Texas RRC March Production Data

The Texas RRC is out with their latest Oil and Gas Production Data. Looks like oil production has leveled out with March production pretty much level with February. All RRC data is trough March 015.

Texas Crude Only

I always show the last 6 months or the RRC data in order to get a pretty good indication of which way data production is moving. From the data you can see that December was a very good month but January was just awful. February was a lot better and March was about the same as February.

Dean 1

The chart above was created by Dean Fantazzini, PhD, of the Moscow School of Economics. He has developed an algorithm which predicts what the data will reflect after the final data has come in. His data suggests that Texas crude has plateaued.

For more on the underlying methodology of Dr. Fantazzini see:
Nowcasting Texas RRC Oil and Gas data (ongoing project)

Texas Condensate

Condensate seems to have plateaued as well.

Dean 2

And Dean’t data confirms that the last three months condensate production comes in at a little below the December numbers.

Texas C+C

Adding crude and condensate we get what the EIA counts, crude + condensate. The EIA data is only through February while the RRC data is through March.

Dean 3

Dean has Texas C+C slightly higher than the EIA in December but falling well below them in the last three months. It looks like that Texas has plateaued, so far, at about the December production level.

Texas Gas Well Gas

 Texas gas well gas seems to be in serious decline.

Texas Associated Gas

Texas associated gas has been increasing but will now likely plateau along with oil.

Texas Total Gas

Texas total gas in March comes in above January but well below December.

Dean 4

And Dean’s algorithm has Texas total gas peaking, so far, in December.

Art Burman Oil Prices Will Fall: A Lesson in Gravity

The oil price collapse is not over yet.  It is more likely that Brent price could fall back into the mid-$50 range than that it will continue to rise toward $70 per barrel.  

That is because oil prices have risen based on sentiment alone. The fundamentals of supply and demand indicate a dismal reality: oil prices will fall and may fall hard in the near term. 

David Archibald Thorium: the last great opportunity of the industrial age

It is a significant fact that half the protein the world eats has its origin in fossil fuels. We are all aware of the green revolution that, amongst other things, saw dwarf strains of wheat increase yields by a couple of hundred percent. There was another revolution in agriculture sixty years prior to the green revolution. That was the development of the Haber-Bosch process of combining hydrogen and nitrogen to produce nitrogenous fertiliser.

The plants that produce that fertiliser, the source of half of the protein we eat, run on natural gas or coal. One day these fossil fuels will run out. Does that mean that half of our population starves? It does if we don’t have a way of producing nitrogenous fertilisers cheaply using something other than natural gas or coal.

And it won’t be sunbeams or wisps of the wind that will keep people fed. Those things barely pay for themselves, if that. Take the case of the Ivanpah solar facility in California built at a cost of $2.2 billion. Rated at 392 MW, Ivanpah is a near 20-fold scale up from the previous largest solar thermal facility of 20 MW in Spain. Despite all the engineering that went into the design of Ivanpah, it operated at least 40% below design in 2014.

Shell’s Arctic voyage marks beginning of peak oil era

Although, Mr Simmons was perhaps wrong in focusing on a potential collapse in Saudi Arabia’s oil production he was right in warning about the dangers of “Peak Oil” but too early in predicting its onset. That time is now upon us. Despite, oil prices being forced lower over the last six months the world is entering into a “peak oil” scenario whereby the cost of a barrel could  feasibly quadruple to around $200 per barrel over the next 10 years.

And finally a report from the Financial Review that tells it like it is:

BHP Billiton’s Tim Cutt says ‘staggering’ oil discovery shortage trend risks oil price spike

But in the last two decades, the industry has been finding less than half the amount it has consumed each year. Current consumption is running at over 30 billion barrels on an annual basis.

“In the past four years discoveries were less than 10 billion barrels per year and in 2014 they amounted to less than six,” Mr Cutt said.

 “That’s only a fifth of current consumption! This is a staggering trend and represents an opportunity and responsibility.”

___________________________________________________________

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569 Responses to Texas RRC March Production Data

  1. Ilambiquated says:

    And it won’t be sunbeams or wisps of the wind that will keep people fed.

    I’m pretty sure sunbeams are what keep us fed.

    EDIT: Although splitting molecular nitrogen into a form that is useful to plants is a high energy operation, the total energy involved is small compared to total energy required to grow a crop.

    As usual in biology, the real problem is information, not energy. Nitrogen fixing requires highly focused energy in a single process, so the system has to “know” how to do that. But not a lot of energy is required from a global point of view.

    • Phil Harris says:

      Hi Ilamb’ed
      Back in 2009 I asked the International Fertiliser people to check an estimate that about 5% of global methane went to make nitrogen fertiliser – with China making most of their’s as urea from coal. They could not give an accurate figure but thought that must be pretty close.

      • Ilambiquated says:

        I’m surprised to hear the number is so high, but I think Wind should be able to keep up the slack.

  2. Dean says:

    Thanks Ron. For more details about the underlying methodology see here:

    https://sites.google.com/site/deanfantazzini/nowcasting-texas-rrc-oil-and-gas-data-ongoing-project

    • Thanks Dean, I have added the link to the post.

      • shallow sand says:

        So, am I correct that December 2014 looks to be the peak, with Feb and Mar of 2015 slightly lower and January 15 lower still due possibly to weather issues?

        • Yes, I think January will be the highest month for shale production overall. Weather hardly played any role at all this year in oil production, even in North Dakota.

        • Dennis Coyne says:

          Hi shallow sand

          Dean’s estimates are excellent, to my eye Texas c+c output has been flat Dec to Mar.

          • Dean says:

            Hi Dennis,

            here the last 6 months corrected:

            Oct 2014 3281621
            Nov 2014 3342100
            Dec 2014 3387371
            Jan 2015 3265784
            Feb 2015 3343918
            Mar 2015 3355709

            • Dennis Coyne says:

              Hi Dean,

              Thanks, was there much change in your estimate over the last couple of months and do your estimates tend to creep higher over time? For example how has your Oct 2014 estimate of Texas C+C output changed over the last 6 months?

              • Dean says:

                it is 3 months that I have (finally) started using the average correcting factors, so that it is too early to say. I would say that after some initial variation the values start to converge.
                Anyway, the values for October 2014 estimated in Jan2015, Feb2015 and March2015 with the average corrections are reported below (C+C):

                Oct 2014 3235645
                Oct 2014 3285867
                Oct 2014 3281621

          • Here is the data with Dean’s adjustment.

  3. Ronald Walter says:

    All of the green environmentalists in Seattle strapped their kayaks to the roofs of their Outbacks and Xterras, headed down to the Shilshole Bay Marina, kayaked on down to where the Shell rigging is parked in Elliot Bay and raised cane because an oil company is moving equipment to Alaska to explore for oil. The horror, an oil company floats equipment on the ocean and the nature lovers in and around Seattle have a cat.

    Next thing you know, the green crew will want to change the name of Black Diamond, Washington to something like Sun Village or some other more eco-friendly name. Coal doesn’t fit into the scheme of things for the green nutjobs.

    Looking at a record low temperature out in my neck of the woods here in the real world. Climate change is whimsical, very unpredictable, you just never know what will happen when the weather doesn’t cooperate with global warming.

    • Weather is is not climate and local weather varies greatly, sometime setting records in either direction irrespective of global warming. This means absolutely nothing except to global warming deniers who don’t know the difference between weather and climate.

      • Ronald Walter says:

        Hot, humid climates

        Humid climates, mild winters

        Humid climates, cold winters

        Dry climates

        Cold climates

        Geography will do the work of which climate is where.

      • SW says:

        I suggest we run an experiment. Let’s remove the polar sea ice and see what that perturbation does to this complex nonlinear dynamic system. We can then use our observations to refine our models. What could possibly go wrong?

        • MarbleZeppelin says:

          SW,
          Taking data now. Experiment in operation. Name is Operation Maui North.

          Can the Inuit play ukuleles and wear grass skirts?

    • wharf rat says:

      “Looking at a record low temperature out in my neck of the woods here in the real world”

      Maybe you’re not in the real world, where it’s called “global warming”, not “my neck of the woods warming”.

      This was Fairbanks, Alaska, at about 7 PM PDT, last night.

      Fairbanks, AK

      77.7 °F
      Feels Like 77 °F
      86 degrees by Fri.
      wunderground.com

      Right now, Fairbanks and my town in NorCal are at the same temperature.

      Laytonville, CA 95454
      Monday 9:00 AM
      Cloudy
      39.7456° N,

      54
      °F | °C

      Fairbanks, AK
      Monday 8:00 AM
      Mostly Sunny
      64.8436° N,

      54
      °F | °C

      On May 12, 2015, a temperature of 80.1°F (or 26.7°C) was recorded in the north of Canada, at a location just north of latitude 63°N.

      Below a forecast for May 23, 2015, showing temperatures in Alaska and neighboring parts of Canada that are 36°F (20°C) higher than they used to be (1979-2000 baseline).

      The image below shows that temperatures as high as 30.2°C (86.36°F) are forecast for Alaska for May 23, 2015, along the path of the Yukon River, at a latitude of ~66 degrees North (65.98°N)

      http://arctic-news.blogspot.de/2015/05/mackenzie-river-warming.html

      • MarbleZeppelin says:

        PIOMAS already has the Arctic Ocean ice volume headed downward from the winter peak.

        • MarbleZeppelin says:

          Here the temperatures are all over the place (latitude 40.7). Highs vary from the 60’s to the 80’s and lows have been ranging from near freezing to the 60’s, oscillating back and forth. One day this month had a high around 80 and a low in the 30’s.
          So much for temperate zone stability. Too bad we can’t tap into that energy differential (other than wind).

      • Here´s a map prepared using the LOTI data set. The referenced web page is included in the map, the software you´ll find in that site allows you to prepare your own maps if you so desire. This beats the endless banter about weather in this or that place.

        • Synapsid says:

          That red-orange color along the Equator in the Pacific, on Fernando’s map, is El Nino saying Hello.

      • Old farmer mac says:

        I may be wrong as wrong can get but I am convinced Ronald is MUCH smarter than many of his posts seem to indicate. I used to refer to him as our resident court jester.

        Sometimes he reverts to that role.

  4. @ Art Berman sez:

    “That is because oil prices have risen based on sentiment alone. The fundamentals of supply and demand indicate a dismal reality: oil prices will fall and may fall hard in the near term. “

    Much of US petro extraction is hedged, the worth of the hedges skyrocketed as crude prices collapsed beginning last summer. Right now, the hedging counterparties are striving to reduce their exposure, they are doing so by bidding futures contracts. Once the hedges expire the driving force behind the current rally will vanish … oil prices will fall.

    90% of fuel use is non-remunerative: it is motorists driving in aimless circles from gas station to gas station = lifestyle. Driving the car does not pay for the car, nor does it pay for the fuel. What pays is debt and lots of it. Underway is the breakdown of the credit system (seen in other venues besides fuel prices): the numbers have become too large for the marginal end users to afford.

    The marginal end users are drivers in Japan, China, Russia, Greece, Syria, Egypt, Portugal, Argentina, etc. Also not in labor force- or on food stamps in US.

    The end users must borrow in order to retire the drillers’ debts; at the same time, in order to reduce the cost of fuel price hedges the drillers and their ‘investors’ are loading up firms with even more debt … which cannot be retired by the end users. Enlightened self-interest has not only become non-functional but perverse.

    Ultimately, the oil price will reflect actual return on its use rather than customers’ access to credit. Because that number is small or negative the target price for petroleum is likely to be small … or very near zero. Sadly, the inexpensive to extract petro resources are long gone: there are likely to be minuscule amounts of -$10/barrel crude. At the same time, to end users that $10 crude will be like $150 crude is to us, today.

    We had fun the cocaine party is over.

    • Glenn Stehle says:

      steve from virginia says:

      90% of fuel use is non-remunerative: it is motorists driving in aimless circles from gas station to gas station = lifestyle.

      This is another one of those empirical claims which departs significantly from reality.

      http://i.imgur.com/lGAgByJ.jpg

      • Thanks for this link Glenn. I am saving it for possible future use in a post.

      • Watcher says:

        I don’t quite get the non remunerative stuff either.

        In the 1950s families went for Sunday afternoon drives. I pretty much don’t think that happens any more. At all.

        People in NYC significantly don’t own cars. So they don’t go for drives anywhere.

        People around Evanston, Wyoming drive from their ranch or farm into Walmart to pick up groceries and People magazine.

        Definitions. Urban is 1500 people, apparently. A “small town America” locale of 1500 people is called “urban”, and oddly there doesn’t seem to be a per square mile addition to that.

        With that definition, which is not helpful for oil consumption thinking, 80% of America is “urban”.

        The contrary way to think about this is . . . 80% of America is already urban. There are no more significant gains to be made urbanizing people to reduce oil consumption.

        • Ilambiquated says:

          Except that your typical “urban center” in America is empty, as this view of Tulsa OK shows

          https://www.google.de/maps/place/Tulsa,+OK,+USA/@36.1514167,-95.9903664,2638m/data=!3m1!1e3!4m2!3m1!1s0x87b692b8ddd12e8f:0xe76910c81bd96af7!6m1!1e1

          Compare this to Stuttgart, Germany.

          https://www.google.de/maps/place/Stuttgart/@48.7739936,9.1667978,2111m/data=!3m1!1e3!4m2!3m1!1s0x4799db34c1ad8fd3:0x79d5c11c7791cfe4!6m1!1e1

          No parking lots!

          And as a result, no driving around in circles.

          What is even more important to reduce driving is zoning laws that allow mixed use neighborhoods. Americans spend most of their lives pointlessly driving around and around a triangle connecting the suburb where they live, the shopping mall where the buy things and the industrial park where they work.

          All this driving is in no way productive or or even useful. It is the result of 60 years of disastrously ill advised urban planning.

          The solution is simple. Reduce or eliminate the percentage of the right of ways dedicated to private cars and build mixed use neighborhoods on the downtown parking lots. Since nearly all American cities suffer from a huge overcapacity of urban roads and parking lots, the cost is zero

          • Around here parking lots tend to be underground. The spaces are small, it encourages smaller vehicles. Some parking lots won’t allow SUVs because they have a 2 meter clearance restriction. I have everything within walking distance, the supermarket delivers our shopping basket to the front door for 4 euros.

            There are neighborhoods built for foreigners about 20 km from here which tend to imitate American style housing areas, with larger lots, swimming pools, etc. The American copy cats seem to be popular with British, Germans and Norwegians.

        • Old farmer mac says:

          Pleasure driving is not part of my lifestyle anymore but a WHOLE LOT of people still do a lot of driving for trivial reasons. I know people who are retired that drive ten thousand miles or more a year. Some people I know make four or five trips a week to the store when one trip would be more than adequate. I know at least four people who drive their kids to school and go back again to pick them up even though a school bus runs directly past their homes.

          There is a student parking lot with well over a hundred cars in it every day at our local county high school which has only twelve hundred students enrolled nine thru twelve. Only the juniors and seniors are old enough to get drivers licenses.

          Non renumerative in this case is simple as simple can be-unless I am mistaken. It means the driving is paid for out of disposable income rather than generating earnings. When I haul fertilizer on my farm truck that is remunerative.

          When I drive it over to the neighbors to go fishing that is non remunerative. But thats only a two mile round trip.

          You could make an argument that driving to work as an employee is remunerative in that it allows you to have a job. But if you walked to the same job you would have more disposable income.

          • Watcher says:

            Long walk.

            Besides which putting labels on what people want to do is not useful. They will continue to want to do it.

            If Chinese consumption is getting in the way of that, why should Chinese non remunerative consumption be permitted to eliminate American non remunerative consumption?

            No one has the right to tell people what they can do, except by military force. Price won’t do it since money is printed. And any candidate who advocates forcing people to do what they don’t want to do will be booted.

            The correct path is victory. If there has to be a victor, correct thinking is that you be it.

        • Greenbub says:

          Maybe it’s my imagination, but it seems to me that there are still a lot of extra-slow drivers going nowhere fast on Sundays.

      • toolpush says:

        Glen,

        Interesting charts. I notice this is from 2004. Any chance of a post 2008 chart for a comparison. Oil usage did drop about 4 million barrel per day. It would be interesting to see which segments had the greatest adjustments?

    • Jeffrey J. Brown says:

      How do bets on future oil prices affect the spot price of crude oil?

      In any case, if Brent averages $65 for May, the annualized rate of increase in monthly Brent crude oil prices will be about 90%/year from January, 2015 to May, 2015.

      China’s oil imports hit an all time record high last month, and US liquids consumption is up by about 4% year over year (early May to early May, four week running average).

      On the supply side, as I have frequently noted, post-2005 global CNE (Cumulative Net Exports) depletion marches on.

      For example, Saudi Arabia’s estimated net exports last year (about 8.5 MMBPD or so) probably accounted for about one-fourth of the total volume of Global Net Exports of oil (GNE) available to importers other than China & India, and I estimate that Saudi Arabia’s estimated rate of depletion in remaining post-2005 CNE will soon be approaching one percent per month. Last year, I estimate that Saudi Arabia depleted about 9% of their remaining volume of post-2005 CNE (about 0.75% per month depletion rate in 2014).

      • Dennis Coyne says:

        Hi Jeffrey,

        The HL for Saudi Arabia currently shows about a 300 Gb URR, is that what you are using to calculate your cumulative net exports? What are your assumptions for Chinese and Indian C+C consumption and your expectations for the growth rates of their GDP?

        Saudi HL below

        • Jeffrey J. Brown says:

          Est. CNE (Cumulative Net Exports)

          Take a multiyear decline in the ECI Ratio (ratio of production to consumption), for a region with declining net exports, and calculate the rate of decline in the ECI Ratio, and calculate the estimated number of years from the net export peak to zero net exports (when ECI Ratio = 1.0).

          Est. Post-Net Export Peak CNE = Annual Net Exports at Net Export Peak (Gb/year) X Est. number of years to zero net exports X 0.5 (area under a triangle) less Annual Net Exports at peak

          For example, for the Six Country Case History, based on the 1995 to 2002 rate of decline in their ECI Ratio, they would hit zero net exports in 2015, and they had 1.0 Gb/year of annual net exports in 1995 (their combined net export peak).

          So, est. post-1995 Six Country CNE were (1.0 Gb/year X 20 years X 0.5) – 1.0 Gb = 9.0 Gb.

          The Six Countries hit zero net exports in 12 years, instead of 20 years, and their actual post-1995 CNE were 7.3 Gb, about 80% of the estimate.

          Based on the 2005 to 2013 rate of decline Saudi Arabia’s ECI Ratio, their est. post-2005 CNE are on the order of about 60 Gb (total petroleum liquids + other liquids). Note that this is without an actual production decline from 2005 to 2013.

          Regarding China & India, as previously discussed, given an ongoing and inevitable decline in Global Net Exports of oil (GNE), unless China & India cut their net imports at the same rate as the rate of decline in GNE, or at as faster rate, it’s a mathematical certainty that rate of decline in ANE (GNE less Chindia’s Net Imports) will exceed the rate of decline in GNE, and the rate of decline in ANE will accelerate with time.

        • Jeffrey J. Brown says:

          Six Country Data for 1995 to 2002 shown below. Note the huge depletion in post-1995 CNE, that corresponded to the decline in their ECI Ratio, even as production rose slightly from 1995 to 1999.

          Assuming Saudi consumption of about 3.1 MMBPD in 2014 (versus 3.0 MMBPD in 2013), the Saudi ECI Ratio fell from 5.8 in 2005 to 3.7 in 2014 (EIA data). Based on current data, Saudi net exports fell from 9.5 MMBPD in 2005 to about 8.5 MMBPD in 2014.

          Based on the preliminary 2014 estimates for Saudi Arabia, they would approach zero net exports around the year 2040, and estimated post-2005 CNE would be on the order of 60 Gb, but they had another year of depletion in 2014, and I estimate that Saudi Arabia shipped 9% of their remaining post-2005 CNE in 2014.

          • Verwimp says:

            Jeff, just some thoughts:
            – I have seen your posts about CNE, GNE, ECI, … on Tod and here for years now and still, I can hardly figure out what you really mean. (I am an engineer. I should be capable to understand, so I forced myself to understand your graphs and formula’s. I succeeded, but it took some time.)
            – Ask Ron for a guest post where you clearly (for dummies) explain your own private jargon. It will clear things out. It will give you a much broader audience (the audience you diserve,because your message is important!)
            – Update your numbers. The 6 country case dates from more than 13 years ago! That is pre-history in terms of peak oil.
            – Have you ever thought about making this calculations on natural gas? I think the ECI of natural gas of certain countries nowadays is going down a lot faster than their ECI on oil.
            Best regards.

            • Jeffrey J. Brown says:

              For a full explanation of the methodology, you can search for: Export Capacity Index. One of these days, I’ll update the article.

              Of course, the point of the Six Country Case History is that these were the major net exporters (excluding China) that hit or approached zero net exports from 1980 to 2010. Updated data would simply show that they collectively remain large net oil importers. The US and China were special net export case histories, in that they became net importers, even as their production continued to increase.

              In regard to understanding what I call “Net Export Math,” I have concluded that even most people who understand it tend to reject the implications, or make qualitative objections to what is a quantitative argument, i.e., cognitive dissonance in action.

              In any case, in my opinion there is nothing more important to the global economy than the critical difference between the top line production number for net oil exporters, versus the bottom line rate of depletion in remaining CNE (Cumulative Net Exports).

              As noted up the thread, I estimate that Saudi Arabia shipped about 9% of their remaining CNE in 2014.

              • Nick G says:

                Jeffrey,

                I agree that the ELM perspective/analysis is very useful. Nevertheless….

                Verwimp is trying to help you. Don’t dismiss his concerns, or those of others who have tried to give you input. That’s the path to being irrelevant.

                The ECI is just a bad ratio. It’s not intuitive, and and it’s misleading in the same way that MPG is misleading* as the number gets larger.

