

            Except that there are really good substitutes for fossil fuels.

            Wind, solar and nuclear (if needed) work very well. Wind is already cheaper than coal. It’s available more widely in the world. Solar, of course, is incredibly scalable and available almost everywhere.

            And we don’t have to convert to them overnight. If we kept natural gas at 10% of the grid’s kWhs, that would make balancing really easy. Balancing without NG would be very doable, but that requires some explanation, so I’ll focus on the first argument: that 100% conversion isn’t needed any time soon.

            • Cae says:

              Are you being sarcastic? From what is understood, nothing can really replace fossil oil.
              …I’ve tried everything, even linseed oil, but nothing gives me a softer smoother body the way Fossil brand oil does. Try it and see for yourself. I think you’ll agree. Fossil’s fabulous.

              • Nick G says:

                The secret is to use flaxseed oil (linseed oil is flaxseed oil gone bad), and to eat it rather then put it on your skin!

                It’ll give you a glossy coat!

                • Cae says:

                  Cool, didn’t know that.
                  Seriously, though, Nick, if you were not being sarcastic, I’d urge you to rethink nuclear, and possibly the others too, although I am getting conflicting, inconclusive info so far.

                  • Nick G says:

                    Nuclear is definitely the riskiest and most expensive option. I include it only because some people have a hard time believing in renewables.

                    What can I tell you about renewables?

                  • Dennis Coyne says:

                    Hi Cae,

                    We might be able to do it with renewables alone, but nuclear research on fast reactors should continue along with further work on pebble bed reactors which shut down safely on their own when power goes out.

                    When fossil fuels deplete and we eliminate nuclear and renewables to provide energy, what do you propose?

                  • Caelan MacIntyre says:

                    Nuclear is not an option.
                    Why it is even being discussed at this stage while Fukushima’s nuclear sore continues festering; the waste-can is kicked down the road; and in light of possible peak government, seems rather reckless, irresponsible and insane.

                • Cael says:

                  When fossil fuels deplete and we eliminate nuclear and renewables to provide energy, what do you propose? ~

                  I propose we take cues from squirrels. I realize it’s hard being nowhere near as intelligent, but we must try. If the animals could laugh and they weren’t so pissed off at us– I mean the ones that are still around with habitat intact– we’d be the laughing stock of the animal kingdom.
                  A renewable and quality-of-life is a natural forest (rather than lumber plantation, duh) or clean river to drink from and swim in without fear of a rash, etc., seeing as we are on about skin in this subthread. Shiny coats shouldn’t be related to fossil oil slicks.
                  But, naturally, we know all this, so I guess it’s for the newbs and as a form of narrative-insistence, while some of us like to talk about Leaves™ as though they’re cars, happy motoring a la Kunstler and all that. (Even he still seems to think, amazingly enough, that we adults need coercive government– you know, like a corrupt, weaponized version of mom, dad and the nanny? But that’s another subject.)
                  We might also be aware of the rewilding (and Permaculture and Transition) movement(s), otherwise, it might be good to consider/reflect on their particular approach. Or the squirrel approach.

          • superkaos says:

            Oil is a central part of Catton’s overshoot. In fact he differentiates two methods by which humans have been expanding human carrying capacity, the first method is the takeover method, which is what you described the roman empire did. In fact that was the only method known to humans up until the industrial revolution when we started to use the second method, the drawdown method. The drawdown method has allowed us to grow to 7 billion people and of course given us all the things we enjoy in our modern society, we have in fact become homo colossus. The argument goes that the drawdown method by its own nature has to be temporal it can not go on forever. Going to solar and wind means to go back to the takeover method but now with 7 billion people instead of the 1 billion that that method maxed out at.

            • Nick G says:

              The idea that fossil fuels represent temporary access to an enormous cache of solar power is…unrealistic.

              The amount of energy released by fossil fuels in the last century represents a couple of months of the solar power that lands on the earth. Fossil fuels do indeed store solar power, but they do it incredibly inefficiently. They stored something like .000000000001% of the solar energy arriving on earth.

              Humans release something on the order of 10 terawatts of power, on average. The sun drops 100,000 terawatts continuously.

              The idea that wind, solar and nuclear can’t replace fossil fuels is highly unrealistic.

              • superkaos says:

                The problem with that argument, at least with the part related to solar, is that it assumes that all that energy arriving to earth from the sun is there for us to use, for free. However how much of it can we take that is not already being “used” by the ecosystem? or at least how much can we take without altering the ecosystem too much? For example, how much of it goes into keeping the current climate as it is? Of course it could be possible that nuclear energy would provide for a very long time, it still is drawdown method and will not last forever, things eventually decay into stable nuclei.

                • Nick G says:

                  The amount used by plants is a tiny, tiny fraction.

                  The US could supply most of it’s needs by just using rooftops. A very, very small portion of desert would work.

                  PV has a slightly lower albedo than the Earth, on average, but it’s about the same as the average roof. If you install it over a parking lot, you’ll actually reflect more than you did before.

              • Caelan MacIntyre says:

                “The idea that wind, solar and nuclear can’t replace fossil fuels is highly unrealistic.” ~ Nick G

                Well, depending on what you (think you) mean by ‘replace’ and (level of) technology, from part of what is understood, those techs are much less mobile compared with oil. Secondly, they rely on some levels of oil input in their resource-extraction, manufacture, distribution, maintenance and replacement (etc.). Thirdly, they rely on a working BAU infrastructure… in the face of the increasingly-dubious dynamics of the global-industrial civilization plutocorpratocracy. Fourthly, they may be less as effective or democratic as all that, and/or compared with say, other forms/levels/types of local, sustainable, resilient, community-/self-empowered tech. Lastly, some of these rely on questionable activities for their operations, such as with nuclear, tax-theft by the governpimps on the backs of the wage-prostitutes and with regard to mining activities, land-grabbing.

                Aside from just those issues, there’s also the issue of ‘other forms of reality’ that exist beyond one’s head and how they mesh.

                • Nick G says:

                  those techs are much less mobile compared with oil.

                  EVs and rail cars are pretty mobile.

                  they rely on some levels of oil input in their resource-extraction, manufacture, distribution, maintenance and replacement (etc.).

                  A little, but that’s not essential. Mining equipment is already electric in many cases. Manufacturing primarily uses electricity. Rail can handle distribution. Maintenance workers can drive…EVs. Utilities love electric vehicles, and are already using them.

                  they rely on a working BAU infrastructure

                  And oil doesn’t? EREVs like the Volt are much more resilient than ICEs – they can run on electricity or oil.

                  they may be less as effective or democratic

                  What’s more decentralized than PV on your roof??

                  • Cae says:

                    those techs are much less mobile compared with oil. ~ Cae

                    “EVs and rail cars are pretty mobile.” ~ Nick G

                    ‘Pretty’ means what and ‘mobile’ in what contexts?

                    “…they rely on some levels of oil input in their resource-extraction, manufacture, distribution, maintenance and replacement (etc.). ~ Cae

                    A little, but that’s not essential. Mining equipment is already electric in many cases. Manufacturing primarily uses electricity. Rail can handle distribution. Maintenance workers can drive…EVs. Utilities love electric vehicles, and are already using them. ~ Nick G

                    Batteries (lifespan/disposal)? Land issues? Resource issues? Highways and other infrastructure and their Maintenance? Costs? Habitat issues? Democracy issues?

                    I’m going through a lot of laptop batteries and they are expensive to replace. And I have seen images of foreign children in among foreign waste like batteries. Technology doesn’t just occur in a vacuum. This also includes the issues of what we want and need. Many needs are manufactured… maybe like your own.

                    “A low-energy policy allows for a wide choice of lifestyles and cultures. If, on the other hand, a society opts for high energy consumption, its social relations must be dictated by technocracy and will be equally degrading whether labeled capitalist or socialist.” ~ Ivan Illich

                    “…they rely on a working BAU infrastructure…” ~ Cae

                    “And oil doesn’t”

                    Oil is the infrastructure; its lifeblood.

                    “…EREVs like the Volt are much more resilient than ICEs – they can run on electricity or oil.”

                    So what.
                    Apparently, the horse can run on food; be adaptively-re-used; eaten; composted, and produce compost.
                    Your cars, by comparison, are one-trick ponies. And they need working roadways which use what for construction, materials and maintenance? I’ll let you answer that.

                    Walking and biking is pretty good too, as is relocalization that in part those two can leverage.
                    And then reality isn’t a GM advert; advertising has many different ways of distorting reality and reality has its own ideas of what works and what doesn’t.

                    “Upon closer consideration, moving from petroleum-fueled vehicles to electric cars begins to look more and more like shifting from one brand of cigarettes to another. We wouldn’t expect doctors to endorse such a thing. Should environmentally minded people really revere electric cars? Perhaps we should look beyond the shiny gadgets now being offered and revisit some less sexy but potent options—smog reduction, bike lanes, energy taxes, and land-use changes to start. Let’s not be seduced by high-tech illusions.” ~ Ozzie Zehner

                    “…they may be less as effective or democratic…” ~ Cae

                    “What’s more decentralized than PV on your roof??” ~ Nick G

                    Simple passive solar for example– sun shining through some glass or on you or some plants (that you can use)– but a way of life in general that doesn’t care what happens when your large-scale/uneconomy-of-scale-produced PV fails or breaks and you can’t find or get the parts or replacements anywhere for your broken crony-capitalistic corporatocratic technofetishes and can take your thumbs out of your in and out doors and fix things yourself for others and more locally. Stuff like that. When you and real community are more self-empowered/decentralized.

                    I’ll close by offering you one of my TOD posts I just thought about.

                  • Cae says:

                    ** Please delete previous post that looks like this one. Sorry, and thanks!

                    those techs are much less mobile compared with oil. ~ Cae

                    “EVs and rail cars are pretty mobile.” ~ Nick G

                    ‘Pretty’ means what and ‘mobile’ in what contexts?

                    “…they rely on some levels of oil input in their resource-extraction, manufacture, distribution, maintenance and replacement (etc.). ~ Cae

                    A little, but that’s not essential. Mining equipment is already electric in many cases. Manufacturing primarily uses electricity. Rail can handle distribution. Maintenance workers can drive…EVs. Utilities love electric vehicles, and are already using them. ~ Nick G

                    Batteries (lifespan/disposal)? Land issues? Resource issues? Highways and other infrastructure and their Maintenance? Costs? Habitat issues? Democracy issues?

                    I’m going through a lot of laptop batteries and they are expensive to replace. And I have seen images of foreign children in among foreign waste like batteries. Technology doesn’t just occur in a vacuum. This also includes the issues of what we want and need. Many needs are manufactured… maybe like your own.

                    “A low-energy policy allows for a wide choice of lifestyles and cultures. If, on the other hand, a society opts for high energy consumption, its social relations must be dictated by technocracy and will be equally degrading whether labeled capitalist or socialist.” ~ Ivan Illich

                    “…they rely on a working BAU infrastructure…” ~ Cae

                    “And oil doesn’t”

                    Oil is the infrastructure; its lifeblood.

                    “…EREVs like the Volt are much more resilient than ICEs – they can run on electricity or oil.”

                    So what.
                    Apparently, the horse can run on food; be adaptively-re-used; eaten; composted, and produce compost.
                    Your cars, by comparison, are one-trick ponies. And they need working roadways which use what for construction, materials and maintenance? I’ll let you answer that.

                    Walking and biking is pretty good too, as is relocalization that in part those two can leverage.
                    And then reality isn’t a GM advert; advertising has many different ways of distorting reality and reality has its own ideas of what works and what doesn’t.

                    “Upon closer consideration, moving from petroleum-fueled vehicles to electric cars begins to look more and more like shifting from one brand of cigarettes to another. We wouldn’t expect doctors to endorse such a thing. Should environmentally minded people really revere electric cars? Perhaps we should look beyond the shiny gadgets now being offered and revisit some less sexy but potent options—smog reduction, bike lanes, energy taxes, and land-use changes to start. Let’s not be seduced by high-tech illusions.” ~ Ozzie Zehner

                    “…they may be less as effective or democratic…” ~ Cae

                    “What’s more decentralized than PV on your roof??” ~ Nick G

                    Simple passive solar for example– sun shining through some glass or on you or some plants (that you can use)– but a way of life in general that doesn’t care what happens when your large-scale/uneconomy-of-scale-produced PV fails or breaks and you can’t find or get the parts or replacements anywhere for your broken crony-capitalistic corporatocratic technofetishes and can take your thumbs out of your in and out doors and fix things yourself for others and more locally. Stuff like that. When you and real community are more self-empowered/decentralized.

                    I’ll close by offering you one of my TOD posts I just thought about.

                  • Cae says:

                    ** Please delete the two previous post that look like this one. Thanks! Probably the last time I use the blockquotes like this! ‘u’

                    those techs are much less mobile compared with oil. ~ Cae

                    “EVs and rail cars are pretty mobile.” ~ Nick G

                    ‘Pretty’ means what and ‘mobile’ in what contexts?

                    “…they rely on some levels of oil input in their resource-extraction, manufacture, distribution, maintenance and replacement (etc.). ~ Cae

                    A little, but that’s not essential. Mining equipment is already electric in many cases. Manufacturing primarily uses electricity. Rail can handle distribution. Maintenance workers can drive…EVs. Utilities love electric vehicles, and are already using them. ~ Nick G

                    Batteries (lifespan/disposal)? Land issues? Resource issues? Highways and other infrastructure and their Maintenance? Costs? Habitat issues? Democracy issues?

                    I’m going through a lot of laptop batteries and they are expensive to replace. And I have seen images of foreign children in among foreign waste like batteries. Technology doesn’t just occur in a vacuum. This also includes the issues of what we want and need. Many needs are manufactured… maybe like your own.

                    “A low-energy policy allows for a wide choice of lifestyles and cultures. If, on the other hand, a society opts for high energy consumption, its social relations must be dictated by technocracy and will be equally degrading whether labeled capitalist or socialist.” ~ Ivan Illich

                    “…they rely on a working BAU infrastructure…” ~ Cae

                    “And oil doesn’t”

                    Oil is the infrastructure; its lifeblood.

                    “…EREVs like the Volt are much more resilient than ICEs – they can run on electricity or oil.”

                    So what.
                    Apparently, the horse can run on food; be adaptively-re-used; eaten; composted, and produce compost.
                    Your cars, by comparison, are one-trick ponies. And they need working roadways which use what for construction, materials and maintenance? I’ll let you answer that.

                    Walking and biking is pretty good too, as is relocalization that in part those two can leverage.
                    And then reality isn’t a GM advert; advertising has many different ways of distorting reality and reality has its own ideas of what works and what doesn’t.

                    “Upon closer consideration, moving from petroleum-fueled vehicles to electric cars begins to look more and more like shifting from one brand of cigarettes to another. We wouldn’t expect doctors to endorse such a thing. Should environmentally minded people really revere electric cars? Perhaps we should look beyond the shiny gadgets now being offered and revisit some less sexy but potent options—smog reduction, bike lanes, energy taxes, and land-use changes to start. Let’s not be seduced by high-tech illusions.” ~ Ozzie Zehner

                    “…they may be less as effective or democratic…” ~ Cae

                    “What’s more decentralized than PV on your roof??” ~ Nick G

                    Simple passive solar for example– sun shining through some glass or on you or some plants (that you can use)– but a way of life in general that doesn’t care what happens when your large-scale/uneconomy-of-scale-produced PV fails or breaks and you can’t find or get the parts or replacements anywhere for your broken crony-capitalistic corporatocratic technofetishes and can take your thumbs out of your in and out doors and fix things yourself for others and more locally. Stuff like that. When you and real community are more self-empowered/decentralized.

                    I’ll close by offering you one of my TOD posts I just thought about.

                  • Nick G says:

                    For better or worse, peakoil is not going to create the anti-technological society you envision.

                    You, and everyone else who feels the same way, will have to make that decision on your own. It’s not going to be forced on you by resource limitations.

                  • Caelan MacIntyre says:

                    “For better or worse, peakoil is not going to create the anti-technological society you envision.” ~ Nick G

                    The mindless dash toward technology(/complexity) for technology’s(/complexity’s) sake, without some levels of sense behind it, seems, ironically, anti-technology, anti-society and anti-life, etc..

                    If it were as simple as ‘peak oil’, then there’d have likely been far fewer collapses and/or declines of previous civilizations and less degradation of what we truly rely on, rather than, for example, a greenwashed technology named after part of a plant.

                    “You, and everyone else who feels the same way, will have to make that decision on your own. It’s not going to be forced on you by resource limitations.” ~ Nick G

                    Decisions on our own?
                    You mean like direct-/pure-/participatory-democratic ones, or do you mean ones that hardly matter outside of ones based on force, lies and manufactured illusions, etc., by a small elite in limited touch with reality?

                    Peak oil can be, or could have been, managed by a smart society– say, through collective pure-democratic decision-making– that didn’t squander/isn’t squandering its resources like oil, etc..

                    Given some observations, we will be lucky if we have a liveable planet left, or one worth living on, never mind one that supports, as you mischaracterize, an ‘anti-technological society’.
                    How about an anti-stupid society?

