114 Responses to Open Thread- Petroleum Oct 28, 2016

  1. Rune Likvern says:

    Thermal Efficieny

    The chart below shows some typical values of of how efficient the potential energy from oil derivatives are transformed into useful work.

    To estimate a global weighted thermal efficiency for oil is subject to a lot of uncertainties, but given that little oil is used for heating and in power plants a global average thermal efficiency of about 30% could be a good starting point.
    As with most things size matters (the bigger the engine, the better the thermal efficiency).

    The potential energy [6 GJ] from one barrel of oil is close to 1,700 kWh if all the energy could be transformed into useful work.
    The reality (physics) does not allow for this, therefore most of the energy from oil is lost as waste heat and what is converted into useful energy (work) is far less and dependent on the process which the oil is used for.

    Car engines are normally four strokes.
    There are also several two stroke engines in outboards, snowmobiles, lawn mowers, chain saws etc.
    Car engines (both diesels and gasoline) in a driving cycle including idling etc, seldom run continuously at their optimum efficiency.

    • SRSrocco says:


      Bedford Hill uses a 20.3% average efficiency for the oil system.


      • SRSrocco says:

        Edit… I meant to say internal combustion engine.


      • Rune Likvern says:

        What is meant by the “oil system”?
        And anyone using decimals for the global oil system should be prepared to back that up.

        • SRSrocco says:


          Actually Bedford uses a 20.45 thermal efficiency for internal combustion engines. Now, why would Bedford not consider backing up that number when the group spent 10,000 hours on their ETP OIL model????


          • Rune Likvern says:

            Wow, now with 2 decimals precision 20.45%!!!!!

            Did they really spend 10,000 hours to arrive at that conclusion?
            And how are the Hills Group definition of ICE’s?

            How are hybrids accounted for?

            Anyone with some basic (as in college level) understanding of combustion engines knows about their thermal efficiencies.
            Oil, depending on how you count the Joules is not the dominant energy source in the global ENERGY MATRIX.

            (Steve, have you become a spokesperson for the Hill Group?)

            • Caelan MacIntyre says:

              Beware the extra 2-decimal precision and ENERGY MATRIX, Rune! They’ll get you if you’re not careful! You have been warned!


              Anyway, to add some value, I’ll quote something that also references you:

              Oil Extraction and Price Dynamics

              Probable scenarios

              “…The oil extraction industry is cyclical with periods of high prices spurring investment followed by periods of low prices in which investment falls. Much oil extraction is not profitable at current prices.
              According to Rystad Energy oil extraction will decline slightly from 2016 to 2020. We believe that efficiency gains should make this decrease bearable. After 2020, we anticipate that non-OPEC oil extraction will fall more rapidly because of the cuts in capital expenses that have taken place in the last two years and accumulated debt of the oil extraction industry. This will cause tension between the extraction industry and the financial sector as they grapple with ways to pay off debt and maintain extraction levels (inter-elite competition). In any case whether it is investors or extractors, this will cause increased social mobility, mostly downward which will put downward pressure on oil prices. Eventually extraction rates will fall fast enough to raise prices at least temporarily, as suggested by the empirical model, until companies and citizens go bankrupt and demand decreases. We anticipate improved efficiency in oil use will be used to reduce cost share, there will not be a corresponding price rebound.
              A Seneca cliff can be imagined if for example a precipitous drop in non OPEC (after 2020) extraction coincides with conflict in the Persian Gulf simultaneously reducing OPEC extraction rates. If extraction rates fall precipitously and remain low for two years, one can expect a price spike followed by a drop in prices which decimates first industries which use oil followed by the oil extraction industry and a recovery will be highly unlikely. Note that both theoretical considerations from the dynamic production function identities and the empirical model indicate that price dynamics will speed the rate of decline in oil extraction. During the growth phase of oil extraction, low prices increased demand and high prices increase supply, during the contraction phase, low prices will diminish supply and high prices will diminish demand.” ~ Aude Illig and Ian Schindler

              • Rune Likvern says:

                Caelan, thanks!
                I will have some more on this subject in a later comment/post.

              • Nathanael says:

                Fascinating. Rystad thinks exploration will only reduce slightly from 2016 to 2020. This excessive exploration should act as a price suppressant, which should reduce exploration. It makes sense that exploration will drop further after 2020…

                This is fascinating because my dumb model shows massive demand destruction from electric cars becoming significant around 2024. Forget “improved efficiency in oil use” — substitution is going to be the big effect. The price crash around 2024 will be permanent and there will be no recovery for the oil industry (thank goodness).

                • Caelan MacIntyre says:

                  No one has really told us much about where we’ll all be going in our new electric cars, such as if or when sociocultural fossil fuel ERORI plummets.

                  You have a relatively-miniscule set of people who own electric cars already and who make claims about how splendid they are, except that they appear to be thinking generally in terms of their present contexts, as opposed to the future.
                  The future is a very different animal.

                  Put it this way: If everyone in a boat all moved to one side all at once and relatively-suddenly, depending on how many people there were and how small and tipping-prone the boat was, they could irreversibly tip it and all end up in the water.

                  Our oversized overcomplex global-industrial society relies on vast amounts of energy to function. Remove that relentlessly, year-after-year, replace it with what, and again, where is everyone going in their new electric cars? It’s not just a rhetorical question.

              • Jeff says:

                Tim Morgan (PhD in economics I think) blogs a lot about the relation between debt, gdp and surplus energy. May be of interest: https://surplusenergyeconomics.wordpress.com/

      • TechGuy says:

        I haven’t posted in a while. But here are my thoughts

        1. Hills Group: If you replace “Oil price” with “Oil profit” than I think the Hills group assessment is correct. I doubt oil will ever fall below $40 for any length of time, but the profit on producing Oil will remain close to zero. Its probably already is near zero because of low prices, and high extraction costs. Over time (my guess 18 to 36 months) supplies with eventually decline do lack of investment in new projects resulting in rising prices. As Oil prices increase it will lead to demand destruction as consumers and business cut back. I don’t think we will see Oil prices to sustain above $80. I think Oil drillers will likely not invest much in new projects, as the risks of demand destruction are too high, which will cap sustainable high prices. In a NIRP/ZIRP system, its just easier to borrow and issue stock buybacks, since the risks are lower than drilling.

        2. The US has been hovering near recession for the past year, and at some point, the US economy is going to fall back into another bad recession, unless there is significant gov’t stimulus that re-inflates the bubble. I would guess the US will slide into a recession in 2017, from lack of consumer demand and soaring health care costs. Which will forcing layoffs and force consumers to cut spending to pay for much higher premiums. The US so far as remained out of recession via increase debt, as consumer bought new vehicles using extended loans (7+ year loans). Another US recession would like cause Oil prices to fall, and any traction made by OPEC to stabilize prices will fail because of weak demand. Higher prices increase the rise of demand destruction.

        3. Increasing problems in the Middle East. There are simply too many “restless” people in the Middle East and the low oil prices is increasing civil unrest in most OPEC nations. Its possible that we will a coupe and more civil wars. KSA seems primed for some internal problems soon. Sooner or later Civil unrest is going to impact ME Oil Exports. More Bad News in the ME is likely to cause prices to spike, but I don’t prices to be remain high (due to demand destruction). The Middle East had a population explosion about 2 decades ago. All these youngster are entering the 20’s and 30’s and have been radicalized. This is an explosive combination when coupled with declining gov’t subsidies/entitlements.

        4. Europe is likely see more extreme economic and social problems, as postponed financial and refugee problems begin to pop up in 2017. I think the Refugee crisis is going to break social services, undermining pensons and entitlements for EU retirees. I expect we see more frequent and more violent riots through out most of Europe. I think Italy will probably be the next Greece, as its finances were near the tipping point and the recent earthquakes is going to push it over the edge as tourists avoid Italy and the cost for the clean up. Europe is facing some severe challenges with its banking system as ZIRP/NIRP has made all their banks non-profitable.

        5. Increasing tensions between NATO and Russia. Perhaps if Trump wins and does repair relations with Russia and gets NATO to back off. If the NATO continues to press Russia is going to eventually cause a nuclear war. If you go back a few years ago I discussed that the Europe would become Belligerent and likely start another global war. Europe was the cause of the first two world wars and odds are that it will also start the third. While the ME has the potential to self-implode it won’t lead to a nuclear war (simply because it does have many nuclear weapons and is completely depend on the West for everything). Odds favor that a nuclear war will begin with NATO & Russia as European leaders on both sides attempt to distract the population away from their own internal problems. Politicans have a habit of falling for their own rhetoric and their collective delusion will drive them into a war they cannot win.

        6. Overall I think the global economy is already in permanent decline. Perhaps if all the major gov’t start printing money and implement more stimulus they might be able to kick the can down another few years. However there is now a lot of in-fighting and a Mexican Standoff Cold war, between the Russia, NATO, and China. Its seems unlikely there will be any global cooperation. I think we might even see some dissentment between the US and the EU, especially if Trump wins.

        7. Its very likely we will continue to see many more job losses as business cut workers, and use more automation. I work with systems and vendors that are replacing workers with automation. As soon as an new automation system is moved into production, the layoffs begin. Corporate Debt as soared and many large business are at risk of credit downgrades as the majority of large corps used debt to finance stock repurchases. There is no demand growth due to the demographic cliff. The Boomers are now well past there peak spending years and neither Gen-X or Millenials have sufficient economic strength to replace the Boomers spending declines. Boomers are also taxing entitlement and pension plans as they retire (stop paying into pensions/gov’t entitlements & and start withdrawing).