                2nd, extrapolating out the ECI (or, perhaps, a better number like “Percent production exported”) is very risky: exporters can eliminate internal price controls and subsidies (as China and India have partially done), and can substitute other things for internal consumption (as KSA is beginning to attempt with solar and NG). That needs to be acknowledged. Really, ELM is a measure of the disconnect of internal country supply & demand from the world market. That disconnect could end.

                3rd, the overall global supply vs demand is more important than single country cases. Rising US production is just as important as declining KSA exports. That doesn’t make ELM irrelevant, but it needs to be acknowledged.

                *That’s why Europe uses liters per km, or gms per km – “fuel per distance” just makes more sense than “Distance per Fuel”.

                • Jeffrey J. Brown says:

                  The ECI is just a bad ratio.

                  I disagree. I chose the production to consumption ratio so that the slope would be in the same direction as declining production, declining net exports and CNE (Cumulative Net Exports) depletion, as shown in the Six Country Case History.

                  In any case, many things are possible, but given an ongoing production decline in a net oil exporting country, unless they cut their oil consumption at the same rate as the rate of decline in production, or at a faster rate, it’s a mathematical certainty that the resulting net export decline rate will exceed the production decline rate and that the net export decline rate will accelerate with time.

                  • Mike says:

                    Mr. Brown, you handled that a lot better than I would have.

                    The internet makes “experts” on everything, out of everybody. It seems it makes oil experts out of folks with very anti-oil agendas. I appreciate your contribution to this…peak oil blog. Your work, and the manner in which you present it, is very relevant.

                    Mike

                  • Nick G says:

                    I chose the production to consumption ratio so that the slope would be in the same direction as declining production

                    There’s an easy solution: use “percent production exported”. That will show a decline.

                    When % of production exported goes from 95% to 90%…that’s not really a big change. But ECI goes from 20 to 10…

                  • Nick G says:

                    Mike,

                    Jeffrey and I have been discussing these things for a long time.

                    You might not guess it, but we actually agree on some basics, like that our dependence on imported oil is very, very risky.

    • Nick G says:

      Right now, the hedging counterparties are striving to reduce their exposure, they are doing so by bidding futures contracts.

      I have roughly the same question as jeffrey. How does “bidding futures contracts” reduce exposure??

      • Bidding futures contracts? I have never heard that term before, and I have bought and sold futures and once was a commodities broker, albeit was for only a short term. You buy or sell futures contracts but I have never heard of bidding them.

        • Watcher says:

          Don’t think HFT is that powerfully into futures yet, but part of the process with equities (and recently bonds) is repeated bids at very high speed with the bid withdrawn when co-located speed sees a sell coming — before the actual transaction computer at the exchange can match the two entities (bid and asked) and complete the transaction.

          This of course freezes activity from the seller, like quote stuffing does, until a better moment arrives when the engine allows trading to proceed.

          • Hey, we are talking futures here not the OTC. (Over The Counter market)

            There is no bid-ask in the futures market. One does not bid on futures. You can put in buy or sell orders at a given price and your order does not get executed unless the commodity reaches that price. But only the floor trader, or the computer, has access to those numbers. On the OTC the bid-ask is always listed but not on the NYSE or the futures markets.

            But I think you are talking about high speed computer trading. Which is nothing more than legalized front running. It should be illegal but somehow the SEC has not got around to doing that yet.

            High Frequency Trading

            High-frequency traders typically compete against other HFTs, rather than long-term investors. HFT firms make up the low margins with incredibly high volumes of trades, frequently numbering in the millions. It has been argued that a core incentive in much of the technological development behind high-frequency trading is essentially front running, in which the varying delays in the propagation of orders is taken advantage of by those who have earlier access to information.

    • Ves says:

      Hi steve from virginia,

      “90% of fuel use is non-remunerative: it is motorists driving in aimless circles from gas station to gas station = lifestyle. Driving the car does not pay for the car, nor does it pay for the fuel. What pays is debt and lots of it.
      The end users must borrow in order to retire the drillers’ debts; at the same time, in order to reduce the cost of fuel price hedges the drillers and their ‘investors’ are loading up firms with even more debt … which cannot be retired by the end users. Enlightened self-interest has not only become non-functional but perverse.”

      You pretty much summed up all what you need to know in these two paragraphs 🙂 Great stuff.
      All these talk about oil production numbers, supply/demand, break even cost, colored graphs, curves..it is all irrelevant. waste of time. I have visited 3 countries in the last year that are on your list that you mentioned where marginal end users are. Yes, you are very right that they are the one setting the price and these marginal users are broke even if Brent is at $50. But life is still moving over there. I am afraid when marginal oil users start falling off the wagon in urban sprawls of Atlanta, Houston, and Dallas that life in Athens will look like life in Disneyland compared to these megapolises.

      • Nick G says:

        Carpooling and EVs.

        Horrors.

        • MarbleZeppelin says:

          First of all, if you worked someplace in the old days (not really that long ago), you lived within sight of the place generally. That is what those whistles and clock towers were for, to get you to work on time. So people can do that if things get tough as far as fuel availability.
          Also they had electric trolleys in the streets, some going between cities and towns.
          And if you have money, call on that autonomous car to pick you up and take you where you want to go. Back in the day we called those taxis.
          Like you Nick G, I don’t see oil depletion as a huge problem, merely a force for change.
          Of course we now have the mall come to our homes. It’s called the internet and we shop all over the world, then the purchases show up at our doorstep. Sure saves a lot of running around not finding things.
          I also phone ahead to see if items I need are in stock or not,
          Oh my, times have changed already.

          • DuaneX says:

            I raised this point in a different thread a few weeks back and was assured the vast efficiency of the logistics and delivery of these items.

            But a guy at the office today had a lightbulb, let me say that again, a LIGHTBULB, delivered from China that he had bought on AliExpress. Here you go: http://www.aliexpress.com/wholesale?catId=0&initiative_id=SB_20150519022206&SearchText=lightbulb

            Hey, it was only three bucks, and it looked cool. Free shipping. This was delivered in a package about the size of a shoebox, all the way from China. I’m sure the logistics are mind boggling. And I’m sure it all comes over in an air shipping receptacle with a heap of other crap. But somehow that lightbulb has to get from a Chinese factory to a consolidation point, to the airplane, to the airport on another continent, to the hub, to the truck that eventually stops outside the office and the guy runs in with a box with a lightbulb in it. I dunno, Zeppelin. I don’t see how this helps with the oil depletion problem. I’ll continue to throw a lightbulb in the grocery cart during my weekly shopping.

            • Nick G says:

              Water shipping is mighty fuel efficient – it’s far more efficient to ship something 6,000 miles in a Panamax container ship, and include it with a truck’s regular route, than it is for you to drive to a local store. If that allows you to reduce your local shopping, then it’s a big saver.

              Of course, if you’re determined to shop at the local store every week anyway, then adding a lightbulb doesn’t add much to your car’s fuel consumption.

            • MarbleZeppelin says:

              A single oddball example, however where did the light bulbs in the grocery cart come from? Think about it.

              Anyway, all passenger flights carry cargo so the amount of fuel to carry a few ounces extra is probably negligible and since it came direct to the person it probably used less transport energy then the one in the store. One person carrying one small item would outweigh that light bulb package. Or maybe they ate a large meal before boarding.

          • Old farmer mac says:

            A nice older lady who serves me occasionally at a nearby fast food restaurant assures me that she will under no circumstances ever give up her job- for the very simple reason that she lives close enough that she can walk to work there.

            As things go from bad to worse in terms of gasoline supplies and price I wonder if there will be a trend will develop wherein people who own homes very near to businesses will rent or sell them to people who work there – getting enough of a price premium to make it worthwhile to move themselves.

            This could become quite pronounced among retired folks who need the money and could buy or rent elsewhere for less.

            If I were a young guy, I would invest in cheap housing close to the ” next big thing” such as the Bakken oil field- understanding that it might be smart to get out early.

            • Nick G says:

              But why would anyone pay more rent, and pay all of the costs of moving, when they could just buy a cheap hybrid or EV?

              I suppose it could take a while to get one, if oil prices suddenly shoot up. Better to put in your order, and carpool for a few months until it arrives.

              Some people can’t afford a new car. Right now you can get a used Prius for 5k. If a oil price spike raises the prices of used hybrids sharply, it will still be cheaper to buy one than to move and pay more rent.

              • Bob Nickson says:

                I’m seeing off lease 2011 Nissan Leaf’s for as low as $10k locally. There are a lot of 2011’s in the $12k range.

                Bargain.

                Using the Tesla Power Wall for value comparison, the battery alone is worth that.

                • Techsan says:

                  We have had a 2011 Nissan Leaf for 4 years now. It’s a great car. No maintenance to date, except to replace the cabin air filter.

                  At these low prices, it’s a free car: the money you save on gas will pay for it.

                  • Jeffrey J. Brown says:

                    Some numbers from Edmunds, based on 75,000 miles over five years:

                    Total estimated five year cost for Nissan Leaf EV: $27,000*

                    Total estimated five year cost for Nissan Versa EV: $32,000

                    *Without the tax credit, the Nissan would be slightly more expensive

                    Looking for used 2012 cars, curiously enough a Leaf would be the same cost, $27,000, as a new one (but with no tax credit for used one). A 2012 Versa would be $29,000.

                  • Nick G says:

                    Jeffrey,

                    I can’t duplicate your numbers. I get:

                    Nissan Leaf vs Versa
                    2014 Leaf 2015 Versa Note

                    True Cost To Own
                    $23,096 $31,109

                    Total Cash Price
                    $26,341 $16,581

                    Even without the tax credit, the Leaf is $500 cheaper. The cheapest car on the road, with better options than the Versa and much better acceleration.

                  • Jeffrey J. Brown says:

                    Nick,

                    It might help is you specify the style, which I tried to do (when I typed Leaf EV, I meant Leaf SV).

                    S model is $23K, SV is $27 K, SL is $29K

                    I suspect that the majority of Leafs sold are SV or SL.

                  • Jeffrey J. Brown says:

                    Carmax has 153 used Leafs for sale. 82% of them are SV or SL.

                  • Nick G says:

                    I suspect that the majority of Leafs sold are SV or SL.

                    That seems very possible to me.

                    I use the very cheapest model, both for the Leaf and whatever ICE benchmark we might choose (like the Versa), because the heart of these discussions tends to be price: what’s the lowest cost vehicle, what’s the difference in cost, etc. When you buy a new car, you have a choice of model, and if price is your main criterion, you’ll choose the base model.

                • Bob Nickson says:

                  Jeffrey,

                  Where are you seeing $27,000 for a 2012 Leaf? There are sixteen 2012 Leafs listed for sale in my area. The most expensive is $15,977 and the least is $11,000, but only three of them are over $13,000.

                  • Jeffrey J. Brown says:

                    Total estimated five year cost to own, inclusive of items like depreciation.

              • Old farmer mac says:

                Hi Nick,

                Rent is NOT necessarily very much or any higher near a lot of jobs, at least in rural areas and small towns. In the small town near where I live there are numerous small cheap houses within a mile or two of most of the stores and restaurants. They rent for only a little more than comparable houses five or ten miles away in less congested areas.

                But I think the real key to my scenario is that a whole LOT of people cannot afford to drive at all. Owning even a very cheap car that is seldom driven is apt to run at least three hundred dollars a month if you include insurance tags taxes repairs depreciation fuel and maintenance. Insurance alone costs that much in some places.

                Anybody working for fast food wages is not really able to afford a car. If such a person can walk to work and shopping or ride a bike or take a street car etc then they can afford to pay a good bit more for the roof over their head, maybe as much as four or five hundred dollars a month, or even more, extra if they give up driving.

                If I still owned a dinky little small house I once lived in in the city I could rent it now for eight fifty. I could rent a better house out in the boonies where I live now for four hundred. Or I could sell it for a hundred g and buy a comparable house in the area I live now for fifty.

                Fifty g is a LOT of money, a FORTUNE, if you are hard up. Tens of millions of us are hard up.

                • Nick G says:

                  Rent is NOT necessarily very much or any higher near a lot of job

                  But, you were thinking about arbitraging a housing price difference…

                  the real key to my scenario is that a whole LOT of people cannot afford to drive at all.

                  PO’s not really the problem. Most of those costs are fixed, so people who can’t afford insurance have already given up their car.

                  Giving up your car is very hard to do in a rural area. Many people who’ve done so live in urban areas with mass transit.

                  • Old farmer mac says:

                    Senior moments are getting to be common events for me. I got off track talking about people unable to afford to drive at all.

                    BUT there are many NICE houses in lots of highly desirable close in communities that are occupied by older folks who are retired or soon will retire.

                    It’s not only the monetary cost of driving- it’s the time and hassle factor as well. A WELL PAID person has to think about five or ten hours a week on the road AVOIDED as being worth an extra five or ten hours of productive work. That is anywhere from a couple of hundred bucks a week on up.

                    The real arbitrage would turn out to be much more about time than money.Retirees time is worth very little in monetary terms.

                    .

        • Ves says:

          Hi Nick,

          Are you suggesting that the sale of EV, in let’s say Greece as marginal oil user, is skyrocketed since start of the crisis in 2008?

          If you are not familiar with car sales stats in Greece, do you have any stats of sale of EV among 50 mil Food stamp strong population in US as Steve quite correctly described as marginal oil users?

          If EV is answer to everything then I guess NASCAR fans are safe. They can keep watching their favorites driving in circles in EV’s.

          • Nick G says:

            Yes EV’s work beautifully in developing countries like China, where there are 100 million e-bikes.

            And they work beautifully for the urban poor (and the middle class and the wealthy) who use EV’s called “trains”.

            And, finally, yes there is a new category of car racing with EV’s. It makes sense: EV’s provide incredible acceleration.

            • Ves says:

              Well okey then, next time when I need travel from Atlanta to Dallas I will look for these EV’s called “trains”.

              • Naked Ape says:

                Well, you actually can travel via Amtrak between Atlanta and Dallas…but via a somewhat circuitous route.

                http://en.wikipedia.org/wiki/Amtrak#/media/File:Amtrak_System_Map.svg

                Now, if there were a line between Birmingham, Memphis, and Little Rock, this city pair would be connected more directly. (see linked Amtrak Map)

                Or…drive a line from Tuscaloosa to Monroe to Shreveport and connect to the line coming East out of Dallas.

                El Paso-Albuquerque-Denver environs seems a logical line as wll.

                When liquid fossil fuels become considerably more scarce, air and auto travel will wither. At that time passenger trains will be more appreciated.

                Problem is, if we wait until these facts become manifest and blatantly evident, it will be waaay late in the game to build out train routes. Not impossible, but if our species was adept at long-range planning, we would have seen this coming in 1972 and changed our ways starting back then to adapt to the inevitable future. Watcher’s obsession with hoarding and burning as much oil for us U.S. Americans (and the Brits) in order to keep every possible barrel from being used by those nefarious Chinese is a fascinating and irrelevant mental fetish…the United States ‘wins’ for its peoples’ welfare in the long game by making smart investments to change its energy paradigm well in advance of the dire straights…but we pissed away that idea long ago.

                For the love of reason, people need to stop fixating on the freaking Chinese and/or the Castro Brothers and/or any other bogeymen/scapegoats and learn to fixate their attention on altering our own society to adapt to the inevitable future.

                Enjoy the slow-motion train wreck that will be the future. Party on, like its Twenty-Ninety-nine!

                • Ves says:

                  I know that you can somehow reach Dallas from Atlanta via Kathmandu 🙂

                  I thought Steve summed it up nicely in just two paragraphs: nature of the oil as “must have lifestyle” commodity as no other commodity, relationship with financial credit that is extended (and pretended) by the finance and the role of marginal buyer. If you understand this you understand why lousy Bakken happened, why the trains with oil will still be rolling from ND, and why the price could easily go down, and why populace in order to afford even these lower prices would have to go into more debt.

                  • Nick G says:

                    oil as “must have lifestyle” commodity

                    Along with yoga pants?

                  • Ves says:

                    ” Along with yoga pants?”

                    of course. Everybody got to have pair of Lululemon’s when get on e-bikes and pull RV behind.

                  • Nick G says:

                    RVs?

                    I hear that in Australia PV is standard on RVs.

                    Just a matter of time before PV becomes standard on all transportation equipment that’s out in the sun all day, like planes, trains, ships and RVs, reducing fuel consumption by 5 to 10%.

                    That’s because PV is far cheaper for generating electricity than liquid fuels.

                    Which brings us back to the nice synergy between renewable energy production, and EV’s, which can buffer the variance of renewables.

                • Nick G says:

                  it will be waaay late in the game to build out train routes

                  Yeah, train routes take a long time to build.

                  It’s too bad – they’re a far superior way to travel. But, EVs will just have to do for most things until we get smarter about this.

              • Nick G says:

                Yeah, we lost the electric inter-urbans a while back, somewhere around the time that GM and the oil companies were dismantling urban rail systems and replacing them with buses.

                It’ll take a little while to get the oil out of long distance passenger travel – fortunately, that’s a relatively small portion of our oil consumption.

            • Watcher says:

              Fortunately people are smart enough to reject all that and recognize that they need not change just to provide China with oil.

          • Old farmer mac says:

            Auto racing is a self supporting sport. Nobody goes to the public kitty to get a new track built to run Nascar races.

            And for what it is worth- the cars in the parking lot burn MANY times as much gasoline as the cars on the track on race day. This applies equally well to all the non motor sport public events.

            Getting forty or fifty thousand or more people together generally results in burning PLENTY of gas.

            Just one plane load of people chasing either the sun or the snow for a couple of thousand miles round trip burns more than the Daytona 500 by a substantial margin.

            Racing consumes only a minute fraction of the fuel consumed by the spectators of other spectator sports. There is only ONE top level Nascar race per weekend in the season. There are DOZENS of football and baseball games per weekend in season.Ditto college ball, pro basket ball , etc.

            So lay off of us long suffering rednecks and pick on the snooty ” more sophisticated than thou” folks who watch football.

            Pretty please. LOL

            • There’s a need for a solar powered vehicle racing circuit. They can have a five mile track with lots of twists and turns. The audience can walk alongside and take close up photos of the drivers as they go about their driving.

            • sunnnv says:

              “Auto racing is a self supporting sport. Nobody goes to the public kitty to get a new track built to run Nascar races.”

              Ummm…
              http://jalopnik.com/5972478/70-million-for-nascar-tracks-and-other-surprising-pork-in-the-fiscal-cliff-bill

              one of the pork items:
              “Extension of a “seven-year cost recovery period for certain motorsports racing track facilities,” tax write-offs which will reportedly benefit NASCAR tracks and other large circuits to the tune of $70 million;”

              • Old farmer mac says:

                Missed that one – but compared to the tax money thrown at other spectator sports such as football it is a trivial amount.

                Just about EVERY kind of business got a piece of that particular handout.

                I should have said Nascar is self supporting in terms of building its own facilities- which is snow white true compared to other sports. I don’t know about other racing venues business models.

                And given current day foolishness , some locality or another may soon decide to build a new track gratis for the megamillionaires who own NASCAR.

                I wouldn’t be surprised at all but to the best of my knowledge it has not happened YET.I have read many accounts of DIRECT tax money giveaways to other sports – money spent DIRECTLY on building new facilities turned over more or less on a silver platter to team owners.

    • bwhill says:

      Once the hedges expire the driving force behind the current rally will vanish … oil prices will fall.

      Shale has been contributed the dubious title of “excess supply”. Most seem to think that if shale went away that prices would recover. Prices are now $40 lower than at their high of about $100. That constitutes $270 billion per year in raw material savings for the refining industry. It might cost $20 – $30 billion per year to pump up the shale industry. US refiners could put that in some budget named “Capital Investment Recovery”. Not many would notice!

  5. Paulo says:

    re: Nitrogen fertilizer costs.

    As my wife exclaimed the other day, “Compost, I need more compost. I have to have more compost”!! (I just about pissed myself she was serious and emphatic).

    We are really, or really seem to be, reaching limits in so many ways these days. Buckle up and double down, compadres. It’s very interesting outside.

    regards

    • Synapsid says:

      Ilambiquated, Paulo,

      This paper on production of ammonia from nitrogen using light, which is what photosynthesis does, caught my eye at the beginning of February:

      Photochemical Nitrogen Conversion to Ammonia in Ambient Conditions with FeMoS-chalcogel, Bannerjee et al., Journal of the American Chemical Society.

      The chalcogel has large surface area and is black, and “goes and goes and goes and still works.” The article at EurekAlert! says that the “FeMoS co-factor in the chalcogel binds to nitrogen [N2 I guess] and reduces it by eight electrons, making two ammonia molecules and one hydrogen molecule.” The conditions are ambient temperature and pressure.

      They ran tests to make sure the ammonia was coming from the nitrogen they were feeding the chalcogel.

      I recall reading one of the researchers saying it was weird to watch this thing producing ammonia when they turn the nitrogen flow on. The reaction is much slower than nitrogenase so they’re trying to speed it up. If they succeed the implications, as the saying goes, are astounding.

      The researchers are all at Northwestern, and the JAC is as reputable a journal as there is. I’ve seen no response to the paper.

  6. Longtimber says:

    http://tech.slashdot.org/story/15/05/16/1745251/the-economic-consequences-of-self-driving-trucks

    Just think, 4000+ 25 ton Robot water hauling trucks pounding North Dakota pavement. Better ND than New Jersey.

    Someone mention that Texas collected 1 Billion from LTO production and had 4 Billion of Road damage. Anyone able to confirm similar numbers.

  7. Guy Minton, CPA says:

    Plateau is a common configuration of a mesa, too.

  8. MBP says:

    Previously there were some questions on water and primary production in unconventional reservoirs, I’ll try and answer them from my interpretation and understanding. In the Eagle Ford, the initial Sw is somewhere between 10-20%, though I’m not sure if this is below or above Swirr. In terms of production method, in the oil window its solution-gas drive and in the gas window its initially gas expansion followed by gas desorption.

    • Mike says:

      Hot dog, MBP, gotcha! So, is there enough bound connate water in these dense shale “containers”to hypothetically produce a well for 25 years making 150 BWPD with a 10% OWR?