                    “Why do complex societies become vulnerable to the very kinds of stress which, at an earlier time in its history, the society in question would simply shrug off? Tainter’s answer lies with complexity, itself, and the law of diminishing returns. As a society becomes more complex, greater complexity becomes more costly. The escalation of complexity becomes increasingly difficult to maintain, until it finally becomes impossible.” ~ Jason Godesky

                  • Nick G says:

                    Well, you’re conflating a few things.

                    I agree that we’re doing great harm to our environment, and that this harm carries great risks.

                    I also agree that our society is not very democratic, and that is greatly undermining our ability to cope with Climate Change and PO.

                    That’s a whole separate thing from whether a simpler life is better for our psychological health. It may be, but what does that have to do with either Climate Change or PO, except that you may be hoping that one of them forces us to simplify?

                    And, it’s different from whether Peak Oil/LTG is going to cause economic collapse due to basic limits to commodity/oil/FF supply- it’s not. Tainter is just…irrelevant. We have very little in common with the agricultural societies on which his analysis is based.

                  • Caelan MacIntyre says:

                    If some individuals, entire societies and their institutions are predisposed to compartmentalize, specialize, decontextualize, etc., then I can understand how holistic, contextual views might be viewed as ‘conflating’ and why ‘great harm is being done to our environment’…

                    “I agree that we’re doing great harm to our environment, and that this harm carries great risks.” ~ Nick G

                    “I also agree that our society is not very democratic, and that is greatly undermining our ability to cope with Climate Change and PO.” ~ Nick G

                    “Utilities love electric vehicles, and are already using them.” ~ Nick G

                    ‘Utilities’ love the tax-paying wage-prostitute who has little say in how they operate or whether they even operate at all. Utilities would seem to include nuclear power plants like the ones in Chernobyl, Fukishima and 3-Mile Island.

                    Real, pure, participatory democracy begins by understanding what it is, and finding out whether you have it or not, and what you might be paying lip-service to and shrugging off

                    Tainter is just…irrelevant.” ~ Nick G

                  • Caelan MacIntyre says:

                    “I also agree that our society is not very democratic, and that is greatly undermining our ability to cope with Climate Change and PO.” ~ Nick G

                    You could back-to-front that too and suggest that a fundamental lack of democracy has created and exacerbated (and continues to do so) PO/climate change and their issues.

                    “According to him, the dystopia of the Wachowski Brothers’ Matrix trilogy is already here: the technological-industrial ‘machine’ is already running the world, a world where individual humans are but insignificant little cogs with barely any autonomy. No single human being – neither the most powerful politician, nor the most powerful businessman – has the power to rein in the system. They necessarily have to follow the inexorable logic of what has been unleashed.” ~ G Sampath on John Zerzan

                  • Nick G says:

                    It’s hard to argue against being holistic and democratic.

                    It’s really not clear what you’re arguing for.

                    If you want to drop out, you’re free to. If you want to start a communal farm with like-minded individuals you’re also free to do that.

                    I have to say though, I really like my indoor plumbing, my long lifespan, and a very low infant mortality rate.

                  • Caelan MacIntyre says:

                    “It’s really not clear what you’re arguing for.” ~ Nick G

                    But you just answered your own question:

                    “It’s hard to argue against being holistic and democratic.” ~ You

                    “If you want to drop out, you’re free to. If you want to start a communal farm with like-minded individuals you’re also free to do that.” ~ Nick G

                    Not exactly, because I live on the same hijacked planet as/by/for the sleepwalking, and they are messing it up for me, themselves and everyone else.

                    “I have to say though, I really like my indoor plumbing, my long lifespan, and a very low infant mortality rate.” ~ Nick G

                    Mm-yes that sentiment that’s inclined to see reality (and technology) on a very narrow timeline (in a very narrow context) while draw-down, depletion and despoilment, etc., continue their relentlessness and infants’ futures are thrown under the bus with relative abandon.

                    With regard to your ‘indoor plumbing’, I’d consider where my water actually comes from (hint: not from the tap) and what’s involved with regard to its infrastructure; take a look at humanure composting and (vis-a-vis) peak phosphate/etc.; some recent research on health vis-a-vis “progress”; and nutrition vis-a-vis industrial agriculture.
                    There’s your homework, Nick.
                    With regard to lifespan, it’s moot if we’re all zombies.

                  • Nick G says:

                    Oh, my. I actually am familiar with that stuff. The water, phosphorus and nutrition risks are all over-estimated. Sure, they’re all problems that need real improvement, but none of them are going to end civilization.

                    I agree that contemporary culture has a long way to go to attain a healthy, maturity. But, I suspect you’re glamorizing either the past, or the alternatives to contemporary OECD cultures.

                    Climate Change is the one big risk that I see. The contradiction here is that you’re underestimating what we can do to address it. EVs, in particular, are an extremely practical solution to both PO and Climate Change.

                  • Caelan says:

                    “Sure, they’re all problems that need real improvement, but none of them are going to end civilization.” ~ Nick G

                    This kind of ‘civilization’ that upholds whatever one might myopically glamorize about it needs to end, though, but it appears already on its way out anyway.

                    And it’s nowhere near just about climate change, although agreed, it’s a big issue, maybe the biggest.

  7. Watcher says:

    Sooooooooooooo, more evidence production was down in October. Whilst the price was cratering.

    How interesting.

    • Watcher says:

      Oh, look. A fight is underway, but it appears close will be sub $77 today. An attempt by the CLR funding will be made to defend it, but oh well. Sterling was slammed hard. 134 pips. That’s a ton for one day.

      How interesting.

    • Dennis Coyne says:

      Hi Watcher,

      Supply is just one part, demand is the other. Supply from OPEC was down, we don’t know about the rest of the World (though I doubt it matched OPEC’s fall, Canadian and US increases may have offset the OPEC drop). The US crude input to refineries (4 week avg) dropped by 800 kb/d in October, but that was the same as last year at this time, there is a tendency for oil prices to fall in autumn (in the US at least). If supply dropped and prices dropped, then demand must have fallen as well.

      • Watcher says:

        Of if supply dropped and demand dropped too, by the same relative amount, then prices, well, son of a gun, they dropped.

        How interesting.

        • Ilambiquated says:

          I think oil prices are driven more by expectations than by short term supply and demand. It is hard to deny it is driven by the groupthink of a small group of narrowly focused people.

          The irony of all this hullabaloo about the “American Energy Revolution” and “Saudi America” is that it may drive (or already have driven) prices down to the point where LTO is no longer viable.

          • Watcher says:

            To some extent, maybe causation isn’t critical, but what IS critical is the potential one way street of destruction of the industry.

            It would lead to high yield bond defaults. HY instruments are not swapped because they DO default often. That means lenders will be badly burned, and the reason that matters is a price rise will not generate a queue of lenders to be re-involved. The oil price required to restart oil flow will likely be higher than the industry smashing price. A hysteresis, of sorts.

            Other things to elevate the restart price would be trash cleanup thrown onto the state. I looked up the security bond in NoDak required by a driller to drill a well, and it’s only $20,000. That won’t fund plug and abandon for a bankrupt LLC, so NoDak will essentially elevate the price of anyone wanting to restart the industry in the future.

            Add to all this the loss of oil transport reservations on the railways. The railways will get occupied with other freight, who may themselves get long term contracts. Then oil can’t flow.

            The collateral for many of the loans is the book value of lease holding at a given price. The falling price probably is triggering recall covenants right now as value of the collateral crashes. The lenders essentially can be foreclosing on their loans, and these won’t be like no recourse mortgages. Other CLR property can be seized.

            The overall point being, it’s a one way street. The price that smashes the industry will be far lower than the price that might let the industry try to restart.

            • Fred Magyar says:

              Add to all this the loss of oil transport reservations on the railways. The railways will get occupied with other freight, who may themselves get long term contracts. Then oil can’t flow.

              That seems to me to be a statement that is self contradictory. If the oil can’t flow then the economy takes a hit and the railways won’t get occupied with other freight… And we are another step down the the other side of the peak oil ladder with all its consequences.

              If BAU is dead then it makes no sense to make assumptions based on BAU, or am I missing something?

          • Old farmer mac says:

            The one given general class of commodities in the world that is most subject to uncertain supply is agricultural crop yield for dead sure.

            Hence anybody who spends a lot of time observing ag commodity prices will eventually develop some insight into prices and the effect of buyers and sellers expectations on prices.

            Fear will certainly cause a temporary short term run up in the price of any given ag commodity in the event it seems it will come up in short supply.This can happen for numerous reasons such as drought or frost or flood or a strike in the fields or even war if there is fighting in the place it grows.Insects and blights can wipe out a significant portion of yield of any crop especially one grown in a limited area such as for instance citrus fruits in Florida.

            If the crop actually proves to be short the price stays up to reflect this reality. If not it comes right back down.The very simple and basically unavoidable fact is that anybody who buys more early in anticipation of higher prices will buy less later since his immediate short term supply is already on hand or at least paid for and in the pipeline.

            The opposite situation- the expectation of a big crop leads to a speculative and optimistic ( on buyers part) drop in price and this drop will last if the crop is indeed a big one. If not it creeps right back up since the actual buyers have to have it and the way they get it is to bid higher for it.

            So now- the users can buy ahead -physically taking early delivery or by executing a naked buy contract for later delivery.Producers can change their production plans in anticipation of higher or lower prices..

            But once a farmer has a crop in the ground he is generally locked in for the year. It is extremely rare for a farmer to VOLUNTARILY walk away from a crop in the ground since he already has money invested in it and it is risky and hard to plow up an existing crop and plant something else even if he has the equipment and capital to do so- and there is sufficient TIME do do so.

            So- farmers are in about the same situation as oil producers except the time frames are different. The time frame for production decisions by farmers is basically annual.

            I don’t know how for sure long it is for oil producers but for conventional oil it is not less than five years ” from scratch” and probably closer to ten on average.Tight oil producers can probably make the decision to drill or not to drill on a much faster basis but it seems that they are also to a large extent locked in by the fact that they have already spent a lot of money buying up land rights and hiring all their personnel and buying or leasing offices and equipment etc.

            So I am guessing that any oil producer who made the decision to drill a particular field in July to drill in December will almost for sure be drilling in December. Plans for drilling next May or June would be easier to shelve.Plans for December 2015 would be even more tentative at this time and it would be easier to cut anticipated losses by means of not renewing equipment leases and employee attrition and better planned layoffs etc.

            In any case the actual price is always determined on average— over any time frame which allows producers and buyers to adjust their operations- by the actual willingness of buyers to buy what is actually available.

            Both oil and grain are easily storable although storage is not cheap since it eats money that could be used for other purposes.

            Fear or optimism may in my opinion cause a temporary run up in oil prices but over a matter of a few months the actual price is going to be based almost solely on how much the end user is willing to buy and how much the producers and refiners send to market. The price will circle closely around this core interaction like a moth around a light and never get very far from it very long.

            Given that oil prices are down and staying down for a few months now it seem perfectly obvious to me that demand is down at a time that production is actually probably going up.This indicates that some oil producers are up shit creek without a paddle because the highest cost producers must be losing money.

            But nevertheless it is better for a producer to run at a (hopefully) small loss while generating some cash flow and praying for better prices than it is to shut down and lose even more

            .So – it is likely hardly any high cost producer has as yet actually shut down his production.This cutting back or shutting down takes a while.But if it costs a hundred bucks to produce a particular oil field and the price stays at eighty very long you can bet your last can of beans that pretty soon- say within a year at most would be my wild ass guess- you will see the drill rigs leaving the neighborhood.Unless the mood changes and the producers of that field aare willing to gamble prices are headed up again in the near term of course- and of course assuming they have the money to hang in there waiting.

            It is always supply and demand in the end except when the producer or distributor has a way of actually controlling how much product gets to the end user.

            This control rarely exists when there are a number of producers who need to sell.It generally requires either active government participation or at least government that is willing to look the other way.

            Sugar producers in the US are a classic example of producers who with the collusion of government manage to partially control supply and thus raise the price they get.The biggest consequence of the defacto American sugar cartel has been for most former sugar buyers to switch to corn syrup and the producers of a few products such as premium candy that simply must be made with real sugar to move production to another country.

            One of the regulars here who has actual oil production experience can probably throw some light on how far ahead most oil producers are actually committed to producing a particular field.

            But I feel comfortable saying that tight oil producers are not yet cutting back in big way based on the rig count news.

            It is certainly possible that Uncle Sam and the Saudis are actively out to inflict some serious pain on Russia and Iran by encouraging as much production as possible thereby keeping the price of oil as low as possible.The Saudis are authoritarians and can do this simply by making the decision and telling their managers to implement it.

            Uncle Sam is not so powerful in this respect but by manipulating the credit markets and environmental and tax regulations in favor of oil producers Uncle can achieve the same result to a substantial degree- more oil production every thing else held equal.

            I have no firm opinion as to whether this credit and regulatory manipulation is happening as deliberate foreign policy ploy or simply in hopes of goosing the domestic economy. BUT it IS happening to some extent in my opinion .

            • Paulo says:

              I thought drilling activity was starting to decline? Coupled with speedy LTO depletion rates there will be a big change a comin.

              Surely, investors will be shy going forward?

              • Dennis Coyne says:

                Hi Paulo,

                My guess is that the drilling plans will be cut back to a level that will just barely maintain output until prices go back up.

                The weaker players will sell off some of their assets to the stronger players and some of the bigger oil companies may swoop in to buy up some of the acreage in the sweet spots. It’s a dog eat dog world, the more profitable companies will be looking for deals.

  8. Rick Munroe says:

    The Financial Post just stated this in its article on the new WEO:
    “The IEA sees total production of crude staying at around 68 million barrels per day until the early 2030s before dropping to 66 million barrels by the end of the period, leaving the task of meeting rising demand entirely to unconventional production and natural gas liquids.”

    My understanding is that global production of conventional crude has been on a plateau for almost a full decade, but that the plateau was around 74 mbpd. I see that in your articles re. JODI stats the number is more like 72. But I’ve never heard IEA (or anyone else) say that it was as low as 68 mbpd.
    Have I missed something?

    • I think the IEA is talking about crude only while JODI and the EIA are talking about Crude + Condensate. That would account for the difference. This seems to be a departure from the IEA’s usual language. They usually speak in terms of “total liquids”.

      • Rick Munroe says:

        Thanks for your prompt reply, Ron

        Do you know how common it is for “crude” stats to be only crude (not including the condensate from the same oil well)? The EIA seems to always cite “crude and lease condensate” so I figured that’s what everyone else does.
        Is that not the case, or would UK, Saudis, etc do their calculations differently?

        • Almost everyone uses crude + condensate except OPEC. They always use crude only and never give condensate figures. So all OPEC nations use crude only and everyone else uses C+C.

          Of course the EIA never uses crude only even when repoting OPEC production numbers. They treat OPEC nations just like everyone else.

          However it gets even more confusing. The EIA gives “total oil supply”, “crude oil, NGPL, an other liquids” and “crude oil including lease condensate”. However the only difference between “total oil supply” and “crude oil, NGPL, an other liquids” is the former includes refinery process gain. The EIA is the only agency in the world, to my knowledge, that includes refinery process gain in their stats.

          BP and the IEA usually give their stats as crude oil plus NGLs.

          • Dennis Coyne says:

            Hi Ron,

            You are definitely correct about BP production data being C+C+NGL, their consumption data is all liquids (includes biofuels, coal to liquids, and such). For some reason I thought the IEA only gave all liquids data, which would be similar to the EIA’s total liquids minus refinery gains.

            I am not trying to correct you, I am trying to learn you follow the data more closely than me.

            Comparing July EIA and IEA data, the EIA has total supply at 91.9 Mb/d and IEA has it at 93.0 Mb/d, I think this is why I had the impression that the IEA includes everything in their supply number.

            • Hey, please feel free to correct me any time. I do follow the EIA data very closely but not the IEA data. So you are probably right.

              But, if you do find out for sure, I would appreciate you posting what you find.

          • Rick Munroe says:

            Thanks for clarifying, Ron.
            It would sure be helpful if the various reporting agencies would standardize their definitions and reporting practices… I don’t see why they can’t/won’t.

          • Sam Taylor says:

            Ron,

            Why do the eia not separate out crude and condensate in their figures? It can’t be that hard to figure out a rough average percentage cut, at least?

            • I really don’t know why the EIA always counts condensate with crude. No it’s not that hard to figure out the amount of condensate since condensate comes primarily from gas wells, not oil wells. But the percentage differs greatly from country to country.

              Anyway most other countries count condensate with crude also. Russia does, but Norway does not. Norway gives three counts, 1 crude, 2 condensate and 3 NGLs.

              You would have to ask someone on the inside at the EIA why they don’t count condensate separately. And I’ll bet most would answer: “That’s just the way we’ve always done it.”

              • Dennis Coyne says:

                Hi Ron,

                You are correct that condensate comes from the gas wells, but there is a significant amount of natural gas that is “associated gas” (especially in the Eagle Ford), no doubt there is some “condensate” from this natural gas as well, it is pretty difficult to measure this at the well head as the “condensate” is mixed with the crude so the EIA decided a long time ago to just lump it all together into a crude plus condensate category.