        8. Interest rates will continue to go lower, and we will see even more NIRP (Negative Interest Rate policy) including the US. The issue is that gov’t continue to borrow money and they can no longer afford even ZIRP (Zero Interest Rate Policy). The US will likely resume QE sometime during 2017, and eventually revert to NIRP. The problem with ZIRP & NIRP is that its killing off Pensions and Banks. The small banks will be the first to go. The larger banks will probably get gov’t bailout (either overt or covert). I don’t think we will see any major spikes inflation in the next 18 months unless the Fed goes crazy. At some point the Fed is going to need to print a lot of money to pay for the unfunded entitlements. Once politicians in the US start handing out printed money (via stimulus, more entitlements, gov’t spending programs, etc) , then we will see inflation take off. Once inflation takes off it will be impossible to switch it off because of the high debt burden and weakness by politicians to cut spending. To be honest, I am quite surprised that politicians in the US haven’t made a move to use the printing presses, since getting elected is about make promises to the people that involve spending money. No politican ever got elected by tell voters they were going to cut their entitlement, or cut back on gov’t services (education, infrastructure, etc). It not a matter of “if”, but when they turn to the printing presses.

    • Oldfarmermac says:

      The rules of physics cannot be broken, but they can be finessed, after a fashion.

      It might be possible at some future time to capture a good bit of the energy that is otherwise wasted in the hot exhaust of an oil burning machine.

      Now by way of example, suppose you buy a small oil fired generating system for your home.Such systems are becoming practical due to modern electronic controls and switching, and scaling up of manufacturing. You could capture nearly all the waste heat for hot water and for space heat. Combining such a system with a heat pump and some passive thermal storage such as masonry inside the living space could be very efficient indeed, if the cost of it falls low enough.

      This would be useful mainly during the heating season of course, in a house, but it could also serve to reduce peak demand on the local grid, thus going a long way towards justifying the cost of it, with peak demand pricing in effect, so I expect it would run sometimes in hot weather as well.

      In larger buildings, a smallish generating system of this sort could supply both the hot water and air conditioning during hot weather, using the exhaust heat to heat the hot water plus a heat driven directly to provide both the ac and maybe SOME power to a heat pump type water heater as well.

      Such a system could cut the buildings grid sourced electrical load significantly plus of course it could help with peak load issues on the grid as well .

      Combine such a gas or oil fired system with some solar panels and some batteries, and you would be in pretty decent shape to go off the grid, without having to spend so much on batteries in order to be sure you can keep the lights and well pump and fridge and computer running, while still using only a very minimal amount of oil or gas.

      Firing such a system with natural gas would be far simpler and far more practical, in areas with to the door gas lines. But plenty of homes and businesses get either or both oil and gas delivered by truck.

      I know peak demand power rates are thru the roof already in some places, but not how many hours and days they apply during a typical year.

      Any opinions as to how long it will be before peak load pricing is commonplace all thru the country will be appreciated.

      My personal opinion is that the price of such a system will fall a lot farther and a lot faster than most people would ever guess, even as the prices of DELIVERED oil, gas, and grid juice go up due to depletion, taxes, and plain old monetary inflation.

      Consider this. You have a Volt, Bolt, Leaf or Tesla in the driveway, and you need heat, but not much domestic electricity. So your system runs charging your car battery, while it heats your house, using American sourced gas, and you avoid buying gasoline made from imported oil.

      Even a Republican ought to be able to understand the advantages of such a setup, if you could find one that understands that we still import millions of barrels of oil on a daily basis. 😉

      It’s best when talking to R’s that you do not mention avoiding using so much coal fired electricity. 😉

    • mynamett says:

      Do the same calculation for tar sand. You might get a result that will show EROEI 0 and 1. Your research seems to apply to conventional oil. The volume also matter. It is a volume issue, net energy issue and a chemical composition issue. Most oil is also not usable until refined. SO you need to include the energy needed to transform crude into usable products such as gasoline, kerosene, diesel.

    • Survivalist says:

      This is an interesting article. He refers to EROEI as the ‘energy cost of energy’.

      “Ultimately, the economy isn’t a monetary system, but an energy equation”


  2. Rune Likvern says:

    I will continue with Volve (by North Sea standards a small and marginal discovery/field) which is an oil field that NPD now reports as shut down.
    For 2015 Volve (discovered in 1993 and started in 2008) had an estimated operational EROEI of close to 12 (at the consumer end!).
    The full life cycle EROEI for Volve is at an estimated 9 at the consumer level.

    So before anyone starts any discussions about boundaries this estimate includes everything from those starting to prepare the documentation to apply for the licence (akind like engaging landmen), to shooting seismics and interpreting seismics, to planning and drilling wildcats and appraisal wells, total 5, to development building of the production installation and drilling producers, observer wells and water injectors (20) and all planning involved and operations, transport to refineries, refining and distribution to consumers.

    I would strongly argue that going beyond what it takes to get all those involved to and from office, heliport or harbor is moving the boundaries to what is called society to further some agenda (or to display pure incompetence). Those engaged in these activities (operating Volve) have to purchase the end products at the same conditions as everyone else.
    Assuming Volve in total and on average engages 400 persons (this includes several shifts offshore, support and administrative functions onshore (which are less energy intensive).

    If these 400 persons (representing roughly the same amount of households) annually used about 1,200 liter gasoline with a heating value about 35 MJ/liter this would amount to about 16 TJ (Tera Joules (Tera; exp12) in a year.

    In 2015 Volve extracted a gross of about 36.5 PJ (PJ, Peta Joules (Peta; exp15), in other words, those involved in the operations of Volve consumed an estimated privately and directly 0.044% of the energy extracted from Volve in the form of petroleum. No matter how this is tweaked without consideration of the contribution from other energy sources the energy consumed by those involved in the operations will amount to something which borders insignificant.

    This should illustrate how preposterous Arnoux’s claim is about the energy used by the oil companies in 2015 left the societies with only 8% of what was totally extracted.

    (I got a lot more coming. Someone sent me the Hills Group report……. as a gift.)

    • VK says:

      Thanks Rune, look forward to your analysis. The wide boundary condition for the oil sector involves close to 1.5 Billion people in the Hills Group Report from Steve’s interview with Louis Arnoux. So technically the whole of Norway could well be involved in the extraction of oil from Volve. The boundary conditions are waaaay too wide.

      • Rune Likvern says:

        VK, thanks.
        I have pondered on responding to Steve’s


        Did the Norwegian oil industry employ any people? Did they buy any pipe? Did they buy other supplies? Did they use any complex financial services? Did they use any large oil tankers? How many people built, service or run large tankers? I could go on and on.

        This increased cost of energy in the entire system you continue to ignore.


        Yup, that is the kind of knee jerk reply I would expect from someone who does not know what he is talking about.

        The oil industry (oil companies, petrochemical plants, oil refineries, oil service companies [Halliburton, Schlumberger etc], exploration firms, mechanical industry like shipyards (that also builds ships not directly involved in petroleum activities and exports products globally to other oil/gas producing countries), seismic companies, engineering firms, various suppliers including shipping, accommodation/cleaning and catering, transport and logistics employed about 300,000 people out of a population of 5.2 million of which about 2.6 million are employed. That is about 10% of the employed population are in some way engaged in the Norwegian petroleum activities.
        Due to the collapse in the oil price about 30,000 jobs in the oil industry have been cut, and most of these former oil employees have found other (non oil related) jobs.

        In 2015 Norway produced 1.95 Mb/d (including NGLs) and consumed 0.23 Mb/d (which also includes consumption for petroleum activities), a net export of 1.72 Mb/d.

        In 2015 Norway produced 117.2 Gcm natural gas and consumed 4.8 Gcm (most in the petroleum sector), a net export of 112.4 Gcm. (World’s third biggest net exporter of natural gas).
        Norway during a “normal” year is also a net exporter of electricity.
        Until recently, Norway was also a net exporter of coal.

        So apart from the oil industry, Norway has several aluminium plants (about 5% of global capacities), steel plants [which does not run on oil!], ferrous alloys, fish farming, ocean fisheries, farming, forestry (and derived industries like paper mills), shipping companies, airliners, telecom companies, weapon industry, construction, retail sales, tourism and then there is the public sector with health care, education, defense, railways, administrative functions of all kinds etc.

        So out of about 10% of the employed population is somehow engaged along the logistics chain to explore, develop, operate and increasingly decommission fields.

        And yes, there is no doubt that the energy industry is energy intensive (it takes energy to produce energy) and the energy intensive phase starts as a development is FIDed and not least during the operational phase. During the exploration and development phase one may say that the energy industry borrows energy from the society, but as demonstrated with Volve this energy is paid back within a few months after start up and from there societies enjoys a flow of surplus energy.

        The oil companies surely would like the financial investment to be recovered this fast.

        So let us say that about 25% of the Norwegian oil consumption in 2015 is used by 10% of those employed in the petroleum sector, this would mean 0.06 Mb/d is used by the oil industry to operate a flow of 1.95 Mb/d while exploring and developing discovereies. Then there are some energy consumption (losses) downstream the production facilities, that is from oil is pumped into tankers and delivered to refineries and further during refining and distribution to end consumers.

        According to Arnoux just 0.16 Mb/d (8%) of this flow became useful (in 2015) for societies, that makes one wonder where (1.95 – 0.16 – 0.06) Mb/d = 1.73 Mb/d went (Yes some for transport, refining and distribution)?