      Mike

      • Mike, the water saturation can range as high as 50 % in some layers. As the pressure drops the water expands and begins to flow. Plus some of this water is moveable water. As the water moves towards the hydraulic fractures it alters saturation, the higher water saturation allows the water to flow much easier.

        I think the wells with higher water cut are simply producing these high water saturation layers. But the ones with anomalous water cuts are simply linked or plumbed to water bearing zones. The lower three forks has quite a bit of water.

    • Watcher says:

      What does this mean? Does this mean if the Eagle Ford produces 1 million bpd it also produces 150K bpd of water?

      • Mike says:

        The assumption in decline curve analysis of shale resources is that wells will produce for 25 years; ie., the long fat tail syndrome. 75% of the EUR gets recovered, I believe, in the first 5 years of the well’s life, then what? In my pea brain I think of the reservoir capacity in this dense, low permeable shale as more or less being limited to the area around the well bore than can be hydraulically frac’ed. Will there be sufficient formation water, and energy to allow recovery of the remaining 25% by artificial lift?

        • Mike, it’s just a definition. The pressure drops as the reservoir is produced, but it never reaches zero. The key is to focus on the rate. What’s the rate you assume at abandonment? Is that rate good enough to pump a well making 50 % water?

          • Mike says:

            Heyzeus, Fernando, I understand that reservoir pressure never reaches zero and I understand very well, thank you, how water moves, just not so much in shale as dense as concrete. I’ve seen a dozen full hole cores of the Eagle Ford; it is a stinking miracle that anything can be wrung out of it.

            I don’t think you know for sure there are “layers” of higher water saturation in this shale stuff and as I have said twice now, there are no water bearing zones above or below the Eagle Ford. “Linked” implies vertical permeability; I don’t think so, not in shale. Perhaps I am wrong.

            I am trying to understand IF there will be sufficient connate water in these little hydraulically frac’ed ultra tight shale “containers” to produce 75% WOR for 18 more years. You raised the very question yourself with your jet pump lecture. I don’t envision the hydraulically frac’ed area around a horizontal lateral in dense shale as containing 62,000 juicy acre feet of reservoir capacity with an underlying oil/water contact like we’d see in the Frio in the GOM; I see the area drained around the lateral as being a “closed system,” for lack of a better word.

            I should not have brought it up; its a lofty conceptual problem I have that relates to this notion that these shale wells will produce for 25 years to recover imaginary EUR. I’ll figure it out, thanks.

            Mike

            • Mike, I find the Bakken a more interesting case study (because it’s oil). The core data shows there are variable saturations. It changes in both the vertical and horizontal direction, so it’s hard to generalize.

              I realize it’s hard to envision anything coming in or out of a well drainage volume, but there are exceptions. Otherwise how do we explain wells making 80 % brine?

              Regarding the recovery, that’s fairly simple, the key is the economic limit. And this is why I’ve commented several times the OPEX needs to be estimated using constant plus variable equation. And this is also why the well design has to consider what happens in years 5 to 25. A marginal well isn’t going to survive with those down times and interventions they seem to have.

              I think they’ll do ok, they’ll figure out how to cut costs, make deals to reduce royalties, and oil prices will rise. That seems to be the way it works.

              • shallow sand says:

                Fernando. They may be able to cut costs in the Bakken, and I am sure they are trying now. However, the Bakken is in one of the most remote locations in the lower 48, with one of the worst climates. Labor is typically a major operational expense. They have to pay more there per hour for labor than most other places, although I do hear they have been successful in cutting fringe benefits, like moving costs, airfare for home visits, etc.

                As for royalties, I do not think there will be much success in cutting those, at least with the private landowners. From my reading, royalties are 12.5-20% in the Bakken, which is already better than places like TX and OK, where I have read 25% is common in LTO leases.

                I am beginning to agree with Mike that in a few years many LTO leases will be sold to operators who specialize in operating marginal wells. I suspicion these wells will finally settle out in the 5-15 barrel per day range, which will make them uneconomic for firms with high G & A expenses. OPEX will range from $25-$100 per barrel for the marginal well operators who buy these wells, in today’s dollars. 5 barrel and less, poor well design or high water cut will be the wells on the higher end, and will be uneconomic, absent high oil prices.

                The exception to my prediction would be some kind of secondary recovery method.

                • shallow sand says:

                  Based on my review of some lease operating statements for 5-7 year old Bakken wells, $9,000-$12,000 per month in OPEX was common for a well having no down hole or other issues. These wells were producing about 1000 barrels of total fluid per month, with about half being oil.

                  As I typed previously, pump changes looked to be about $30K and tubing leaks looked to run in the $60-70K range, but as Mike noted, those costs can vary greatly.

                  Probably look at two failures per year on average, as Mike said. One well I reviewed had 0 failures, one had 4. Low OPEX was $17 per barrel oil, high was $59 per barrel oil. I did not figure in gas sales, that was about 1/2 to 1 mcf of gas sold for each barrel of oil produced.

                  The wells were on the lower side cumulative wise, from about 95K barrels to 200K barrels in the 5-7 year time span. I guess average is closer to 220-240 for that amount of time.

                  There were two recent refracked wells, each cost about $3.5 million, each boosted well production from 20-30 barrel range to about 350 bopd for the first two months.

                  • TechGuy says:

                    Shallow Sand Wrote:
                    “There were two recent refracked wells, each cost about $3.5 million, each boosted well production from 20-30 barrel range to about 350 bopd for the first two months.”

                    Great! All we need is the Price of Oil to rise to about $160 bbl to break even on that $3.5M investment! 🙂

                    Decades ago the sarcastic comment about investment fraud was: “Do you want to buy the Brooklyn bridge?” . Perhaps in the next decade it will be replaced with “Do you want to buy a shale oil well?”” 🙂

                    Bakken doesn’t drill for LTO for profit. It drills in Wall street looking to shake down gullible investors desperately chasing alpha.

                  • Dennis Coyne says:

                    Hi Shallow sands,

                    What do you think of Fernando’s fixed plus variable OPEX?

                    Maybe monthly OPEX= $12,000+$10*o,
                    where o is monthly output and I assume 1 barrel of water for every barrel of oil?

                    For 500 b/d (peak output) we would have $164k for monthly OPEX or $11/b in OPEX.

                    When well output falls to 20 b/d, OPEX rises to $30/b.

                    We could make the fixed portion higher and the variable portion lower, if you would prefer a 6 to 1 ratio in OPEX from low to high output.

                  • shallow sand says:

                    Dennis. I think OPEX would be lower than $11 at a 500 rate. Recently re fracked wells I reviewed were in that ballpark, maybe a little lower and OPEX was $2-3 per barrel of oil.

                    Two 3/13 completions that averaged 140 barrels of oil per day each for previous year were in $10-$11 per barrel range re OPEX.

                    Main variables concern water disposal, pump change and tubing leaks. Probably plug in $100,000 per year for one pump change and one tubing leak per year per well. I will look at water disposal charges and see if I can come up with a per barrel cost, many not have time till late tonight to do, just hitting this site a few minutes while I am waiting.

                    Again, very small sample that I reviewed. Will keep looking for more lease operating statements, but those are hard to come by in public online forums.

                  • Dennis Coyne says:

                    Hi Shallowsands,

                    Thanks. I was using $12,000/ month with a $3000/month charge for maintenance ($9000/month for monthly running costs, disposal, electricity and fuel, and labor). So you are thinking more like $18,000 per month fixed with a lower variable cost such as $3* monthly output, this would give us $4/b at 500 b/d and $33.60/b for 20 b/d.

                    Note that I have rolled the $100,000 per year into the $18,000 / month fixed cost, so
                    $100,000/12=$8333/month is set aside for future well repairs (pumps and tubes), and $9667 is just another portion of fixed monthly cost, essentially this just treats ongoing maintenance as a part of OPEX.

                  • shallow sand says:

                    Dennis, I think the one thing you should try to incorporate, (maybe you already are) is an average cost per barrel for water disposal. It appears to me that wells that go much past 1/1 oil to water in later years (5+) will be challenged economically at today’s oil prices.

                    For example, one well I reviewed produced over 1,000 barrels of water per month compared to just about 400 barrels per month of oil, if I recall correctly. This added quite a bit to $ per barrel.

                    Hope this helps.

                  • Dennis Coyne says:

                    Hi Shallow sands,

                    Thanks for the suggestion. In order to simplify the model I use averages, so I am just using a function of monthly output times a varible faactor at this point where the water disposal cost is rolled in using the assumption of 1 bw per bo. the best I could do is find the water output curve of the average well and plug in different numbers for water cost and oil cost.

                    I think fernando’s initial guess was 10,000+5*o+5*w is OPEX with o=oil in b/month and w= water in b/month.

              • Mike says:

                Fernando, most of the Eagle Ford is oil also.

                I’ve drilled horizontal, fractured carbonates in my career. As depletion set in there was insufficient reservoir energy, or connate water to produce those wells economically. They would pump off. As they got older we put them on time clocks and eventually they were shut in for days at a time allowing for fracture and wellbore replenishment to occur. Those wells would then pump off in 24 hours again and the cycle repeated. It is something along those lines that concerns me about these very dense shale wells with 25 year EUR estimates. It has nothing to do with economics and everything to do with understanding formation water.

                Marginal wells can be managed with high WOR; give me a 200 BTFPD with a 15% OWR and I’ll make money till the cows come home. Offer me a low fluid entry well that makes 30 BTFPD with a 15% OWR, that has to be lifted from a medium radius curve at 9000 ft. TVD, and I’ll say no thanks every time.

                Costs can only be reduced so much, for reasons Shallow points out, and he is, of course, correct about royalty under private mineral ownership. Reducing royalty in like pulling teeth.

                Mike

        • Dennis Coyne says:

          Hi Mike,

          For the average 2008-2012 Bakken well, 196 kb are recovered in the first 5 years, 262 kb at 10 years, 300 kb at 15 years (17 bo/d at month 180), and 327 kb at 20 years (10 bo/d at month 240). At 26 years and output of 6 bo/d the well is abandoned at 344 kb.

          About 57% of EUR has been produced at 5 years, if we assume abandonment at 10 b/d, EUR is only 327 kb and 60% of EUR is produced at year 5 in this case.

          For the Eagle Ford the EUR is only 206 kb with well abandoned at 17 years ( at 5 bo/d), at 5 years cumulative output is 165 kb or 80% of EUR, so your description applies well to the Eagle Ford average well, but no all that well for the average Bakken well.

    • MBP says:

      On connate water:
      With your example to make 150 bwpd you would need somewhere in excess of 1 mmbw over a 25 year life. That would be about 100% RF for water in a well that has a URR of 400 mbo. Unless you find a way to waterflood, there is probably half of that water available to actual flow. Knowing the clay content of the rock would help with determining the % bound water. Also I have no idea of the wettability of the Eagle Ford. Without and detailed information, I’d say you’d get probably half of that water out under primary.

      Watcher:
      The OWR will change over time. Part of the Sw is bound water held by capillary pressure and will never be moveable. Also, as water cut increases, the relative perm to water increase so if flows easier. If it is something you are interest in learning about, there is a good article on it here:

      http://www.ihrdc.com/els/ipims-demo/t26/offline_IPIMS_s23560/resources/data/G4108.htm

      Part of it is from Dr. George Asquith, one of the brightest log interpreters I’ve ever met. It should help you, or anyone else, understand (one of the reasons) why it is harder for a oil reservoir to produce oil over time.

      • Mike says:

        Thank you very much, sir. I am actually familiar with Dr. Asquith and might have remembered to look for an answer thru him. The volume of recoverable bound water from a typical shale well, and the absence of significant water sources above or below the EF, has always bugged me about the economics of recovering those long tailed EUR’s.

        Mike

        • shallow sand says:

          Reading American Oil
          & Gas Reporter article on all of the horizontal plays in OK with a lot of quotes from the “big boys” like Continental and Newfield. Then at the end some quotes from a private long time OK operator that has been drilling some 5,000′ laterals in the Cleveland and Tonkawa. “I don’t know how well we can produce laterals later in life. All the traditional technology is based on vertical wells and gravity separation where sand settles to the bottom. There is no way to diagnose those conditions in a lateral well bore. You can have a coffee can of sand block the lateral and you don’t know whether you are producing 10 percent or 90 percent of the lateral. Trying to clean out horizontal sections and lifting can be real challenges. The earliest horizontal wells were dry gas in the Barnett. The liquids rich are a different ball game. We have been doing this for only 10 years, so this is still a very young technology.”.

          This is what has crossed my mind. Is it off base? Interesting that this doesn’t come from the “big boys” but from a smaller long time private company.

          • Mike says:

            No, shallow, it is not off base. We have many years of historical perspective on horizontal drainage mechanisms and recovery rates in conventional reservoirs, only 7-8 years in tight, low permeability mudstone like the Eagle Ford and Bakken. I think the shale industry is applying EUR type curves to something we don’t really know how is going to work from year 7-9, out. I have always been concerned about this and have therefore always questioned shale industry EUR’s. I have said as much here many times. The recovery factors and the URR the shale industry touts is bunk.

            We now have, in an abstract, general way shown, above, that there may not be enough bound, connate water in this shale for wells to produce economically to the magical 25 year mark. I worry about proppant embedment and closure. You have brought up another issue: solids, frac sand, clays, shale collapse; all that stuff entering a horizontal lateral is a very difficult, costly fix, that can, and does, alter the performance and ultimate recovery of a horizontal lateral.

            This is very important and seems to be going plumb over the peak oil community’s head, particularly those that are graph and data driven. You have to be IN the oil business, with skin in the game, to know what the data means, if it means anything. You get that, Shallow. People should appreciate your comments here. EUR’s change thru the life of the well and often they can, and do come abruptly to an end.

            “I don’t know how well we can produce laterals later in life.”

            Exactly.

            Thank you, Shallow.

            Mike

            • Glenn Stehle says:

              Mike said:

              This is very important and seems to be going plumb over the peak oil community’s head, particularly those that are graph and data driven. You have to be IN the oil business, with skin in the game, to know what the data means, if it means anything. You get that, Shallow. People should appreciate your comments here. EUR’s change thru the life of the well and often they can, and do come abruptly to an end.

              Well I for one certainly appreciate and can relate to what you and Shallow have to say, maybe because I spent my working life in oil and gas operations and in putting drilling deals together.

              Fortunately for me, though, all the working interest is gone, and all that remains is overriding royalty interest, so I don’t have to contend with the many problems you guys do. But nevertheless, I’ve been there and done that, which tends to put a damper on all the pie-in-the-sky visions of those who are in love with theory but lack practical experience.

              For me, however, the revolution in big frack jobs and horizontal drilling has been quite a windfall, so my royalty interests dictate I shoud be screaming “drill baby drill” to the top of my lungs. So it’s a mystery to me why I’m so skeptical of these plays. Needless to say, I’m conflicted, not only about the merits of the “shale oil revolution” but about global warming too.

              The hands-on experience of those like you and Shallow who are actually “in the business” provides a perspective which is invaluable.

              • Mike says:

                Thank you. I am also a mineral owner. It must work for operators paying all the bills for it to ultimately work for mineral owners.

                Mike

            • Dennis Coyne says:

              Hi Mike,

              Isn’t there some experience from the Austin chalk, I thought they used horizontal laterals there, I realize the formation is different, but did they frack those horizontal wells in the Austin chalk?

              Wouldn’t someone with experience in that play have a better understanding of the long term problems with horizontal fracked wells?

              Using NDIC data for 2008, 2007, 2006, 2005, and 1990 to 2000 wells, I spliced together well profiles out to 23.6 years.

              This is not a true well profile, but is based on the assumption that the late years of the average 2008 well will be similar to the late years (years 12-25) of the average 1990 to 2000 well (most of these are horizontal wells). EUR=330 kb

              • Dennis Coyne says:

                Hi all,

                A pretty good review of horizontal drilling (but old, 1992) at link below:

                http://www.eia.gov/pub/oil_gas/natural_gas/analysis_publications/drilling_sideways_well_technology/pdf/tr0565.pdf

                Based on this paper there were fracked horizontal wells in the Giddings field of the Austin Chalk in Texas.

                • Glenn Stehle says:

                  There were also fracked horizontal wells drilled to the Devonian in the Permian Basin in the 1990s and the early naughties.

                  All the horizontal wells on the linked map, for instance, were completed in the Devonian at that time.

                  http://i.imgur.com/AHydx9e.png

                • shallow sand says:

                  Dennis, thanks, interesting. Real quickly looked at RRC PDQ. Take a look at Burleson Co, Giddings (Austin Chalk – 3). Shows many wells still in production, in 2014 oil per day average 3,372, gas 2,440 (BOE 6/1). Looks like Anadarko is a major operator.

                  Have no idea how many of those are horizontals, may be interesting to look deeper into those.

                  Maybe Mike can give some information.

              • Dennis Coyne says:

                Hi Shallow sands,

                I couldn’t find the well or operator you referred to, but there are a bunch of wells in Giddings Austin Chalk 3, the following well is in the chart below:

                Lease Name: AKIN-FOXFIRE UNIT, Lease No.: 22405

                well started production in April 1994 and was abandoned in November 2011 after 17.5 years.

                • shallow sand says:

                  Dennis. I was not referring to a specific well, but production from the entire field per barrel of oil and per boe casinghead gas for 2014, plus indicating that the major operator there at present is Anadarko, which is a large US independent.

                  I do not know how many of those wells are horizontals, but if there is a way to find out, one would have a lot of data to review if time permitted.

                  • Dennis Coyne says:

                    Hi Shallow sands,

                    Yes a lot of output from the field, I can’t seem to pull up the completion data, I do not have the skills that Mike has, he probably has access to a bigger data set through a subscription.

                  • shallow sand says:

                    Dennis, I am not good a providing links, but google “Horizontal Drilling, What Have We Found?” by Gary S. Swindell, consulting engineer, Dallas, TX, that appeared in the Oil & Gas Journal 3/25/1996.

                    Some interesting information, one part being that 65% of EUR from US horizontal wells at that time was recovered in the first year, on average.

                    Also, there were several Bakken horizontal wells drilled in North Dakota in the 1990’s it appears.

                • Mike says:

                  Holy schnikes, Dennis; I am graphed out.

                  The first type curve in the Bakken based on previous “horizontal” wells is likely meaningless because prior to 2008 there was no horizontal lateral + stage frac’ing = miracle thing going on before then. The faster you want to get it out of the ground, IMO, the faster its going to poop out, you know that.

                  In graph #2, is that well, or wells, plural? If that is a one well unit then that is the Mother of all Chalk wells. Some remedial attempt at something occurred in year 8 and it no worky, after that I can’t tell what the well made. Not much, just for a long time. It’s funny, that. I operate a well that was born the same day I was. I can’t plug it for sentimental reasons, consequently the CUMM PROD is very impressive on the old bastard. We’re both going out together, I say.

                  Graph #3, same thing. It just produced a long time after year 8-10; as I said probably 3 days a month, which significantly reduces CAPEX and makes almost any well profitable and likely to live to an old age.

                  Graph #4, is neat but I don’t understand it. If that is a data driven reason to suggest maybe my idea about shale wells reaching a mid-life crisis, I buy it!

                  Mike

                  • Dennis Coyne says:

                    Hi Mike,

                    I am not sure which is graph #4,

                    I could not find the number of wells for the leases which started producing before 2005, there used to be a nice map tool that let you find it, but the RRC web page has changed and I can’t figure out how to find the number of wells on the lease. I think you are correct that there are probably 2 or 3 wells on that lease (and you would know better than me).

                    If graph 4 is the one that shows my Eagle Ford average well profile, that was a standard presentation suggested by Rockman (or he gave me that impression).

                    He told me of you draw an asymptote to the cumulative well profile with a slope equal to the output in barrels per month when the well is at its economic limit (for the “average” well) that points to your EUR.

                    In this case I assumed the economic limit was 7 b/d (or 212 b/month) and the EUR of the average Eagle Ford well is about 13 years at 210 kb.

                    When you look at my silly models for the Eagle Ford, that is the well profile that is used. I do adjust the EUR higher when the model underpredicts actual output by more than 5 %. I used to simply move the entire well profile higher by 1 or 2% to make the model match the data.

                    A problem is that assumes the EUR of the average well has increased by 1 or 2 %.

                    I believe that assumption is too optimistic and have recently changed the model where the shape of the well profile changes, with higher output in the early months and lower output in later months, but with overall EUR for the “average” well remaining the same as before (210 kb).

                    This is my “constant EUR assumption” for the average well. Note however that the constant EUR is very temporary, I also assume that at some point the EUR will start to decrease, but am waiting to see a decrease in the 6 month cumulative of the average well over a 6 month period, before declaring that this has occured.

                    In the mean time, for the Bakken (where data collection is much easier because they report individual well data, rather than by lease as in Texas), cumulative output for the average well has remained relatively consistent from 2008 to 2012. Then the 12 month cumulative rose over the 2008 to 2012 average in 2013 and 2014.

                    Initially I raised the EUR of the 2013 and 2014 average well to account for this, with the 2014 well rising to 15% higher than the 2008 to 2012 average well.

                    In my view it makes more sense to keep assuming the EUR in 2013 and 2014 remains at the 2008-2012 average level, with a new well profile that is higher and steeper in the first 12 months than the 2008 to 2012 average well and with lower output in the later months so that overall EUR remains about the same.

                    Clearly every well does not have a constant EUR, I am talking about the EUR average of the 2000 to 2500 wells completed in 2013 and 2014.

                    It is very possible that the new well EUR has started to decrease and possibly the higher EUR in the first 12 months for 2013 and 2014 average wells is an indication that EUR has started to decrease. That assumption seems a bridge too far, maybe even the assumption that EUR has not increased in 2013 and 2014 is too conservative.

                  • Mike says:

                    Dennis, I don’t think your work is silly; I hope that you don’t believe my antidotal way of simplifying very complicated aspects of a complex business like oil production is silly either. I’ve been at this a long time and have learned to trust my instincts.