                • Yes Dennis, I am well aware of “associated gas”. That’s why I said condensate comes “primarily” from gas wells.

                  But with oil wells, some condensate is, no doubt, mixed in with the oil, but not all. The temperature of the oil exiting the well is usually quite hot and much of the condensate is still a gas at that temperature.

                  • Jeffrey J. Brown says:

                    Or to simplify somewhat, one can simply say that condensate is a byproduct of natural gas production (from all sources).

                  • Dennis Coyne says:

                    Ron,

                    That is correct, the gas then gets separated from the oil, and depending upon how quickly this happens the condensate may remain in the natural gas, I imagined that it would cool down and the condensate would condense out of the gas, by the time the gas had been separated from the oil.

                    I imagine they just put the oil in a tank and pump the methane off the top into a pipeline or separate tank, by the time the process is complete, a lot of the condensate is mixed with the oil unless they keep the oil heated for some reason.

                  • Well it’s not really that simple. But the oil has gas, water, oil and often a lot of sand that comes up with it. All are separated at the same time. The thing runs continuously and I doubt that the oil or gas has very much time to cool.

                    Youtube 3 Phase Separator

                  • Dennis Coyne says:

                    Thanks Ron,

                    I didn’t know that.

                  • Dennis Coyne says:

                    Hi Ron,

                    The video was interesting, it didn’t say anything about how long the fluid sits in the separator, in order for the water, oil, gas, and solids to have time to separate, I would think the stuff would be left to sit for a while and it would cool down to some degree while it sits.

                    It is unclear what temperature these separators typically operate at. Part of what enables the lease condensate to be removed is the lower pressure in the separator, though temperature may also be important.

                    The fluid only stays in the separator for 5 minutes or so. Wellhead temperature info is hard to find on the web.

                  • Dennis, the oil never sits, it is always flowing. How fast it is flowing I have no idea. Of course it cannot flow too fast or the oil would not have time to separate from the water.

                    If they have a lot of oil, they just use more separators. I have seen several of these horizontal separators sitting side by side at Safaniya in Saudi. Back then it never occurred to me to count them. But thinking back there were likely less than a dozen.

                    The oil coming out of the ground is quite hot but it depends entirely on the depth of the well. The temperature increases by 104 degrees F per mile of depth. And of course the oil must travel some distance to get to the GOSP. That allows it to cool some more.

                    The temperature of the deepwater Gulf of Mexico oil is 456 Degrees F(235 C). Of course most wells are not nearly that deep.

                    But yes, some of the condensate stays mixed in with the oil. I have no idea what percentage however.

                    I do know that in Safaniya they got an awful lot of sand coming up with the crude and water.

                  • Dennis Coyne says:

                    Thanks Mike,

                    I know the oil is hot, but I am thinking mostly of onshore production where the relatively low pressure of the separator will allow most of the lease condensate to be removed from the associated gas. My guess is that there is very little of the pentanes plus that remains in the gas stream from the separator, most of the NGLs that are left mixed with the methane would be butanes, ethanes, and propanes (in their various forms). Though Ron is correct that a small amount of the pentanes plus may remain in the gas phase due to the higher temperatures.

                • Mike says:

                  Dennis, to generally answer a few of your questions below, you may use a bottom home temperature gradient of 0.032 F per ft. So say, a 9000 ft. well would have at BHT of 288 F. Ambient air temperature is also part of the issue at the surface, but then there is often cooling that occurs as high GOR liquids go thru chokes, etc.

                  Pretty much any kind of separator, 2 phase or 3, vertical or horizontal, works on a simple gravity basis and within a few minutes of residence (retention) time phases are separated, often not perfectly but close enough. Some fluids are separated better, faster than others based on density. The process can all be sped up by internals in the separator, for instance coalesce plates, etc. The oil phase might then go to a heater treater where the liquid is heated back up to reduce BS&W, water goes to more retention time for disposal or reinjection and the gas phase may go to a lower working pressure separator where the change of pressures helps separate the high end hydrocarbon chain, like condensate.

                  • Mike says:

                    Ron beat me to it, but he is right. BHT’s in deep wells can cook bottom hole assemblies in the drill string, like steering motors, and logging tools, the technology has really improved on that, however. I have been around a few well heads (Christmas trees) that were too hot to touch.

                    Solids are often part of the production stream, as Ron says, and that can be a bitch to deal with. Separation engineering is actually very complex.

                  • Mike, keep in mind that though I spent 5 years in Saudi Oil fields I was in computers, not dealing with the oil directly. Back then, the early 80s, I was not even interested in oil production, just the computer technology I was dealing with. It was basically flow technology, and very primitive compared to today’s flow technology I am sure.

                    Back then I only knew the oil was hot because of putting my hand on the pipes on the offshore platforms in Safaniya. And I knew about the sand only because I heard the engineers bitching about it.

                    As an oilman we do appreciate your input on this list. And when we get things wrong, and we often do, please feel free to correct us. We will not be embarrassed I promise you.

                  • Mike says:

                    Mr. Patterson, you guys are doing plenty fine without my input. Temperature gradients are fun to know about; sometimes in weird places, for weird reasons they get all out of kilter.

                    Safaniya is offshore, yes? I can only imagine the sand problems those guys have and how that effects surface production facilities in limited deck space.

                    Mike

    • Jeffrey J. Brown says:

      Rick,

      If you haven’t seen it, following is the current version of my “Crude Oil Versus Condensate” essay:

      Peak (Crude) Oil in 2005?

      In my opinion, actual global crude oil production (45 or lower API gravity crude oil) may have effectively peaked in 2005, while global natural gas production and associated liquids (condensates & natural gas liquids) have so far continued to increase.

      I’ve always thought it odd that when we ask for the price of oil, we get the price of 45 or lower API gravity crude oil, but when we ask for the volume of oil, we get some combination of crude oil + condensate + NGL (Natural Gas Liquids) + biofuels + refinery gains.

      This is analogous to asking a butcher for the price of beef, and he gives you the price of steak, but if you ask him how much beef he has on hand, he gives you total pounds of steak + roast + ground beef. Shouldn’t the price of an item directly relate to the quantity of the item being priced, and not to the quantity of the item plus the quantity of (partial) substitutes?

      In any case, the closest measure of global crude oil production that we have is the EIA data base that tracts global Crude + Condensate (C+C). In regard to this data base, a key question is the ratio of global condensate to C+C production. Unfortunately, we don’t appear to have any global data on the Condensate/(C+C) Ratio. Note that when the EIA discusses “crude oil” they are talking about C+C.

      Insofar as I know, the only complete Condensate/(C+C) data base, from one agency, is the Texas RRC data base for Texas, which showed that the Texas Condensate/(C+C) ratio increased from 11.1% in 2005 to 15.4% in 2012. The 2013 ratio (more subject to revision than the 2012 data) shows that the 2013 ratio fell slightly, down to about 15%, which probably reflects more focus on the crude oil prone areas in the Eagle Ford. The EIA shows that Texas marketed gas production increased at 5%/year from 2005 to 2012, versus a 13%/year rate of increase in Condensate production. So, Texas condensate production increased 2.6 times faster than Texas marketed gas production increased, from 2005 to 2012.

      The EIA shows that global dry gas production increased at 2.8%/year from 2005 to 2012, a 22% increase in seven years. If the increase in global condensate production only matched the increase in global gas production, global condensate production would be up by 22% in seven years. If global condensate production matched the 2005 to 2013 Texas rates of change (relative to the global increase in gas production), global condensate production would be up by about 67% in seven years.

      We don’t know by what percentage that global condensate production increased from 2005 to 2013. What we do know is that global C+C production increased at only 0.3%/year from 2005 to 2013. In my opinion, the only reasonable conclusion is that rising condensate production accounted for virtually all of the increase in global C+C production from 2005 to 2012, which implies that actual global crude oil production was flat to down from 2005 to 2012, as annual Brent crude oil prices doubled from $55 in 2005 to $112 in 2012.

      The following chart shows normalized global gas, NGL and C+C production from 2002 to 2012 (2005 values = 100%).

      http://i1095.photobucket.com/albums/i475/westexas/Slide1_zps45f11d98.jpg

      The following chart shows estimated normalized global condensate and crude oil production from 2002 to 2012 (2005 values = 100%). I’m assuming that the global Condensate/(C+C) Ratio was about 10% for 2002 to 2005 (versus 11% for Texas in 2005), and then I (conservatively) assume that condensate increased at the same rate as global gas production from 2005 to 2012, which is a much lower rate of increase in condensate (relative to the increase in gas production) than what we saw in Texas from 2005 to 2012.

      http://i1095.photobucket.com/albums/i475/westexas/Slide2_zpse294f080.jpg

      Based on foregoing assumptions, I estimate that actual annual global crude oil production (45 or lower API gravity crude oil) increased from about 60 mbpd (million barrels per day) in 2002 to about 67 mbpd in 2005, as annual Brent crude oil prices doubled from $25 in 2002 to $55 in 2005. 

      At the (estimated) 2002 to 2005 rate of increase in global crude oil production, global crude oil production would have been up to about 90 mbpd in 2013. 


      As annual Brent crude oil prices doubled again, from $55 in 2005 to an average of about $110 for 2011 to 2013 inclusive, I estimate that annual global crude oil production did not materially exceed about 67 mbpd, and probably averaged about 66 mbpd for 2006 to 2013 inclusive.

      • Chris says:

        The price of crude oil is linked to the global “oil+substitute” demand versus supply. So if crude oil production decreases but substitute production increases to compensate, the equilibrium is reached. The big question in the coming years will be: how crude oil production decrease will be compensated by substitutes? The current continuous decline in oil price could have a big impact on the whole production next year. To guarantee budget equilibrium in producing countries, oil price should be higher than $100. So the current price situation cannot continue for many months/years. I think OPEC will lower production (decision or consequence of peak production) or the rest of the world will lower production (peak production or lack of profitability). Within several years, USA will decrease with high decline rate. I think nobody (no country) is prepared for this.

        • Jeffrey J. Brown says:

          Of course, if global crude oil production has effectively peaked, it’s when, not if, that global condensate + NGL production also peaks. Note that even on the high end of the API gravity range of crude oil, the distillate yield drops significantly, just going from 39 to 42 API gravity:

          http://i1095.photobucket.com/albums/i475/westexas/Refineryyields_zps4ad928eb.png

          And when we calculate Global Net Exports of oil (GNE*), we use total petroleum liquids (+ other liquids for EIA data). GNE fell from 46 mbpd in 2005 to 43 mbpd in 2013. Available Net Exports (GNE less Chindia’s Net Imports, CNI) fell from 41 mbpd in 2005 to 34 mbpd in 2013.

          *Combined net exports from Top 33 net exporters in 2005

        • Watcher says:

          I’m kind of watching all the recent talk of new condensate refineries proposed, and chasing funding.

          That funding isn’t going to be there. This SHOULD restrict production.

      • Rick Munroe says:

        Thanks for that, Jeffrey.
        I have no idea whether IEA has followed your line of thinking but their conclusion (crude volume around 67 -68) is consistent with yours, which strikes me as perfectly sensible and yet another cause for concern.
        Excellent analysis.

        • Jeffrey J. Brown says:

          If actual global crude oil production is projected to be flat, what happens to net exports of crude oil as exporting countries consume an increasing share of their own crude oil production?

          The 2005 to 2013 rate of increase in (2005) Top 33 Exporters’ total liquids consumption from 2005 to 2013 was 2.6%/year (EIA).

  9. Cave Bio says:

    Hello everyone,

    I posted these links at the end of a thread a few posts ago. My guess is very few people saw them. I thought I would throw them out again.

    I am most interested in the first link. I would love an independent confirmation of their claims.

    http://www.sciencedaily.com/videos/7bdf3c8319a5ffeae565a710fea6ea74.htm

    http://www.sciencedaily.com/videos/923ccd12c60ef1e458fa2e41cf5ef7e8.htm

    Best,
    Tom

    • Cave Bio says:

      I forgot to put the titles to the stories.

      For the first link:
      Israeli firm makes solar power at night

      and the second link:
      Saharan solar project to power Europe

      Best,
      Tom

    • Watcher says:

      As was just proven in the midterms, as described by the New York Times was essentially this:

      “. . . and also we found that no matter how many left wing billionaires spent how many millions trying to make climate change an important political issue, from coast to coast nobody cared. “

      • Jef says:

        “…nobody cared. “

        Its not that they don’t care its more a matter of the fact that all of their “caring” is going into trying to make a living. The vast majority of the population a rapidly loosing wealth and earning power putting themselves and their loved ones at risk of economic then physical death.

        They fail to see how focusing on climate change will address their financial concerns or if they are smart enough they realize that addressing climate change will in fact make their financial prospects even worse.

        • Nick G says:

          No, it’s a matter of misinformation – especially from Fox News.

          Kicking the oil habit is very cost effective. For instance, the Nissan Leaf is the cheapest vehicle on the road to own and operate.

          • wimbi says:

            Right. I’m way ahead of my neighbor who went on with his BAU buys when I spent LESS money on PV, Leaf, all PV run electric appliances.

            Now, no gasoline bills, no electric bills. He still pays what he paid, plus.

        • Watcher says:

          Well, nobody cared is always relative. Do you care about brocolli? Not at all until I mentioned it, but now that I did you think about it . . . care about it . . . more than you did a minute ago.

          The point is millions were poured into climate change hype and it didn’t move the care needle. They did a helluva lot more than the mention I just did, and got nothing for it.

          It’s a non subject for the people who pay the bills.

  10. Old farmer mac says:

    I have this site bookmarked and check it frequently. The people who run it have good intentions and don’t run anti science bullshit but they do run often run stuff that is technically feasible or potentially feasible but unlikely to be commercialized any time soon if ever.Let’s just say there is a lot of chaff in the grain.

    Some stuff they link to is no more than company pr or marketing release. The first link about Israelis generating electricity at night with some new form of storage technology similar to but different from molten salts looks to me to be a press release. Maybe the company is for real but I estimate that ninety nine percent plus of the time such press releases describe things that never come to pass.

    The second link is about solar power plants in the desert near the Med being built out on a grand scale and HVDC lines built to transport the juice to Europe by 2018.

    This general plan has been around for a good while now but it got bogged down because of the price tag and associated political problems and more or less permanently put on hold a couple of years ago.Maybe longer.

    I cruise the energy news quite often but this link is the first one I have seen that indicates this giant project has been dusted off and put back on the front burner. May be it has.

    But if it has it has not been headlined by any of the major sites that deal with politics or energy or the economy in recent days unless I missed the headline.

    I doubt it is going to happen anytime soon but this scheme may have been reborn in the last few days as the result of Europeans getting their act together out of fear of the Russian bear.If this is the case it should be a lead item on a lot of sites including lots of major newspapers..

    • Ilambiquated says:

      The idea of creating huge solar fields in the Sahara bogged down because nobody can figure out whose interest it is supposed to be in. Maybe in a science fiction world you can imagine it being in “everyone’s” interest.

      In the short term it doesn’t make much sense for the North Africans, because it’s just foreign capital using almost free land and exporting the results. Energy shortages in the Middle East and North Africa are mostly caused by political and governance problems, so decentralized solar is probably a better bet in the short term.

      It doesn’t make much sense to Europeans because in the short term there is no lack of land and sunshine in Southern Europe.You could increase the solar energy industry tenfold in Southern Europe without running into land issues. Why bother with North Africa?

      • Caelan MacIntyre says:

        Your comment reminds me that I just listened to Radio Ecoshock’s podcast last night and interestingly, there was some mention in the discussion about this issue regarding nuclear power (brief):

        “I ask Olli about the Finish government’s position on climate change (they favor the bureaucratic solutions which don’t really do much); and about the expansion of nuclear power in Finland. We agree that nuclear power pre-supposes and enforces a centralized government that must be willing to use force to protect the reactors – for generations.”

        …Nothing like peak government digging in its heels with nuclear power on the eve of civilizational decline/collapse to keep one up at night.

        • Caelan, a few years ago I was very strong pro nuclear power. Then I got to thinking about a possible total economic collapse. What would happen to those nuclear power plants then? That was when I turned on a dime and became anti nuclear power.

          • Fred Magyar says:

            Yep! And that in a nutshell is my main personal reason for being anti nuclear at this time! Nuclear requires the maintenance of a very complex society for a very long time to come. Unless I have been reading the writing on the wall incorrectly, our complex societies are about to undergo a rather drastic simplification… and that doesn’t bode well for nuclear power generation.

            • Caelan says:

              The recent landing of a ‘drone’ on an asteroid, rather than, say, another shipment of people for a current Martian terraforming project (funded by a non-coercive taxation system) is as good a metaphor as any for our their squanders and corruptions.

              • Caelan, with all due respect if we directed all our space technology and resources toward a Martin terraforming Mars, every hour worked and every penny spent would be a total waste of time and money. From Wiki:

                The atmosphere of Mars is less than 1% of Earth’s, so it does not protect the planet from the Sun’s radiation nor does it do much to retain heat at the surface. It consists of 95% carbon dioxide, 3% nitrogen, 1.6% argon, and the remainder is trace amounts of oxygen, water vapor, and other gases.