  3. R Walter says:

    Lawnmowers, I have to mow to keep critters from becoming a nuisance, I will recommend a Honda lawnmower. After using lawnmowers for years and know how they wear out sooner than later, a Honda is as rugged and as tough as they get for a walk behind mower. I have a larger mower, but I would rather get the exercise than spend the money on gas to run the engine on the larger mower.

    Using the walk behind gets the job done with a lot less gas. You save money in the long haul by using less gas, you get to stand on the planet outside in the open air in the great wide open. It is as good as it gets.

    As for chainsaws, you mean Stihl.

    Be sure to change the engine oil. Engine oil heats up and wears out with use. Use synthetic oil whenever you can, it lasts far longer than regular good old Oklahoma crude.

    1.3 billion vehicles, who knows, but you are probably looking at 40 million barrels of oil for oil changes alone for all of the engines on the earth after 200 hours of use and driving etc.

    Not to mention hydraulic oils.

    You’re going to need oil no matter what the circumstances.

    • GoneFishing says:

      What’s the problem with motor oil?

      Oil doesn’t dissolve in water. It lasts a long time and sticks to everything from beach sand to bird feathers. Oil and petroleum products are toxic to people, wildlife, and plants. One quart of motor oil can pollute 250,000 gallons of water, and one gallon of gasoline can pollute 750,000 gallons of water! Oil that leaks from our cars onto roads and driveways is washed into storm drains, and then usually flows directly into a lake or stream. Used motor oil is the largest single source of oil pollution in lakes, streams, and rivers. Americans spill 180 million gallons of used oil each year into the nation’s waters. This is 16 times the amount spilled by the Exxon Valdez in Alaska!

      EV’s don’t use or leak motor oil.

      • Watcher says:

        But spilling motor oil is a very green thing to do.

        It’s recyling. Putting it back in the ground where it came from.

      • clueless says:

        The world’s oceans are toxic. Big deal.

    • Fred Magyar says:

      You want to use even less gas and get more execercise? Try this.
      Of course you could just eliminate your lawn entirely by letting it go wild.
      That way it attracts birds, butterflies and bees.

      • Oldfarmermac says:

        History books tell us that the reason we HAVE lawns goes back to old times when proud rich folks kept a little patch of grass to demonstrate they were rich enough that they didn’t have to graze it or plow it up.

        If we can figure out a way to morph birds, flowers and bees into status symbols, lawn mower sales will fall like a rock, lol.

    • Longtimber says:

      Today, cut these up into 11 pieces with a 16″ Makati with 100% PV Power, – No Batteries.
      You can see saw on Top. 35 mins, 2 chains, 2 wheelbarrows of Sawdust.. Too sweaty and covered with sawdust to mess with phone. I’ll take an after pix tomorrow

      • Caelan MacIntyre says:

        Fun. Where are you? Indiana?

      • clueless says:

        That is truly amazing. Unbelievable. How could anyone accomplish so much in only one day? Think of the pioneers that lived 150 years ago who only had hand saws. They would be truly be amazed. I bet that they never would believe that one person could accomplish so much. However, I am surprised that you were so sweaty after holding a power tool.

        I would like to see the after pictures. If you had 2 wheel barrows full of sawdust, one can only imagine what the 11 pieces looked like.

        I am sure that OFM learned a lot from this post.

      • Longtimber says:

        Extra sweat when the trunks are twin knots + > 1m in dia. Chain kisses dirt your done, Tractor, jack or 24″ bar would have been the bomb, Final cut required digging holes & truck + chain , Logs green, 1500kg? Ready to split when heat breaks. It’s brutally hot in NW Florida now.

        • Longtimber says:

          Off subject – but oil subsitution, hell of a saw for the Money.
          Does NOT replace a $1000 LOG Saw, but it’s a must have at this price. 12 Gauge cords required. Downside 120V. OhMy .. 240V Stihl have hit the Street. You can put a 2kW Autotransformer in a Lunchbox for North America if you don’t have 240V Handy.

          • Matt Staben says:

            You know, that’s a real funny thing. I just last week received my brand new DOLMAR ES-173A electric chainsaw – it’s the Makita rebadged – even says on the box that Dolmar is a member of the Makita Group.

            There’s two versions of the chainsaw. The newer one that has a thermal shear “pin” that stops the saw when its getting hot – and certain other things that render it somewhat inferior to the prior model.

            The one you want to buy is the Makita UC4030A or the Dolmar ES-173A. You can buy the Dolmar for $220 shipped, or less. I found one for $200 but it was their last.

            The saw has oil problems, just like the reviews state. There’s the older manufactured model of the UC4030A/ES-173A that is made in Germany, and the more recent ones made in China (Mine is China) – they’re the same, except, the oil pump is cheapened in the China version and requires low viscosity oil otherwise it plugs up. I am currently experimenting with this problem – I did not have good success with a 2-parts canola w/ 1-part ATF blend. To restart the flow, I have to dump the oil (easy), remove the bar and chain (easy), and use an air compressor to pressurize the oil tank. It’s that big of a pain in the ass – but I’ll figure it out, I hope.

    • me says:

      >You’re going to need oil no matter what the circumstances.

      I agree, but a little oil goes a long way.

      Most folks don’t have oil, and have to buy it from The Man, but I think we are headed to an era of democratization of energy production.

      For example, most German cities burn municipal waste in plants like this:


      This is a ARIZ-style problem solution, where one problem turns out to be the solution to another problem.

      In the typical German way, they’ve totally over-invested in capital equipment. So there is now a serious shortage of municipal waste in Germany.

      On the other hand, it has made it very easy to adhere to the EU demand to shut down landfills. Dumping inflammable waste is illegal in Germany now, and the country still has to import huge quantities of waste from its neighbors to feed its waste-burning power plants.

      This is democratization in the sense that it replaces natural gas burning in a country that has little natural gas. It also is an excellent design, because it changes a problem (waste) into a solution (fuel).

      This plant in Düsseldorf burns a ton of waste a minute.


      Waste processed is Mülldurchsatz in German.

      A more obvious example of democratization is solar. This is a very common sight in rural Germany: A pig sty with a solar panels on the roof.


      This is a great way for farmers to reduce their electricity bill. Getting methane from pig excrement is also widespread.

      If I were governor of New Jersey, I would set a goal of zero net energy imports. Why should a densely populated heavily industrial state import energy from its resource-rich neighbors?

      New Jersey currently imports huge quantities of coal, natural gas, fuel oil and nuclear fuel. All that represents money flowing out of state. Meanwhile the state produces vast quantities of inflammable waste and squanders vast quantities of energy on stupid things like inefficient transport and ludicrously bad insulation. In addition, New Jersey makes no use of its significant coastal wind potential, and little use of its solar potential.

      New Jersey should be a net energy exporter.

      Here’s a nice TED talk about closed loop design.


      • asdf says:

        Now look at costs and output of these waste burners. Couple of those opened recently i my country, and the costs were about 150 million USD each, for electrical output 6-9 MW, plus associated heat (20 MW) for buildings heating. That’s couple times more expensive than coal plants.

  4. John says:

    I want one of these mowers! Can I get it in John Deere green? Based upon my old road cycling days, I think my EROEI could be as great as 0.0001. 😀

  5. Rune Likvern says:

    I am working (on and off) on something on world crude oil supplies that may end up as a post on Fractionalflow.
    I agree with Rystad Energy (ref Caelan’s post further up. Disclosure, I have never had anything to do with Rystad) that global oil extraction will decline towards the end of this decade.

    I look at this through the lenses of discoveries (and their sizes) not FID, expected changes to the oil companies’ balance sheets at end 2016 (financial leverage will by default come up, assets/equity come down due to lower oil price and lower reserves [of which some will be rebooked at a higher price]), CAPEX constraints, their Reserves Replacement Ratios (RRR), likely near term (oil) price and cost developments to name the most important ones.

    The chart below [note scaling on the right axis] is now my conceptual understanding of global crude oil supplies towards the end of 2018. We are soon entering November 2016 which makes me now expect the period with decline to last longer.

    I expect capacity of about 5 Mb/d of global crude oil capacities to vanish by end 2018. That will have some implications. It took years with a high oil price ($100/b) to grow supplies with 5 Mb/d.
    During the next upturn in the price things will be different, most of the “easy” oil was developed during the last high price cycle.

    I do not expect the decline to accurately follow my suggested span. Depletion induced declines never sleeps and some portion of world crude oil supplies is now from sources (like LTO, “small” offshore discoveries) that depletes fast and other legacy sources are also in general decline.

    The decline is already baked into the cake. It does not matter if oil prices moved above $80/bo as of next week. This would stimulate more drilling for tight oil, but for other developments, it would take anywhere between 2-4 years from these are FIDed (Final Investment Decision) until they flow.

    The oil companies drew down their portfolios of discoveries being profitable at $80/bo during the high oil price period that ended during the summer of 2014, and still there are some developments in the pipeline that will start up during the next few years, but this portfolio is shrinking fast. The tight oil companies have drilled most of their sweet spots and are now cash flow constrained wrt drilling.

    • Watcher says:

      In the context of utter necessity, it would be useful to have an oil flow analysis that is entirely non economic in basis. How much oil can, say, China get out if slave labor is presumed, or price decreed.

      Argentina is not a great example because of geology based decline over 10 yrs, but their production has held flat to a slight rise since they decreed their price of oil.

      Regardless, a pure geology estimate of what can flow would be useful.