                    I’ve made my point, I hope, about long, fat EUR tails in shale wells. I’m not buying it. I’ve never bought it. I might be wrong. If I am right, then shale economics are even worse than we have been yaking about for years, as is the contribution that unconventional resources will have to our energy future.

                    One of the problems I have with “modeling” everything is, as I have said, extenuating, unforeseen, shit happens stuff that changes the oil landscape overnight. For instance a ULCC upside down in the Strait of Hormuz. Or, yesterday, a 500 bbl. oil spill on the beaches below my beloved UC Santa Barbara. Modeling what an event like that has on the American public, already angry and mistrustful of the oil industry, is impossible. California wants no frac’ing, no offshore development, no more produced water injected into its subsurface; now this. There may never be another oil well drilled in that state, watch.

                    Mike

                  • Dennis Coyne says:

                    Hi Mike,

                    I appreciate your real world perspective and it helps a lot in making my models more realistic.

                    I mostly wanted to explain the well profiles that I use are not the “fat-tailed” hyperbolic well profiles with a “b”=1.4 that are used by some people.

                    I generally use b<=1.2 and the well profile is switched to exponential decline when the monthly decline rate gets to 0.875% (10% annual decline rate) for the hyperbolic model, typically this happens at about 9 years.

                    Bottom line, my models are fairly "thin-tailed", I also reduce output to zero when the well output gets to 7 b/d or less (which is fairly conservative), this happens at around 25 years.

                    Your criticism that we do not know what these wells will produce in the future is correct, a lot will depend in oil prices and politics and there is not a good model for any of that.

                    The model results are just a what if exercise where I assume that we allow continued drilling and I make a WAG at oil prices, and also assume that the well profiles that I am using are correct and that debt will continue to be extended to those companies that operate most efficiently (and get their cash flow into positive territory.)

                    Are all these assumptions likely to hold?

                    I am very doutful that they will, but I try to make the assumptions relatively conservative.

                    Hey what's a good guess for water disposal costs in Texas? Very roughly, $5/bw or $10/bw? I have no clue, but I think Fernando suggested $5/b for the Bakken as a starting point.

                  • Mike says:

                    Dennis, I appreciate your work.

                    I took an imaginary trip for a vacuum truck, yard-to well location-to disposal well-back to yard in the EF (and I think not much different in the Bakken) and came up with 3.82 per barrel (170 bbls.) plus 50 cents disposal, or $4.32/bbl. I’ll cross my heart on that.

                    Many operators in sweet spots with high well densities, however, will build their own water gathering system, separation and treatment facility, and have their own disposal well. Not all water is trucked. What portion of produced water is managed internally I do not know. The capital expenditure to deal with produced water in-house, so to speak, is enormous but I can’t even take a stab at how to prorate those costs per barrel of produced water. I am personally aware of costs associated with a commercial treatment/disposal well for trucking and it was 8.5 M. The pay out on that CAPEX, by the way, beat the snot out of an average sinkin’ shale well.

                    4.0-4.5 dollars a barrel.

                    Mike

                  • Glenn Stehle says:

                    You might find this to be helpful.

                    You can find water injection volumes broken down by:

                    1) County
                    2) Operator of injection well
                    3) RRC district
                    4) Injection type (whether disposal is into productive zone or non-productive zone)
                    5) Lease
                    6) Field

                    Texas Railroad Commission Water Injection Query

                  • Dennis Coyne says:

                    Hi Mike,

                    Thanks. I will use $4.50 per barrel for water disposal costs.

          • Dennis Coyne says:

            Hi Shallow sand,

            Isn’t there some experience from the Giddings field in Texas where there was a fair number of horizontal fracked wells drilled in the 1980’s.

            We would have 25 years of data from those wells. Not much data from PDQ. The Cunningham lease (#14028) in district 1 (Giddings-Austin Chalk 1) started producing in 1995 and is still producing at 20 years at about 167 barrels per month over the last 12 months.

            The PDQ only goes back to 1993 so the data is sparse. Mike may have greater access to older data.

            • We would have 25 years of data from those wells.

              I really don’t see how data from fracked conventional wells in reservoir rock is going to help much with the analyzing of fracked wells in source rock.

              • Dennis Coyne says:

                Hi Ron,

                I was under the impression that the Austin chalk was a relatively “tight” formation which is the reason that horizontal fracked wells were used there. I will let Mike correct me, or shallow sands, or MBP.

                • shallow sand says:

                  I am not really the one to comment, but I thought the Middle Bakken, at least, is not really a source rock, but is “sandwiched” between two source rocks, and is a mix of oil bearing rock.

                  • Dennis Coyne says:

                    Hi Shallow sands,

                    That was my understanding as well, but I will let those more knowledgable than me confirm or not.

                  • Look at it as if it were a cake. Three Forks is a very hard mix of poor quality rocks, very brittle, with tiny natural fractures. On top, the lower Bakken shale, a good source rock, it generates the oil, leaks it to the middle bakken, a very hard, brittle mixture of different types of rock mixed with shale. Fractured, very low quality. On top the upper bakken shale, another source rock. The shales surrounding the middle bakken serve as pressure seals, so the bakken has high pressure in the micro fractures where the oil is found. In some areas it’s really abnormal, with pressures which are at least 50 % than “normal”.

                    I’ve seen exploration reports which referred to shales like the two bakken shales as source, and a rock like the middle bakken as a “carrier bed”. In other words, in many settings the shales have a set of poor quality interbedded brittle rocks which carry the oil to a good quality reservoir. About 30 years ago an old geologist who used to teach me about these things told me the key in exploration was to find a good shale, with lots of carbon, mixed with a “dirty lime” (a shaley/dolomitic carbonate). He also showed me they had a very typical gamma ray curve, what we call a “hot lime/shale sequence”. Hot means the gamma rays are higher in the carbonate section.

      • Dennis Coyne says:

        Hi MBP,

        When I looked at single well leases in the Eagleville 1 and 2 fields (about 500 wells) a year or two ago, it looked like the average well would have an EUR=250 kb. So if your estimate is correct there may be enough water, note that the well might be done after 13 years. Rockman told me when the tangent to the cumulative well profile is at a certain slope, the well would be shut in, probably when OPEX= marginal revenue, and last time I checked, this was at 13 years and would bring the EUR down to 210 kb, if we assume the economic limit is 7 b/d.

      • MBP says:

        So many comments, where to start.

        The Austin Chalk then, why not. I consider it different than a truly unconventional field in that it produces ok as a conventional field. I know the Bakken has some conventional components but most of the formation cannot be produced without large horizontals, where wells will still produce in the Austin Chalk as verticals. Its highly fractured, and those natural fractures are what wellbors need to intersect to get production. A horizontal well has a higher chance of intersecting fractures than a vertical well (especially if you frac it) so that is why horizontal wells have taken off in the play.

        On horizontal wells, Ron is right that there is a difference between horizontals in a conventional field vs those in unconventional plays are designed to do different things. Unconventional wells are not always drilled this way, but they will be most effective if the wellbore is perpendicular to the direction of maximum stress the basin underwent. This aligns the wellbore perpendicular with preferential perm and the dominant natural fracture network and should contribute to flow better than a well that is not drilled in this way. Conventional horizontals, that are going to be waterflooded or CO2 flooded, need to be drilled the exact opposite way. I.e. they need to be drilled parallel to maximum stress so the dominant fracture network is parallel to the lateral. This (theoretically) keeps the horizontal from watering out quickly and thus stranding oil.

        I used my incredible artistic skills in MS Paint to draw the below illustration. For both sides maximum stress is top to bottom so the fracture network is left to right.On the right is a horizontal in a unconventional play (as well as the Austin Chalk, which I’ll call a hybrid) with the lateral maximizing contact with the natural fracture network. To the left, is a horizontal drilled in a conventional field. It is perpendicular to the unconventional wellbore to try and keep it from watering out. The blue arrows represent the primary movement of injected water from the injection wells (triangles).

        ***Well I tried to post the picture, for some reason it wouldn’t let me 🙁

        • Dennis Coyne says:

          Hi MBP,

          Thanks!

          So the Austin chalk horizontals would be drilled like in the Eagle Ford and Bakken, or do they use CO2 and water flood in the Austin chalk?

          Sorry for dumb questions, I guess I don’t know if the Austin chalk is considered conventional, I thought it was a “tight” oil play, but I am wrong in many cases.

          • MBP says:

            No questions are dumb questions. I have no problem with people wanting to learn.

            I don’t think is has the connectivity to be flooded effectively as a conventional field, so I think it is most effectively drilled like an unconventional target. There are pockets of porosity and permeability that allow for flow without the need for large frac jobs, but the likelihood if hitting one of these is somewhat limited. That is why horizontals are used, to increase the chance of intersecting the natural fracture network that is charged with hydrocarbons.

            • Dennis Coyne says:

              MBP,

              Thanks, I think I’ve got it now.

            • shallow sand says:

              MBP. What indicators are there based on your knowledge of EFS,
              Middle Bakken or Three Forks that would indicate higher bopd in later years than Austin Chalk, Upper Bakken or other 1990s horizontal targets.

              Also, do you think Permian horizontals have more chance to hang in there? I know there are many formations being targeted in the Permian.

              • MBP says:

                I think the Austin Chalk is more compartmentalized than the true unconventional plays. Therefore, I think as time go on it will have a harder time maintaining flow through the fractures. I don’t actively work unconventional wells, so I’m not the best person to ask in terms of long term production curves. I’ve always relied on engineers to predict how much oil is going to be produced after I tell them where it is.

                • Dennis Coyne says:

                  Thanks MBP,

                  I didn’t realize how the labor was divided, so Fernando and Mike might know, if WOR or GOR sheds any light on future well output.

                  • Steady gor is better. For these wells in ultra low permeability rocks, low water cut is better. As you know I’ve been inquiring about it because high water could mean they are fractured out of zone, have poor cement, or the plumbing puts them in contact with an acquifer.

                  • Dennis Coyne says:

                    Hi Fernando,

                    Thank you.

                    I am only beginning to understand how some of this works, but my understanding level is very low.

                    On the water cut, could you define “low”?

                    By water cut, do you mean the water oil ratio, so a low water cut might be 0.25 bw per 1 bo or less?

                    My impression is that the Bakken/Three Forks is driven primarily by water (or maybe a combination of gas and water) and that the Eagle Ford is driven primarily by gas, is that correct?

                  • Dennis, water cut is the water production rate divided by the total fluid rate.

                    Low means as low as possible. Say 1 % water cut. That’s not usually possible. Reservoir energy comes mostly from fluid compressibility.

                    What seems to make these reservoirs work is the over pressure, which gives a wider range of delta pressure from initial to abandonment. The high gas oil ratio helps. I suspect the reservoir pore space is in micro fractures or very tiny pores. This probably traps gas bubbles for a while, preserving reservoir energy. Water has low compressibility, therefore although it expands it doesn’t yield as much energy. There are other subtle issues, such as rock compressibility (a very small factor, I suppose). The only reason water helps is the cooling service it provides in some cases. But a deep 300 degree F well doesn’t really benefit from water because it’s so hot. Those wells need to be gas lifted if they produce water and can’t flow properly (my guess).

                • Dennis Coyne says:

                  Fernando, thanks.

                  So for the Bakken it would be better to focus on the oil gas ratio or the gas oil ratio, the water is more of a nuisance, I guess.

              • Dennis Coyne says:

                Hi MBP,

                If I understand Shallow Sands correctly, I think he is looking for WOR or GOR levels that might be indicative of a well that won’t die early (at 9 years).

                I would also be interested because I have some data for the Bakken, for the Eagle Ford I have very little.

                • Mike says:

                  Dennis, I can’t answer your question about decline rates after year 8 in the Bakken. Neither can anybody else. I should withdraw my statement regarding pre/post 2008 Bakken performance; I was under the impression that the stage frac’ing party got under way up there in 2006 and 2007; you say 2000. I don’t know. The metric would be higher productivity.

                  As to early warning signs for premature death in shale wells; I don’t know. Neither does anybody else. I am trying to figger it out. The more I read the bigger the difference in the EF and Bakken appears to be; ND is not my hood and I should not make comments about what I don’t know. Steady GOR is good, like Fernando says. Actually I think the inverse of GOR, yield, is more important. Water saturations are more important than production WOR, up to a point. There appears to be connate water in the Bakken, and nearby outlying water sources in the Bakken. In the EF there is nothing to frac into that would flood the situation unless it was a fault encountered in the lateral with sufficient displacement to the Edwards, or other oceans below. That would be rare. I am worried that EF wells might dry up like prunes.

                  Time will ultimately tell the tale. The problems with predicting the future of shale oil are 5 fold: 1.) future economics (unknown oil prices), 2.) reservoir function that even allows a future, and 3., 4. and 5.) debt, debt and debt:

                  http://fuelfix.com/blog/2015/05/21/lenders-give-sabine-oil-gas-more-time/

                  Mike

                  • Dennis Coyne says:

                    Thanks Mike,

                    Obviously my guesses about this would be much worse than yours.

                    I absolutely agree we do not know what the future decline rates will be. I was just trying to use the older Bakken wells to give some indication of the decline rate.

                    I don’t have any water saturation data, I have data on the barrels of water per month from many of the Bakken Wells (those that have been producing for 6 months at least will no longer be confidential). In the Eagle Ford there is considerable gas and oil data from the RRC that can be mined. The interesting metric is the oil to gas ratio? What level of barrels of oil per MCF of gas would we like to see for a long lived Eagle Ford well?

                    I found the following paper (link below), which seems to suggest in a very low pemeability reservoir (less than 0.001 mD) that the reservoir pressure will remain relatively constant and that the gas drive will continue for many decades.

                    http://www.diva-portal.org/smash/get/diva2:570795/FULLTEXT01.pdf

                  • Dennis, the steady decline rate you see in the 2009-2010 wells should do fine. That decline rate is a function of a ton of parameters, so it’s hard to tell what’s going to happen.

                    Don’t forget the wells may eventually be put on cyclic schedules. The well shuts in, it’s allowed to build fluid, gets pumped, then shut in. I would love to see how a five year old well behaves after a one year shut in. It could be a disaster to a huge success. But I love experimenting with other people’s money.

          • Mike says:

            The Chalk is some of my old hood; I used fractured carbonates, like the Chalk, as an example of problems sometimes associated with dissipated(ing) reservoir energy, lack of connate water and possible production problems. The source for hydrocarbon existence in the Chalk is the underlying Eagle Ford shale. A Chalk well that still produces 160 BOPM after 20 years is produced 3 days a month, I can almost assure you; the rest of the time the well is down awaiting fracture/wellbore storage to replenish itself. 338K BO CUMMPROD would put any well in the Austin Chalk Hall of Fame as one of the all time greats.

            There is often a vertical aspect to the natural fracture system in the Chalk (faults) that can create avenues to deeper sources of water; faults are sought out in the Chalk, or were before horizontal work in it began, but avoided altogether in shale laterals. Some times Chalk wells reach economic limits because they watered out, sometimes they dry up like raisins and don’t make anything. I have never heard of the Chalk being water flooded, or CO2 flooded; that CO2 stuff does not grow on trees.

            There is a carbonate-like component to shale (brittleness, etc.) but otherwise fractured limestone is not like dense shale, IMO. Its two entirely different animals; Ron’s right about that.

            Again, my concern is how these stinking shale wells will behave after year 8 or 9; they may not make it out of out middle age. I’ve made my point and should cool it before I make a fool of myself in front of MBP.

            This shale stuff is unique. Its different. Past performance (of anything) is not an indication of future (shale) results.

            Mike

            • Dennis Coyne says:

              Hi Mike,

              I agree that there are likely big differences between the Austin Chalk and the LTO plays. There seems to be quite a bit of water in the Bakken/Three Forks so perhaps that will perform somewhat like the Austin chalk.

              Just to clear something up in my mind (trying to learn),

              you mentioned that the massive fracking that started occuring in the Bakken/Three Forks in 2008 relative to earlier wells (which were also horizontal wells with either no fracking or fewer stages)
              makes you think these wells cannot be compared with the earlier wells. They are a horse of a different color.

              Is there a metric we can look at such as the water oil ratio or gas oil ratio that would indicate this difference?

              The average 2008 Bakken/Three Forks well produces about 47 bopd at 84 months from the start of production. The decline rate from 72 to 84 months is about 12.5%, if we assume this rate continues for the next 10 years, the well would be down to 12 b/d at 17 years, if we assume 10% annual decline over the next 7 years the well would be at 5 bopd at 25 years.

              My assumed well profiles are a bit more optimistic, I assume hyperbolic decline to a 9.5% annual decline rate at 8 years with exponential decline at 9.5% after that (year 9 and later).

              Note that the annual decline rate for the 2007 well from 75 to 92 months is about 7%. For the 2006 well (very few wells so possibly not as reliable) the decline rate of the tail is about 8%.

              Does the 9.5% annual decline estimate make sense to you for years 9 through end of life? If not what rate makes more sense? I can easily use whatever rate makes sense to those with greater knowledge than me(you, MBP, Fernando, Shallow Sands, and others.)

              Thanks.

  9. Jeffrey J. Brown says:

    60 Minutes reran a program last night on crumbling US infrastructure, and I was reminded of a post I made on The Oil Drum when it was still up and running, to-wit, It would be ironic if some poor soul in his brand new high tech Tesla happened to be driving across an ancient US bridge, just as it crumbled into an underlying river.

    It just seems to me that we have quite the conundrum, i.e., how do we transition to a happy vision of millions of EV’s, when the roads and bridges they are supposed to travel on are crumbling underneath them?

    An essay on this topic I wrote about four years ago:

    Commentary: Will we be able to maintain & replace our energy & transportation infrastructure in a post-peak oil world?

    http://www.resilience.org/stories/2011-04-04/commentary-will-we-be-able-maintain-replace-our-energy-transportation-infrastruct

    60 Minutes Program: “Falling Apart”

    http://www.cbsnews.com/news/falling-apart-america-neglected-infrastructure-60-minutes/

    • BC says:

      Jeffrey, indeed.

      With real final sales/GDP per capita not growing since 2007-08, global trade flat, US oil production per capita down 40% since 1970, world oil production per capita down since 2005-08 (the world now where the US was in the mid- to late 1970s), and US capital formation to GDP at the levels of 12-22 years ago, not only can we not afford to repair the existing mature, complex, high-tech, high-entropy infrastructure, it follows that neither can we afford to simultaneously continue to build out “renewables” (especially with electricity consumption per capita at the level of the late 1990s) to anywhere close to the necessary scale AND maintain indefinitely the fossil fuel infrastructure.

      Doing one or the other or some combination of rebuilding existing infrastructure and building out “renewables” is like investing for “the future” that is unlikely to materialize, i.e., similar to Japan’s bridges to nowhere and China’s dozens of empty Potemkin Village-like ghost cities.

      But the belief in costly, increasingly unprofitable, ecologically destructive perpetual growth on a finite planet does not permit reframing values, expectations, and actions in terms of conserving, recycling, reducing, and sustaining a steady state with redistribution to maintain a sustainable standard of material consumption and well-being per capita.

      http://www.straight.com/news/452581/afterburn-richard-heinberg-paints-bleak-picture-inevitable-post-carbon-future

      Were we to consciously cease growing in order to reassess, consolidate, reallocate, optimize efficiencies, and redistribute, the system will collapse, or so it is said.

      But that assumes that the “we” who have the wealth, institutional authority, and political power could, or would, actually do anything about mitigating the worst effects when their self-interested imperatives and indifference to the bottom 99% imply that they don’t need to care.

      So, “we” are going to continue BAU, or speed up the process, and increase the probability of collapse (or an increasingly volatile descent per capita).

      Back to the iThingies, Facebook, and an update on the size of Kim’s backside to distract ourselves from the maladjusted gloomsters’ memes. Like, doom and gloom is, like, OMG, so wa-a-a-ay yesterday.

    • MarbleZeppelin says:

      I would like to see some actual data on this problem. How much petroleum actually is needed to maintain a given length of highway or repair a bridge. If it’s petroleum that is the problem then someone should figure just how much of a problem it really is.

      I also find it quite astounding that we continue to fund petro wars instead of funding and requiring the fuel efficiency that would eliminate the need for the petro wars. That money could be used to fund highway repairs. In a rich country like the USA, it seems strange that money seems to be a problem. More than likely we are at peak Lilliputian rather than peak oil.

      • BC says:

        Marble, Peak Oil is in the rear view mirror in per capita terms, i.e., it’s history. We are witnessing the increasing incidents and scale of effects of Peak Oil (overshoot, LTG, etc.) around the world. It becomes a matter of whether we choose to recognize and acknowledge the effects and proximate causes. Most eCONomists don’t acknowledge (at least not publicly) the causes and implications hereafter because they don’t get paid to challenge the Establishment BAU assumptions and imperatives. There’s no money or careers to be made pointing out the imperial nakedness, especially not in proposing alternatives.

        As so often is the case, it is about exergy, scale, and the rate of growth of real, after-tax profits and incomes, velocity, and gov’t receipts that largely determines what gets done, who benefits, and who pays.

        The Anglo-American-Zionist imperial war machine is the means by which the imperial corporate-state uses never-ending war as a kind of global business strategy by the owners of empire.

        Now, back to our distractions.

        • MarbleZeppelin says:

          I repeat, all that hen scratching and still no data.

          • BC says:

            Marble, I am providing the narrative and the motivation to challenge your thinking (or not). Don’t expect one to hold your hand and lead you in the dark to the data, analysis, and insights. You can’t do it. I have faith in you. 😀

            • MarbleZeppelin says:

              Do I have to do everything myself? What good are you.?
              Oh yes, tell me another bedtime story or narrative as you call it. It puts me to sleep and demotivates me.

        • Hillson says:

          Hear, hear. War is the goal, with petrol being a needed ingredient for said war.

          Submission and compliance from Iraq would’ve sated the Empire for a while, but a new enemy would still be sought. Remember early in the Iraq war when things appeared to be going “ok”? The U.S. was itching to go after Iran next.