                If we went to Mars we would have to carry every ounce of food we needed with us. We would need to carry every ounce of water we needed with us. We would need to carry every breath of air we need to live with us.

                The bottom of the ocean is a thousand times more hospitable and much easier to reach than Mars. If you wished to colonize empty space it would make a lot more sense to start there. Or if you were dead set on space, you could start with the Moon. It is a whole lot closer so when you ran out of air, you wouldn’t have so far to to get some more.

                • Caelan says:

                  My metaphor was somewhat exaggerated, but still, would you (or others reading this) have different ideas on how your stolen money was to be spent?

                  By the way, did they not already find water on Mars? But anyway, I suggest that they get a big gas compressor ship to suck Venus’ atmosphere up and blow it out on Mars. To increase its gravity and maybe add to its surface material and atmospheric composition and pressure, maybe smash relatively-useless Phobos and Diemos into it as well, perhaps along with a few asteroids from the nearby belt. Then, after that’s all done and the dust has settled, gradually build a moon from more of the asteroid belt to give Mars some tidal forces to increase internal heating/volcanism and expulsion of more material and for the early imported terrestrial organisms. Simple. ‘u^

      • Nick G says:

        Local governments could tax it for revenue, and Europeans could get a more diverse supply base.

        It would be limited – there’s no question Europeans don’t want to import a large percentage of their power from Africa.

  11. Caelan MacIntyre says:

    With regard to Greer’s and Orlov’s recent articles about collapse, and mentions of these warbands and losing control of peripheries, etc.; I would suggest that that state governments are ‘warbands’ in a sense– superset warbands– so it seems to stand to reason that things like that, (etc.), would fragment into smaller and more diffuse localized forms that echo the parents as it were.

    Anyway, one question I had for the group here is if there was any thought or discussion about the results of US fracking vis-a-vis the recent drop in oil price. I have been reading something of a fracking struggle as a result, but how much of US fracking production is exported out of the US and what will happen when US and other countries become more ‘localized’. (I also have come across some recent discussion of ‘protectionism’, but of course this kind of post-peak oil protectionism seems quite different.)

    Old farmer mac;
    If you read this, I have heard that (at least many) (so-called-) farmers have been farming ‘wrong’ for the past 7000 years or so– monocropping, tilling, soil depletion, pesticides and fossil fuel inputs to name a few.
    I’ve also always had a hard time with the term ‘weed’ by the way. A weed is a plant, and often, if not usually, edible, hardy, self-propagating, wild and perennial. ‘Agriculture’ may not be as hard as some seem to think, and of course we, as a species, have been making things hard for ourselves as almost par for the course.
    Lastly, I hear that if we want to feed a lot of people post peak oil and maybe even as climate change really kicks in, ‘weeds’ may become among our best bets. And bbq’ued rat. ‘u^

    • Anyway, one question I had for the group here is if there was any thought or discussion about the results of US fracking vis-a-vis the recent drop in oil price.

      It will take a while for the price drop to show up as a drop in production. There is a backlog of wells waiting for completion so it will not affect them. But the rig count has already started to fall. A few weeks ago the rigs drilling for oil stood at 1,609 and a couple of days ago it was at 1,568, a drop of 41.

      But it will have one effect that the drillers cannot control, investment.

      IEA warns low oil prices threaten US shale investment

      Investment in US shale oilfields will fall by a tenth next year – and result in a decline in production – if the oil price continues to trade around $80 a barrel, the world’s energy watchdog has warned.
      Wednesday’s forecast from the International Energy Agency is the clearest sign yet of the potential impact of the sharp drop in the price of Brent crude, in the wake of booming US oil production.

      I don’t know what you mean when you ask “what will happen when US and other countries become more ‘localized’.” But if you mean what happens when globalization slows or stops, then that is an entirely different subject and will only happen after we are already well into collapse. There is no danger of globalization even slowing down as long as we have business as usual.

      • Caelan MacIntyre says:

        Good morning, Ron.
        What I was thinking of was price forcing a premature braking of fracking, but then once fracking prematurely slows, then what?
        There was a previous contention that shale oil/gas was going to give the US what was it? 200 years of energy independence? In what context? It was supposedly hot air, but then, what of a more localized context and along with the tar sands from Canada?
        And we are seeing of course the new deals and apparently new ‘petrocurrency’ with Russia and China. Also, I recall Numan’s ‘Fuck the EU.’ remark as well as the group of climate scientists’ recent letter of urgency. Oh, and the recent news that Romania’s fracking estimates have been revised to 0. How does that happen?

        This year especially, too many things seem to point to ‘managed contraction’. Did I miss discussion about this, or has there been any? Contrary to some persistent contentions, I have a hard time buying that TPTB are forever into BAU and delusion.

        • Calean, now I understand. By “more localized” you meant “more energy independent”. Naw, that is a myth. The fracking boom will peak around 2016, give or take a year or so, then all this talk about energy independence will be heard no more.

          Fracking, even before the price collapse, was not a viable option in most countries around the world. Now it is viable in almost none of them.

          I have problems with this statement of yours: “Contrary to some persistent contentions, I have a hard time buying that TPTB are forever into BAU and delusion.”

          First I don’t know who these “TPTB guys” really are. Are they company executives, media moguls or politician? But it doesn’t really matter. I think you are simply wrong, they are all BAU delusional. In fact almost everyone is BAU delusional. Francis Bacon, about 400 years ago, observed, “Man prefers to believe what he prefers to be true.”

          People, in general, never see a real crisis coming down the road. And they certainly never see a real disaster coming. You can show them the evidence until the cows come home and they will not believe it. They will not believe it because they prefer not to.

          Of course there is more to it than that. When people, in general, understand that they don’t fully understand a subject, they turn to someone whom they believe is an expert on the subject. And there are always “experts” out there, on both sides of every story. So people pick the expert that gives them the expert opinion that they prefer to believe.

          • Tom Fugate says:

            Ron, with all due respect I think you are wrong that TPTB are BAU delusional. By TPTB I think we are talking about the people in charge of running the US dollar based economic system, i.e. the Federal Reserve and the large banks. Just recently we have seen the Fed wind up its QE3 which then led to a large drop in the stock market. Then this guy Bullard from the St. Louis Fed comes out and says maybe they should launch a QE4 and that was enough to send stocks soaring back to new heights. Then they bring out none other than Alan Greenspan who says QE3 has been a failure and the people should ‘buy gold’ because its going to be much better than ‘fiat currency’ including the dollar.

            These are indications that the folks running the operation know its reaching a crisis point. That may be what Caelan is referring to. Whether there will be an attempt to engineer a ‘controlled contraction’ if such a thing is even possible I don’t know. But its something we pay attention to and discuss because it will affect us all in my opinion.

            • Well I never thought of the Fed as being “The Powers That Be”. TPTB is a very confusing term and I just wish folks would just not use it. It is a little like “The Elites”, just who the fuck are these guys?

              But you are correct, if anyone is aware of a pending crisis in the economy then it would be the folks at the Fed. But I was thinking more in the terms of politicians and company executives or the media.

              And of course it also depends on what kind of crisis you are talking about. Do you really believe the folks at the Fed are even remotely aware of the situation in the oil patch. They read what Citi says, or what BP says, or what the EIA says and take their cue from them.

              • Watcher says:

                Do you really believe the folks at the Fed are even remotely aware of the situation in the oil patch.

                That is about as fundamental a question as there is.

                Are they getting their information only from Citi and JPM? There have been indications this is not so. I recall the past Secy of Energy being in meetings with Bernanke, and Obama has mentioned things like “Secy Chu tells me we’re going to have the battery problem solved in 18 months (this was 3 years ago) and oil will lose its purpose blah blah blah”. Chu was/is aware of Peak Oil.

                Bernanke was a smart guy. He knows exactly where money comes from and what oil means in whatever context.

                Rather than ask provocative questions about them doing things because they don’t understand, I conclude they are smart enough to understand and know there is no solution and have decided to buy time and hope the tail event is favorable rather than negative.

                (Buying time for a miracle also buys it for a disaster). But when disaster is inevitable, you have no choice but to to buy time and pray.

                • Nick G says:

                  Watcher, that’s silly, even for you. The Fed does not think that PO is going to be TEOTWAWKI. That’s very clear. Their researchers do a lot of analysis of oil related issues. For instance, the St. Louis Fed did a thorough job of showing that oil shocks tend to be short term events. Other researchers, like James Hamilton (who is very, very PO aware) do similar analysis. There’s no sign of TEOTWAWKI.

                  • Watcher says:

                    James Hamilton works for the Fed?

                  • Nick G says:

                    Nah, he’s an “Other researcher”.

                  • Watcher says:

                    Point being, never heard of him.

                    Chu gave talks around 2005 at Lawrence Livermore (hmm is it still called that?) about peak oil production and one of his subordinates has been quoted saying that Chu was entirely aware of Peak Oil but could not talk about it in his position of Secy of Energy. And he was asked to sit in meetings with Bernanke.

                    And so, Bernanke got briefed by more than the Citi shills. He knew Peak Oil, which is, somewhat by definition, hopeless.

                  • Nick G says:

                    James Hamilton’s is well known in PO circles. He’s often quoted by PO enthusiasts. Here’s his blog: econbrowser.com

                    The decline of oil production isn’t a hopeless problem. If “hopeless” is the definition of “Peak Oil”, then Chu is not PO aware.

                  • Cae says:

                    It’s TEOTWAWneedI. Long time coming. Death of a thousand cuts.

          • Nick G says:

            People, in general, never see a real crisis coming down the road.

            There are plenty of people forecasting a real crisis from Climate Change. The Powers That Be that are fighting to prevent a transition away from Fossil Fuels are the oil & gas and coal industries – mostly wealthy investors and top management.

            • I stick by my statement. People in general are not forecasting a crisis from Climate Change. Some people are but the vast majority of people believe business as usual will continue and climate change will have no effect for decades, long after they are dead.

              …mostly wealthy investors and top management.

              And these guys are definitely not forecasting a real crisis from Climate Change. But you make my point. Nothing is being done to mitigate climate change because people, in general, see no real crisis coming down the road.

              • Nick G says:

                1) I think that if you were to poll people with college degrees around the world, you’d find the majority agrees that Climate Change is a real concern. The same would be true in the US, though propaganda has had an effect on them, so their level of concern would be lower.

                2) If Americans are fed misinformation, why would you expect them to know differently? Most people don’t have the time to do a lot of independent research.

                • Joel Caris says:

                  Hi Nick,

                  It’s easy to say you think something is a real concern. It’s another thing to believe it to the point that you actually make changes in your life to address it.

                  The number of people who claim to believe climate change is a problem is irrelevant. The number who back it up with action is relevant.

                  Despite the appearance, most politicians aren’t complete idiots. They can read voters well enough to understand the difference between what they claim they want and what they actually do. The vast majority of Americans don’t want any real action on climate change, and that extends across the political spectrum.

                  They want comfortable lives, right now. If politicians take real action now to reduce the threat of climate change, it would lead to less comfortable lives, and they would promptly have their asses handed to them in the next election.

                  • Nick G says:

                    1) You’re raising some interesting points, which I’ll address below, but they’re not relevant to this discussion. Here we’re talking about people’s willing to entertain an idea that may have negative implications. I’m arguing that the majority of college educated people around the world are willing to entertain the idea that Climate Change is a very big risk.

                    2) there is a big difference between unilateral sacrifice, and changing the rules for everyone. Competitive athletes, for instance, may not be willing to wear protective gear that puts them at a disadvantage, but they’d be delighted with a rule that all must follow. The same is true for individuals and countries.

                    3) most action on Climate Change would improve people’s lives. A reduction in oil consumption would reduce costs, reduce pollution, and reduce the number of servicemen coming back with PTSD, disabilities on in a box. The same is true of coal (except for the oil wars).

                  • Caelan says:

                    Perhaps many are waiting for ‘something to happen’, and/or for ‘someone to do something’ while they ‘wait it out’, hamstrung by the lock-ins of their food and housing to their respective monetary/currency systems.

                    Maybe that’s key: That a currency restructuring to get each one more local again may lend some power back to more effective change/managed contraction.

                  • Joel Caris says:

                    Nick,

                    Climate change is going to wreak havoc on people’s lives. It already is doing that. But most all of us humans can’t get our minds wrapped around it. It’s not the way we think (I’m not sure it’s not the way humans think, but it’s definitely not the way this culture thinks.) For instance, I’ve made significant changes in my life–scaling back my energy and resource usage–over the last number of years due to concerns about the environment, climate change, peak oil issues, and current and future economic troubles. Despite all that, I still have a hard time truly believing that my future may be significantly worse than my present. But there’s a very strong likelihood that it will.

                    Most everyone in this culture believes the future will be better than the present, more or less. Therefore, even if they profess to believe in climate change, even if they do believe in it intellectually, they rarely have wrapped their head around its implications emotionally. In other words, they still think the future will likely be better than the present, which is not at all what climate change (and peak oil, etc.) is promising.

                    And so they may profess aloud their belief in it as a problem, but they don’t really believe it’s going to truly break apart their lives. Therefore, they pay more attention to their short term needs at the expense of the more long term trends and promises of climate change.

                    An honest addressing of climate change would involve a very significant and quick reduction in fossil fuel usage. I agree with you that this would have some benefits in reduced pollution and it might very well lead to less military adventurism if, as part of that program, we were to voluntarily begin winding down the American empire. However, it would also lead to a significant reduction in standard of living, because those two things hinge on fossil fuel usage and the American empire’s continued functioning. Take those things away and you get significantly less energy and resource usage per capita, which creates a reduced standard of living.

                    Granted, this may very well also lead to some increases in quality of life as people adjust to a new way of living and discover new forms of meaning and more purposeful work. But that’s a hell of a transition and not everyone is going to get on board with the new way of thinking. Regardless, it would be a way of living with significantly less physical luxury, no matter how you slice it, and that’s the way that Americans currently quantify their quality of life.

                    This is why we see no significant action on climate change. The population at broad doesn’t want it. They want their accustomed way of life, not a reduced standard of living that helps to mitigate the devastating environmental and economic problems coming down the pike.

                    Of course, we probably aren’t going to agree on this entirely because, so far as I can tell (correct me if I’m wrong) you believe that we can more or less substitute out fossil fuels for renewable energy. I don’t believe that’s at all possible. I’m a big fan of renewable energy (though the obsession over PV at the expense of passive solar makes me a little crazy) but I don’t believe for a moment that it can duplicate or even come close to duplicating what fossil fuels give us. We can’t run anything like our current economy on renewable energy. Ain’t gonna happen.

                    But again, I’m pretty sure we disagree on that.

                  • Nick G says:

                    Yes, indeed, we disagree.

                    Listen to Wimbi, who owns a Nissan Leaf. He thinks it’s far better than the infernal combustion engine vehicles he owned before it. EVs (or PHEVs, if you’re worried about range) are faster, quieter, more reliable and cheaper. They’re better in general. That’s why Tesla’s competitors are very, very nervous.

                  • Caelan says:

                    **Please delete previous, similar, post to this one. Thanks!

                    “If the program works as promised, it could neuter impending bitcoin regulations that seek to tie individuals’ identities to bitcoin ownership. By encrypting and mixing together its users’ payments, Dark Wallet seeks to enable practically untraceable flows of money online… ‘This is a way of using bitcoin that mocks every attempt to sprinkle it with regulation’, says Cody Wilson…’ ” ~ Wired

                    ”Balkind: Permacredits… propose[s] a way for people to invest in permaculture projects. …In the future, systems like Ethereum will create opportunities to rewrite how society operates. That process will present a historic opportunity for laws to be changed. Will the social justice activists be driving that change or will they be hiding from it?

                    Schneider: So this is really about power.

                    Balkind: Whenever we talk about money we’re also talking about power. If we want to focus solely on cryptocurrency, we’re talking about the ability of normal people to take control over money, to make it their own, to use it as a tool to better organize their communities and meet their needs… Cryptocurrency and crypto-contracts go hand in hand—so yes, we’re talking about a lot more than money…” ~ Resilience.org

                    I think I feel the decentralized tribe trying to once again wake up and wrest control from its very antithesis and nemesis, the large-scale centralized nation-state. They are getting it from all sides now.

                    ISIS may really be more of a spinoff so to speak, rather than a blowback, of the violence-based crony-capitalist nation-state.

                  • Joel Caris says:

                    Hi Caelan,

                    Personally, rather than messing around with attempts to create alternate currency, I prefer to just avoid money when I have the opportunity. I do a bit of bartering and trade and really enjoy it. It creates relationships–also a helpful skill and infrastructure for current and future hard times–and eliminates the worries about your currency being co-opted or destroyed by the state.

                    I really think getting away from money as much as possible is a more resilient strategy than attempting to create alternate currencies. Any currency, by its definition, involves some amount of centralization and is, therefore, potentially subject to interference by those with vested interests. Personal relationships, on the other hand, are far harder to interfere with.

                  • Caelan says:

                    Hi Joel,
                    I am inclined to agree in some senses, and just used the bitcoin/dark wallet as an example in that particular context.
                    I also seem to recall writing elsewhere about how cryptocurrencies could be the temporary means to achieve particular ends, but that their fundamental weakness could be what currently gives them their potential strength, namely the internet and its infrastructure.