      • Oldfarmermac says:

        First you would have to determine HOW MUCH slave labor could be devoted to the job, and how much skilled labor, and how much structural steel, and concrete, and how many trucks and how many drill rigs, and how much pipe, on and on and on.

        You could probably come up with a decent estimated upper limit for any GIVEN oil field, because of the law of diminishing returns. At some point it would be obvious that it would cost a lot less to get the oil from someplace else, or simply do without.

        Most people don’t appreciate just how fast costs can go up if you try any and every possible trick. It typically costs fifty times as much to win a race as it does to finish last in NASCAR, but the winner is usually less than a minute ahead of the last place finisher after three or four hours.

        Keeping old sick people alive for the last few weeks tends to cost more than their entire health care bill for their entire life prior to that last few weeks in the hospital.

        Diminishing returns matter. A LOT.

        • Watcher says:

          If you’ve ever flown into Asia, one of the surprises is this bunch of 25 guys standing outside the window as you pull up to the gate. The door opens in front and back. Passengers deplane forward.

          The 25 guys come onto the plane from behind. They have the interior cleaned in about 5 minutes, because man hours cost nothing, and the quicker turnaround is probably worth an extra flight per year.

      • Survivalist says:

        It is interesting to note that much of the end of slavery coincided with the increased production of fossil fuel and fossil fuel powered machinery. Perhaps the decrease in fossil fuel production shall coincide with an increase in slavery.

        • Jeff says:

          Timothy Mitchell wrote a book on this topic “Carbon Democracy: Political Power in the Age of Oil”. The book has been debated quite lot.

          From the cover of the book:
          “In the twenty-first century, the oil-based forms of modern democratic politics have become unsustainable. Foreign intervention and military rule are faltering in the Middle East, while governments everywhere appear incapable of addressing the crises that threaten to end the age of carbon democracy – the disappearance of cheap energy and the carbon-fuelled collapse of the ecological order. In making the production of energy the central force shaping the democratic age, Carbon Democracy rethinks the history of energy, the politics of nature, the theory of democracy, and the place of the Middle East in our common world.”

        • GoneFishing says:

          “Perhaps the decrease in fossil fuel production shall coincide with an increase in slavery.”
          Now it’s called wage slaves.
          I am sure all those kids that spent their young lives in horrible industrial conditions were so happy about fossil fuels.

          • Survivalist says:

            They should have just skipped fossil fuels and jumped straight to free, green, renewable, happy energy. If they had those kids could have been. What’s that saying, ‘if we keep doing more and more with less and less pretty soon we’ll be doing everything with nothing’.

          • Caelan MacIntyre says:

            Have you been hacking my laptop? I have a few images like/about that.

            Slavery (and not just with children of course, but also with many others, including ‘seniors’, maybe like as ‘greeters’ at Wallmart) is alive-and-well here and there and in a coat of whitewash, peeled away, examined, and called for what it is; wage slavery.

            Industrialism hasn’t really changed, except to look all nice and pretty to those who are more inclined to accept surface treatments (and glowing reports thereof) as suggestive of what lies beneath.

        • Hickory says:

          Thats a very interesting point (fossil fuel/slavery).
          Another facet of this for the current times is robotics, and the replacement of of human workers.
          For example, I realized that around here each garbage truck has just one worker, who drives and operates a robotic arm to pickup and dump the can. I wonder if that one worker will start to be replaced by a robotic driver as well.

          • GoneFishing says:

            Yes, robotics has become a replacer everywhere. No need for AI to take over, they replace us and make the ones left work harder. It’s not just robotics, this started with advances in communication technology and electronics. Gone are the telephone switchboard workers, the railroad switch tower got replaced, it’s all radio and phones now from central computer bases that run several small railroads or large parts of big ones.
            Of course everyone knows about assembly line jobs, robots and computers doing most of the work. But those annoying automated check-outs at retail stores where one person oversees five or six registers, they are cutting down on jobs.
            “The “automation bomb” could destroy 45 percent of the work activities currently performed in the United States, representing about $2 trillion in annual wages, according to a study last year by the consulting firm McKinsey & Co. We’ve seen only the beginning of this change, they warned. Currently, only 5 percent of occupations can be entirely automated, but 60 percent of occupations could soon see machines doing 30 percent or more of the work.

            The McKinsey analysts sharpened their argument in a paper released last month. Their estimates, based on U.S. Bureau of Labor Statistics data covering more than 800 occupations, draw a shocking picture of the future. In manufacturing, 59 percent of activities could be automated, and that includes “90 percent of what welders, cutters, solderers and brazers do.” In food service and accommodations, 73 percent of the work could be performed by machines. In retailing, 53 percent of current jobs could be lost.”

            Yes, the robots are winning already and they don’t even have to be very smart. But if they do get slightly “smarter”…
            “White-collar workers may imagine that they’re safe, but that’s wishful thinking. If computers can be programmed to understand speech as well as humans do, 66 percent of jobs in finance and insurance could be replaced, the most recent report says.”

            What is not evident are the jobs that never happened because of robotics and computers, not just the jobs lost. I can say that in my area robotics and computers allowed the exclusion of an additional 300 to 400 percent growth of people hired as the company grew in size over the years but did not have to grow much in employees. Also the number of managers and supervisors can be cut down.

            • Caelan MacIntyre says:

              Perhaps this a kind of self-cannibalization of the crony-capitalist plutarchy ‘economy’– a kind of eating itself out of revelance, tail-first (fringes-first).

              IOW, the robots(/robot-owners) better start paying (more) governpimp taxes soon. ‘u^

              A much cooler way to say relevance, usually spoken through an internet chat medium
              I’m still waiting for the revelance aspect of the situation

          • me says:

            A lot of the services industry is about to get hammered.


            Retail sales, warehouse and trucking jobs are quickly vanishing. Health care is booming on the other hand.

        • me says:

          This idea is based on the false premise that slaves were biological batteries, like the humans in the movie The Matrix.

          Actually human slaves in the 19th century were mostly doing fiddly things with their hands that are now done with machines that hadn’t been invented at the time.

          Technological innovation and politics drove more of the changes in slave populations.

          Eli Whitney’s cotton gin eliminated the need for many slaves, but produced new demand for cotton pickers. Poor farming practices in Virginia ruined the tobacco industry, so slaves were sold “down the river” to pick cotton around the southern Mississippi. Cheap Prussian Blue dye from a new process created by Hessian chemists destroyed the South Carolina indigo business about the same time, so the big Eastern slave populations were in steep decline decades before the American Civil War broke out.

          Slavery was heading South and West by the 1840s, out of sight and out of mind. Meanwhile urban white workers in the Northeast were afraid that freeing the slaves would depress wages, so there was little political pressure to end it. That political calculation changed when the slave owners turned traitor.

          I’ve often wondered if the rebels troops wore undyed grey wool uniforms instead of blue because they couldn’t or wouldn’t import the blue dye that killed the old South Carolina plantation culture and led the old aristocracy to revolt against the modern industrial world. Armies were the biggest customers of indigo.

          • Caelan MacIntyre says:

            This makes me think of disruptive effects on large-scale monocultures and monopolies and the like, with the key prefix being ‘mono’– a point being that ‘disruption’ is more likely to happen in non-resilient systems and contexts.

            Edit: They are their own disruption.

    • Survivalist says:

      Thanks for that comment Rune. I’m extremely interested in future trends in oil production and pondering how the various responses by nations/states/corporations/communities will play out. I heard someone once say that the market solution to peak oil is that a few billion people get to starve. Perhaps that is true. Any anthropologist will tell us that people steal before they starve. Peace likes a full plate; grub before ethics, and all that. I really like your data driven analysis. If you ever feel like you have any insight into how the ‘human factor’ will play out please don’t hesitate to share. The potential human response to this impending predicament is extremely interesting.

    • Rune Likvern says:

      The article linked below from Mises Institute contained a chart (the first one that prompted me to superimpose (overlay) development in total global energy consumption since 1820, from 1965 from BP Statistical Review 2016, pre 1965 from Smil, biomass from Fernandez.

      Note how specific energy consumption (energy/person) started to grow with the industrial (fossil fuel) revolution and and really took of in the 60’s.
      Keep in mind;

      Malthus died in 1834.
      Haber-Bosch process successfully developed for industrial scale in 1910
      Due to its dramatic impact on the human ability to grow food, the Haber process served as the “detonator of the population explosion”, enabling the global population to increase from 1.6 billion in 1900 to today’s 7 billion. Nearly 80% of the nitrogen found in human tissues originated from the Haber-Bosch process

      The green revolution in the late 1960s
      After the Second World War, increased deployment of technologies including pesticides, herbicides, and fertilizers as well as new breeds of high yield crops greatly increased global food production.

      Rosling’s projections are based on the continuation of 2 important fundamental drivers of economic growth
      1) That the energy resources and flows will be there
      2) Acceleration in debt growth that took off in the 1970’s will continue

      Chances now are that global energy production will slow and is soon likely to start to decline and debt growth cannot continue much longer.

    • Nathanael says:

      I’m with you on this, Rune.

      However, I think the key missing point in these analyses is the *substitution effect* on demand.

      Electric car demand is growing exponentially. Particularly in China, where in the major cities, to get a gasoline car, have to enter a license plate lottery with low odds of getting a car registered — but all electric cars can be registered immediately. (In addition, practically all new city buses in China are electric because the national government will only provide subsidies to local agencies for electric buses now, not for fuel buses.)