          • MarbleZeppelin says:

            That’s right, General Butler said so.
            Winning a war is different than occupation. Think tar baby if you try to be nice about it.
            I don’t think the US was really itching to go after Iran, just a few idiotic political fatheads beating the war drums. Iran would make a huge mess out of our fleet and probably take down the Saudi oil fields at the same time as a lesson. They just have too many missiles to deal with. It would also get Russia involved quite quickly, not good.
            The US needs to be making friends and helping, not stirring up more trouble.

            • Glenn Stehle says:

              MarbleZeppelin said:

              I don’t think the US was really itching to go after Iran…

              If you think that, you really don’t understand the mentality of folks like Rumsfeld, Cheney or Hillary Clinton, or the imperial overreach which seems to be a hallmark, throughout history, of imperial decline.

              With America’s manufacturing economy in shambles, the Clinton machine can now be redirected to geopolitical maneuvers.
              Hillary Clinton: The International Neocon Warmonger

              • MarbleZeppelin says:

                Only a partial quote, read the rest of my sentence.

                • Glenn Stehle says:

                  The problem is I don’t see Hillary Clinton as being representative of “a few idiotic political fatheads beating the war drums,” but very much in the mainstream of political thought in the United States.

                  • MarbleZeppelin says:

                    You are the one that put her in with those guys, not me.

                  • Glenn Stehle says:

                    Well yes, I did put Hillary Clinton in with Cheney and Rumsfeld.

                    So that brings up an interesting question: Do you believe her foreign policy prescriptions differ significantly from those of Cheney and Rumsfeld?

                    As you may recall, the US barely dodged lightning in Syria. But the reason the US didn’t go to war against Syria wasn’t because of anything the US did. No, on the contrary, it was because none of its allies, not even Obama’s poodle David Cameron, would join it in another military adventure.

                    And where was Hillary Clinton in all this?

                    Well of course blaming Obama for not going it alone in Syria, for refusing to intervene in Syria and to escalate the conflict there:

                    As she writes in her memoir of her State Department years, Hard Choices, she was an inside-the-administration advocate of doing more to help the Syrian rebellion. Now, her supporters argue, her position has been vindicated by recent events.

                    The Atlantic, “Hillary Clinton: ‘Failure’ to Help Syrian Rebels Led to the Rise of ISIS”

                    Hillary the neocon: Am I wrong?

                  • Glenn Stehle says:

                    MarbleZeppelin,

                    And I am far from alone in believing that America has come unhinged.

                    John Mearsheimer, for instance, had this to say about the hypersensitivity and paranoia which inflicts mainstream US politics, Mearsheimer being of the leading thinkers from the realist school of US foreign policy.

                    In February 2013, Secretary of State Hillary Clinton stated that Americans “live in very complex and dangerous times,” and the following month Senator James Inhofe said, “I don’t remember a time in my life where the world has been more dangerous and the threats more diverse.” These are not anomalous views. A 2009 survey done by the Pew Research Center for the People and the Press found that 69 percent of the Council on Foreign Relations’ members believed the world was more dangerous than—or at least as dangerous as—it was during the Cold War. In short, the elite consensus is that Egypt and Syria are not the only countries Washington has to worry about, although they are among the most pressing problems at the moment. This grim situation means the United States has a lot of social engineering to carry out, leaving it no choice but to pursue an interventionist foreign policy. In other words, it must pursue a policy of global domination if it hopes to make the world safe for America.

                    John J Mearsheimer, “America Unhinged”

                  • MarbleZeppelin says:

                    At the right edge of the commentary and can’t reply directly.
                    Am replying to Glenn Stehle says:

                    20/05/2015 at 8:53 am

                    MarbleZeppelin,

                    And I am far from alone in believing that America has come unhinged.

                    Glenn, when are you going to learn that there are corporations, groups and their politicians that benefit from promoting war and a heightened sense of fear among the populace and the government/military.

                    It’s an old con game that is only driven by greed. War, munitions, security, surveillance, and their ilk are all big business. Don’t be conned.
                    It is pursuing inappropriate and self-destructive policies to some extent, but that is being driven by the greedy groups I talked of earlier. They are the unhinged ones and need to be quietly put out of control.

                  • Glenn Stehle says:

                    MarbleZeppelin,

                    Indeed, there very well may exist a tiny fringe element who “are the unhinged ones and need to be quietly put out of control.”

                    However, anyone who has studied the history of Jimmy Carter and Ronald Reagan knows that the social illness goes much deeper, and is much more ubiquitous, than this.

                    When it comes to human affairs, human realities are every bit as important as physical realities.

                    But of course I realize that the Green Utopians, just like the Carbon Utopians and neocons, labor under the delusion that they can “create their own reality.”

                    Only time will tell. We’ll see how maleable human hard-wiring and cultural programing are.

              • Hillson says:

                Who said anything about winning? Perpetual war makes the imperialists plenty of money and keeps the lower class down so more oil can be exported to pay for (temporarily) rebuilding infrastructure. If “victory” is somehow reached and peace breaks out, that population will ramp up domestic consumption. Ask Jeffrey Brown how that works out.

      • Watcher says:

        Could print enough to do both.

    • Nick G says:

      The whole thing is pretty silly.

      Oil companies don’t want higher gas taxes, so we keep them at the same level for 20 years. After inflation, that means we’ve cut gas taxes dramatically, so there’s no money for road/bridge repair.

      It has nothing to do with what we can afford, and everything to do with oil companies protecting the value of their reserves and hanging on to their obsolete position in society.

      • BC says:

        Nick, it’s been a zero-sum situation in the US since 2000-07, and now the conditions are global. The same interests who own the oil companies also own controlling interest in the Fortune 25-100 firms that have revenues equivalent to 40-75% of US GDP. They largely decide who wins, who loses, who gets selected, who gets paid, who gov’t sponsors and protects, and what “we can afford”.

        The owners of the imperial corporate-state don’t care what the bottom 99.9-99.99% of “us” want, as long as they maintain their wealth, status, influence, and power, and the capacity to act as they see fit to secure their wealth and power. If a “renewables” build out to scale and mass-scale happy EV driving were to have been more profitable than war, TBTE banks’ plunder and bailouts, buying gov’t, and the rest of it, they would have gone all in. They know it ain’t gonna happen because “they can’t afford it” and be profitable.

        • Nick G says:

          World GDP has grown since that time – it’s not zero sum.

          Yes, the wealthy have way too much power, and wages and sales have been growing slower than they should have been because the wealthy have gotten the marginal gains, and haven’t spent it properly (instead, they want to invest it, so there’s way too much money sloshing around looking for investments).

          On the other hand, it’s not *all* of the wealthy that have been holding back the transition away from FF: it’s FF investors, like the Kochs.

          And, even the Kochs are only succeeding in slowing down the transition.

          • BC says:

            Nick, take out China’s growth (unprecedented credit and unprofitable fixed investment to GDP to build dozens of Potemkin Village-like ghost cities), and real final sales/GDP per capita are flat.

            Now that the US and Japan have begun to contract FDI to China and firms and expats are bolting with their feet, the effect on China’s unsustainable growth will be too obvious to ignore hereafter.

            China’s organic growth is no faster than 3-3.5% and ~2.5-3% per capita, and the growth will slow even more hereafter owing to demographic drag effects (as in Japan, EZ, US, and the Asian city-states), excessive debt, and no profit, labor force, and productivity growth to justify further growth of investment, production, and exports.

            As to the wealthy “investing”, you probably mean speculative rent seeking of unsustainable returns of 7-10%+ when the economy needs non-inflationary investment and production at labor returns to 2-3%.

            • I target 4 %. Over the last few months it seems to have worked because I expected oil prices to rise, and they did. But those sweet times are quite rare.

            • Nick G says:

              BC,

              I’m sure that there’s quite a lot of production that isn’t allocated optimally: housing that’s not needed, etc.

              But that seems unrelated to the question of whether oil supplies are limiting production. And, again, GDP has been growing lately despite the recently high oil prices.

      • thrig says:

        Yes, yes, just a nip and tuck to the gas tax, and all will be well. Meanwhile, back in the real world,

        http://www.strongtowns.org/journal/2015/5/10/lafayette

        “A 533% tax increase….just to tread water” “auto-oriented development patterns are bankrupting our cities”

        • Nick G says:

          That’s interesting, but the article really provides no data on costs. What are the assumptions for pavement lifetimes? Costs per linear or square foot? Total amount of pavement?

          • Caelan MacIntyre says:

            So, throw a whole lot of statistics/questions of statistics at the issue to confuse and confound? ‘Assumptions for pavement lifetimes’? Please.

            It’s about complexity. And it has you and everyone else by the balls. I’ve seen you trip over it. And maybe flail. Taxes, statistics, etc. are part of the bureaucratic apparatus that’s tanking under its own weight. Can’t you hear the metal creaking? The governpimp statistics cronies death-gripping their desks?

      • TechGuy says:

        Nick Wrote:
        “Oil companies don’t want higher gas taxes, so we keep them at the same level for 20 years. After inflation, that means we’ve cut gas taxes dramatically, so there’s no money for road/bridge repair”

        Thats not the problem. States have made significant increases in fuel taxes over the past decades. The issue is that the tax revenue is being siphoned to fund pet projects that are completely unrelated to road maintenance, by politicians looking to toss money around to get re-elected.

        One of hundreds of articles how fuel taxes are used to fund non-road maintanance projects:
        http://www.ncpa.org/pub/ba761

        • Nick G says:

          You’ve had the misfortune to have found a right-wing “think tank” which promotes “private alternatives to government regulation and control”.

          There’s no mandate from god that fuel taxes be used on roads. This article seems to trying to reduce diversion of fuel taxes, probably to prevent increased fuel taxes which would hurt the oil industry.

          The basic problem: the right-wing has been reducing government revenues of all kinds, regardless of the state of the economy, the tax base, or the needs of taxpayers for services.

          That’s why roads aren’t being maintained…

          • Boomer II says:

            One environmental “benefit” of reduced road construction and maintenance is to discourage driving.

            Where I live, more deals are being cut with private companies to own and maintain roads and to charge fees to access the roads, or at least the fast lanes. I’m not sure if this is what small government supporters want, but it is happening.

            Where I live, whenever they widen the highways to add more lanes, it just seems to encourage more cars on the road. Putting less money into roads (and hopefully more money into public transportation and walkable communities and bike paths) might be a good thing.

  10. MarbleZeppelin says:

    From the article:
    “In the past four years discoveries were less than 10 billion barrels per year and in 2014 they amounted to less than six,” Mr Cutt said.

    “That’s only a fifth of current consumption! This is a staggering trend and represents an opportunity and responsibility.”

    But don’t those discovery estimates tend to grow with time as actual field data becomes available?

    • It depends on whether he´s reporting probables or something else. My experience is that reported discoveries don´t necessarily grow if the numbers are reported by the exploration guys. When we engineers take over the development we drop the explorers´ figures (we have to follow regulations), but the Proved plus probables don´t seem to grow much. The idea is to do it right, because those numbers are used by governments and other bodies, and one has to work on having a solid reputation. At one point in my career I was asigned to work within an Exploration group, so I got very familiar with the way they did their numbers. My personal choice is to keep everything above board, try to get a solid number for proved, be a little more liberal with the probable, and push for the development to have the budget to drill extra wells and allow for water injection and other EOR from the beginning. In one case I even had a water and gas injection (alternating WAG) thrown in the development plan, which really helped because it helped boost reserves for a property sale. That WAG was a bit weird, but it worked.

      • MarbleZeppelin says:

        Thanks Fernando,
        Looks like another case of undefined numbers. I guess it can go both ways.

      • Dennis Coyne says:

        Hi Fernando,

        One of the few places that reports proved plus probable reserves is the United Kingdom and their 2P reserves have grown by roughly 20% over the last 20 years (though I do not have access to very good UK discovery data, UK does not do as good a job with that as Norway whose data is very detailed, but I haven’t figured out how to translate Norway’s many reserve categories into proved plus probable.

        Maybe Euan Mearns has some discovery data for the UK.

        Your 25% reserve growth estimate seems quite conservative to me based on the experience in the US where we can estimate 2P reserves at about 1.75 times proven reserves and reserve growth has been more like 50% over the last 30 years using EIA data for reserves and output from 1977 to 2006 (before the LTO boom).

        • Dennis, my estimate was based on my experience. It’s also intended to be a global figure. For example, I think Venezuela’s reserves are overestimated.

          Then there’s the skeletons. Field we discover, appraise, prepare reserves estimates (proved plus probable), and they go poof. They never even get developed.

          For example, did you follow the oil industry in the South Atlantic? The famous Falklands oil fields? How many barrels do they produce? What about the fields in the Canadian Beaufort? How much is Exxons jv actually producing at Arkatun Daggy? Those fields have had discovery volumes attached to their names. But either they don’t produce, or it’s likely they won’t produce that much.

          • AlexS says:

            Rosneft Started Production at the Sakhalin-1 Arkutun-Dagi Field

            January 19, 2015
            http://www.rosneft.com/news/today/19012015.html

            The participant companies of the Sakhalin-1 consortium are pleased to note that all the works for the start of the commercial oil production at the Arkutun-Dagi field were conducted in strict compliance with the approved schedule, determined technological specifications and subject to all the industrial and ecological safety legislations. Berkut platform started first oil supplies.
            Production output from the field at planned capacity will reach 4.5 mln t. a year.

            Arkutun-Dagi field is located about 25 km from the north-eastern shore of the Sakhalin island in the sea of Okhotsk. According to the development simulation model, the existing world’s most powerful drilling platform provides for well drilling with horizontal displacement not less than 7 km. As a result, the platform virtually appears as a giant multiple well platform, which allows maximum efficient offshore development.

            Sakhalin-1 is the first large-scale shelf project carried out in the Russian Federation on the PSA conditions (executed in 1996).

            Shares of the project participants:
            Rosneft – 20%
            ExxonMobil – 30%
            SODECO – 30%
            ONGC Videsh Ltd. – 20%

            • Those extended reach wells can’t really drain the field. They are nibbling the edges. That field was discovered over 35 years ago, and as far as I can tell the original reserve booking will never be produced.

          • Dennis Coyne says:

            Hi Fernando,

            I am referring to C+C less extra heavy proved plus probable reserves, so oil sands in Orinoco and Canada are not included.

            I am well aware that some reserve estimates are too high and some are too low, it is the average that matters. In the US, UK, and Norway on average there has been substantial reserve growth, my guess is that 25% is too low and estimate and 50% may be too high.

            How about 37% (split the difference) for World C+C less extra heavy oil 2P reserve growth?

            • Starting from which number? Are you using the BP Factbook?

              • Dennis Coyne says:

                Hi Fernando,

                Good question, the BP numbers include NGL reserves, so EIA reserve numbers are better, but there is some inflation of OPEC reserves, which might be offset by 1P reserves used in some non-OPEC nations.

                In 2011 the EIA has C+C-extra heavy 1P reserves at 1165 Gb.

                We will assume 2P reserves are approximately this level, if the inflated OPEC reserves (extra 300 Gb based on Jean Laherrere’s estimate) roughly balance with the probable reserves from non-OPEC nations.

                So if reserves grew by 37% from 2011 to 2050, then 2050 2P reserves plus C+C production over the 2011-2050 period would be 1600 Gb, if we add the 1150 Gb of cumulative C+C-XH output up to 2011, we get a URR of 2750 Gb (with zero new discoveries after 2011). If we assume 50 Gb of new oil discoveries between 2011 and 2050, we would be at 2800 Gb for World C+C less extra heavy oil URR.

                • Sounds fine. I don’t think it matters much, because the marginal reserve adds only reduce the decline rate after a field reaches peak. And in 10 years most fields will be beyond peak or plateau.

                  • Dennis Coyne says:

                    Agreed. It will help reduce the decline rate a bit, but is not going to affect the peak much (if at all).

  11. I´ve been reading local oil ministry webpages in several countries I´ve worked in. The following may be of interest:

    1. Colombia. Production average previous 12 months (to Feb 2015), 994 thousand BOPD. Production Feb 2015, 1029 thousand BOPD, 6 thousand BOPD lower than January 2015.

    2. Argentina. Production is being subsidized, the government PAYS $72 a barrel. All the oil is processed in country, they import a small amount. The only area with potential to increase production is Vaca Muerta in Neuquen province, mainly where Chevron is active. Chevron stated they will continue investing. Well costs are higher than the USA as far as I can tell. YPF, the state controlled oil company, is trying to find other partners, but the going is tough.

    3. Ecuador. Slight production drop. Ecuador is an OPEC member, therefore it has to hold the line on increases. I don´t think they any have spare capacity. They have a very transparent report, list production EACH DAY for all operators, but they don´t lump the dailies, and I didn´t feel like copying the numbers to add them up.

    4. Azerbaijan. Definitely losing production. They have plans to develop more Shah Deniz gas condensate, are investing heavily in gas pipelines to move gas to Europe. The new red government in Athens is making noise, they want to renegotiate the gas transit fees.

    5. Australia. Recent peak in June 2014 368 thousand BOPD. February production 314 thousand BOPD. March production 249 thousand BOPD (must have shut in facilities for maintenance?).

  12. learner2 says:

    Art Berman is saying that world production is still growing, ex-shale. Thats causing a surplus, and so expects lower prices. Somehow, based on the last few articles here, it doesnt look like that to me. Only saudi increased production, rest was lower per recent Ron’s posts.

    • I dunno, I decided to access the webpages for these ministries to see what’s going on. From a purely common sense approach one would have to think production is dropping. But large projects do go on. This means we see new fields going on stream. But the fields with flexible responses are definitely cutting back. And don’t forget the Saudi-Kuwaiti joint zone has been shut in.

      I guess I’ll try to search country by country using their ministry pages to see what they show?

      • shallow sand says:

        I realize that a large percentage of oil is produced by national oil companies. Therefore, I think the large one’s (Gulf OPEC and Russia) hold the keys.

        Concerning spending by large public companies, Morgan Stanley reports that from a review of over 120 publicly traded companies, CAPEX spending is expected to fall by $131 billion dollars, from $520 billion in 2014 to $389 billion in 2015.

        So a big drop in spending, but still a large amount of money being spent to find oil. Sub $60 WTI will mean most USA and Canadian companies continue to be cash flow negative, or stop spending CAPEX and see output fall significantly.

        For example, I would also note that ConocoPhillips, which produces over 1.5 million BOE per day, just announced plans to hold CAPEX flat for the years 2015, 2016 and 2017. Of course, those figures could always be revised. That announcement followed a several billion dollar cut of CAPEX from 2014.

        I think the ball is in the court of the Middle East and Russia. It appears Saudi Arabia, Kuwait, UAE and Iraq are drilling more and therefore could increase production, and Iran will likely be in the same category, if sanctions are lifted. Russia appears more likely to hold production near present levels, than to significantly increase or decrease production.

        I suppose if OPEC is more concerned with market share, they could pressure prices for awhile. However, the countries that have sovereign wealth funds will either need to tap them, or lower domestic spending. The remaining OPEC countries will suffer to varying degrees. Eventually, OPEC uses up spare capacity, and then there will be a supply problem.

        Assuming OPEC is able to keep a lid on oil prices for a few years, the big losers will be USA and Canadian oil companies. Sub $60 oil through the end of 2017 will hurt. An average price of $48 WTI caused all major non-integrated companies to be very cash flow negative in Q1 2015. Even with major CAPEX cuts, there will be little earnings for these companies at sub $60 WTI, especially if natural gas stays at $3.00 or less.

        The heavily leveraged shale will be hardest hit. Really between a rock and a hard place at sub $60 WTI through the end of 2017, can’t see banks continue to loan, therefore production will fall significantly, and there will be little to no operating income to reduce debt.

        • I don’t know about the individual Arab OPEC nations, but Venezuela will have major social unrest if prices stay below $80 for 12 months. This week has been terrible for them, the bolivar went over 320 in the black market, the economy keeps griding down, poverty is higher now than 15 years ago, they have electric power cuts, crime is even higher, food scarcity and lack of medicines are the norm. The only thing keeping the people from rioting is the extreme repression.

          To add fuel to the fire the Wall Street Journal published an article discussing the Venezuelan government’s involvement in the drug trade, and a former Spanish Prime Mnister, Socialist Felipe Gonzalez, said he would go to Caracas to help defend opposition leader Leopoldo Lopez during his ongoing sham trial.

        • Venezuela’s bolivar is at 350 this morning. The black market rate is zooming. I think it’s a combination of the government running the printing machines at Zimbabwean rates, and sheer panic as people try to put their holdings in dollars at whatever price they can find.

          Just to give you an idea of the rate of change, about a month ago I sent money to help a poor Venezuelan family I know, that day the black market quote was 275.

          In other news, Qatar’s Sheikh Tamim bin Hamad bin Khalifa Al Thani landed in Caracas a few days ago, didn’t receive the customary ceremony at the airport, drove to the presidential palace and met with Maduro. The rumor mill says the two leaders were afraid of an attack by Arab radicals to get the Sheik. The conversation revolved around oil prices, and Maduro said after the meeting that OPEC nations agreed a higher price was desirable. However, the Sheikh didn’t confirm this point, got on his plane and that was it.

          The Maduro regime includes Arab radicals in the upper echelon, including Tarek el Aisami. When I lived in Venezuela the intelligence agencies reported there were Al Qaida recruiters working to pick up Arab Venezuelans who spoke perfect Spanish, but other than an attack on the Caracas synagogue there wasn’t action within the country.

        • Venezuela bolivar at 392 in afternoon trading. Towns of Higuerote and Caucagua having anti government protests, burning car tires on the streets. Power cuts seem to be the main driver.

          Power cuts to the west in Carabobo shut down the El Palito refinery.

          Doctors mounting protests as their monthly salary is down to $20 U.S. Per month. Lots of physicians fleeing the country.

          Chile’s parliament voted to have government withdraw their ambassador from Caracas until human rights abuses cease.