                  • Joel Caris says:

                    Hi Caelan,

                    Yep. I wouldn’t want to put my faith in anything long term that required the internet and its attendant infrastructure to function. Much as I have seen the internet come into widespread use in my lifetime, I expect it to be transitory enough to drop out of widespread use before I die (likely still technically available, put too expensive for the vast majority of people.)

                  • Cae says:

                    Listen to Wimbi, who owns a Nissan Leaf. ~ NickG

                    The Nissan Leaf owns Wimbi. It’s symbiotic.

    • Nick G says:

      what will happen when US and other countries become more ‘localized’.

      It’s important to keep in mind that the idea of collapse, and breakdown of shipping and communication, is highly unrealistic. Greer, for instance, is a good writer (and an excellent druid, I’m sure), but he knows very little about energy.

      • Nick, could you elaborate a bit on exactly what point you are trying to get across here? I am not really sure what you are talking about.

        • Nick G says:

          Caelan referred to collapse, and I figured that his reference to “localized” was a reference to a breakdown in shipping.

          I was addressing both ideas, as well as his reliance on a non-expert for ideas about PO.

          • Yeah, that’s what I thought also… at first. Then he explained that by “localized” he meant energy independence, countries depend on local resources more and more. Of course I really don’t think so and said so in my reply.

            But my problem with your reply was: “It’s important to keep in mind that the idea of collapse, (snip) is highly unrealistic.

            I really don’t think so. I believe, very strongly, that total world economic collapse, sometime in the first half of this century, is inevitable.

            • Nick G says:

              Yeah, disagreeing on that one.

              So, we’ve agreed that there are feasible solutions for some uses of oil, right? For instance, 90% of passenger travel could be eliminated by PHEVs and EVs, that would actually save money over current ICE vehicles, and that would reduce US oil consumption by about 45%.

              Long-haul trucking is about 12.6% of US fuel consumption, and that could be replaced by rail and local EV trucks. Rail can be electrified. Asphalt can be replaced by concrete.

              What is your biggest remaining concern related to oil?

              • I don’t really see the conversion to electricity that you do. I think that is mostly wishful thinking. However I cannot predict what will really happen. Chaos does not lend itself to prediction very well. And I do think there will be chaos, at least off and on and in most places in the world.

                And it will be a worldwide problem and I see your electrification prognostications as applying mostly to the USA.

                • Dennis Coyne says:

                  Ron,

                  It all comes down to whether a capitalist economy can adjust to lower oil availability. You envision a steep decline in oil output. That could happen if extraction rates (depletion rates) increase in an attempt to maintain output and would result in an extended plateau (bumpy) for 5 to 10 years with a steep decline once output cannot be maintained. If extraction rates remain at current levels (around 6% of producing reserves) then a gradual decline in C+C output will begin soon (within a year or 2) and unless there is an economic collapse (which I agree cannot be ruled out) oil prices will increase and the transition can begin. You do not think such a transition is possible, I think it is possible, but by no means certain. I also think that it is very likely that there will be severe economic disruption, oil prices that increase by too much and then cause recession with oil prices dropping due to low demand. There is a high likelihood that after 5 years of declining oil output (at 1% to 2%) per year a severe depression may result.

                  When you suggest economic collapse I believe you are predicting something much worse than this, as in complete social disorder along the lines of Mad Max( or some other imagined dystopia.)

                  I don’t think that is the most likely outcome, possible, yes, but not the lead pipe lock that I think that you assume.

              • Nick G says:

                The electrification part is pretty straighforward – all of the car companies are coming out with hybrids, PHEVs, EREVs and EVs. The existing ones, like the Leaf and the Volt, have lots of spare capacity, and could ramp up quickly. Tesla is expecting to grow by 50% per year for as long as demand holds out: that kind of growth for all EVs would give them the whole new-car market in 8 years.

                I agree that the US is in a better position, in large part because we’re so much more wasteful (so there’s more slack to cut). But, the same logic applies in the rest of the world: they can cut fuel consumption in very straightforward ways. Europe, for example, relies more on trucks than the US, so they could cut freight fuel consumption more than the US by going to rail.

                • Watcher says:

                  http://www.usatoday.com/story/money/cars/2014/10/28/musk-tesla-sales-us/18078221/

                  As a result, the sales-counting service that USA TODAY depends on, Autodata, says its monthly tally of Tesla U.S. sales “are based on Tesla’s quarterly estimates and our internal validation process. The numbers are estimates but (Autodata believes they) are indicative of actual sales results.”

                  They indeed showed a drop in Tesla’s sales numbers in the U.S., both in September and so far this year, compared to the same periods last year. Autodata says Tesla sold 1,650 cars in September, down 15.4% from a year earlier. The nine months through September, by Autodata’s count, Tesla sold 13,850, down 3.2%.

                  Ward’s, basically, showed the same direction — down.

                  • Nick G says:

                    This is old news – Ward’s was incorrect (they were estimating ahead of the official data). Tesla September sales were 65% higher than Sept 2013, and YTD sales were also higher.

                  • Watcher says:

                    Old data, eh. I just looked around further I’ve seen no retraction from Wards or Autodata, or the Wall Street Journal, or Fortune saying they had incorrect data.

                    In fact, here is Fortune’s revisit, dated 28 October.

                    http://fortune.com/2014/10/28/is-that-can-it-be-a-tesla-maker-blowing-smoke/

                    Note very explicitly that the conversation is about US sales.

                  • Dennis Coyne says:

                    Hi Watcher,

                    Tesla is very limited on the number of cars it can produce, it is also attempting to roll out a new SUV and possibly they have cut back on production of the Model S.

                    It is also possible that they are selling more cars to foreign consumers and fewer cars in the US, so worldwide sales numbers are what is important.

                  • Nick G says:

                    Yes, old data. All of that was speculation about Tesla’s 3rd quarter annnouncement, which was November 5th.

                    See the actual data here: http://files.shareholder.com/downloads/ABEA-4CW8X0/3631118180x0x791902/d7b8cc04-9c3e-4216-9ce3-7fb4d7e0c00b/Q314%20SHL%20Final.pdf

                  • Watcher says:

                    Dood, what is the matter with you.

                    Nothing in that link rebutted the industry standard measures from Wards. There was no update in that link that showed the Wards, and Autodata, and WSJ and Fortune were wrong.

                    They had the data correct. And it looks like Musk’s tweet “that the WSJ article is incorrect” was a lie.

                  • Nick G says:

                    Dood,

                    Ward’s was incorrect. They were speculating, because Tesla doesn’t release monthly figures, but no one is questioning the accuracy of Tesla’s quarterly reports.

                    The 3rd quarter is now in, and here’s the quarterly data:

                    Tesla
                    quarter production 3rd qu YTD
                    2013-1 5000
                    2013-2 5450
                    2013-3 5535 15985
                    2013-4 6587
                    2014-1 7535
                    2014-2 8763
                    2014-3 7785 24083 51% growth

      • thrig says:

        Do you perchance have a publication akin to “Green Wizards” that contains your own telling of how energy works? A book, or research—something more substantial than your “oh boy, sunshine! boo! carbon bad!” ostinatos, for example. That might go some ways towards resolving who has a better handle on energy.

        • Nick G says:

          That’s a great question! A good book or two that I could point to with confidence would be a very good thing. In the meantime, take a look at my blog: http://energyfaq.blogspot.com . It gives a lot of specific information, with references.

          On The Oil Drum I used to post things with lots of references, but lately I’ve tended to rely on specific information to persuade people. So, for instance, when someone talks about EREOI, or scalability, or comparative costs, I answer that specific question.

          As for Greer – I evaluate apparent energy authorities on two things: do they have any relevant training, education or work experience? Can I find any specific, credible information on renewables? Greer provides evidence of neither.

        • Nick G says:

          Let me give you some of the specifics I look for. An expert on energy needs to acknowledge and incorporate some things like:

          EVs are cheaper than ICEs to own and operate. That’s fairly new, but the curves (falling EV cost, rising ICE cost) have been clear for some time.

          Wind is now cheaper than coal, in the US. Again, those relative curves have been clear for some time.

          Solar has reached grid parity in many places, and is growing explosively.

  12. Old farmer mac says:

    It will be interesting to see what happens in the Senate next week when the Keystone is actually voted on.It is certainly easy to be cynical about it finally making it to the Senate floor at this late date.

    http://www.foxnews.com/politics/2014/11/13/keystone-pipeline-becomes-political-football-as-congress-resumes-session/

    I usually have a gut feeling on how such votes will go but not this time.There is no doubt about how the repuglithans will vote. The question is how the dimorats who may feel threatened in terms of their own next election are going to vote.

    It is often said that leadership in politics involves figuring out where society is headed and taking a short cut to get out front and yelling follow me.

    At least a couple of democrats other than Landrieu will probably vote in favor.

    If enough cross over then this bill will be a hot potato for the White House.

    Obama is in the usual lame duck situation but this time the duck is in worse shape than usual.

    I am almost cynical enough to believe that the repugs hope the bill will pass and that he will veto it rather than allow it to stand.What they want the most is the question- the pipeline or another political club..

    If I HAD to guess my guess would be that they think they are hoping for a Senate victory and a White House veto.

    • Watcher says:

      The thing is, Keystone was a major election issue just a week ago for pretty much no one. I don’t know of a single candidate that made it a platform centerpiece.

      And yet somehow it becomes the first thing demanded that Reid’s lame duck Senate should do.

      I think Democrat fingers are going to go up into the wind. This issue isn’t going to save Landreui. She is going to lose. Once Reid draws that conclusion the desire to “fire the base” will kick in, and I give 50/50 odds it doesn’t come to the floor until after McConnell takes over.

  13. Caelan MacIntyre says:

    “It is often said that leadership in politics involves figuring out where society is headed and taking a short cut to get out front and yelling follow me.” ~ Old farmer mac

    Really?

    What do you make of this quote from Nicole Foss?

    “Governments are crowds. They are reactive not proactive. And essentially it means that whatever they do, they’re… extrapolating past trends forward and not anticipating trend changes. So that’s like driving your car, flooring it, while looking only looking in the rear view mirror. It’s practically a guarantee of a really nasty accident. Plus the people who are in power tend to have the most invested in the status-quo. They tend to have benefitted greatly from that. These are not the people you are going to look to to change that kind of system.”

    • Old farmer mac says:

      It is very much an in the money quote and some people would put it squarely in the ten ring. Personally I put it somewhere near the bullseye maybe a seven or eight.

      Governments do have a certain bedrock amount of institutional memory relating to past events and particularly past crisis’s and do exhibit some foresight and do undertake substantial proactive measures in respect to many problems actual imagined or potential.So no nine or ten from me but otoh everybody is entitled to a certain amount of huff and puff exaggeration of the facts for the purpose of advancing their own point of view.

      But while it is in her own words there is nothing much if anything original about it. This is not to knock Foss. Hardly anybody ever has anything original to say anymore. If you look around you can find that just about everything that CAN BE said has been said already by somebody.

      I certainly have hardly ever anything original to say myself although in a forum such as this one I have some stuff to say that is hopefully new to some of the readers.None of my remarks about agriculture for instance would be news to a professionally educated farmer who pays attention to the news.

      • Cae says:

        “…everybody is entitled to a certain amount of huff and puff…” ~ Old farmer mac (ofm)

        Anyone you know?

        “…professionally educated farmer…” ~ ofm

        Maybe there’s y/our problem right there, and…

        “…who pays attention to the news.” ~ ofm

        ‘Agropundit’… Whaddaya think? Sounds catchy?

  14. Old farmer mac says:

    Generally I am with Ron and others who think the media mostly gets it right and conspiracy theorists almost always get it wrong but from time to time the media really drop the ball or maybe/ perhaps to put it more accurately fail to realize there is a ball to be dropped.

    I am THOROUGHLY convinced that the way certain important issues are covered has MUCH more to do with the politics of editors and reporters and media owners and advertisers than it does with the actual facts involved.Some of these issues include oil and energy supplies and peak oil.

    Here is a link to a story that observers of coverups and media failures will find to be fascinating reading.

    http://www.theatlantic.com/national/archive/2014/11/veterans-iraq-war-untold-story/382558/2/

    We wouldn’t give a damn about SAND COUNTRY except for the oil and some other minerals found there or nearby. Nor would anybody else excepting a few diehard tourists and natural scientists and the people who actually live there.

    So- in the last analysis anything that has to do with our SAND COUNTRY adventures is a peak oil story.

    • Mac, I have never claimed that there is not a natural bias in reporting a story. In fact I would be the first to say that there is a tremendous amount of bias in almost every story reported from the field… or elsewhere for that matter. But natural bias does not a conspiracy make and neither does it indicate any kind of “cover up”.

      The story in the Atlantic is all about natural bias. It is a story about something being uncovered because no one found it before, not because anyone covered it up. The article is not about any kind of deliberate cover up and is certainly not about any kind of conspiracy.

      Reporters report what they see, or in many cases, what they thought they saw. It is very possible that they sometimes get it wrong because of their own personal biases, that is their political opinions. And a reporter with very strong political opinions will often get a story very wrong. That does not mean he/she is deliberately lying.

      Mac, where I disagree, so strongly with so many, is I do not believe there is any media conspiracy which is controlled by a half dozen or so of media executives who fear offending advertisers. I hear that bullshit story over and over again. That is crap, pure bullshit.

      • Old farmer mac says:

        NOR do I believe in a CONSPIRACY involving executives afraid to offend advertisers.

        As I said first off I mostly agree with you about such things.

        But I DO believe that a lot of particular media executives are very reluctant or actually afraid to offend particular advertisers and that some media executives are quietly taken aside and TOLD directly or indirectly by owners and management of interlocking corporations that certain stories are to be ignored and others played up to the extent possible.

        Beyond that a hell of a lot of the media has such an inherent political and cultural bias that it the content produced might as well be labeled as advertisements for particular constituencies/ special interests.

        My local NPR station for instance has never in my experience even ONCE discussed any subject having to do with cultural or political conservative values without the sneer and the condecension and contempt being perfectly obvious to anybody without a totally tin ear.Now it is true that Rush Limbaugh is equally guilty of going to the opposite extreme but otoh he is only on the air on for a few minutes any given day and has virtually nothing in the line of resources such as are possessed by NPR.

        A few days ago I listened to an entire two hours where in every last speaker spoke of the repuglican takeover of the Senate and congress as if this were the worst disaster to take place in their lifetimes.NOBODY at all had a single thing to say good about it.

        Incidentally I never listen to anything on the radio except music and NPR and once in a long while some right wing talk radio. If you have heard Rush L a couple of times you know what he is going to say about almost anything at all and hence there is no reason to listen to him more than at long intervals.I listen to NPR because as unhappy as I am with the bias exhibited NPR is still the only broadcaster putting out anything really worth listening to.A whole lot of the programming is excellent to outstanding.

        Now as it happens it may be that they were right (about the election results ) but the point is that they are OBVIOUSLY biased toward the left. Fox is on the other side nearly all the time of course and equally biased of course.

        Now you may not think there was a cover up of the injuries suffered by ( only a few it is true )troops in Iraq from chemical weapons. I disagree.The Pentagon covered it up in my estimation for it’s own reasons (explored in the linked article) and the leftish media failed to report it due to not wanting to give any credence to the repuglithans and the repuglithans and right wing press accept whatever comes out of the Pentagon as Holy Writ.

        So far as I am concerned a failure to report a story is the same thing as a cover up if there is a political or economic motivation for the failure.

        Nevertheless I believe that by and large the mainstream media eventually gets it right sooner or later – most of the time- and that anybody who takes the time to read the partisan press on both sides can almost always figure out where the truth lies.

        AND FOR WHAT IT IS WORTH- in my opinion the leftish / liberal press is right about the environment ten times as often as the conservative / rightish press.However I do not believe in any absolute morality since I am a darwinist thru and thru. Mother Nature ” says” it is good if it contributes to survival and reproduction. So eating baby rabbits is good if you are a fox and not so good if you are a rabbit.

        The eating of rabbits babies or otherwise is utterly irrelevant if you are a fungus. This inescapable general observation means that morality is necessarily a relative rather than an absolute proposition.

        When it comes to issues such as the right to smoke pot or possess a firearm or or who will be designated a legal sexual partner (victim?) I don’t see that any given group of people in the press has a right to say ” This is right and moral” rather than ” This is wrong and immoral”. Nevertheless it is unusual to find any coverage in the msm where in it is not obvious as hell what the prejudices of the writers and editors are..

        Incidentally I tend to a libertarian position on these particular issues speaking as conservative who believes the government should only undertake to manage things that cannot be managed (otherwise) by people sorting themselves out into like minded communities.Hence air pollution problems are necessarily the rightful province of government since such problems are not manageable otherwise.

        Attempts to legislate morality and lifestyles are apt to backfire big time.

        Attempting to legislate life styles and morality in recent times had a hell of a lot to do with the dimocrats getting their asses handed to them on a platter last election.

        Attempts by conservatives ( read repuglithans mostly ) to regulate morality in times past gave us prohibition and conservatives consequently were thus responsible for the rise of the American mafia. The desire ( on the part of right wingers for the most part of course) to control people who want to smoke pot or inject herion or whatever has been responsible in very large part for the growth of a police state in this country that may very well eventually destroy our personal freedoms.