      Even without such extreme pressures as this, electric vehicles are uniformly cheaper to operate than gasoline vehicles even at $40/bbl oil, and are typically lower on Total Cost of Ownership for high-mileage applications. And of course they’re nicer in every way. As upfront purchase price for EVs drops (which is happening fast), it’ll soon be insane to buy a gasoline car.

      So basically electric vehicle sales will be production limited. The resulting drop in oil demand depends on how fast the manufacturers can spin up the factories and production lines. It also depends on the miles-driven-per-year and fuel economy of the displaced gasoline cars. Unfortunately I don’t have a good model for any of these three!

      My really dumb model assumes 13476 miles/year and 25 miles/gallon for the fleet being retired, which is 539 gallons/year for each car replaced. If we ignore everything else produced from a barrel of oil this means about 28.37 barrels per year of demand drop per electric car sold; less demand drop if the demand drop comes out of something like condensate which produces more gasoline out of each barrel.

      Anyway, the dumb model assumes 1 million electric cars per year in 2018, doubling each year thereafter. So a 28 million barrel per year drop in 2018, 113 million in 2020, 454 million in 2022, 1815 million in 2024, 7262 million in 2026, etc. Crude oil consumption is in the ballpark of 90 million barrels per day, which is 32650 million barrels per year.

      Based on the dumb model, it looks to me like 2025 is around the time when the demand destruction from electric cars starts exceeding the oil supply decline from depletion. (It hits 11% of the current oil demand.) This should cause catastrophic collapse in the oil business. By 2030 gasoline demand should be essentially nonexistent.

      While demand for other oil products will likely still exist, there will be downstream bankruptcies everywhere as the refineries are mostly optimized to produce gasoline; the ones which retool early to maximize aircraft kerosene output should be the survivors. Upstream will be a financial bloodbath, of course.

      Obviously I could have the rate of production growth of electric cars wrong (in either direction, since this is at the precision level of wild-ass guess). High-miles-per-year and low-mpg gas vehicles may get replaced first, which will make oil demand decline more quickly in the near term. On the other hand, increasing numbers of people in India and China buying cars who never had cars before could slow down the transition (if electric cars remain production limited)… but not by much. The incredibly long waiting lists for Teslas mean that other companies will be scrambling to get into the market, so I probably have underestimated the growth rate in the later period; it’ll take each new company 5-10 years to really start making cars, but come 2025 lots of them will be operating, which should mean increased growth.

      Another source of error in the dumb model is possible accelerated decline due to the fast-decline oil wells like the fracked ones. If decline rates accelerate to 20% or more, it’ll take another year before elecrtric car adoption rates exceed those decline rates.

      I predict that oil prices will crash through the floor a few years BEFORE the electric-vehicle-induced demand decline exceeds the supply decline, because investors and futures traders are forward-looking, and it’ll be really obvious by 2023 or 2024 what’s happening. Nobody will want to be stuck with the soon-to-be-cheap oil.

      Anyway, there’s a window for a possible oil supply shortage, and for oil prices to go high, between 2017 and 2025. With a 2-4 year pause before a FID, and some time to actually drill, if oil prices went high in 2017, and this caused investors to decide to do more drilling, the new wells might be producing in 2020. Given that oil prices are going to be crashing by 2024, this would give a very short window for profitability, so anyone who does this is a sucker.

      • shallow sand says:

        Good for the environment, bad for my community, where the job losses will be tremendous.

        Over 800 direct refinery jobs, another 200 full time refinery contractor jobs, plus 500-2000 periodic turnaround jobs. Additionally will remove hundreds of rental properties utilized during turnarounds, and therefore will put some in foreclosure. Will also reduce the number of construction workers who maintain the rentals.

        Additionally will lose another 100 upstream jobs and will end about 40 small upstream businesses. Will also put two supply companies out of business, another 25 or so jobs. There were more upstream jobs and supply company jobs, maybe 1/3 have disappeared since 2014.

        Our school district and local governments will lose over 35% of property tax base.

        We already lost 50 jobs and a couple percent of our property tax base when our small power plant (coal fired) was decommissioned due to new environmental regulations.

        Of course, another concern is the 700+ jobs at the auto factory one hour away, plus the 2,000+ jobs at the various auto parts suppliers located 1/2 to 1 and 1/2 hours away. Many in our county work there. Maybe those will be retro fitted for electric cars?

        Of course, when the self driving semi trucks become commonplace, there go another big chunk of jobs here.

        This is in one small county. I do not necessarily disagree this is coming. I also agree that there will be offsetting benefits in other communities, not sure whether there will be a one to one offset.

        Not necessarily complaining, so please, please do not attack me for pointing the above out. Maybe suggestions on how my small community should prepare for your scenario. Maybe description of offsetting job gains? I understand the environmental benefits, assuming all the electricity can be produced via wind, solar and other renewables.

        All would not be lost, we would still have our other two factories, Walt-Mart, prison, hospital, schools (with reduced enrollment). A town near us lost their refinery 25 years ago, population has dropped about 1/3.

        You do agree, I assume, there will be massive jobs lost as a result of the end of ff industries. The CEO’s of those organizations may not be sympathetic, but maybe the rank and file are? They all can’t get jobs installing solar panels I presume. So what should they do?

        In summary, will the end of ff hurt the economy, while helping the environment?

        • Greenbub says:

          Shallow, always good to hear from you. Demand for crude is going UP and production is going down. Oversupply is almost over. I drive a 2003 VW golf gasoline powered car. That is not changing for me or a lot of other people anytime soon. By the way, did you ever see any figures on how many stripper wells were shut in over the last two years?

          • shallow sand says:

            Greenbub. I haven’t seen any shut in stats, but do know that the number of stripper wells increased from 2012 to 2015.

            This is because, of course, all US onshore wells become stripper wells eventually. Every shale well will be someday, and many already are.

            API 9.3 million inventory build. Looks like we need to take another dive to get OPEC and Russia serious.

            • Watcher says:

              hard to get a look at US consumption on a weekly or monthly basis. EIA has some stuff that isn’t comprehensive. We know consumption has been up last year or two from mazamascience.

            • shallow sand says:

              Greenbub. Go to the Interstate Oil and Gas Compact Commission website. Has many stats on stripper well production, shut in wells, etc. thru 2015.

        • Hickory says:

          Good points. It appears that there will be a huge degree of disruption over the next decade. buckle your seatbelt.

        • islandboy says:

          You do agree, I assume, there will be massive jobs lost as a result of the end of ff industries. The CEO’s of those organizations may not be sympathetic, but maybe the rank and file are? They all can’t get jobs installing solar panels I presume. So what should they do?

          Shallow, while I can’t answer for Nathaniel, I can offer my island perspective. The major sources of employment on my island have been agriculture, tourism and commerce. Big money earners have been bauxite mining/processing entertainment and more recently sports, the latter two being areas where a small number of people have done very well for themselves (you might have heard of Bob Marley and Usain Bolt).

          In terms of agriculture, Jamaica was a very important source of sugar for the British empire with the island being dotted by a sizable number of sugar estates using slave labor. After the abolition of slavery in 1831, the sugar industry remained a big employer of newly freed slaves although some refused to work for their former masters, resulting in the introduction of Chinese and Indian indentured labor (the original source of ethnic Chinese and Indian communities in the island). Fast forward to today and only a handful of Sugar factories remain in operation unable to successfully compete with larger scale, mechanized operations in countries like Brazil or sugar beet operations in Europe. A newspaper article from September 2015 carried the headline “Sugar in serious trouble” listing heavy losses in both the sugar and rum sectors. The situation has not improved AFAIK and unlike in the seventies, when the government used revenue from bauxite mining royalties (more on that to come) to nationalize the sugar factories and keep them running at a loss to save jobs, there is a real risk that more factories might close and that factories that have suspended operations may never resume. What are the workers, some of whose families have worked in the industry for generations, to do?

          According to a web page at the web site of the All Island Banana Growers Association, “Jamaica was the first commercial producer of bananas in the Western Hemisphere. The country’s export trade began in 1866.” Again, competition from much larger scale operations, adverse weather (hurricanes, droughts), plant diseases and labor disputes have wreaked havoc on the industry, now a shadow of it’s former self leaving it struggling to survive. What are former banana workers to do?

          According to this web page “by 1957 Jamaica had become the number one bauxite producer in the world with nearly five million tones, almost a quarter of all the bauxite mined in the world in that year.” and “By 1974 Jamaica had become the world’s fourth largest producer and second biggest exporter of alumina.” Fast forward to today and Jamaica is not even in the top five bauxite producers, coming in at number six, producing eight times less than the leading producer and half of the amount produced by the number four and five producers. Last year I posted a fairly long comment, detailing the fortunes of the island’s bauxite/alumina industry over the years. In the case of the bauxite/alumina industry, wages are on average much higher than other sectors of the Jamaican economy but, in 2008 many workers lost their jobs when three of the four alumina plants were closed following the GFC. Following the purchase of one of the shuttered alumina refineries by Chinese interests, there is much hope in the surrounding communities that economic activity will recover when the plant reopens.

          Kirkvine, another closed plant close to a major town, reputed to have the most pleasant climate because of it’s altitude, on the top of a hill, is unlikely to be so lucky. The word is that the only other plant that has resumed operations, has been using that plant as a source for spare parts so, getting it back in operation is going to be a major undertaking. Bauxite mining is still underway in the region that used to supply the Kirkvine plant but, the alumina production is happening at a plant on the plains to the east of the town. As a result, all the support services that were built up to support the mining and the alumina refinery still have customers … for now but, it is unlikely that the town is as prosperous as it used to be, following the loss of all the high paying jobs at Kirkvine.