    • OPEC, crude only, is up 869,000 bpd over the last two months, March and April. Largest changes were Saudi Arabia up 432,000, Iraq up 365,000 bpd, and Libya up 160 bpd over the two month period. Iran was up 59 bpd and Angola down 133 bpd over the two month period.

      I don’t have the non-OPEC production over those two months but I would believe it is down at least a couple of hundred bpd over that period, likely more. But overall, production has increased since January. So I think Art is right.

      • Ron, as you know I don’t keep my own data, I just look over the figures you post, but I think that’s really comprehensive. So let me go over what I recall:

        1. OPEC projects over 1 million bopd demand increase in 2015.
        2. U.S. Production seems to be flat and will go down slowly over the next 6 months.
        3. After surveying a scattered group of countries I conclude that non OPEC production outside North America will be down.
        4. OPEC is up, but the increase doesn’t offset the declines elsewhere, nor does it cover increased demand.

        I didn’t put numbers to the above because in many cases we get NGL and other liquids tossed into the mix. The EIA seems to generate politically slanted forecasts, so we can’t go by those.

        My overall sense is that production isn’t going to keep up with demand, stocks will likely go down, prices will increase, and we’ll see activity pick up when they approach $80 per barrel WTI. But it will be uneven.

        Argentina’s use of subsidies to keep prices steady is an interesting bit. They want steady activity levels, and are trying to keep Chevron investing in the Vaca Muerta tight oil play.

      • Jeffrey J. Brown says:

        FT: Energy groups take knife to $100bn of spending after oil rout

        http://www.ft.com/intl/cms/s/0/74230642-fb1b-11e4-9fe6-00144feab7de.html?siteedition=intl#slide0

        More than $100bn of spending on new projects by the world’s energy companies has been slowed, postponed or axed following the oil price plunge, evidence of the drastic industry action that will curb output in coming years.

        Companies including Royal Dutch Shell, BP, ConocoPhillips and Statoil have led moves to curtail capital spending on 26 major projects worldwide, according to analysis commissioned for the Financial Times.

        The delays and cancellations, many disclosed quietly in recent weeks and months, come amid a wider retrenchment by the industry that has seen thousands lose their jobs and led to a slowdown in the US shale boom.

        The research by consultancy Rystad Energy shows that producers have targeted some of the highest-cost areas as they have trimmed spending, with nine Canadian oil sands projects put back, each ranging from $1bn to $10bn in planned expenditure.

    • AlexS says:

      Art Berman looks at historical data.
      But the EIA and others forecast a sharp decline in global liquids surplus from June 2015.
      The market may be anticipating this change in fundamentals

      World Liquids Production Surplus/Deficit vs. Brent oil price (RHS)
      Source: EIA STEO May 2015

      • The EIA includes NGLs in their figures. This masks real trends in the crude + condensate market.

        • AlexS says:

          Art Berman’s chart includes all liquids, and he uses the same source.

          If we exlude NGLs and other non C+C liquids from production numbers, we should do the same with the demand numbers.

          • Glenn Stehle says:

            Predicting oil prices is a fool’s errand.

            While geology and technology are becoming increasingly important, political economy still plays the larger role.

            Predicting near-term political and geopolitical developments — such as how much oil the Saudi royal family will decide to produce in the coming months — in a highly unstable and chatoic world in which there is a rebalancing act going on, is, IMHO, impossible.

            None of this, of course, slows down the speculators, like Berman and Gail Tverberberg, one iota. They continue to make their grand predictions about oil prices for the near future, Berman perhaps a little bit more cautiously than Tverberg.

            It’s amazing how quickly hypothesis hardens into dogma, and dogma into theology, with religion these days quite frequently being of the “secular stealth” variety.

            • AlexS says:

              I think Art Berman in this particular article is predicting short-term price correction, not a long-term downward trend.
              And there is more or less common view in the market that crude prices are due for a correction after the recent rally

              • Glenn Stehle says:

                In addition to this article, I was thinking of another recent article Berman published where he said:

                The present oil price collapse is because of over-production of expensive tight oil. The collapse occurred because of the inability of the world market to support the cost of the new expensive oil supply from shale, oil sands and deep water. Demand was progressively destroyed during the longest period of sustained high oil prices in history from 2010 through 2014.

                From this I concluded that Berman imbibed of the same Kool Aid that Tverberg has.

                “Demand was progressively destroyed…from 2010 through 2014” is an empirical claim which is false, and demonstrably so.

                As to the statement that “there is more or less common view in the market that crude prices are due for a correction after the recent rally,” I suppose this might mean something to those who subscribe to neoclassical and postclassical economics and their abiding faith in market fundamentalism, a tenet which holds that markets are “rational.”

                I like what Keynes had to say: “Markets can remain irrational longer than you can remain solvent.”

                More on this dissident viewpoint can be found here:

                Benoit Mandelbrot thinks we’re all screwed

                https://www.youtube.com/watch?v=DLFkQdiXPbo

                The (Mis)Behavior of Markets

                ***Here is a graph of World Liquid Fuel Consumption for the past 10 years, and as can be seen the claim that “Demand was progressively destroyed…from 2010 through 2014” is false:

                http://i.imgur.com/J4FD7nb.jpg

                • Nick G says:

                  That chart shows about 10% growth in oil consumption over 10 years. What was world GDP growth over that period – 40%, as a wild guess?

                  IIRC, 25% is a rather smaller ratio of oil:GDP growth than was seen in the prior decades.

                • BC says:

                  Glenn, there has been little or no growth of consumption PER CAPITA since 2004-08.

                  Peak Oil is behind us. We’re into the initial stages of global “Limits to Growth” PER CAPITA.

                  We have reached the systemic exergetic limit bound to growth of population, production, and consumption PER CAPITA.

                  • Glenn Stehle says:

                    Well actually, per capita energy consumption in the United States has been essentially flat for the past 45 years, as the attached graph illustrates.

                    What has varied over time is the percentage of the GDP which was necessary to spend in order to maintain that per capita energy consumption flat, as the graph also shows.

                    But I’m quite sure that, given the way the EIA calculates these things, it doesn’t include the amount of money the US has spent on military endeavors, under the aegis of the Carter Doctrine, to maintain the flow of cheap and plentiful oil to the United States.

            • AlexS says:

              Glenn,
              no matter if you adhere to neoclassical or keynesian theory, you must admit that all market rallies are sooner or later followed by price corrections. I personally think that a $10-15/bbl correction is imminent this summer before the price recovery continues.

              The graph below compares Brent price dynamics during the 2008-09 and 2014-15 cycles (days after the peak):

              • Glenn Stehle says:

                What would happen to your prediction if Putin and the Saudi royal family were to put their heads together and decide it’s to their mutual interests to cut their oil production by 1 or 2 million barrels per day?

                And I don’t see how the 2008 and 2014 oil price routs have anything in common.

                In 2008 you had a Minsky moment in the US, the European Union and Japan which caused a recession in those countries, along with oil demand destruction in those countries, to which OPEC responded by cutting oil production by several million barrels per day.

                In 2014 you had no Minsky moment, no financial crisis and no economic recession, steadily increasing global oil demand, a surge of oil supply from the United States, to which OPEC responded by increasing oil production by about 1 million barrels per day in March and April.

                Have you ever heard of the old saw that “correlation is not causation”?

                • Glenn Stehle says:

                  OPEC crude supply 2008 to 2015

                  • Jeffrey J. Brown says:

                    EIA data show that OPEC 12 total liquids consumption increased from 7.7 MMBPD in 2008 to 9.1 MMBPD in 2013, as their net exports fell from 28 MMBPD to 27 MMBPD.

                • AlexS says:

                  There is 0% probability that Russia cuts oil production to support prices, and no more than 10% probability that the Saudis cut their production.
                  As regards the graph that compares oil prices in 2008-09 and 2014-15, I wanted to point out, that there were several price correction in 2009, when
                  the general trend was already upward.
                  This time, we already had a $10 price correction in March

              • Jeffrey J. Brown says:

                IMO, the biggest difference between 2008/2009 and 2014/2015 is six years of depletion:

                In round numbers, we have burned through about 100 Gb (billion barrels) of Global Net Exports of oil (GNE*) from 2009 to 2014 inclusive, as GNE fell from 46 MMBPD in 2005 to 43 MMBPD in 2013. The volume of GNE available to importers other than China & India fell from 41 MMBPD in 2005 to 34 MMBPD in 2013.

                Based on the 2005 to 2013 rate of decline in the (2005) Top 33 Net Exporters’ ECI Ratio (ratio of production to consumption), I estimate that post-2005 global CNE (Cumulative Net Exports) are on the order of about 500 Gb.

                Therefore, based on the foregoing estimate, during the six year period from 2009 to 2014 inclusive we may have burned through about one-fifth of the total post-2005 cumulative supply of Global Net Exports of oil.

                In other words, depletion marches on, at an accelerating rate of depletion in the remaining supply of post-2005 Global Cumulative Net Exports of oil.

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

          • Yes, we should do the same with demand. Demand is simply refinery runs. Do you have an easy to find refinery run statistic?

  13. Old farmer mac says:

    Lots of things are sure as hell going to be MUCH more expensive -TOO expensive to be affordable as time passes and fossil fuel depletion proceeds right along. But we can get along ok without most of them , and we can substitute other goods and services for the ones we can’t get along without.

    There is no really good evidence in my opinion that renewables cannot be made to work well enough to support a basically decent and dignified lifestyle for the ones of us who make it thru the coming baked in collapse – the ones who live in currently rich and thinly populated countries anyway.

    I know where of I speak when it comes to agriculture. We can drop WAY down the ladder and live much healthier lives eating a lot less red meat and a lot more grain and fruits and veggies.Just this adaptation alone will save us a huge chunk of our current needs for nitrates.

    AND anyway the doomers are RIGHT – for the most part- in my estimation.
    The population problem is mostly going to take care of itself.
    Don’t get caught in Egypt.

    But there is no real reason we can’t manufacture enough nitrates for a MUCH smaller population to get by ok using renewable power -as from wind and solar farms – if we make the effort. The fertilizer plants can be located where the wind and solar farms are located – and the wind and solar farms can be built where the wind and sun resource is optimal. Trains can do the hauling. If the wind quits blowing then the train can just sit on the tracks until it starts up again – or until the sun comes up.

    The naysayers are locked into their current vision of business as usual and cannot conceive of any thing different other than collapse.

    But we CAN adapt – if we choose to do so on a collective basis.

    We can easily divert at least half the megabucks we spend on automobiles to building out renewable energy facilities. In a real emergency we could get by without ANY new cars for five or ten years.

    We can get by with very few or NO new roads. No more new roads means any future growth is concentrated on existing roads thus reducing driving distances.

    Marble Zeppelin is right. We can quit spending on oil wars (maybe not immediately but over time) and put that money into renewables and conservation and efficiency.

    I hope and pray ( not literally) that we get a series of peak oil and peak resources bricks upside our collective head , one after another, starting very soon.

    I fear nothing else will sufficiently impress the public with the necessity of getting on with the transition. Fossil fuels aren’t going to last forever and once they are REALLY short it will be extremely difficult or impossible to get the public to accept the short and medium term sacrifices necessary to build out renewables.

    The transition is going to take a wartime type of effort if it is to be far enough along for renewables to shoulder the load as fossil fuels get to be ever more expensive.

    I don’t want to have it said I am warmongering but consider a scenario along these lines:

    Three years down the road.

    Oil is at ninety plus and there is no longer a glut. There is also little or no spare capacity. Depletion never sleeps.

    The international situation gets out of hand and we ( with help ) push the Russians too hard to get out of places they don’t belong – or at least places we don’t want them.

    Putin calls the western bluff and simply turns off the pipelines used to export Russian oil and gas.

    The world economy would have a heart attack within hours and be in the hospital for the duration.

    It may take something of this magnitude to get the message across. Hopefully there will be less disruptive wake up events.

    I have heard it said by professional military people that that just one obsolete fighter plane equipped with just one load of obsolete but powerful air to ground missiles is more than ample to sink a loaded supertanker in open waters – and that it would hardly be possible for a skilled pilot to miss such a huge unprotected and unarmored target at point blank range.

    It is supposed to be uncontrollable fire rather than holing the hull that does this trick. There might be a chance of putting the fire out in port where there is plenty of fire fighting capacity close at hand but no chance at all in open waters, especially if the engines are put out of commission.

    A dozen commandos dropped on such a ship by a helicopter could surely sink it. There are not many men on tankers and few if any of them are professional soldiers with weapons at hand.

    I have never heard of a German admitting it publicly but I am convinced there are plenty of people in Germany who understand the real score in respect to depleting fossil fuels and even faster depletion of IMPORTABLE oil and gas – people who have not forgotten WWII. People who are VERY nervous about being dependent on oil and gas imported from Russia. I think maybe such people have a lot to do with Germany working so hard on renewables.

    • Mac, that sounds extremely far fetched. The Russians aren’t were they don’t belong. And the USA will get zero support trying to attack Russia. It risks global thermonuclear war. Stop watching so much Neocon propaganda.

      • Old farmer mac says:

        HI FERNANDO,

        I am not actually worried to about a nose to nose confrontation with the Russians – and I am agnostic about current Russian actions in places near or within old Russian traditional borders- since I am not well enough informed to know the rights and wrongs of this matter or even what the various players are up to.

        Time is too limited to keep up with everything.

        So I qualified my example with ” where we don’t want them to be”.

        The odds of a war breaking out in any particular trouble spot are actually pretty slim even in times of high tension.

        But since there are SO MANY potential trouble spots, wars still happen – with some of them coming as big surprises to just about every body.

        Maybe the next big one will come as a result of a confrontation between China and Japan that gets out of hand.

        My minor point is that depending on IMPORTED fossil fuels is a very risky thing for a country to do – unless it has the MUSCLE to ensure that deliveries will continue no matter what.

        Not many countries dependent on imports have muscle to that extent. In a confrontation between sovereign countries the US might be the only one right now capable of actually occupying a distant foreign country and taking over oil production and sending it to the home country. And it is a hell of a stretch even for us.

        There are a few countries that have the muscle necessary to invade a nearby neighbor and make it stick – unless the neighbor has powerful friends willing to come to its aid.

        My major point is that unless we get a series of wakeup calls one day we will wake up with oil and gas and maybe coal too in such short supply that the prices of them go through the roof and stay there.

        At that time it will be TOO LATE to manage a successful transition to renewables.

        There is a day coming when it is either renewables plus nukes or reversion to a preindustrial way of life.

        I suspect this day is coming within the next thirty or forty years at the very latest. Maybe sooner.

        You have a lot to say about renewables being too expensive – and in short term dollars and cents terms I mostly agree.

        This is why I have not invested more than a pittance in renewable energy so far at the personal level. My strategy is to focus on efficiency and conservation for now. The dollars and cents work out quite favorably using this strategy.

        Tell us – how long do you think it will be until it is cheaper to feed the grid to the extent possible with wind or solar power JUST TO AVOID BUYING natural gas to generate electricity ?

        My own seat of the pants guess is that this tipping point is not very far off AT ALL for some countries that must import gas. Depletion never sleeps.

        And while it does not noticeably help any GIVEN electrical customer or any GIVEN utility , the increasing penetration of wind and solar power on the grid IS cutting significantly into the sale of coal and natural gas.

        It seems altogether possible, likely even, that in the USA we will be getting ten percent of our electricity from wind and solar power within ten years. This will result in the sale of coal and gas for electrical generation being depressed by pretty close to ten percent .

        That in turn will result in a BIG DOWNWARD IMPACT on the price of both coal and gas since we produce most of our own of both fuels.

        As a matter of fact I suspect very strongly that on a society wide basis any money we spend subsidizing renewable energy will COLLECTIVELY save us twice as much, or more, in future purchase costs for coal and gas for generation.

        A wind or solar farm than runs essentially fuel free is saving coal and gas not just this year but every year for the next twenty to thirty years at least.

        And even then it will still produce some electricity. And it can be refurbished as good or better than new for a fraction of the cost of a new scratch built wind or solar farm.

        Personally I BELIEVE in peak oil and peak gas.

        Beyond that I VERY attached to my refrigerator and electric stove and hot water heater and air conditioners. I am also VERY fond of out of season fruits and veggies shipped a thousand miles or more.And I have already lived three or four decades longer than I would have, most likely , in a preindustrial setting.

        • Mac, the point I want to emphasize is that Russia isn’t where they ain’t supposed to be. The U.S. population gets a flood of slanted ultranationalist propaganda, intended to make sure there’s support for completely useless wars. I got my eyes opened because I had access to private intelligence information, and could interact with people from other countries who showed me how the U.S. Public was deceived.

          If oil prices go up the U.S., if it has a rational government, will outbid other nations. The ones who will suffer a lot are nations such as Jamaica, Pakistan, and Kenya.

          • Old farmer mac says:

            I have stated here before that in many respects I feel the same way about my country as a good hearted country boy feels when he finds out his sweetheart who is ” waiting for the wedding bells” is a gold digging whore sleeping with somebody else.

            So as I said I am agnostic about what is going on with the Russians. Fifty years ago I would never have believed that the Rolling Stone magazine would do a FAR better job reporting on big bank shenanigans and crimes than all our newspapers put together but such is reality.

            So I don’t have much use for the MSM media except to pick thru for hard data and use the data to think for myself.

            It’s a Darwinian world. Somebody is always imposing involuntary sex without lubricant on somebody else.As the cops say HIS Story, HER story, THE story in domestic disputes.

            Not being on the scene I have little idea what is happening with the Russians. Your anti commie credentials lead to to think you are not too likely to take up for them just because you are in the same political camp at least.

            But you avoid my questions.

            I really would like to know how long you think we can continue to depend on oil and gas for the bulk of our energy. A wild ass guess is ok if you identify it as such.

          • Hillson says:

            Interesting comment Fernando. Are you willing to elaborate on what this deception was? Cause I know what I think it is and BC probably knows too. I’m sure others can guess; everyone’s aware of the event, they just haven’t investigated it for themselves…yet. Try not to fall too deep down the rabbit hole!

            • Hillson, which instance in particular? Gulf of Tonkin? The fake genocide in Kosovo? The fake Iraqi WMD? The fact that Osama was in Pakistan with full knowledge of the authorities and was shot? The fact that Crimea has been part of Russia for a long time and was switched to Ukraine in a bureaucratic bungle by Krushev? The fact that USA troops invaded Russia at the end of World War I and were defeated? Which lie or distorted fact do you wish to discuss?

              • Nick G says:

                The fake genocide in Kosovo?

                • Yes, Nick, the fake genocide in Kosovo. That was a creation of the Bill Clinton/Tony Blair propaganda machine.

                • Nick, the USA started bombing in late March 1999. Prior to the initiation of the USA bombing there was barely any activity on the ground. No mass killings, no genocide. Many years later they took Milosevic and put him on trial for several years. And they never made any of the supposed Kosovo charges stick. They were all found to be lies and made up. So, the judges, who hold political trials on behalf of the USA and NATO, decided to file new charges against Slobo for crimes elsewhere. But the man died. The whole trial was a travesty, it was intended to protect Clinton, who could have been indicted as a war criminal.

                  • Nick G says:

                    Serbia would seem to be pretty untrustworthy, after it’s behavior in Bosnia and Croatie, right?

                    This seems to be the biggest claim about Kosovo:

                    The Račak massacre (Albanian: Masakra e Reçakut, Serbian: Акција Рачак, Akcija Račak, “Operation Račak”) was the mass killing of 45 Kosovo Albanians that took place in the village of Račak (Albanian: Reçak) in central Kosovo in January 1999. The killings were a deliberate massacre of civilians perpetrated by Serbian security forces.[3][4]

                    http://en.wikipedia.org/wiki/Ra%C4%8Dak_massacre

              • Hillson says:

                Are you saying you’ve seen “private intelligence” about all these events? And I don’t think you can trust “intelligence” that much, if at all. The agencies that produce it have so many motives, counter motives, and inter-agency conflict, who the hell knows what’s true. I trust my own eyes and instincts more than any “official” govt report. Plus the media are lap dogs, so they report anything they’re told, and the intel community is clever enough to dupe most of the media into thinking they’ve found a real scoop when they’re really being fed lies.

                BTW, you still haven’t guessed what I had in mind. Think big.

                • Yes Hilson. Oil companies pay for private intelligence. they use separate departments to track criminal activities within and against the company, and to collect general intelligence, some of it via reports issued by commercial outfits, some collected internally. They like to be able to move fast if things get sticky, and they don’t like to invest in countries which may get bombed within the year. As far as I know communication with the real pro intelligence agencies is non existent. On the other hand I’ve been followed by the CIA, and I’ve had people ask me about CIA activities (they tend to be a bit evident in some cases). We also had Stasi under KGB direction bug our offices in Africa and places like that. But that has nothing to do with what we learn about things.

          • Nick G says:

            If the US were to have a rational government it would move to cheaper, better ways to move people and freight around than oil.

            We actually are doing that, with passenger and truck CAFE regulations, but too slooooowly.

        • Glenn Stehle says:

          • Old farmer mac said:

          The odds of a war breaking out in any particular trouble spot are actually pretty slim even in times of high tension.

          If history is any key to the future, once-great hegemonic empires such as the United States don’t go out with a whimper, but with a bang.

          War ended the heydays of all the great global hegemonic empires since the Renaissaince: Spain, Holland and Great Britain.

          How quickly we forget Great Britain’s demise with WWI and WWII.

          Imperial hubris is extremely obdurate, and doesn’t turn on a dime when the empire becomes decadent. And in fact, an overly muscular foreign policy and militarism-gone-bad is part of the decadence: the empire attempts to replace its deteriorating moral and productive might with military and financial might, which has never worked.

          • Old farmer mac said:

          In a confrontation between sovereign countries the US might be the only one right now capable of actually occupying a distant foreign country and taking over oil production and sending it to the home country.

          Yea. That really worked out well in Iraq.

          When Carter militarized US energy policy in the late 1970s with his Carter Doctrine, and Reagan picked up the ball and ran it through the goal posts, conquest and plunder worked for a while. But then it stopped working.