        • But I DO believe that a lot of particular media executives are very reluctant or actually afraid to offend particular advertisers and that some media executives are quietly taken aside and TOLD directly or indirectly by owners and management of interlocking corporations that certain stories are to be ignored and others played up to the extent possible.

          But of course. That’s why we have heard absolutely nothing about shrapnel from automobile air bags wounding and killing people. We never heard a thing about sticking accelerators causing deaths. And of course CNN gives the best performing cars in crash tests but never the worst performing cars:

          Small cars get crushed in crash tests

          The two worst-performing cars in this test were the Fit and the Fiat 500, the Institute said. In both cars, the occupant compartment was crushed in and the steering pushed back toward the driver. In the Fit, the driver’s head glanced off the airbag before striking the instrument panel. In the 500, the door was ripped off its hinges. These cars were also the only ones in which injuries were deemed likely to both legs, not just one.

          The problem with making claims about what media executives do behind closed doors is that one can never be proved wrong. Even though I can show hundreds of examples where networks have exposed faulty products one can always claim that there are others that were not shown because of the advertising clients pressure. And they can never be proven wrong.

          The reason I don’t believe it is not just the fact that I see faulty products exposed on TV every day, but the fact that every station has competition. If they don’t do the story someone else will and they will be scooped.

  15. yves says:

    “Saudi Arabia’s oil exports were much higher back in the late 1970s than they are now. When they cut oil production and exports in the 1980s, they likely did have spare capacity.”

    There are two parts in the 80ies, the Saudis cut their production at the beginning (partly for technical reasons I think), but they raised it starting 1985, greatly accelerating the price drop (counter oil shcock).
    https://www.youtube.com/watch?v=02F-3l1EKsA

    • Caelan MacIntyre says:

      So Obama makes a recent trip to Saudi Arabia and what happens? The oil price drops. Have I got that right?

      • yves says:

        IMHO our time is completely different, don’t know what is happening, and not sure any form of “concerted strategy” is going on at all (would say none)…

        Plus the Saudi production isn’t increasing at all, so tough to say it is responsible for the oil price drop
        And for the US the oil price drop would be/is bad news for shale oil.

        • Caelan MacIntyre says:

          We are being held hostage by TPTB via money, force and propaganda.

    • Jeffrey J. Brown says:

      My 2¢ worth:

      I suspect that the Saudis have been waiting for a downturn in global demand that would allow them to maintain their production and net exports (especially during their low domestic demand winter season), as a way to drive down oil prices, which would hurt the high cost tight/shale producers.

      But an important point to remember is that the Saudis have so far been unable, or unwilling (take your pick), to exceed their 2005 annual net export rate of 9.1 mbpd (total petroleum liquids + other liquids, EIA). This post-2005 decline in net exports is in marked contrast to the large increase that they showed from 2002 to 2005, as their net exports increased from 7.1 mbpd in 2002 to 9.1 mbpd in 2005. Based on EIA data, their 2013 net exports were 8.7 mbpd (total petroleum liquids + other liquids).

      A second, and almost totally ignored, point is that CNE (Cumulative Net Exports) depletion marches on. By definition, it’s not whether Saudi Arabia has depleted their remaining volume of post-2005 CNE, it’s a question of by how much. The following chart shows normalized values for Saudi production, net exports, ECI Ratio (ratio of production to consumption) and remaining estimated post-2005 CNE by year (with 2005 values = 100%). The estimate for post-2005 CNE is based on the rate of decline in the Saudi ECI Ratio (at an ECI Ratio of 1.0, net exports = zero). I estimate that in only seven years, through 2012, Saudi Arabia shipped roughly one-third of their post-2005 CNE.

      http://i1095.photobucket.com/albums/i475/westexas/Slide21_zps74c9ebac.jpg

      • Jeffrey J. Brown says:

        Quarterly Saudi Production* and Brent Crude Oil Prices for 2008 to 2009

        2008:

        1Q: 10.7 mbpd & $97
        2Q: 10.8 mbpd & $122
        3Q: 11.1 mbpd & $115
        4Q: 10.5 mbpd & $55

        2009:

        1Q: 9.5 mbpd & $44
        2Q: 9.7 mbpd & $59
        3Q: 10.1 mbpd & $68
        4Q: 9.9 mbpd & $75

        *Total petroleum liquids + other liquids (EIA)

        • yt75 says:

          Note : it would be interesting to do “revenues graph” for the major producers, that is “export volume * barrel price of the time” in adjusted USD.

  16. Longtimber says:

    2 posts back there was a comment about Obama sending 1500 more pair of boots to Iraq on the same day of a casulity . I met my sister from a Madrid/ATL/Pensacola flight , and the fallen was abroad.. Upon landing the plane is held till a ceremony with family is completed for the fallen return to US soil. Another unaccounted cost of crude.

  17. Watcher says:

    For left wing leaning folks, y’all seem to have a really profound belief in capitalism and economics. That stuff used to be evil.

    The law of supply and demand is a law . . . why? Because some academics populating a science that is not a science said it was?

    What happens if a participant in a marketplace has no desire to profit? The Bank of Japan is buying stock market Exchange Traded Funds in the Nikkei in addition to Japan Govt Bonds. The Federal Reserve bought trillions of Treasuries and Mortgage Backed Securities on the open market and made no effort to get a good price because supply and demand didn’t matter.

    As for media bias and conspiracies . . . reporters report what they see, and they are funded to see things according to where the editorial staff allocates budget to assign stories.

    • Watcher says:

      Oh, btw, rumor has it Putin has politely decline to attend the next gathering in Davros.

    • Dave Ranning says:

      Liberal Left, your analysis is entirely correct.

      Radical Left is another story.

      But this is a oil blog, so I’ll stay quiet.

    • For left wing leaning folks, y’all seem to have a really profound belief in capitalism and economics. That stuff used to be evil.

      What the crap are you talking about? Sometimes I think you just make up crap in order to have something to ramble on about. Just who are these “left wing leaning folks” and why do you think they somehow have switched from believing capitalism was evil to having “a profound belief in it?”

      And economics? Economics just is, it is not something one would “believe in” or disbelieve in. Do you believe in mathematics? Silly question isn’t it?

      The law of supply and demand is a law . . . why? Because some academics populating a science that is not a science said it was?

      It’s just a figure of speech. Who gets upset because supply and demand is often referred to as a law? And no, no academics populating a science said it was a law. It is just a figure of speech that became a commonly used term because of frequent use by market analyst writing in the media.

      What happens if a participant in a marketplace has no desire to profit?

      Their stock crashes and the CEO gets fired.

      • Watcher says:

        What’s the Fed’s stock symbol, so I can watch for the crash?

        • Now you are just getting silly. The Fed is not a participant in the market as anyone would define “participant” in the market. That is one who participates in buying and selling stuff in the market.

          • Watcher says:

            Okay, look, the point of this is that this nearly religious worship at the altar of supply and demand has led y’all into total confidence that oil’s price needed to derive from production and/or consumption.

            The Fed bought bonds in the marketplace for bonds. They are forbidden by law from buying bonds directly from Treasury. They bought in the bond marketplace from Primary Dealers. Period. There is no avoiding it. They were a market participant with no interest in profit. They did the same with MBS.

            The Bank of Japan is presently buying stocks on the Nikkei. Period. There is no avoiding it. They are a market participant with no interest in profit.

            When you have such participants involved, there is no reason to expect supply and demand to be operative.

            I am sympathetic to a desire to make it all conform to what we used to think was the function of the matters economic we all grew up with, but that all went away in 2008, and it’s not coming back.

            • Okay, I was mistaken in my comment. The Fed does buy bonds in the market place. I was thinking in terms of equities and commodities, not debt instruments. But I do wish you would just say, in your original posts, exactly what the fuck you are talking about instead of speaking in riddles.

              • Watcher says:

                How did you italicize the quote? I asked that in a recent ronpost but the next ronpost came out and I think you missed it.

                Actually colorizing the quote would be better, but italicizing is fine, just anything to keep quote and response from blending.

            • Old farmer mac says:

              There are many things that can temporarily or maybe even semipermanently affect the operation of the law of supply and demand. First off it is as Ron said it is merely our name for the observation of people’s and business’s behavior involving supply and demand rather than a law in the sense of the laws of physics..

              Nobody I know of who has any knowledge of economics beyond that of a child denies that both supply and demand can be – and often are- influenced by the actions of bankers, bureaucrats, armies, accountants, and movie stars.

              But when a bank pours money into one particular part of the economy – say the oil industry- for purposes of keeping that industry solvent and producing- which in my opinion is not a proven fact in the case of tight oil- Well, if that money is lavished on the tight oil industry then it is not available to pay me to grow more ( or less ) apples.Or to bail out the auto workers unions and GM or the banks themselves if the money originates in the magic keyboard of the guy who presses the zero key and who resides behind the curtains along side the mighty wizard.

              If society knowingly ( or unknowingly thru the actions of its government) provides incentives to produce more oil this does not mean supply and demand are no longer relevant.

              Games and wars are won by both offensive and defensive actions.Keeping an opponent from scoring is as effective in achieving the goal of winning as scoring by the home team.

              Rather than saying supply and demand are flawed concepts I think it would lead to greater understanding if we were to talk about the lack of a truly free markets.

              And for what it is worth- while there are some minor markets that are close to being truly free markets there aren’t any that really matter in terms of the big picture that I am aware of.

              Every major market I can think of is manipulated in one direction or the other by bankers and bureaucrats.

              It is not at all uncommon for markets to be manipulated in both directions by employees of different parts of the same organization. The health department is quite often at odds with the agriculture department.The one does what it can to convince us to eat less while the other does all it can to get us to eat more.

              • Dennis Coyne says:

                Hi OFM,

                Certainly supply and demand can be influenced by all sorts of things including a change in consumer preferences or changes in government policy.

                This is easily accommodated in supply and demand analysis by shifts in the supply and/or demand curve.

                Even children realize that the curves are not fixed.

  18. Watcher says:

    Oh look, oil is sub 76.

  19. Anon says:

    More oil cratering. WTI is now trading mid-$75 and Brent is ~ $79.

    Gonna be a long, cold winter in North Dakota.

    • Watcher says:

      Just checked the Williston weather. No snow, but they will go sub zero Farenheit tonight.

      • Mike says:

        I trust you boys are enjoying yourselves pecking away at the computer and watching the price of oil go down, like your play by play analysts on ESPN. Because there are a lot of folks outside in the oilfield right now, cold, wet, and scared to death they might lose their jobs before Christmas because of what’s happening to oil prices. Go read a book or something.

        • Watcher says:

          Oh, the same focus would be here if oil were ticking in at $200/barrel and your tired, wet and cold were rubbing their hands together in glee, and pretty much ignoring all the rest of the citizenry losing their jobs to a GDP smashdown — because of course with their spare time they could all go to the library and read a book.

        • Fred Magyar says:

          Because there are a lot of folks outside in the oilfield right now, cold, wet, and scared to death they might lose their jobs before Christmas because of what’s happening to oil prices.

          So you mean they might experience what I experienced back in 2008? Heck and I still had to pay my child support and buy Christmas presents too. As they say, life ain’t fair is it?

          Yep, I think I might go read a few books now, especially since I gave up TV back in 2006.

          Cheers!

          • The Wet One says:

            I gave up TV for almost 15 years. Then I got married and my wife is still addicted to the damned thing. I’m paying for cable for the first time in my life. It is not a pleasant feeling feeding the devil incarnate and being subjected to infernal TV commercials in the background. It is not pleasant at all to be so close to Hell itself. But love makes you do weird things, so I endure.

            • Nick G says:

              Get a Tivo (or other DVR). Then she can skip the commercials, and record exactly what she wants, and ignore the rest.

            • Cae says:

              The first and last tv I owned was 1992– a family hand-me-down.
              I had these things some of us call, ‘girlfriends’, with tv’s but that doesn’t count, in part because I usually left them alone with them. One tv was at the foot of our bed. Nothing like Charlie Rose– hey baby– to help warm our nights.

              But anyway, at this relative and increasing distance, whenever I catch the stuff on it, like in hotels and whatnot, what plays on it seems like creatures from another, if Earth-like, planet. I’m not kidding. It is like the tv has picked up broadcasts from space or through an alternate-reality wormhole, broadcasts of a slowly dying planet of and by a lost species… Maybe it’s true. I suppose it’s possible…

          • Old farmer mac says:

            I gave up tv back in the late seventies or early eighties.Reading books every evening rather than worshiping the idiot box is a very dangerous undertaking in respect to your social life.

            It tends to leave you wishing there were some people around to talk to who happen to know enough to make it worth while…

            • Cae says:

              The Six Million Dollar Man would have likely either broken his back or seriously injured it after probably the first attempts at lifting a car or running 60 miles per hour. It would have been cool to see him wipe out, like his plane, at that speed.

              Oscar Goldman (hovering over operating table): “Well Steve, it looks like we forgot to make your spine and pelvis bionic too. Sorry ’bout that. We’ll give you some now. It’ll cost the taxpayer a 6 billion though, but it’ll be our little secret. Maybe we can recoup some of the costs by this new tv show we’re working on… Do you like tv? Ok, putting you under now…”

  20. Watcher says:

    From ZH

    If WTI Drops To $60, Deutsche Bank Expects One Third Of The High Yield Energy Space To Default

    That’s not a gentle production decline. That’s the D word.

    • Watcher says:

      Wow, never seen that before. ZH changed that headline to gentle it up some.

      If WTI Drops To $60, It Will “Trigger A Broader HY Market Default Cycle”, Says Deutsche

      • BAU says:

        “This chart also shows, perhaps better than any other we have seen, the extent to which current economic recovery in the US has in fact been driven by the energy development story alone.”

        from the ZH article

  21. Watcher says:

    http://www.todayonline.com/business/more-lawsuits-filed-against-ow-bunkers-singapore-units

    If I get this right, OW Bunker is the #3 supplier of fuel to shipping around the world, and they have bankrupted themselves in what looks like 2-3 weeks from the oil price decline.

    We’ll call that a domino.

  22. Andy Hamilton says:

    Pretty good FT article (go through Google to avoid registering etc):
    http://www.ft.com/intl/cms/s/0/22df01de-6979-11e4-8f4f-00144feabdc0.html#axzz3IysZs5pE

    — 1,568 rigs drilling for oil onshore in the US last week, 41 fewer than in mid-October, —-

    — figure likely to continue to fall eg Halcon Resources, which operates in the Eagle Ford and Bakken, said on Monday it planned to run just six rigs next year, compared with the eight it is running now and the 11 it had planned for 2015—

    —- Other reductions in their capital spending plans: Continental Resources cut its 2015 budget from $5.2bn to $4.6bn; Rosetta Resources to spend $950m next year, down from $1.2bn in 2014; and ConocoPhillips said it planned to spend less next year than the $16bn it is spending this year —-

    • Watcher says:

      The rig count needs to be seasonally adjusted. The count always falls in winter.

      These numbers are already obsolete. Oil is now under 75.

  23. Verwimp says:

    What is going on?

    • ezrydermike says:

      yeah, this is very strange and happening very fast.

    • Allan H says:

      The price of oil has been climbing since the late 90’s. In between prices have roller coastered many times. For example in the 2007 to 2009 two year period WTI went from $60 to $140 then back down to $42. From there it went quickly back to $70 then did a steep rise to over $110 in 2011 when it quickly fell to $80 and has since jig-sawed it’s way up to over $100 and now fallen to the $70 -$80 range.

      Oil prices are nothing, if they are not volatile. The fact is the trend is generally upward but the range is on the order of $30 and sometimes much greater. A year or two from now will tell if the $70 range will stick for a while. In the meantime, the oil miners are stuck with some low returns and unlike hard rock mining can’t close down quickly when market prices drop.
      Anybody remember the game called “Boom or Bust”? Sometimes you make a lot of money, sometimes you feel like a vacuum is attached to the bank account.

    • BAU says:

      With QE gone, prices moving to where they should be according to demand? Combined with some temporary shale bonanza? And some dollar strengthening?

      With marginal barrels costing more than what mr marginal buyer wants to pay, wont we see way more volatlity from now on forward? It’s either consumer = happy or driller = happy?

    • Anon says:

      Stops with no fundamental reason to cancel them.

  24. SRSrocco says:

    HELL… natural gas prices were holding up rather well for quite a while, and now it is down below $4. The 10-year month WTIC chart does not look good as we could easily see sub $70 soon. The Shale Oil Industry has survived on relatively stable oil prices in the $90-$100 range for the most part since 2011.

    It’s one thing for the price to spike lower and correct back higher, and another to remain at these low levels for several quarters or a year.

    steve

  25. Pingback: » OPEC MOMR October Production Data – Peak Oil BarrelPeak Oil Barrel Olduvai.ca

  26. Doug Leighton says:

    Ron,

    There’s been a lot of talk here about Climate Change in the sense of awareness, concern and, willingness to do something. Most people I meet fall into two categories: aware and unaware. There are always deniers but these are mainly oddballs poisoned by indoctrination.