          Jamaica produces what is arguably the finest coffee in the world as well as chocolate beans that are favored for use in blending with beans that lack the desired flavour from large volume producers. Fluctuating prices have brought booms and busts in coffee and chocolate, with periods of high employment followed by abandoned acreage and job losses.

          So, I guess my point is that, anybody who has never faced losing their job in tough times is extremely fortunate as US steel, textile and autoworkers will testify. I myself have seen two of my jobs go obsolete and saw the writing on the wall for a third. The good thing about the oil business is that it is unlikely to go belly up overnight. I have come to view this whole Peak oil scenario as an incredibly slow moving train wreck, giving occupants on the train plenty of time to bail, once they recognize what’s happening. Of course, there are those who will choose to ride the train till the end, denying that a crash is in progress. Deniers will have to face the consequences.

          • Nick G says:

            Well, look around you, and ask – what work needs to be done? I’m sure you’d say there’s a lot, including much more and better housing, roads, education, healthcare.

            Then ask, what’s in the way of people doing that work? I don’t have an easy answer, but I think that might be a useful question to try to answer.

            For instance, job skills are basic. Who runs the schools, and how’s their management and planning?

            • islandboy says:

              Then ask, what’s in the way of people doing that work? I don’t have an easy answer, but I think that might be a useful question to try to answer.

              Quick and easy answer: The money to pay for it.

              It would seem that in many instances the people with the money would rather take a risk with the off chance that they’ll get a good return on it than spend it on the common good with no chance of recovering anything (IOW paying taxes). 😉

              • Caelan MacIntyre says:

                “Then ask, what’s in the way of people doing that work? I don’t have an easy answer, but I think that might be a useful question to try to answer.” ~ Nick G

                “Quick and easy answer: The money to pay for it.” ~ islandboy/Alan

                (Quick and easy) Good answer: (The money to pay for it)


                So real government/real, plural anarchy/community, as opposed to the relatively-internal, non-plural anarchy/governpimp gangs we seem to have now that we mistakenly call ‘government’.

          • Caelan MacIntyre says:

            What are we to do?

            Don’t be traitorous for one.

            Take our lips off the plutarchy’s priapus for another. It’s diseased, and some seem to have caught it pretty bad. You can see it all over their lips (and writing), and it’s contagious.

            And get back to the land, pronto, such as beyond the rape of Jamaica with mines, monocultures and mindless menialities…

            We have our Mango fable on POB, but you won’t seem to have any of it. Why’s that? Do you have some kind of illegitimate status on Jamaica and/or a stake in her continued rape?

            Babylon System: The Continuity of Slavery

            “It’s all there in ‘Babylon System’ by Bob Marley. The song condemns the uncompensated labor… It demands repayment or reparations… They must rebel to regain it: ‘Got to rebel, got to rebel now’, Marley sings…

            In this paper I examine slavery as a continuing problem. I understand slavery in a broad sense, as the archetype of unfreedom. Although slavery has always existed, predating all other forms of coerced labor, I focus here on modern slavery… that came into being with the European conquest of the Americas and the subjugation of Africa.

            Since freedom does not extend to the working day, the term ‘wage slavery’ is not a neologism, but a relatively accurate characterization of everyday labor relations, especially where work is less skilled and more akin to the mass labor of early and industrial capitalism.

            Early ‘free’ workers on both sides of the Atlantic strenuously sought to distinguish themselves from the ‘unfree’ workers who supplied their workplaces in Bristol, Manchester, Lyons, Amsterdam, Boston, or Lisbon with primary materials like tobacco, cotton, or sugar

            It may be particularly useful to realize that the exploitation and domination experienced around the world today was forged in the system of slavery. Slavery was after all the first transnational capitalist enterprise.

            Think of the ‘Joe Sixpack’ type who goes off to work each morning with a bumpersticker on his car that reads (in bitter jibe at Disney’s seven dwarves) ‘I owe, I owe, so off to work I go.’. He is expressing in these few words, however unconsciously, his ongoing vulnerability, his identity with maquiladoras in GM plants in Ciudad Juarez, sweatshop workers at sewing machines in New York’s Chinatown, and makers of computer chips in Saigon. They are all wage-slaves.

            Of course to say this is to run the risk of ignoring the very serious distinctions in status between the situations of ‘northern’ workers- often white, male, unionized, citizens, protected by some form of labor regulation, etc.– and those of ‘southern’ workers who are nonwhite, undocumented, or perhaps chained to a carpet loom somewhere. Yet in ending this paper I would prefer to stress the commonalities that extend across all these conditions. Chief among these is the legacy, indeed the continuity, of slavery, the ‘Babylon system’.”

            Babylon System

      • Ralph says:

        I think it is impossible to predict future supply of electric vehicles, but there is no doubt that in the UK at least there is a huge suppressed demand for them, once they reach practical range and prices. These days people talk about when they become mainstream, not if. That is a huge change in social perception in the last five years.

        My (family of four) have owned my Leaf for 6 months now, and the old diesel is only used about once a month for longer journeys or to stop the brakes seizing up. At 24KWh it is already yesterday’s technology, with new electrics being between 30KWh and 42KWh (Unfortunately the 60KWh Bolt won’t be sold here). It has a 100 miles range under ideal conditions, which in practice means upto 80 miles at freeway speeds or in winter, and with recharge points 30-50 miles apart, it makes long journeys a logistical exercise with a significant fear of being stranded, and significantly increased journey times. With a range of 180miles+ the new (and slightly cheaper) Renault Zoe removes almost all of these drawbacks for longer journeys by adding a lot of flexibility about recharge locations, number of recharge stops, and the option to trade range for speed.

        Whilst it is still twice the price a of a basic cheap car, it is certainly no more expensive (after subsidies) than a mid-range car, and is dramatically cheaper to own and run, as well as being much easier and nicer to drive, which makes it a no-brainer for many of the UK car buying demographic.

        One more iteration of range and price improvements will see electric cars as a practical and desirable choice for at least a majority of the UK new car buyers.

        • Toolpush says:

          Ralph, and any other electric car drivers/experts.

          I have been wanting to ask someone this question for a while. This seems a logical point in time.

          When does an electric car go into re-gen braking?
          1/ Is it as you lift off the throttle or
          2/ When you first apply the brake pedal?

          I see the Bolt has a hand lever for re-gen braking, which seems to me a very good idea. Having driven electric forklifts, they seem to re-gen as the throttle is eased off. This can make for a rather jerky ride on part throttle, unless you extremely careful. How does an electric car drive? Is sounds to me they are most likely designed to run on cruise control, something that I never use.

          And on the same theme, do the hybrids work the same?

          Thanks in advance.

          • Jeff says:

            Re-gen starts when the throttle is eased off. On some models (all?) you can adjust the setting from “brake” (good going downhill) to “very gentle”.

          • Fred Magyar says:

            Hey Tool push I wasn’t too sure myself so I did some digging.
            Seems regen braking on electric trains has been around for almost a century. Different forms of electric transport have different versions.

            In any case here’s some info from the TESLA forum:

            Regenerative braking – how does it work?
            Submitted by steveg1701 on Mon, 2015-12-07 20:27
            I know that when you take your foot off the go pedal then it engages the RB mode but what about when you press on the brake? Does the friction brake assist the RB or does it become the only braking mechanism?

            jbunn | 7 December, 2015
            Not quite.

            If you have regen turned ON, it regens whenever your foot is off the go pedal. The brake pedal just provides additional braking if needed, but regen is always working.

            AoneOne | 7 December, 2015
            Also, regen isn’t all or nothing. Instead, it’s controlled by the accelerator pedal: regen increases gradually as the pedal is released, just as acceleration is increased as the pedal is depressed.

            This is the secret of one-pedal driving. Except for coming to a complete or sudden stop, your foot never leaves the pedal.

            • Eulenspiegel says:

              I have an electrike bike with regenerative braking.

              There it is coupled to the brake – when you press it softly, only the motor recharges the battery, pressing it more activates the mechanical brakes. After 4000 miles I’m still on my first set of braking shoes, normally I have to change every 1000 miles.

            • Toolpush says:

              Thanks All,

              So it appears re-gen is effected by the throttle position, and the brake pedal only operates the friction brake. Not sure why the concept of single pedal driving is considers good. I have driven hydraulic drive vehicles, not cars, with one pedal forward, one pedal reverse. It was not nice, control was very difficult to master. EVs will have to be a big improvement if they are to be considered an advance.
              As I stated before, I feel these systems are more designed for cruise control type driving, rather than human inputs. From what I have seen on the roads, not many people have good throttle control as it is.
              Does anyone have real life experience on how EVs are to drive?

          • islandboy says:

            Hey Toolpush, If you’re really interested and you have the time, a British television actor Robert Llewwllyn has a youtube channel Fully Charged Show and has reviewed just about every plug in he can get his hands on including one or two one off, technology demonstrators (eg. a Rolls Royce). Llewellyn is not a gear head so his reviews are pretty good for non gear heads. There are also many other youtube channels that review EVs so you can sort of take your pick.

            Right now each manufacturer is implementing regenerative braking differently. Tesla is basically on or off (mild or strong), Nissan I think is the same except that the brake pedal modulates the amount of regen as well. I don’t recall how GM did it for the Volt but IIRC they are implementing a couple of different settings for the Bolt. Volkswagen has three stages of recuperation from mild to harsh as well as off for their e-Golf and BMW has their own implementation.