          But this is not 1979, nor is it the 1980s. Many things have changed since then.

          • Old farmer mac said:

          …the increasing penetration of wind and solar power on the grid IS cutting significantly into the sale of coal and natural gas.

          It seems altogether possible, likely even, that in the USA we will be getting ten percent of our electricity from wind and solar power within ten years. This will result in the sale of coal and gas for electrical generation being depressed by pretty close to ten percent .

          I’d have to research the figures for the USA, but I don’t think that is what typically happens.

          I’ve read some of the critiques of Energiewende, and as I recall off the top of my head what happened in Germany is that energy consumption merely increased to consume the new energy coming on line from renewables, and the burning of fossil fuels stayed constant or even increased (also due to the elimination of nuclear).

          The state planners, technocrats and “scientist kings,” as Reinhold Niebuhr called them, never seem to get the “conservation” point to work out as planned.

          • Old farmer mac says:

            I have often posted here and elsewhere that it is a Darwinian world and that war is more or less always with us and more or less inevitable between countries large and small in any combination when resources are critically short.

            But it is still true that most hot spots and crises do not result in a war happening. If every crisis and every hot spot resulted in a war there would be ten or twenty or fifty times as much fighting happening at any given moment as is actually taking place on average.

            It is true that whoever is at the top of the geopolitical heap is eventually knocked off and replaced by an upstart sooner or later. I agree totally on this point. War is involved most of the time.

            Now it is also true that I said it is a hell of a stretch even for the USA to invade a country for any reason – super expensive in material treasure and good will and potentially expensive in our own blood as well.

            But anybody who thinks that if we had WANTED to stay in Iraq or anywhere else we could not have done so knows damned little about modern day war making technology.

            We left for one reason, basically- we did not have the necessary motivation to pay the price of staying. The American public does not want us occupying other countries as a general rule and our leadership does not and has never wanted to just kill as many people as is convenient to maintain an occupation. That sort of thing looks REALLY bad when it comes to the legacy thing. We want the rest of the world to think we are the nice guys – even when we aren’t.

            Let me just go all the way to a ridiculous extreme to make my point. ONE neutron bomb is enough to pretty much wipe out the population of a major city.

            Thank sky daddy we are not as nasty and as brutish as we HAVE THE POWER TO BE.

            If the Japanese in WWII had had the killing power of a MODERN war making machine they would have just totally wiped out the population any place they invaded where they met resistance, maybe saving a few for slaves.

            Ditto the ancient Isrealites for that matter.

            The BOSS told them to kill’em ALL – except the good looking young women of course. Ditto lots of other aggressive folks throughout history.

            If we keep on sending out inadvertent and deliberate homing signals someday a predatory space going species is going to locate this blue marble and look it over and decide it is worth colonizing.

            They will probably just use PESTICIDES to get rid of us humans. This would result in less damage to their new property than using ordinary weaponry.

            Nobody should take this comment TO THIS POINT seriously. Sometimes I just feel like saying something outrageous.

            Now as far as the substitution of wind and solar power for coal and gas generated power goes , nobody who understands the basics of economics would argue that this does not have the effect of depressing both the quantity sold and the price of coal and or gas.

            Of course in a growing economy the price of coal and gas might continue to rise even though a lot of electricity is generated by wind and solar infrastructure.

            In that case the question would be this one -HOW MUCH MORE EXPENSIVE would coal and gas be if we were using say ten percent MORE of each?

            Let’ s not forget that both coal and gas are depleting resources that are being shipped ever longer distances.

            The last I checked coal out of Wyoming costs about six times as much in Atlanta as it does at the mine. Georgia power plants used to burn Appalachian coal. It costs too much these days.

            • Glenn Stehle says:

              Old farmer mac said:

              But anybody who thinks that if we had WANTED to stay in Iraq or anywhere else we could not have done so knows damned little about modern day war making technology.

              We left for one reason, basically- we did not have the necessary motivation to pay the price of staying.

              This is 24ct neocon posturing, first articulated by Norman Poderhetz from his editorial command post at Commentary and through organizations such as the Committee on the Present Danger, in which he figured prominently. Podhoretz charged that the lack of commitment and resolve was why we lost the Vietnam War.

              The second-generation neocons would take up the same drumbeat:

              Writing in 2000, Robert Kagan and William Kristol, echoing Podhoretz twenty years earlier at the end of the Carter presidency, proclaimed that a great crisis was at hand. Although Americans no longer faced a great-power adversary comparable to the Soviet Union, “there is today a present danger.”

              The present danger is that the United States will shrink from its responsibilities as the world’s dominant power and — in a fit of absentmindedness, or parsimony or indifference — will allow the international order that it sustains to collapse. The present danger is one of declining strength, flagging will and confusion about our role in the world….

              The moment of decision was now at hand. “Either we act aggressively to shape the world and change regimes where necessary,” wrote William Kristol and Gary Schmitt, “or we accept living in a world in which our existence is contingent on the whims of unstable tyrants.”” According to Kristol and Lawrence Kaplan, “The alternative to American leadership is a chaotic, Hobbesian world.” In such a world, “there is no authority to thwart aggression, ensure peace and security or enforce international norms.”

              Immediately after the attacks of September 11, 2001, and despite the dearth of persuasive evidence linking Saddam Hussein’s regime to the attacks on the World Trade Center and the Pentagon, neoconservatives in and out of government began pressing insistently for an all-out invasion of Iraq. The key to ultimate victory in the war on terror, neoconservatives believed, lay in Iraq. “The road that leads to real security and peace,” argued William Kristol and Robert Kagan, was “the road that runs through Baghdad.”

              –Andrew Bacevich, ‘The New American Militarism: How Americans are Seduced by War’

              • Old farmer mac says:

                Andrew Bacevich may or may not have a good understanding of the politics of wars and occupations.Don’t know and not willing to take time to find out.

                Calling names is a fun thing to do and a great way to win an argument when you are losing by changing the subject.

                Bad characters are plentiful right across the board in every walk of life. This does not mean that they are wrong about every thing.

                I know a good many people who were in combat in the most recent American adventures in Sand Country. Most of them are actually very decent people. A few aren’t.

                Without exception they all tell me the same thing. If Uncle Sam wants people dead, they die.

                The Iraqi army was a truly well trained and well equipped one, and a big one. Once the fight was joined, they didn’t have a PRAYER.

                Mopping up all the civilians would have been as simple as shooting them on sight.

                As I said before thank sky daddy we are not quite the low life bullies we COULD be.

                I SAID myself – in basically so many words- that we do not generally invade and permanently occupy other countries because as a nation we are not into that kind of politics.

                Now if he thinks we do not have the MILITARY CAPABILITY to wipe people out – if we were mean enough and nasty enough that we wanted too – then he is a FOOL.

                The forces that chased Saddam back home could have killed every single soul they encountered from the time they landed until the time they returned home – no problem at all except the MORAL and POLITICAL aspects.

                The TECHNOLOGY is more than up to the job these days.

                EVERY country with a modern military establishment possesses it but only the USA possess it in such massive quantity.

                Our possessing SO MUCH power is NOT a good thing.

                Our MIC needs a severe pruning.

                Such a pruning would not only save us a lot of resources better expended on other things – it would reduce the temptation to get involved in unnecessary and ill considered foreign adventures.

                • Lloyd says:

                  OFM said:
                  Without exception they all tell me the same thing. If Uncle Sam wants people dead, they die.
                  -snip no problem at all except the MORAL and POLITICAL aspects.

                  It’s funny how conservatives (generic, not just Mac), who claim to want to squeeze every last bit of juice out of a dollar, forget the financial price of their military.

                  All that dying comes at a cost: by my calculation, based on Brown University’s “Cost of War” project, $39 million per dead Iraqi soldier ($69 million if you include interest costs out to 2053.) The 134,000 civilian deaths? Not a big concern from a price standpoint.

                  These costs are only viable for small, contained conflicts (and one at a time, please.) They also require lying at the start (well, more lying): lying about the costs as well as the causes of hostilities. Iraq was supposed to cost $50 billion, not $2.2 trillion dollars (or $3.9 trillion with interest out to 2053.)

                  And because you didn’t break out a precise context for “moral”, I’m not going to give you the benefit of the doubt whether you were speaking of political will or the question of damage to individual soldier’s psyches. War already screws soldiers up in horrible ways: ordering them to be genocidal introduces problems and costs that are beyond calculation. It is more than an ethical consideration: there are real financial costs involved, ranging from mutiny on the battlefield (increased costs to replace and arrest mutineers), increased difficulty raising a volunteer army going forward, and increased costs to reintroduce veterans into society.

                  But that’s beside the point. I don’t think politics or ethics restrained Bush, Cheney and Rumsfeld; their stand on torture shows that ethics were not a concern.

                  What held them back was the high cost of killing people half way round the world.

                  -Lloyd

                  • Boomer II says:

                    What held them back was the high cost of killing people half way round the world.

                    Yes, I think so.

                    We haven’t had a war since WWII where the country was asked to bear the true cost war.

                    The country hasn’t been asked to sacrifice to fight a war. And if we were, we would likely think twice about it unless our very existence was being threatened.

                    One reason some folks have wanted to bring back the draft (including those who wanted it to go away in the first place) is so more pain would be felt when we went to war. And maybe then we wouldn’t be so quick to do it.

                    Another problem we are starting to face is the high cost of veterans. With better combat care, we are saving more lives, but those lives may end up missing multiple limbs. So we need to factor those costs into the cost of war.

                  • ezrydermike says:

                    of course we haven’t really stopped fighting, now we do it through “targeted assasinations” including drone strikes and the use of proxy armies.

                    Plus cyber and financial warfare

                  • Old farmer mac says:

                    Hi Lloyd,

                    You are making unwarranted assumptions about my personal thinking . I fully understand and appreciate the costs of war,at every level except for fighting it personally. I lucked out by being at draft age when there was no active draft.

                    Did you notice that I said that it is a bad thing that the USA possesses so much power and that the MIC needs a severe pruning?

                    That such a pruning would reduce the temptation to use the remaining power recklessly?

                    I do not know any of the politicians you mention personally- so I cannot say what they THINK – but I know that ANY politician that makes it to the very top of the heap in Western societies has to put very great weight on the effect of his actions when it comes election time – not only next election but for many following elections.

                    Bush Cheney and Rumsfield were NOT willing to wage unrestricted total war on Iraq or any other country. Nor were any democrats who voted with the republicans willing to do so.

                    The political price of doing that was or would have been totally beyond the possibility of paying it in terms of party politics – survival politics- and international relationships with the rest of the world.

                    IN A NUTSHELL – we left not because we could not have stayed but because we lacked SUFFICIENT motivation to pay the price of staying longer.The motivation to pull out was greater than the motivation to stay.

                    Now as it happens I have a number of relatives and friends either dead or permanently crippled up from war, going back as far as Korea. The last of the WWII vets I knew are all dead now except a couple.

                    In the grand scheme of things countries large or small have never in history-until very recently – paid much if any attention to the suffering and death of a few of ”us” or any number of ” them”.

                    But since the arrival of television , the public in a country such as the USA is very uncomfortably aware of what is actually going on when troops are in the field as opposed to barracks.

                    THIS AWARENESS is what restrains warmongering politicians in modern western countries.

                    IF we were smarter we would as Nick often points out taken the renewables and conservation path but that path was not in actuality open to us in political terms-

                    It was blocked by overall social and business inertia, by the primitive state of the renewables industries up until VERY recently, and by the incessant efforts of the bau community to protect its turf.Big business has been buying elections since well before my own time. ( There IS a difference between a conservative and a republican. Hardly any republicans are real thinking conservatives. The word hardly means anything useful anymore in public discourse. I use it in the engineering sense myself.)

                    The ” war” path was not so blocked so we went to war to preserve business as usual.

                    The price was very high. I have never argued otherwise.

                    But JUST SUPPOSE we had stayed home. Suppose Saddam were still alive and in control of most of the oil in Sand Country?

                    Suppose Business As Usual had collapsed in the USA and the rest of the world if the flow of oil from Sand Country had stopped?

                    The consequences MIGHT have been a LOT worse than the price WE paid. The price paid by civilians on the other side is not given much weight at all by politicians of ANY stripe when they are in the hot seat.

                    I also fully understand that our meddling in that part of the world has had the same effect on the rise of militant Islam as throwing gasoline on a fire.

                    But those particular fires have been burning hot more or less for a thousand years already. There is no real reason to think that they would have burned out on their own.

                    I am getting tired of this thread but my original point remains.

                    THE TECHNOLOGY and the POWER to wipe people out exists these days. EVERY modern country with a significant military establishment possesses it.

                    Thank sky daddy it is seldom ever used by a stable government except maybe at the level of a village and even then only on very rare occasions.

                    So called ethnic cleansing is the only real exception to this general rule.

                    When Sherman marched thru the South burning the crops in the field and all the infrastructure useful to a war effort along the way his troops did NOT just shoot everybody they encountered.

                    BUT there was nothing actually STOPPING him from doing so – except morality and political considerations.

                    Had he tried to enforce such an order his own colonels would have collectively arrested him – or one of his troops would have shot him.

                  • Glenn Stehle says:

                    Old farmer mac,

                    I’m on the same page as you up until you state: “But JUST SUPPOSE we had stayed home.”

                    From this point onwards you go all neocon on us.

                    You start comparing, on the one hand, what did happen, to, on the other hand, what the human imagination is capable of imagining could happen.

                    This, of course, is what idealists and romantics — like the neocons, the Green Utopians, the Carbon Utopians — always do. The result is that instead of being the opposite of the Green Utopians and Carbon Utopians, you end up being the mirror image of them.

                    In a contest between factual reality and what the human imagination is capable of imagining, reality will always lose.

                    But of course those who came after Kant and vitiated his philosophy, all in the name of Kant of course, see nothing wrong with this, because they have come to believe, in the famous words of Karl Rove, that they can “create their own reality,” in defiance of both physical nature and human nature:

                    The aide said that guys like me were “in what we call the reality-based community,” which he defined as people who “believe that solutions emerge from your judicious study of discernible reality.”

                    … “That’s not the way the world really works anymore,” he continued. “We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality—judiciously, as you will—we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors…and you, all of you, will be left to just study what we do.”[2]

                    The fundamental conundrum which the neocons, the Green Utopians and the Carbon Utopians face, and which unleashes all their highly unrealistic imaginings and speculations of how things could be, is summed up very well by Elizabeth Kolbert in her critique of Naoimi Klein’s latest book:

                    To draw on Klein paraphrasing Al Gore, here’s my inconvenient truth: when you tell people what it would actually take to radically reduce carbon emissions, they turn away. They don’t want to give up air travel or air conditioning or HDTV or trips to the mall or the family car or the myriad other things that go along with consuming 5,000 or 8,000 or 12,000 watts. All the major environmental groups know this, which is why they maintain, contrary to the requirements of a 2,000-watt society, that climate change can be tackled with minimal disruption to “the American way of life.” And Klein, you have to assume, knows it too. The irony of her book is that she ends up exactly where the “warmists” do, telling a fable she hopes will do some good.

                  • Nick G says:

                    Apocalyptic narratives about the consequences of the end of fossil fuels, are a weapon the fossil fuel industry uses to prevent change.

                    Sadly, Naomi Klein takes those narratives at face value.

                  • Boomer II says:

                    The fundamental conundrum which the neocons, the Green Utopians and the Carbon Utopians face, and which unleashes all their highly unrealistic imaginings and speculations of how things could be

                    But isn’t this what religion and ethics have always been about? We set a standard which we never live up to, but we still aim to try.

                    We’re always aspiring to what could be. Man fails often, but still aspires.

            • Andrew Bacvich is a West Point Graduate. Here’s his resume:

              Andrew J. Bacevich is Professor Emeritus of International Relations and History at Boston University. A graduate of the US Military Academy, he received his PhD in American Diplomatic History from Princeton University. Before joining the faculty of Boston University, he taught at West Point and Johns Hopkins. In the fall of 2014, Bacevich will teach a MOOC (Massive Open Online Course) titled “War for the Greater Middle East” on the edX platform.

              Bacevich is the author of Breach of Trust: How Americans Failed Their Soldiers and Their Country (2013). His previous books include Washington Rules: America’s Path to Permanent War (2010); The Limits of Power: The End of American Exceptionalism (2008); The Long War: A New History of US National Security Policy since World War II (2007) (editor); The New American Militarism: How Americans Are Seduced by War (2005); and American Empire: The Realities and Consequences of U.S. Diplomacy (2002). His essays and reviews have appeared in a variety of scholarly and general interest publications, including The Wilson Quarterly, The National Interest, Foreign Affairs, Foreign Policy, The Nation, and The New Republic. His op-eds have appeared in the New York Times, Washington Post, Wall Street Journal, Financial Times, Boston Globe, and Los Angeles Times, among other newspapers.

              In 2004, Dr. Bacevich was a Berlin Prize Fellow at the American Academy in Berlin. He has also held fellowships at the Paul H. Nitze School of Advanced International Studies, the John F. Kennedy School of Government, and the Council on Foreign Relations.

              Bacevich outguns the neocon mafia when it comes to real knowledge, but the neocons are largely in control. Their use of Fox News, influence in the Republican Party, and over democrats like Hillary Clinton makes neocons a clear and present danger to the USA. But as they say in Texas, life is a bitch and then we die.

              • Old farmer mac says:

                OK so he obviously knows something about military power.

                I have a hundred bucks to bet against a stale donut that if he is asked point blank and must answer the question as to whether the US or any other large rich country COULD wipe out the population of any smaller less well armed nearby country he would say YES.

                But at this time only the US actually has the power to project force long distances this way on the grand scale.

                And we are not willing to do it alone even when we COULD. This sort of behavior is acceptable to the international community only to the extent that other influential and powerful western countries are willing to send along some troops with ours.

                If we have to go it alone , we are generally not going to go. Bad politics.

                • Mac, I dunno. My parents were into urban guerrilla warfare in real life (go read my “War as I remember it”). I think it depends. Did you read “imperial hubris”? Written by a CIA guy, it’s a really good book about the topic.

            • wharf rat says:

              mornin’, Mac
              “I have often posted here and elsewhere that it is a Darwinian world”
              Why not? It’s Darwinian’s blog.

              Moving right along, oil leak in Santa Barbara.
              http://www.independent.com/news/2015/may/19/big-oil-spill-along-refugio-coast/
              The first time it happened, the environmental movement was born….

              The idea came to Earth Day founder Gaylord Nelson, then a U.S. Senator from Wisconsin, after witnessing the ravages of the 1969 massive oil spill in Santa Barbara, California. Inspired by the student anti-war movement, he realized that if he could infuse that energy with an emerging public consciousness about air and water pollution, it would force environmental protection onto the national political agenda.

              http://www.earthday.org/earth-day-history-movement

          • Nick G says:

            Glenn,

            I suggest you get better sources of information for German and US electricity markets. You’re getting biased information.

            US power generation is pretty flat, coal is declining, and wind and solar are replacing it (as is nat gas).

            The wild-card with Germany is the phasing out of nuclear, which is slowing down the transition away from coal. Nevertheless, the transition is continuing.

            • Glenn Stehle says:

              Coal consumption, despite switchover to natural gas due to its low price, is not declining in the United States. For the past couple of years coal consumption in the United States has increased.

              • Nick G says:

                US coal consumption:

                2008: 1.12 billion tons
                2014: .92 billion tons

                http://www.eia.gov/coal/production/quarterly/pdf/t32p01p1.pdf

                • Glenn Stehle says:

                  Yes, but aren’t you leaving something out there, like the Great Financial Crisis (GFC) which began in 2008?

                  Recessions always impact energy usage to the negative side, not only coal, but also oil and gas, and electricity. Can you name any exceptions?

                  But coal consumption in 2012 in the US was greater than it was 2011.

                  Coal consumption in 2013 was greater than it was in 2012.

                  And coal consumption in 2014 was greater than that it was in 2013.

                  So was the fall in coal consumption between 2008 and 2011 caused by the efforts of the Greens, or was it caused by the GFC?

                • Nick G says:

                  Here’s a good chart to illustrate what’s going on:

                  • Yep, it seems to be going up again. When gas prices increase they’ll switch to coal. I don’t think the new EPA gizmo is constitutional. Time will tell.

                  • Glenn Stehle says:

                    That’s right, Fernando.

                    There’s been a great deal of switch-over to natural gas in electrical power generation, but despite it all, coal consumption is back on the uptick.

                  • Glenn Stehle says:

                    And I’ve read a number of analyses which charge that burning natural gas, despite all the public relations which issue from the oil and gas industry, is more damaging to the environment than burning coal.

                  • Glenn Stehle says:

                    And natural gas consumption in the United States experienced a rapid uptick beginning in 2010.

                  • Yes Glenn. In this world, baloney proliferates. Must be a fake environmentalist getting paid by a coal company to badmouth natural gas.

            • Glenn Stehle says:

              And as Statistisches Bundesamt reports, coal consumption in Germany, and this despite Energiewende, or maybe even because of Energiewende, has increased:

              In 2014 approximately 43% of the total gross electricity production was based on coal. This is a marked decrease from 1990 when brown and hard coal accounted for 57% of the power generated. In the past few years, gross electricity production from coal has gone up again: for example, power generation from hard coal rose from 108 to 109 billion kilowatt hours (+1%) compared with 2009, and electricity generation from brown coal increased from 146 to 156 billion kilowatt hours (+7%).

              • Nick G says:

                Electrical output is not the same thing as coal consumption/input.

                Germany knew that it would unable to reduce coal consumption as quickly as would be ideal, so they had a long-term plan to replace inefficient coal plants with much more efficient plants.

                • Glenn Stehle says:

                  Ah, but it is you who said, “The wild-card with Germany is the phasing out of nuclear, which is slowing down the transition away from coal.”

                  That’s quite a distortion. The reality is something quite different: the “phasing out of nuclear” is not “slowing down the transition away from coal,” it has caused a rebirth of coal consumption in Germany.