    Between Europe, NA and Asia I see large differences. Asians know about climate change but say: Yes, once we catch up with the West we can start worrying about that; this is an almost universal response in China. Europeans I’ve spoken to are all aware of Climate Change and about half seem prepared to make “some” sacrifices; more so in the north/northwest than in the south and east. In Western Canada perhaps 35% of people take climate change seriously but I’ve yet to meet anyone who has suggested doing something that would mitigate affects.

    Why? A house full of kids needing rides, plus trips on jets/cars to relatives, etc. In other words, 99% are too busy with life to bother with something so seemingly distant; a form of denial but there it is. And, apart from a few college kids, younger folk frequently seem determined to defy conservation with their trail bikes, quads, skidoos, all transported by jacked up 4X4s with massive tail pipes and huge tires: Electric vehicles, yeah right old man. Then there are the old folks who spend huge percentages of their week on medical related trips.

    My conclusion is that awareness is a small part of the equation. We’ve become a culture where free time has largely disappeared. Climate, yes of course I know about that but I’ve got to get Johnny to the hockey rink and I’m late picking Sarah up from violin lessons and after I get the tires rotated were having dinner with the Blakes ………… In that respect. it doesn’t bode well.

    • Dennis Coyne says:

      Hi Doug,

      I was looking over a PhD Thesis by Steve Mohr, a summary can be found at the following link:

      http://www.theoildrum.com/node/6782

      I adjusted his URRs by reducing the amount of Coalbed methane to 1400 EJ (from 2500 EJ) and assumed there would be no output from the Green River Shale (which he put in the category of “shale oil” [not LTO]). So the Oil URR is reduced to 17919 EJ (3100 Gb), my Oil estimate is actually a little higher at 3300 Gb of C+C+NGL.

      When we convert all of the oil, natural gas, and coal to Carbon emitted to the atmosphere and add in Natural gas flaring, cement production and land use change total carbon emissions are 1200 Gt up to 2112 at which point we assume emissions have fallen to negligible levels (less than 2.5 Gt/year).

      The atmospheric CO2 reaches about 500 ppm (using a Bern type model) in 2100 and falls to 400 ppm by 3000. It will take about 1000 years for the ocean to warm to equilibrium, ice sheets to melt and other changes to occur to the earth system, if we assume the ice albedo feedback is lower because ice sheets are considerably smaller than the last glacial maximum, this would lower the Earth System sensitivity to about 5C from Hansen’s 6C estimate, with a atmospheric CO2 at 400 ppm this would be ln(400/280)=.357 times 5C=1.8 C.

      There are other potential problems such as other greenhouse gases such as methane and other man-made greenhouse gases (refrigerants mostly), but the potential methane problem is controversial, if fossil fuels are limited as some of us believe, the climate change problem may not be our biggest problem. Bern model for several different scenarios (750 Gt C, 1000 Gt, C and 1200 Gt C) shown in chart below. One thousand Gt is usually considered the safe level and it would be best if we stay under that to give us a margin of safety.

  27. Cave Bio says:

    Hello everyone,

    I have talked about NASA’s CARVE experiment in other posts. Some recent data was released about methane release from Alaska tundra. I thought a little good news is worth posting.

    Alaska shows no signs of rising Arctic methane, NASA study shows
    http://www.sciencedaily.com/releases/2014/11/141113134856.htm

    Best,
    Tom

    • Allan H says:

      The study showed “a new analysis of NASA airborne data finds that methane is not being released from Alaskan soils into the atmosphere at unusually high rates”. So methane is only spewing out at a normal high rate as of two years ago. The study was limited to terrestrial sites in Alaska and failed to mention that global methane concentration has risen by 72% since 1950.
      2013 data from Point Barrow shows the highest “lowest low” methane concentration ever recorded. Point Barrow methane data is trending upward with time.
      I guess it is good that we are not in extreme runaway feedback scenarios yet. Still I would like to see the CO2 down to 300 ppm and methane back down to 1000 ppm before I declared good news.

      • Cave Bio says:

        I completely agree with everything you say–I did emphasize “little”.

        Best,
        Tom

      • Old farmer mac says:

        Maybe if the methane concentration gets high enough the computer on my truck engine can dial back the fuel injection a bit and I won’t have to buy so much gasoline.

        I am NOT forgetting the smiley face. 😉

  28. Longtimber says:

    http://news.yahoo.com/govt-tells-us-drivers-used-cheap-gas-050813195–finance.html

    Gov tell us … Get used to high gas prices – now get used to cheap gas. WTF.

    “That may not seem like a lot in the context of a $17.5 trillion U.S. economy, but economists say it matters because it immediately gives consumers more money to spend on other things. Consumer spending accounts for 70 percent of the U.S. economy.
    Quinlan says the price of gasoline is one of the three big drivers of consumer confidence, along with stock prices and the unemployment rate. “Lately all three are moving in the right direction,” he says.”

    • Anon says:

      The two aren’t mutually exclusive. Cheap gas in the short term will torpedo a great deal of new, high cost projects, which will cause production loss in the medium+ term.

  29. Anonymous says:

    http://www.cnbc.com/id/102169784
    “Baker Hughes confirmed Thursday it is in preliminary talks with Halliburton regarding a potential business combination in a release. Baker Hughes has a market cap of more than $22 billion and operates in 80 countries. Halliburton, on the other hand, has a market cap of $47 billion. ”
    Another domino 4 sure.

  30. Chris says:

    WTI in the $73 range currently. What can happen next? Low energy prices should enable slightly increase in consumption. Low oil prices are good for everyone except producers and their suppliers (and the suppliers of the suppliers). If one look at gold producers to attempt a prediction, high cost oil producers should reduce their operating costs and considerably reduce exploration and investment in new production capacities (decreasing future production). They will also try to boost the production of existing rigs (if possible). Due to the short cycle in shale (and tar sand), these high cost producers will be affected first.
    Now, different producing countries have enough reserves to maintain low oil prices for several months (years?). But at current prices, they miss ~$25 per barrel per day in their commercial balance. For Saudi Arabia only, we are speaking about ~$180 million per day, ~$70 billion per year. This is not a small amount. For OPEC, we are speaking about $600 million per day, more than $200 billion per year.
    If OPEC (and especially Saudi Arabia) is attempting to force high cost producers to reduce their production by lack of profitability, oil prices will sky rocket by the end of next year due to irreversible damages to high cost producers.
    Note that from a commercial balance perspective, a coordinated (small) reduction of oil production by OPEC by only 1 million barrels will probably enable again ~$100/barrel until next year. By reducing slightly their production, they will considerably increase their revenues.
    I would be Saudi Arabia, I would start to decrease production when seeing the first high cost producing companies filing for bankruptcy. This will eliminate competitors and other companies will take time to recover. Traditional oil companies have already left the shale oil industry.
    The global effect should be Peak Oil in 2015, sooner then most people are expecting. Note the IEA is indirectly predicting peak oil in the years to come as they predict a big shift from oil to gas by 2030 for energy sources… and we are currently predicting peak gas by 2030…

    • Cave Bio says:

      At least in the short term, the IEA thinks prices are set to fall farther. We have a very interesting couple of years ahead of us.

      Oil set to fall further in ‘new chapter’ for markets: IEA
      http://www.cnbc.com/id/102185253

      • Chris says:

        OK, thanks.
        If OPEC does not act (cut production), it would mean they lost the power they thought they had. The amazing thing is that whatever they do they probably lost their power this year. I think decrease in production will be compensated by US+Canada on next year and, in 2016 or 2017, they will not be able to increase production enough.

        I am curious to know their decision in two weeks…

        • Old farmer mac says:

          The only really big increase in production anywhere in the world in recent times has been in the US and that is about all in the tight oil fields and is ” only” around four million barrels a day.

          If OPEC can get its act together then the OPEC countries could easily cut production by that amount and put the price back about where it was previously in a matter of months at the most.

          • Mike says:

            Mr. Mac, the additional LTO production in the US has thrown the worldwide supply/demand equation completely out of whack (along with falling demand); we are now greatly over supplied in the US…at the great expense, as you know, of massive debt that would choke a big horse. The world gets smaller and smaller (unfortunately) and the price of any oil, anywhere, is subject to worldwide supply/demand dynamics.

            So respectfully, I think that OPEC pretty much has it’s act together, at least KSA does, and I wondering why you are anybody else would believe it is OPEC’s responsibility to cut their production to raise oil prices in the US? I think that maybe EOG and CLR should rein it in a little as well, don’t you?

            Mike

            • Dennis Coyne says:

              Hi Mike,

              Everyone will cut back, but in the past Saudi Arabia has acted as the swing producer, they are not willing to shoulder the burden without other cartel members joining in.

              As far as I know CLR are not members of OPEC 🙂

              Generally small oil producers behave as if they are involved in a competitive marketplace where the produce until their marginal cost is equal to marginal revenue.

              Marginal revenue is clearly lower at an oil price of $75/b and fewer new wells will be drilled if oil prices remain at $75/b.
              The average new well in the Bakken is not profitable at a WTI of $77/b, and a better analysis would probably put this number at $80/b (I no doubt am missing some of the real costs of extracting oil, so I’ve added $3/b for the missing stuff).

              In the Eagle Ford a lot of output is condensate which sells for less so if we discount the average Eagle Ford barrel by $5/b because 40% of output is probably condensate, the WTI would need to be about $77/b for the average new well to break even.
              Here I did not add extra dollars because I have not accounted for income from associated natural gas and NGL sales which may be as much as $5/b of C+C produced after deducting transport costs and royalties and taxes.

              Bottom line CLR and EOG will be cutting back at a WTI of $75/b.

              I hope prices go back to $95/b. Hope things get better for you.

              • Mike says:

                Thanks, Dennis; after 50 years of living and dying by the price of oil, I get all the dynamics of small producers and big producers in the worldwide market, I assure you.
                Speculation about break even costs don’t interest me much. CLR and EOG will eventually be cutting back drilling shale wells out of necessity. That’s different than actually expecting OPEC to voluntarily shut-in production to save the price of crude oil. I was curious how many people actually believe that is reasonable expectation.

                • Dennis Coyne says:

                  Hi Mike,

                  Let’s assume for a moment there was not a group of countries but a single country with a single national oil company, or that everyone in OPEC was in agreement and followed the agreed to quotas with no cheating.

                  The cartel produces 30 Mb/d and gets $75/b for a total of $2250 million/day. They decide that higher prices would be good so they cut production to 25 Mb/d and the oil price rises to $90/b for a total revenue of $2250 million/d. No loss of revenue and costs would likely be lower (because 5 Mb/d less oil is produced) so that net revenue would increase.

                  So if OPEC can reach agreement on cutting production and my guess of the price response to a cut of 5 Mb/d is correct, then a cut in OPEC output would be very logical.

                  Now if OPEC’s aim is to smash the US oil industry, then no, a cut in OPEC output would not make sense.

                  I think Ron’s analysis that Saudi Arabia is tired of being the only OPEC member that cuts output is spot on. Whether other OPEC members think a cutback makes sense depends on their motivation which is unknown. Do they want more money or do they want to hurt the rest of the oil industry?

            • Watcher says:

              Duh.

              KSA didn’t do anything to make the price fall. Now they are supposed to make it rise? Hey, that’s fair.

              • Watcher says:

                There initially was a presumption that hey, the breakeven is lower than these prices.

                Then prices fell more and son of a gun if the computed breakeven didn’t fall more.

                Then, now, the narrative is changing a bit. Yes, it’s below breakeven, but some concept of momentum asserts itself and nothing bad is going to happen unless prices stay in the 70s for a long time, and of course that couldn’t happen, could it? What’s a long time? Years. Decades. Couldn’t possibly be days or weeks or even months.

                I’m gonna go find some sample lien covenants and see if what I suspect is true is indeed true — that when collateral value drops below covenant at the end of any month, the note is declared due. So the lender could start tapping into company assets immediately.

                • nNgass says:

                  The graph shows that SA needs $93/b for break-even. The well head break-even price is much lower but SA needs that high price to afford the social spending programs in order to keep civil obedience.

                  • Watcher says:

                    That has never made any sense guy, but it’s gotten a LOT of play recently so not surprising you posted that.

                    Fiscal breakeven means nada. You got a problem with fiscal breakeven, you cut spending or you run a deficit. Big deal. You can’t find borrowers for your deficit? You have your central bank print the money and hand it to you. Who is going to complain? The Fed? The BoJ? The Free Market? hahahahahah

                    So this means what for oil? Nothing. The Fed has done this for 6 yrs and probably will do it again soon. Fiscal Breakeven Means Jack.

                  • Watcher says:

                    oops, can’t find lenders for your deficit . . . .

              • Cave Bio says:

                The Saudis did not do anything to drop the price of oil, except for actually drop the price of oil.

                http://online.wsj.com/articles/saudi-oil-price-cut-upends-market-1415063053

    • Allan H says:

      I think that the Saudi’s realize that lower prices, although they hurt the current bottom line, are best all around. It is the final tool to stave off the next recession. Worldwide recession and/or high oil prices would merely promote further conservation and efficiency changes in the world, thus cutting demand anyway, permanently. Better to rake steady money in for an extra decade than to cause major turmoil in the world, possibly lower profits and probably major wars over oil and other resources.
      Sometimes getting less profit is the better way.

      • Old farmer mac says:

        There is a lot to be said in favor of Allan H’s comment from the pov of people in the drivers seat in OPEC countries.

        The people in control in those countries are living very comfortable lives. Short and medium term stability is probably their primary goal and so long as there is enough revenue coming in to maintain stability they are most likely going to be somewhat conservative about rocking the social and economic boat unnecessarily.

        Most people who hang out in peak oil forums don’t seem to believe that very fast ( in historical terms) adaptation to high oil prices can come about but I do.Personally I think such things as affordable batteries for electric cars and mini cars and long distance trains are going to be realities within a decade or so. Ditto coal to liquids if the price of oil stays goes back up – and I believe it is going back up before very long.

        Most of my neighbors who weren’t actually poor or semi poor had oil burning furnaces ten or fifteen years ago. Just about every one of those furnaces has been replaced by heat pump or a wood stove. I still use one but only as back up in the middle of the occasional very cold night when the fire burns out.

        The auto press is full of articles about the new model hot rod Mustangs and Camaros but I never see any of them on the road. The ones the middle aged looking to get their youth back guys and girls are buying are v6 powered and get better gas mileage than some econocars used to get.The young folks aren’t buying them at all- they buy cheaper cars.

        A LOT of people I stay in touch with are telling me their kids are more interested in fancy phones and an apartment within walking distance of the bars and clubs where they hang out than in cars.

        Just about all of my Scots Irish skinflint relatives are now replacing their recently only adapted compact cfl residential lights with led lights as the cfl’s fail.

        SO- Any action taken ( or not taken) by OPEC that tends to keep oil prices down will of course tend to slow down the trend towards energy efficiency and away from cars and other oil intensive goods and services.

        BUT -Having said all this I still believe the price of oil is going to go back up pretty soon barring Old Man Business As Usual having to move into the nursing home and that it will continue to go up on average over the years for the foreseeable future.The highs will be higher and so will the bottoms of each price cycle compared to previous cycles in my opinion.

        Oil comes out of holes in the ground.It depletes and a WHOLE LOT of somebody’s are going to be going without with dire consequences within the next decade or two.

        We may or may not be able to skinny thru the coming peak oil bottleneck as a species.My guess is that there will be a substantial die off of the human population and that times will be pretty damned tough in places such as the US and Canada but that we yankees will not only survive – we will be able to fit back into all the nice clothes we put away in attics once we start riding bicycles and walking more. 😉

        This rosy scenario is based on Old Man Business As Usual hanging in there long enough for us to make the necessary changes in our lifestyles and economies of course.

        Once gasoline hits eight or ten bucks enterprising folks in need of work are going to earn their groceries running a grocery delivery route on cargo bikes or in small vans.

        If I were a young guy I would try to get the dealership franchise for whatever make of electric scooters and bicycles first gains widespread acceptance- meaning parts and warranties and mechanics on the premises LOCALLY in my community.

        Oil wars are baked in. Lets hope one of them doesn’t morph into a CBN WWIII.

        • Watcher says:

          Slightly old thinking, Farmerguy.

          Don’t think in terms of civilian casualties. They are counter productive.

          The goal is to break the enemy’s resistance. You do that the way siege warfare always did it. You starve them. Without oil they starve. Food can’t get to cities. They surrender. So nukes and biologicals and chemicals . . . counter productive — they reduce consumption rate and surrender takes longer.

          You need to cut off the enemy’s oil. Then their cities start to starve and they surrender. Then you disarm them. Then you sterilize them (if you have a generation of time and want conscience balm) Or if you don’t have time and must have the oil they would burn even in surrendered mode right now — you nuke them, but again, only after they have surrendered and disarmed, so there can be no retaliation).

          Then you write the history books celebrating your morality in wiping out evil, or maybe they had an imaginary plague and you did the world a service.

        • Watcher says:

          Once gasoline hits eight or ten bucks enterprising folks in need of work are going to earn their groceries running a grocery delivery route on cargo bikes or in small vans.

          And the groceries got to the shelves to be picked up by biker guys . . . how?