            I have taken Test drives in the Tesla Model S more than once and it is a really easy, pleasant car to drive. I highly recommend that any one who is curious about EVs take one for a test drive. Tesla is particularly keen to get people behind the wheels of their cars so it’s very easy to arrange a test drive and I can’t ever recall being asked “So, when are you thinking of buying the car?”

            It’s quite a mixed bag really.

  6. islandboy says:

    IEA still low-balling solar growth, says Energy Watch Group

    The EWG’s president Hans-Josef Fell added: “In the last 10 years, the IEA has been making misleading projections for solar PV and wind, as well as e-mobility, ignoring the radical price fall in these sectors. This appears as an attempt of protecting fossil fuel business that has come under economic pressure.

    “We call on the IEA to urgently review its assumptions and to finally make realistic projections in its forthcoming World Energy Outlook.”

    The IEA’s World Energy Outlook is due to be published on November 16, and the EWG has affirmed that it will be closely assessing the projections laid out in the publication for evidence of further obfuscation of renewable energy’s growth and progress.

    Hans Josef Fell along with the late Hermann Scheer, co- authored the German Renewable Energy Act which was enacted in 2000 so he should have considerable experience in these matters. Good to know that he is still around, fighting the fight!

    • Oldfarmermac says:

      Hi Island Boy,

      Those of us who have been looking at the work produced by any large government agency with a cynical eye for a few decades virtually always come to the conclusion that such agencies turn out results that first and above all are written in such a way as to tell the powers that be what they want to hear.

      So the Ag Department turns out work that pleases the congressmen from the farm states, and the businessmen who own the food processing and distribution industry, which dwarfs the actual food production industry.

      It would be naive to expect any other result.

      It takes years and years to get well established facts translated into labeling on food, and getting such facts acted on as label recommendations or actual regulations can take decades.

      So we don’t have an upper recommended limit for sugar in our diet, the way we do for salt or saturated fats, etc.

      But fortunately a few of the smaller but still critical agencies such as the National Institute of Health are protected from the worst of the partisan influences due to being important to EVERY constituency, at some level. So a researcher or doctor working for such an agency can say what is on his or her mind, part of the time at least. for the most part.

      And most tenured professors in the hard sciences tell it like it is, which is fortunate indeed.

      I wouldn’t hold my breath waiting for the IEA to change it’s ass kissing ways.

      But the agency WILL change its ways when the discrepancy gets bad enough, and the public gets interested enough in renewable energy, that the comedians on tv start making fun of the agency and it’s ridiculous predictions.

      That will be any decade now. 😉

      But for now the fossil fuel industries, and their political allies, can easily afford to spend many times more on electing lap dog politicians as the renewable energy industries can afford.

      • islandboy says:

        First, let me apologize to all those focused on the supply side for posting my demand side comment above. I just assumed that the Open Thread was Non-Petroleum and from the looks of some of the other comments, it looks like I’m not the only one. Rune’s post at the top should have been a giveaway but, c’est la vie.

        Secondly, one reason I thought my initial comment was worthy of a post here is that, it is the first time I can recall that any one at the level of Hans Josef Fell, has ascribed a motive to the actions of the IEA, as in :

        In the last 10 years, the IEA has been making misleading projections for solar PV and wind, as well as e-mobility, ignoring the radical price fall in these sectors. This appears as an attempt of protecting fossil fuel business that has come under economic pressure.

        Fell’s late compatriot, Hermann Scheer was as vocal a proponent of renewable energy as I have ever heard, a virtual loose cannon and I can’t recall him ever being on record saying that, the IEA is “protecting fossil fuel business”.

        Finally, this all dovetails pretty nicely with Rune’s 10/31/2016, 4:41 pm comment. It has occurred to me before that, the abolition of slavery in the the Americas was more about the replacement of human slaves with mechanical, fossil fuel powered, slaves than any “struggle for freedom”. From Wikipedia,

        The Industrial Revolution was the transition to new manufacturing processes in the period from about 1760 to sometime between 1820 and 1840. This transition included going from hand production methods to machines, new chemical manufacturing and iron production processes, improved efficiency of water power, the increasing use of steam power, the development of machine tools and the rise of the factory system.

        The fact that slavery was abolished towards the end of the industrial revolution seems to me to be too much of a coincidence.

        The IEA’s continuous low balling of renewable growth projections strikes me as disingenuous, to put it mildly, especially taken against the background of often overly optimistic projections for FF production. Fear of being embarrassingly wrong about optimistic projections for renewables cannot be an excuse since, they are embarrassingly wrong about oil production all the time. How much more embarrassing would it be if they were wrong by being too optimistic about renewables?

        Growth in renewables, solar PV in particular, has outstripped all but the most optimistic projections and R&D spending on technology like perovskites, could bring about even lower cost and higher growth than current optimistic projections envisage. If renewables continue to outperform conservative projections by wide margins, how long will it take for the public to start ignoring the forecasters that were wrong and start paying attention to those that have been on target?

        How Fast can solar grow? Germany installed somewhere between 2 and 3 gigawatts f solar PV in one month back in December of 2011. In my island nation, ground was broken on a supposedly 20MW solar farm in July 2015 and when I paid a visit to the site at the beginning of August, construction was complete and they were starting to test. To the best of my knowledge, it is now fully operational and using on-line estimation tools, I have estimated that the total available capacity may be closer to 30MW. Another solar farm is slated to begin construction shortly and when complete will more than double the island’s utility scale PV capacity. Add the estimated 30MW of private, distributed PV and you’re looking at 90MW which, if multiplied by six, would meet, if not exceed the island’s peak, mid day electricity demand (the actual peak is after dark).

        IMO there is a distinct possibility that renewables will soon begin to have a measureable impact on global energy production, if that is not already the case. The longer it takes for global oil production to begin in earnest, the less of an impact the decline will have, due to the uptake of renewable energy (wind and solar) and increasing availability and use of EVs.

        • Nick G says:

          The fact that slavery was abolished towards the end of the industrial revolution seems to me to be too much of a coincidence.

          Fossil fuel didn’t affect farms much until the 20th century. In fact, demand for hand labor on the farm grew during the period before the US civil war, due to improved methods for processing cotton.

  7. Longtimber says:

    Around 33 mins – Current Illusions of Energy and Money,
    Silver’s role on our Energy Future, Required EROI to support our Energy Diet, Gubbermint parasites, Dollar Pollution, Deep State, Shadow gov, No need for Taxes, Unlimited Fiat Paper instead, Lawyer disease, Race for Anti-dollar assets, Russia will have to send us aid. — Confused yet?

  8. HVACman says:

    A few weeks ago, someone noted the conspicuous absence of several former “regulars” on the PO forums. One mentioned was Jeffrey Brown (aka “westexas”), famous for his Export Land Model. I just saw a “westexas” comment to a Kunstler article post in the Peak Oil News forum at peakoil.com. Looks like Jeffrey has been staying below the radar, but not completely off the battlefield.

    Which brings to mind – I wonder what the current ELM numbers look like with the world’s continuing high production numbers? Sticking close to predictions?

    • Watcher says:

      Largely crapola. Reserves write down is economic. The oil is still there.

      And if shale producers can borrow in order to fund executive production bonuses, Exxon borrowing to pay dividends to little old ladies is immoral . . . how?

    • Nathanael says:

      Road to bankruptcy. I’ve already predicted that ExxonMobil will declare bankruptcy before 2030.

      Borrowing to pay dividends is certainly legal, but it means the company is financially unsustainable. They’re hoping the losses are temporary; they’re betting on either (a) higher oil prices or (b) more cheap-to-produce oil. They won’t get either.

      The Chatham House report apparently says that the oil majors are “faced with the choice of managing a gentle decline by downsizing or risking a rapid collapse by trying to carry on business as usual.” They chose rapid collapse, of course.

  9. Nathanael says:

    From the corporate finance end, these are the big news points.

    First, the oil majors are in terrible shape, financially speaking.

    They’ve *finally* given up on burning their profits on exploration. Mostly.

    Second, drilling is being perpetuated primarily by “zombies”. Still a lot of unprofitable wells being drilled. So supply will remain excess even though nobody’s making any money off it.

    Finance should dry up completely within a year or two, once the banks realize that they’re throwing good money after bad. The banks can be remarkably stupid, however, so it’s not clear how long this will take.

    The “fracklog” will pour supply into the market for a few years.

    So I’m expecting a supply glut for a couple more years. This should be sufficient to keep prices down. By 2018 oil demand should be quite definitively declining: it’s already cheaper to operate battery-electric vehicles than gasmobiles even at current oil prices and it will become even cheaper as time passes; and China is accelerating the transition through aggressive government policy. Declining demand and persistent oversupply should keep prices low enough to bankrupt nearly everyone and that should *eventually* cause the end of exploration for oil, though it remains to be seen how long irrational, money-losing exploration will continue.

    I’m still working out NG demand. NG demand will decline when new solar becomes cheaper than operating old gas turbines for electricity, and we’re almost there in Dubai already. There will be a further demand drop as heat pumps become cheaper to operate than gas boilers, but it’ll only kick in as people replace their heating systems so it’ll be slower.

    NG actually faces an upcoming transportation pricing issue which will help knock it out of the market, similar to coal. Coal can cost nothing at the minehead and still be too expensive at the power plant thanks to transportation costs; this is one of the major forces driving coal power out of the market (you’ll note the plants are closing basically in order of how far away they are from the mines). NG pipelines are cheaper than coal trains, but they still add a huge amount to the cost. This transportation cost does not respond to supply and demand, so there’s a floor on price-at-point-of-delivery even if there’s a massive supply glut. As soon as new solar or wind, or a heat pump, becomes cheaper than the transpo cost, you get substitution. Electricity transportation costs are also substantial but tend to be lower, *particularly* for solar power which can be distributed.

  10. aws. says:

    Canadian Bakken

    Saskatchewan to drill most oil and gas wells in 2017, says PSAC

    By Kyle Bakx, CBC News Posted: Nov 02, 2016 5:21 PM ET

    Oil and gas drilling expected to rise in 2017, but only slightly, according to PSAC

    “Saskatchewan will outperform Alberta in wells drilled for the first time in the 36 years I’ve been in the industry and probably the first time ever,” PSAC president Mark Salkeld told CBC News. “It’s a drive to get the wells drilled, completed, producing and getting cash. It’s a hole-making factory that they’ve got going on down there.

  11. George Kaplan says:

    Bllomberg report – as clear as mud:


    “International oil companies will probably cut investment spending about $370 billion this year and next, according to Wood MacKenzie Ltd., just as the United Arab Emirates warned about a “massive” number of projects being delayed because of the drop in crude prices.
    The investment cuts will mean a 3 percent reduction this year in oil and natural gas production, equivalent to 5 million barrels of oil, and another 4 percent, or 6 million barrels, in 2017, Jessica Brewer, a Middle East analyst for WoodMac, said in an interview at the company’s Dubai office Thursday. The global oil industry has postponed a number of projects, raising the risk of a slump in output and a potential shortfall in supply, U.A.E. Energy Minister Suhail Al Mazrouei told reporters in Abu Dhabi Thursday.”

    They are talking about oil and gas combined and say so, so why convert to equivalent oil to confuse everybody. I think cuts in 2015/2016 wouldn’t lead to that sort of drop so quickly.

    And then:

    “Spending cuts in capital investment and deferred projects will amount to $1 trillion for the period from 2014 to 2020, according to WoodMac. By the end of the decade, those projects that didn’t go ahead will account for the equivalent of about 3 million barrels a day of supplies. Most Middle Eastern producers have moved ahead with projects, Brewer said.”

    Most ME producers moved ahead with projects but UAE says a massive number have been delayed. But that doesn’t seem such a big deal as $370 billion cut leads to 3% and 4% drops in successive years, but a $1 trillion cut only to about 1 to 2% over 6 years.

    Anybody know what the hell they are really trying to say here?

    • Jeff says:

      I guess they want to talk prices up?

      My guess/interpretation:

      “3 percent reduction” = this years’ oil and gas extraction will be 3 percent lower than last year.

      “projects that didn’t go ahead will account for the equivalent of about 3 million barrels a day of supplies” = projects will be put on hold (probably temporarily) equivalent to 3 million barrels a day between 2014 and 2020. The actual production will decline with more than 3 million barrels a day when also considering old production/decline due to depletion.

  12. Enno Peters says:

    I’ve a new post on the Eagle Ford, here.

    • Reno Hightower says:

      Great work enno

      Have you done any work on the Haynesville?

      • Enno Peters says:

        Thanks Reno,

        I haven’t really. However, at least I should cover the Texas part of Haynesville.
        If you
        1. go to my latest US presentation
        2. in the total production overview select only the basin “Other (TX)”
        3. Select “show production” by “formation”

        => you’ll see the other main formations in Texas, outside the Eagle Ford & Permian.

        However, this doesn’t show Haynesville. I still need to figure out exactly which fields & formations are included in the Haynesville basin, right now these formations may be unassigned (and therefore displayed under “Unknown”).

        I’ve also looked at adding Louisiana to my data. Although a lot of data is available, similar like Texas it is A. difficult to get everything and B. production is also reported per lease, not by individual well, and therefore it will require some effort to make good individual well production estimations. Maybe in the future.

    • George Kaplan says:

      It looks like the completions are coming down to be about the level of spuds – i.e. the DUCs will reach a steady state working inventory I’d guess around 250 (below which the drilling and completion crews would not be able to work independently) with 45 to 40 oil wells drilled per month, maybe a few more if rigs are added. There was a Bloomberg report in September indicating around 460 DUCs, and a Drillinfo one in June giving around 580 so the DUC numbers are coming down quite quickly by those and the wells completed per month are also on a falling trend. The permit count will be interesting to check as well over the next couple of months.

  13. Watcher says:

    A lesson at $44/b.

    Don’t predict oil prices.

    About a week or two ago there was an avalanche of analysis (here) of what was going to happen as oil’s price rose.

    No one seems (ed) to want to do an analysis of what happens as oil’s price fell. How very interesting. Where are the graphs of what it all looks like at $28/b for . . . however long it takes to destroy the US.

    Pretty sure we have evidence of US oil production falling, btw. And now oil’s price declines. You’d almost think supply and demand is not determining price. Gasp.

    • Survivalist says:

      What determines price if not supply and demand? Market sentiment perhaps to an extent. If anybody knows what OPEC is going to say and do I’d guess they have a pretty good shot at predicting price.

      • Watcher says:

        Suppose you were a government trying to inflict pain on another country.

        Suppose you sold oil, and when a price was bid you said — that’s an acceptable bid, but we are willing to sell for less. So our price is lower than what you bid.

        The bidder does a jawdrop and accepts the price and pays it.

        And down goes the price.

        Look up predatory pricing.

        • Survivalist says:

          Thanks for the reply. Who do you think the countries are in your story. I’d guess you’re perhaps referring to Saudi Arabia as the seller. Who do they wish to inflict pain upon in your opinion; USA, Russia, Iran, all of the above, all oil sellers/the competition? Why do you suppose they do this? What’s in it for them? To what end do you feel they are doing this? Do you think they are achieving they’re objectives? Sorry about all the q’s. I’m just curious what you think about the motives.

          • Watcher says:

            Russia has plenty of reasons to want to inflict pain. They, properly and corectly, wish to achieve dominance — as the US has.

            KSA is just matching their price to avoid loss of marketshare. As they have said.

      • George Kaplan says:

        Supply has increased a lot over the last month – Kashagan ramping up, Libya and Nigeria back on line, end of maintenance for Buzzard in North Sea, Filanovsky and another (Messoyakha?) in Russia starting up, Brazil FPSOs and some GoM projects ramping up. Increase in storage and drop in price seems to be as expected (although EIA may also have got some figures out of phase and over estimated inventory drops in the previous two weeks which were corrected this week). There is still more to come next year especially in Brazil and offshore Africa.

        • Watcher says:

          While shale declines. Ron’s tracking at the top of the page has made clear what growth there has been in oil in recent years came from shale.

          We also have sharp increases in car sales in China and India to eat up any new supply. Lots of cars sell in the US too, but those are replacement oil consumption, not new. China is largely new.

          As for Cushing’s week to week measure, let’s keep in mind the definition of WTI was changed about a year ago to address shale’s input to Cushing and how its constituent parts diluted what was coming from Texas conventional. We don’t really know what US oil flow is because “oil” has a variable definition.

          [revisiting quickly. Car sales China


          Call that a typical number — 1.8 million cars. X 12 = 21.6 million cars. They are nouveau riche and not many older cars go to the junk yard like the US so we’ll call 95% of those 21.6 million cars new oil consumption.

          Call it 30 mpg and 20 miles a day driven . 5.8 barrels a year per car, burned. X 21ish million is about 350K bpd new oil consumption in china for 2016. 3ish% growth from just cars. On track for another 5% year] (not a market KSA can just concede to Russia.)

          Once more time sportsfans. mazamascience.com/OilExport. LOOK AT CHINA and INDIA’s BLACK LINE.

          • George Kaplan says:

            As usual what looks to me to be a simple commercial decision seems to take on some kind of magical realism quality when you get hold of it. Which is not to say you are wrong, just that the threads you see are not within my vision to follow.

            • Survivalist says:

              what was it that Nietzsche said about those who always see obscurity as profundity?

        • AlexS says:

          “Filanovsky and another (Messoyakha?) in Russia starting up”

          East Messoyakha was launched in September; Suzunskoye. Pyakyakhinskoye and Filanovsky in October.
          Novy Port, Trebs & Titov, Prirazlomnoye (in Arctic offshore) and several other fields are rumping up output.
          Russian oil production in January-October 2016 was up 210 kb/d (almost 2%) from the same period of 2015.
          There will be more start-ups and further increase in production from the recently launched fields in the next 3 years, while production from brownfields is supported by increased drilling.
          Hence Russian oil production is expected to peak no earlier than 2019-2020.

    • shallow sand says:

      EIA says it has stopped falling.

    • Oldfarmermac says:

      Anybody with a sophomore level understanding of economics knows that while supply and demand ultimately determine price, short and medium term prices can be and are often manipulated for one reason or another.

      A price war can be an economic weapon, used by a stronger competitor to run a weaker one out of an industry, and at the sovereign state level, a price war can be used as an economic and quasi military weapon against the enemies of the state.

      Producers can get together in cartels and control price via controlling supply.

      I know, because I took the basic course with a sophomore level course number back in the dark ages. There were many examples given , and many terms introduced, in relation to this manipulation of supply, demand, and price.

      Economists aren’t stupid as some of us seem to think they are.


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