          • Dennis Coyne says:

            On trains for long haul and trucks for the last few miles.

            He didn’t say there would be no oil, only that it would be expensive.

      • Watcher says:

        The Saudi leadership has traditionally shown some interest in consumer well being.

        Everything changed in 2008. And it continues to change — because population grows.

        One can make an inelasticity of demand argument in oil that is quite powerful. One can do the same for supply. These guys are going to produce regardless of price. Jeffrey makes the point often. Why didn’t price rise sharply ramp up supply from KSA through the 2000-2010 decade.

        But another manifestation of the change that renders history irrelevant is, of course, China and India. Population grows. They can overwhelm EU recession.

        • Dennis Coyne says:

          Hi Watcher,

          The price elasticity of demand is steep(relatively inelastic) in the short term, but over 5 to 10 year periods, the demand curve is much less steep. People respond to high prices by buying a natural gas boiler (or a heat pump), by moving closer to their employer, and by buying more fuel efficient cars, even if the M1 Abrams is the safer vehicle. 🙂

          • Watcher says:

            I have forgotten the website, carbuyers.com . . . whichever is the largest, recall a CEO interview few years ago by the Tom Keane crew at Bloomberg.

            Went like this . . . “Are you seeing any effect on sales from the price of gasoline.” You could hear the guy shake his head.

            “It’s not there. The F150 is number 1 and number 2 isn’t close. We do a lot of data analysis on this to try to manage our advertising resources and we have a lot of employees who want to be green, but we just can’t do it and make it consistent with rational business behavior. Our tentative estimate is we would not see anything in totals or mix until we got to $20/gallon, and maybe not then. People want what they want and nothing my business can do will change that.”

            That’s not a quote. Paraphrased, but that’s the story.

            • Dennis Coyne says:

              Hi Watcher,

              F150 sales are great, when oil prices rise to European levels in the US (or close because the US will never put taxes on gasoline to any significant extent), then US citizens besides the F150 owners will buy cars that get European levels of fuel economy.

              Gasoline at $6/gallon would change people’s preferences.
              Not yours, just everyone else’s.

    • Caelan MacIntyre says:

      “Low energy prices should enable slightly increase in consumption. Low oil prices are good for everyone except…” ~ Chris

      Drive those wage prostitutes to their red-light corners for the governpimps’ taxes. Taxes and death.

  31. James says:

    Take a look at this link and provide some analysis if you can. This, somehow doesn’t look good.

    http://www.thehillsgroup.org/depletion2_022.htm

    • Old farmer mac says:

      Some of the graphs would be easy to misinterpret on my part since I am not done any practice problems to make sure I am reading them correctly but:

      If I am reading them correctly they basically mean that reality is going to be treating us to some involuntary sex in the near future unless we get really humping on energy efficiency and substitution.

      IF Hill Group is right and I am reading them right it is now a race between economic collapse brought about by unaffordable oil and the economy adapting fast enough to that unaffordable oil to prevent the MOTHER of ALL DEPRESSIONS aka known as collapse.

      This is no news to most of us but it drives home the point that even if oil production continues to go up a little for a little longer we are already past the tipping point and on the downslope as far as oil is concerned.

      I post a lot of stuff indicating that I believe places such as the US and Canada MIGHT skinny thru the peak oil bottleneck but I do not believe we necessarily will make it thru more or less whole- by which I mean the electricity and water stay on and there is food in the supermarkets and cops (in military uniform maybe ) on the streets and only an occasional riot rather than a super sized version of Somalia.

      Any sports nut will tell you that any given team may beat any other given team on any given day if the ball bounces just right.We live in interesting times indeed.

      And so long as the grid and the internet stay up everybody in this forum has his own crystal ball with which to watch history unfold.

    • nNgass says:

      The Hill Group: Price curve is curtailed at 2020 at $11.76/ barrel. That is ridiculous. Where are the fields that can produce at that retail price? The well head production price must be $6-8/b counting all other costs such as taxes and transport, etc. The Hill Group even projected that in 2030-2035 the cost will be $0.00. Further, the Hill Group also published the table
      2012….$104.60
      2013……96.20
      2014……87.40
      2015……77.30
      2016……65.90
      2017……54.20
      2018……41.20
      2019……26.90

      I plotted this table, and behold, it is a steep straight line down which hits $0.00 for oil in May 2021. Such a straight line is suspicious. Why would oil decrease year after year in this fashion? One would think the slope would taper off so to approach the $0.00 oil price slowly. It shows to me that the Hill Group has no skills in math. When their straight line hit $0.00 it continues downwards without any restriction, meaning that after May 2021, one would get paid when buying oil.

      There are other strange projections. In 2019 the oil price is $26.90 and in 2020 it dropped to 16.76 (what a precision in price). Between 2019 and 2020 there must be a catastrophic event, only, and already, know to the Hill group. So, why not telling us so we could prepare? Then from 2020 to 2030-2035, the oil drops only about $1.12 to $1,67 per year to make it to their $0.00 prediction.

  32. Doug Leighton says:

    WARMEST OCEANS EVER RECORDED

    http://www.sciencedaily.com/releases/2014/11/141114090009.htm

    “This summer has seen the highest global mean sea surface temperatures ever recorded. Temperatures even exceed those of the record-breaking 1998 El Nino year.”

    “The current record-breaking temperatures indicate that the 14-year-long pause in ocean warming has come to an end.”

    • Doug Leighton says:

      GLOBAL WARMING NOT JUST A BLANKET: IN THE LONG RUN, IT’S MORE LIKE TANNING OIL

      http://www.sciencedaily.com/releases/2014/11/141110161136.htm

      “Instead of carbon dioxide being like a blanket that slowly warms the planet, after about a decade most warming comes from melting ice and snow and a more moist atmosphere, which both cause Earth to absorb more shortwave radiation from the sun.”

      “Melting ice creates darker surfaces that can absorb more heat, and the more melting the more heat it can absorb. Likewise, warmer air holds more water vapor, causing it to absorb solar radiation that might otherwise bounce back off clouds, ice or snow.”

      “….results do not change our overall expectation that the planet will continue to warm due to the burning of fossil fuels, but they do change our fundamental understanding of how that warming comes about…”

  33. Longtimber says:

    http://www.tampabay.com/news/business/energy/psc-staff-backs-florida-utilities-proposal-to-gut-energy-efficiency-goals/2206391

    “The utilities said it’s cheaper for them now to produce a kilowatt of electricity than to save it.”

    Translation: We build more unnecessary, obsolete 19th century energy dinosaurs to extort your wealth to us. Florida imports 99% of it’s energy since you have no rights to use god given distributed gen technology or stop wasting energy. You MUST pay up, else your house turns to mold mush. Also, you shall pay energy you don’t use.

    • Watcher says:

      Went through that article. I see nothing incorrect in it.

      “The state’s utilities — including Duke Energy Florida, Tampa Electric and Florida Power & Light — argued during hearings this summer that energy-efficiency programs have become too costly to continue. The utilities said it’s cheaper for them now to produce a kilowatt of electricity than to save it.”

      The PSC reviewed that math and agreed.

      “In addition, the staff said the solar rebate programs should be allowed to expire in December 2015 because they “represent a large subsidy from the general body of ratepayers to a very small segment of each utility’s customers.”

      Nothing appears incorrect in that.

      The envirowhacko rebuttal wasn’t bad:

      “As for energy efficiency, the Southern Alliance and other environmental groups said the utilities simply calculated high costs to kill the programs.

      “The utilities cost estimates across all … tests are unnecessarily high relative to peer utilities in other states,” the Southern Alliance was quoted as saying in the staff report.”

      It would be nice to see those numbers, but it also is likely worth noting that Florida gets hotter than some other states in which “peer utilities” might reside.

      “”People should be up in arms,” Glickman said, “that we’re ending energy-efficiency programs while we’re approving new power plants.”

      That’s exactly what you should do when the numbers compel it, as they appear to.

      • Fred Magyar says:

        The envirowhacko rebuttal wasn’t bad

        Except that when you do the whole cost accounting of what burning fossil fuels actually costs society at large in terms of climate change and sea level rise I think I’ll side with them over the interests of Duke Energy Florida, Tampa Electric and Florida Power & Light… They are only interested in very short term profits!

        I live in Florida and witness the effects of sea level rise on an almost daily basis. Ask the folks down in Miami and South Beach how much it is costing them now.

        At least the people you call envirowhackos understand that we need a paradigm change away from fossil fuels and that those who don’t should be the ones forced to pay the true cost and not the other way around!

        • Watcher says:

          It’s not the function of the PSC or the utilities to wander around with flowers in their hair worrying about what society wants or needs. The PSC represents voters, and the voters will vote what they will vote.

          You think you have the votes, run your campaign to do things economically wrong to be your idea of ‘societally right’ and see if you win. Evidence is, that doesn’t get votes.

          In fact, as we’ve just seen, you can pump millions into media to hype global warming and you’ll still lose the vote. But hell, what you should do, if you really cared about all this, is arm yourself and your brethren and go out and mow down whoever votes against you. That’s if you really cared about the issue.

          • Fred Magyar says:

            But hell, what you should do, if you really cared about all this, is arm yourself and your brethren and go out and mow down whoever votes against you. That’s if you really cared about the issue.

            Yeah, that sounds like a really good idea! On the other hand if we are going to be true to our principles we should just roast the bastards on a sunny afternoon under giant fresnel lenses >;-)

        • Doug Leighton says:

          Fred, I visited an old friend of mine in Florida last winter who took my wife and I on a coastal tour (Mississippi side). We had always assumed the place was fragile w.r.t. sea rise but seeing where some people there stick their homes you really have to wonder. Add a foot to high tide (you do have tides?), throw in a hurricane and………… “we need a paradigm change away from fossil fuels” yes we do but I think some of you guys are playing a version of Russian roulette when it comes to building stuff down there, even given things as they are right now.

          • Fred Magyar says:

            Add a foot to high tide (you do have tides?)

            Oh yeah, you should see what some of our streets look like at high tide on the night of a full moon. Sooner or later there will be another major Hurricane too. It’s insane!

      • Longtimber says:

        No question on the State/Utility Rebates for PV. They actually have been gone for a long time. But the current $400 per ton for “Geothermal” need to expire also. The Solar Rebates were counter productive and actually killed off PV DG Installs. Unless you were one of the lucky few that actually got a rebate. We tired to get the rebate lowered by 75%, so more systems could get installed, but no .. can’t have people seeing power meters running backwards. 6 Years ago a 5 Kw PV system was ~ $40k with a 20k Rebate. Now a 5K Pv system is under $15,000 before Fed rebate, so 11K out of Pocket for most. But where systems were 20K out of pocket, it was an easier sell, since you were getting a check for 20K. Go Figure. Does not matter what the Generation source is, ROI on the 1st waves of conservation is many times prettier than NEW Generation. There is so much waste everywhere. In Triage, You stop hemorrhaging before you admininstrating new blood. Many of the FLA Utilities conservation programs where aimed at mid and low incomes. Like the Solar Rebates, the paperwork is crazy. In Mexico power is 33% cost the 1st 500Kwh. Progressive like California.

  34. Ronald Walter says:

    http://www.bnsf.com/about-bnsf/financial-information/weekly-carload-reports/pdf/20141108.pdf

    11,580 oil tanker carloads

    44,452 coal carloads

    31,809 gallon crude oil tank car:

    http://www.americanrailcar.com/pdf/RailcarManufacturing/TA-Crude%20Oil.pdf

    757 barrels per tank car

    757 barrels of oil x 100 tankcars

    75,700 barrels for each train

    757 x 11,580 is 8,770,195 barrels of Bakken oil hauled by BNSF in week 45 ending 11/08/2014

    • Watcher says:

      You do realize that is 1.2 mbpd and essentially an impossible oil production rise of about 20% in 30 days from the whole field? Even more so because some is transported by pipeline?

      I’d guess your error is in rail car size. They’re not all 31800 gallons. Some are 29,000, 25,500 and 23,500 gallons.

  35. Ronald Walter says:

    The obvious easy answer is to cripple oil production in the ME, direct military intervention. War will cause an increase, spike, in oil prices in about ten minutes.

    We had to destroy the world to save the world.

    • Watcher says:

      Somewhat. Libya is the best target for all sorts of reasons — but that assumes you accept the price has been moved by supply and demand.

      That need not be so.

  36. Watcher says:

    Fairly powerful Euro/USD reversal when the European markets closed, essentially driving the Euro up and dollar down. Various commodities instantly redenominated, with oil rising slightly above 75. Sterling and JPY haven’t followed suit so the move is muted.

  37. Cave Bio says:

    Hello everyone,

    Here is a Mother Jones review of a Deutsche Bank analysis on solar power:

    Here Comes the Sun: America’s Solar Boom, in Charts
    http://www.motherjones.com/environment/2014/11/solar-energy-power-boom-charts

    Last week, an energy analyst at Deutsche Bank came to a startling conclusion: By 2016, solar power will be as cheap or cheaper than electricity from the conventional grid in every state except three.

    Best,
    Tom

    • Fred Magyar says:

      Which is why here in the Sunshine State, Duke Energy Florida, Tampa Electric and Florida Power & Light are trying to do whatever they can to build more fossil fueled power plants now, while they can still convince people that Solar is too expensive!

      I’m an Envirowhacko, but I’m Ok…
      I sleep all night and I work all day.

      Apologies to Monty Python >;-)

  38. Marcus says:

    Oil market is trapped in a negative bubble interesting analysis by Kemp
    http://mobile.reuters.com/article/idUSKCN0IY23920141114?irpc=932

    • Marcus says:

      I meant to add that the above article agrees with my idea (& Watchers) that the price is not entirely driven by supply & demand. Momentum is very important as traders put in stops which automatically buy or sell when the price hits predetermined points (the whole point of technical analysis) & then things can snow ball quite quickly from there.

      • Dennis Coyne says:

        Hi Marcus,

        That is true in the futures market. The spot price is determined by supply and demand.
        On November 11 the WTI spot price closed at $77.85 see

        http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=rwtc&f=d

        Chart with 5 week centered moving average spot price for WTI in $/b

        • Marcus says:

          Hi Dennis,

          Have a look at this article:

          http://seekingalpha.com/article/127614-how-do-you-buy-spot-oil?page=2
          From the article:
          The spot price is what you would fork over to take physical delivery of that oil today. The EIA defines it as:
          The price for a one-time open market transaction for immediate delivery of a specific quantity of product at a specific location where the commodity is purchased “on the spot” at current market rates.
          The spot price is relatively unimportant in global oil markets. Most refiners purchase oil with the help of long-term contracts, either one-off privately negotiated contracts or contracts from an exchange which are of course based on the futures prices

  39. ezrydermike says:

    Came across this FOX opinion piece. Apparently there is another thing that caused me to lose my moral compass. I don’t love fossil fuels enough. This is also un American. So I wonder amidst the discussions here, how does a piece like this move the dialogue in a different direction. There is still a large FOX audience. Although it’s not a news piece, this is certainly part of MSM, it came in my Google news feed. Of course, the author is also trying to sell his book.
    ” America loves fossil fuels. In the 2014 election, more than any in recent memory, candidates competed with one another to take the strongest position in favor of fossil fuels. It was the best illustration yet that Americans see enormous opportunity in, among other things, shale energy technology (fracking), in energy transport (Keystone), and in taking the noose off the coal industry.”

    http://www.foxnews.com/opinion/2014/11/14/fossil-fuels-moral-choice/

    Carry on

    • Fuser says:

      The author makes the case that we have a moral responsibility to burn our fossil fuels. We really are just observers watching this whole thing go down.

      • Fred Magyar says:

        FOX certainly has some truly brilliant commenters!
        This one gets my vote as best of the lot:

        …A 2014 model car built to US emission standards actually CLEANS the air as it drives through Mexico City or Bejing.

        I wonder if this person has any idea that a single gallon of gasoline burnt in an ICE produces roughly 20 lbs of CO2 through the magic of chemistry…

        • Fred Magyar says:

          Oops forgot to close the italics tag

        • Fuser says:

          By that commenter’s logic, they would be better off sucking on the exhaust pipe than walking down the street. Let him try it out.

          • Cae says:

            …sucking on the exhaust pipe… ~ Fuser

            If haplessly crashing down on some sites sometimes and reading the commentary were akin to some effect, it might be that.

  40. Watcher says:

    As regards the purity or sanctity of money and the markets, and why oil is all that matters:

    It’s in the form of an image so I’m retyping it . . . fast:

    In 2013 the SNB increased the share of equities in its foreign currency accounts from 12 to 16%. This was mostly in shares of small cap companies and equities from developed economies that had not been previous included. Equities are managed passively [this means index investing rather than choosing individual companies, so all members of the index are proportionally bought]. The SNB doesn’t buy equities of mid or large cap companies to avoid conflict of interest. The SNB also doesn’t buy stock in companies involved in arms trade or human rights abuse blah blah blah.

    FYI “equities” are stock. Meaning, this is a self admission from the Swiss National Bank (their Fed) that they create money and buy stocks.

  41. Watcher says:

    There is rather a lot of danger in the hype unfolding that OPEC is going to restrain production at the Nov 28 mtg. If they don’t. If the communique says nada, oil is going to 65.

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