                  • Nick G says:

                    First, here’s your original quote:

                    as I recall off the top of my head what happened in Germany is that energy consumption merely increased to consume the new energy coming on line from renewables, and the burning of fossil fuels stayed constant or even increased (also due to the elimination of nuclear).

                    This was in reply to a comment about wind and solar:

                    It seems altogether possible, likely even, that in the USA we will be getting ten percent of our electricity from wind and solar power within ten years. This will result in the sale of coal and gas for electrical generation being depressed by pretty close to ten percent

                    So, you seemed to be criticizing Germany’s transition to wind and solar as being too small to reduce FF coal consumption.

                    If the elimination of nuclear is making the job harder, that’s not a criticism of wind and solar. It may be a valid objection to Germany’s elimination of nuclear, but that’s a separate discussion.

                    —————————————–

                    Second, you’re still talking about kWhs from coal as if it were the same thing as coal consumption. It’s not: Germany has been replacing old, inefficient coal plants with newer more efficient plants. That’s been part of the plan all along, taking place simultaneously with a ramping up of renewables.

                  • Glenn Stehle says:

                    All those promises of a glorious future are swell, but Energiewende’s track record speaks for itself:

                    1) Some of the highest residential electricity rates in the world.

                    2) Carbon emissions which have risen substantially from what they were a few years ago.

                    As far as I’m concerned, that sure ain’t no way to run a railroad, and this despite all the wierd contortions and back flips the Green Utopians went through, and are still going through, to peddle Energiewende as the best thing since sliced bread.

                  • Stan says:

                    You are criticising Energiewende’s track record based on half facts and half truths. It has also produced:

                    1) Some of the lowest commercial electricity rates in the world.

                    2) Chances for nuclear emissions which have declined substantially from what they were a few years ago.

                  • Glenn Stehle says:

                    Stan,

                    Germany has “some of the lowest commercial electricity rates in the world”?

                    Where do you come up with this stuff?

                    In 2013, Germany had the highest industrial electricity prices of any place in Europe, with the exception of the island of Cyprus.

                    http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Half-yearly_electricity_and_gas_prices,_first_half_of_year,_2011%E2%80%9313_%28EUR_per_kWh%29_YB14.png

                  • Stan says:

                    Great Glenn. You got something right. Germany’s industry electricity prices are highly subsidized. However wholesale electricity prices are declining and your yardstick isn’t the one the German’s are using. You are spreading nonsense based on half truths: http://www.carbonbrief.org/blog/2013/07/the-energiewende-and-energy-prices-public-support-and-germany%E2%80%99s-long-term-vision/

              • sunnnv says:

                “…for example, power generation from hard coal rose from 108 to 109 billion kilowatt hours (+1%) compared with 2009, …”

                Look close at that figure.
                Why did they compare 2014 to 2009?

                Because 2009 was the trough – after the economic crash.
                This is a bunch of sleazy cherry picking.
                Last year the “coal is rising” noise was even louder, because 2013 was higher than anything since 2009, but 2014 is down from 2013.
                The general trend of the coal graph is down.

                n.b. look at how big the renewables piece is now.

                Will try to post the .png in a separate reply, the last time I tried a graphic, I lost my whole reply.

    • Ilambiquated says:

      there are plenty of people in Germany who understand the real score in respect to depleting fossil fuels and even faster depletion of IMPORTABLE oil and gas

      As a long term resident of Germany I can confirm this, but I don’t think it necessarily has to do with WWII. Any country where you don’t have a domestic fossil fuel industry is going to have public opinion sceptical of importing fossil fuel. Germany has lignite, and the lignite industry is politically connected and fighting to keep itself alive. Nobody is interested in keeping the oil and gas industry alive.

      If there is one aspect of WWII that really influences modern German thinking about energy, it is the fact that people were literally starving in the late 40s and early 50s. Germans really hate waste.

      For example Gerhard Schröder, who was Chancellor when they started the big push to cut energy consumption and switch to renewables, grew up dirt poor in the basement of a bombed out apartment building in Hamburg. He never met his father, who was killed in Romania. He learned the value of scrimping and saving early on. So did a whole generation of Germans.

  14. Nick G says:

    Solar works just fine. Here’s an updated chart of Ivanpah output. We see that the last 1/3 of the year saw sharply higher output, and 2015 is sharply higher than 2014. This article was exaggerating normal early development problems.

    • Last year they had cloudy weather in July and August. If the El Niño kicks in hard they’ll have very cloudy weather. Lots of rain all the way to Death Valley, and a slight financial problem.

      • Nick G says:

        Yeah, concentrating solar like this is more vulnerable to clouds than PV, which doesn’t care whether light is diffuse or direct.

        Another reason why PV is winning the competition with CSP.

      • MarbleZeppelin says:

        Give it time, weather varies even in the Mojave. It will all work out. Did coal driven generators back in the 1800’s get this much flack? They were horribly inefficient and polluting.
        Now we have nice clean power from a reliable non-depleting source and people line up to naysay. What is wrong with people now? Are improvements threatening them? Even old Scrooge learned to not say Bah Humbug. Not the spawn of the Koch brothers though, they just incessantly rant like the wacko conservative right wing radio commentators. No comment is too non-factual or illogical to make.

        Why are there so few people who at least appreciate the effort to make some forward progress?

        • I don’t think coal power was being hailed as the planetary savior in those days. Today we hear and read tons of baloney about solar power. It clutters up the ambiance.

          • MarbleZeppelin says:

            That’s because we have learned a lot since then Fernando. A huge amount about how things work. We now know that human actions have planetary consequences. So of course you are going to hear that changing from planetary environment wrecking energy to almost harmless renewable energy is the best thing.
            Anyone who thinks otherwise has a head buried somewhere or is a corporate zombie.

            • The baloney comes in the part when they bs about solar being cheap, “free”, competitive…,you know. Baloney.

              • Nick G says:

                It’s cheaper than oil-fired electrical generation in Japan, India, China, Hawaii, etc., etc.

                And, it’s cheaper than coal:

                Coal: occupational health costs, CO2, sulfur/acid rain, mercury in food, water consumption, adding up to $.18 per kWh ($345B/year):

                “The United States’ reliance on coal to generate almost half of its electricity, costs the economy about $345 billion a year in hidden expenses not borne by miners or utilities, including health problems in mining communities and pollution around power plants, a study found.

                Those costs would effectively triple the price of electricity produced by coal-fired plants, which are prevalent in part due to their low cost of operation, the study led by a Harvard University researcher found.

                “This is not borne by the coal industry, this is borne by us, in our taxes,” said Paul Epstein, a Harvard Medical School instructor and the associate director of its Center for Health and the Global Environment, the study’s lead author.

                “The public cost is far greater than the cost of the coal itself. The impacts of this industry go way beyond just lighting our lights.”

                http://uk.reuters.com/article/2011/02/16/us-usa-coal-study-idUKTRE71F4X820110216?rpc=401&feedType=RSS&feedName=environmentNews&rpc=401

                or here’s the link to the pay-wall-protected version if desired: http://onlinelibrary.wiley.com/doi/10.1111/j.1749-6632.2010.05890.x/full

                These costs are large even if you don’t accept that Climate Change is costly – the cost table on page 92 (20 of 26) includes 3.06 cents for CO2, only 17% of the total.

  15. Nick G says:

    One day these fossil fuels will run out. Does that mean that half of our population starves? It does if we don’t have a way of producing nitrogenous fertilisers cheaply using something other than natural gas or coal.

    That’s pretty straightforward: use surplus renewable electricity to produce cheap H2, which you use the same way you use H2 from natural gas, to produce fertilizer.

    • Jef says:

      Nick – “…use surplus renewable electricity…”.

      Thats pretty much the issue. There is and never will be ” surplus renewable electricity”.

      • Nick G says:

        Sure there is. Even now it’s not unusual for power prices to go to zero (or even negative!) when there’s excess wind and nuclear power at night, when demand is low.

        This will become much more common. A basic load-following strategy is overbuilding: building more capacity than you need. The US, for instance, has about 3x as much capacity as it needs, in order to provide backup and handle peaks (this is old, and has nothing to do with renewables).

        Wind, solar and nuclear have essentially zero fuel cost, so there’s not reason not to produce full tilt. That means lots of excess, very, very cheap power a large part of the time.

        • Strummer says:

          The current surplus is due to a lack of electricity-powered infrastructure and transportation. If we implement the vision you are constantly talking about, and move to electric transport, there won’t be any surplus. Or do you expect that the capacity of renewable electric power sources will easily grow to accomodate the current need, the need of migrating all the current infrastructure and transport to electric and on top of that it will produce abundant surplus?

          • Nick G says:

            Yes, electricity is so much more efficient that accomodating both existing power demand as well as electric transportation would be pretty straightforward.

            In fact, the more EVs we have on the road, the easier the grid conversion is, as flexible EV charging helps buffer the variance of renewables.

            • MarbleZeppelin says:

              And EV’s can run in their own solar footprint. In a few years many may be a source of energy rather than a user.

        • I didn’t know uranium was free. Where can I get some?

          • Nick G says:

            I admit it – I over simplified – it’s hard to cover everything in a single sentence.

            Fuel costs are less than two thirds of a cent per kWh. Perhaps more importantly, nuclear power plants aren’t really designed to load follow on a diurnal cycle. Heck, they’re not really designed to load follow on a seasonal cycle – they fake it by scheduling their maintenance during periods of low demand.

            • Old farmer mac says:

              Nuclear plants are run at the highest possible power out put as much as possible because that is the optimal business model. The fuel is so cheap as to be almost negligible in comparison to the capital costs of the plant.

              So – the owners run them flat out all the time- if possible.

              BUT there is no fundamental reason that nukes cannot be designed to load follow and in fact France runs her nuclear fleet so as to follow the load on her grid to a substantial extent.

              A new generation of nukes could be designed and built with load following being a PRIMARY criteria rather than an afterthought as is the case with existing older plants.

              I once spent a ton of time researching this question but being careless about backing up I kept the file on a computer that croaked and lost it.

              But anybody interested can google the topic and verify that the French do this to a substantial degree.

              But it would be better overall for a country when possible, to curtail gas and coal fired generation , rather than nuclear, since coal and gas are many times as expensive as nuclear fuel.

  16. Jef says:

    Pretty much in line with what Watcher has been saying about FF industry and digits on a screen.

    “Governments Giving Fossil Fuel Companies $10 Million a Minute: IMF
    Energy companies receive $5.3 trillion a year in funding from governments worldwide, says financial powerhouse”

    http://www.commondreams.org/news/2015/05/18/governments-giving-fossil-fuel-companies-10-million-minute-imf

    • Nick G says:

      These are subsidies, and they’re real costs to taxpayers and others.

      Fossil fuel is very expensive, and we have cheaper and better alternativers, right here and now.

      • Watcher says:

        Rational thinkers reject yours. As they should. There is a post above about some other subsidies going on . . . oh yes, some guy talking about Argentina. Shell is still there because Argentina is buying the output for $70+.

        That’s what a government does, any government, when they know they MUST have it and there is no alternative, and there isn’t going to be one. No question whatsoever if Chile had oil Argentina would have gone and gotten it by now. As they should.

        • Jef says:

          you must assimilate…..

        • David P says:

          Watcher, I agree that your theory that governments will use ‘funny money’ to keep the fuel flowing as long as possible has merit.

          I am surprised more people don’t see that the old rules of finance barely apply when the governments can right the rule-book (as long as they can still maintain trust in the system).

          Keep up your good work (message).

          • Watcher says:

            Well, there has to be a limit to it. Paper can’t have the same value as oil.

            But they can certainly enforce a policy to get oil when it must be had.

            A GOP administration since 2008 would have done worse because there is no answer to the failure other than to print money and a GOP administration would have opposed it as irrational debasement. A Democrat administration . . . isn’t as tied to any sort of monetary morality. They were perfectly willing to undo mark to market because leaving it in place would have amplified the apocalypse.

            But . . . oil. Argentina is buying oil for $70+. Shell takes that money and says okie doke. The loss? Printed. Debt taken on by the Argentina central bank and then presumably deleted from the screen. All that matters is barrels/day. Not dollars, when you are at the point where you no longer care about the facade.

            And so . . . when exporting countries won’t take paper for oil, and the US HAS to have it, subsidies of domestic production seem a pretty obvious step to take, buying more time for that miracle to arrive.

            Japan? Well, never forget . . . there need not ever be war.

            All you have to do is surrender.

        • Nick G says:

          Argentina – the country that’s been stagnating for 50 years…

          • Glenn Stehle says:

            When I think of Argentina, I think of what Porfirio Díaz said of Mexico: “Poor Mexico, so far from God and so close to the United States!”

            No nation under an imperial jackboot can thrive, including Argentina and Mexico.

            One must remember that when Argentina ran up its unpayable debt, it was under a military dictatorship backed by the United States. Much more on how the US assisted this murderous dictatorship has come out recently, for instance, New Memo: Kissinger Gave the “Green Light” for Argentina’s Dirty War.

            For a great deal of detail of how Argentina’s unpayable debt was created under the aegis of the military dictatorship and the IMF:

            Argentina’s quarter century experiment with neoliberalism: from dictatorship to depression

            Rise and Collapse of Neoliberalism in Argentina

            At only short and ephemeral periods during the past 500 years has Mexico had a state which represented its people. Instead the Mexican state was imposed by an empire and represented the interests of the empire, not of the Mexican people. This invariably results in a corrupt and dysfunctional state, shorn of legitimacy and credibility.

            • Nick G says:

              I’m not sure what that discussion of US policy in Argentina and Mexico has to do with the cost/benefit of oil subsidies in Argentina.

              • It doesn’t, it’s a typical commie rant from Latinamerica blaming everything on the USA. They invented generation x syndrome. And that’s why they are doomed to be second raters who will never amount to much.

                • Glenn Stehle says:

                  The Chinese, sporting a checkbook with $3 trillion US dollars to back it up, have all but declared the Monroe Doctrine dead.

                  So the US, after having played dirty for the past 200 years in Latin America, with the exception of a short hiatus during WWII, would now like to play nice.

                  And Obama, in his speech which he gave at the Summit of the Americas last month, made no bones about his desire to sweep all that nasty stuff the US did in the past under the rug.

                  So in that sublime way which Obama has of putting things, he told the other attendees of the Summit that

                  When I came to my first Summit of the Americas six years ago I promised to begin a new chapter of engagement in this region. I believe that our nations have to break free from the old arguments, and the old gievances that had too often trapped us in the past, that we had a shared responsibility to look to the future, and to think and act is fresh ways.

                  So all is forgotten. All is forgiven. No foul! Just turn your attention towards the glorious future, and forget about the past.

                  Eerily, it’s the same rhetological strategy Obama used to exculpate the crimes the financial/military-industrial complex had perpetrated against the American people during Bush’s presidency. That was back in 2009 when Obama first took office.

                  So for Obama, it’s all about impunity and immunity, and nothing about crime and punishment, at least when it comes to America’s oligarchical class.

                  But many in attendance at the Summit of the Americas, emboldened I’m sure by a new competitor in town anxious to curry favor with them, said “Not so fast.” Obama was made to suffer through hours of speeches recounting the US’s past crimes — military, covert ops, dirty wars, sanctions, embargoes, and a littany of other financial and economic assaults — which the United States had perpetrated upon its southern neighbors.

                  As one listened to the arduous rebuke Obama endured, one could not help but be reminded of Milan Kundera’s famous quote. “The struggle of man against power,” he said, “is the struggle of memory against forgetting.”

                  • Nick G says:

                    The US has made a lot of mistakes, including fighting $2T oil wars.

                    It would have been far cheaper and safer to just move to EVs, and other better and cheaper alternatives to oil.

  17. Old farmer mac says:

    Here is a brain teaser for an engineer.

    Suppose you have a basically free supply of highly concentrated oxygen. Suppose you feed it into a boiler instead of ambient air ?

    How much coal or natural gas could you save, as a percentage, per kilowatt hour of electricity generated by burning coal or gas ?

    The amount of fuel saved would be substantial because feeding a fire with ambient air means heating up the roughly eighty percent of nitrogen and water vapor etc to no good purpose.

    At some point it may be that we will have wind and solar farms DEDICATED to electrolysis of water to get H2 for use in making ammonia used in turn in fertilizer.

    At that point in time we could use the O2 also generated for any number of purposes. Using it to make a boiler run hotter on less fuel might be a good use for it if it is available in large quantities with few other useful bulk applications for it.

    • Jonathan Madden says:

      OFM,

      Changing the concentration of Oxygen in a boiler will not make a significant difference in its heat output.

      To a first approximation, an electric power station boiler relies on the energy and temperature of the combustion products. The higher the temperature, the higher the theoretical efficiency of the energy conversion from heat energy to mechanical/electical energy. The Carnot thermodynamic cycle explains this:

      http://en.wikipedia.org/wiki/Carnot_heat_engine

      Burning fuel with Oxygen produces energetic effluent gas whose temperature can be contolled so as to optimise electric generator operation. There will be an upper temperature limit imposed by the materials used in the combustion chamber, tubing, steam turbine, etc., which is attainable regardless of whether pure Oxygen or air is used.

      The important factor is that the energy output (i.e. energy in the effluent combustion gas) is independent of the composition of the input Oxygen mix. As long as you can get your turbine temperature up to the operational figure, you are not losing any efficiency.

      Hope this helps.

      • Old farmer mac says:

        Thanks Jonathan,

        What you seem to be saying is that out of the energy released by combustion using ambient air , the amount of heat energy that is carried up and out of the smokestack in the form of hot nitrogen is not enough to matter in overall terms.

        I am not able to do the necessary computations myself , having only an abc level understanding of thermodynamics.

        But it sure seems like a lot of that heat could be captured if the fire were hotter – as it would be if there were only fuel and oxygen in the combustion chamber.

        Excessively high temperatures to me at least at first glance would not be a hard problem to solve- you could just dial back the feed rate of the fuel and the oxygen to the point the heat exchanger would not fail prematurely- or upgrade the materials used to build it.

        • Jonathan Madden says:

          OFM,

          The thermal efficiency of a particular combustion process is maximised according to the type of fuel and oxidant, amongst other things.

          Generation plants burning methane use a Combined Cycle process to bring the net overall conversion of fuel energy to electrical energy up to about 55%. The waste heat from the exhaust gases (including condensing steam) is used to pre-heat fuel gas(es), and by means of coupled steam turbine stages to transfer heat into pressurised water or steam in the turbine itself.

          Details are here: http://en.wikipedia.org/wiki/Combined_cycle

          What’s important is maximising the entropy of the exhaust gases, which may of course include water from condensed steam. Gases at low temperature, say less than 150C, have little to contribute to the efficiency of the cycle even if they are present in large quantities. This type of energy is named ‘low grade’ (high entropy) and may be used for heating in the vicinity of the power station. (‘District Heating’)

          Were one to have a pure H2/O2 combustion system then you would indeed have no exhaust gas. Energy would be extracted from combustion steam, from the initial hottest ‘high grade’ steam through to condensing steam.

          I believe there would be a difference in efficiency between this type of boiler to one using H2/Air, but I think this would be small. Somebody, somewhere, must have tried it out, experimentally or at least theoretically!

          • We just need to take a second pass at the exhaust gases, run some sort of subsidiary cycle. I’ve been thinking, if a plant is by the Great Lakes it could get an extra 7 to 8 % using lake water as the heat sink.

      • sunnnv says:

        The nitrogen dilutes the heat, so the exhaust gases have a larger-than-needed volume than pure oxygen. So when the exhaust gases cool to the final temperature (per Carnot), that means more energy is lost.

        Oxygen firing increases flame temperature greatly (say 5000F vs 3000F for air).

        BUT – the turbine blade, boiler tube, etc. materials may not be able to stand the higher temps.

        In some industrial processes, it does make sense.
        http://www1.eere.energy.gov/manufacturing/tech_assistance/pdfs/oxygen_enriched_combustion_process_htgts3.pdf

        For fossil field power plants, there are many tradeoffs, among them, the cost of oxygen and the “price” on CO2 emissions.
        Retrofit of an existing plant would require flue-gas recycle to keep boiler temps low, so increased costs/complexity.

        But a new plant could do pressurized combustion, which simplifies CO2 capture and is more efficient.
        https://mitei.mit.edu/system/files/hong-analysis.pdf

        Praxair is researching a cheaper way of separating oxygen from air,
        with an in-boiler oxygen transport membrane.
        http://gcep.stanford.edu/pdfs/RxsY3908kaqwVPacX9DLcQ/kobayashi_coal_mar05.pdf

        NETL has a list of the projects they’ve funded in this area.
        http://www.netl.doe.gov/research/coal/energy-systems/advanced-combustion/project-information

        I’ve been somewhat dubious about it, but there’s a lot of active work in the area,
        with some full sized plants under development:
        http://cornerstonemag.net/exploring-the-status-of-oxy-fuel-technology-globally-and-in-china/

        I know Vattenfall cancelled their CCS research, but then they’re being clobbered by renewables and the nuke shutdown in Germany.
        https://sequestration.mit.edu/tools/projects/vattenfall_oxyfuel.html
        http://spectrum.ieee.org/energywise/energy/nuclear/swedish-energy-giant-vattenfall-nets-billions-for-nuclear-phaseout

    • MarbleZeppelin says:

      I think you are missing the point of it all. . Since we already remove gigatons of oxygen from the atmosphere by turning it into CO2 through combustion, why not just put it back into the atmosphere to help replace the loss. Breathing is a useful bulk application.

      If we have a source of hydrogen since the oxygen would be derived from water, why do we need the fossil fuel burner? Just burn the hydrogen when the sun doesn’t shine or the wind doesn’t blow. It will take up the oxygen we put back in the air and become fully recyclable.

      • clueless says:

        Marble – What do you mean, “Breathing is a useful bulk application? ” Breathing takes in Oxygen from the atmosphere and puts out CO2 into the atmosphere. That is a bulk application of what?? CO2.
        I am happy that someone as astute as you, recognizes that there is no harm in CO2.

        • Nick G says:

          That meme has been going around in right-wing circles.

          But, it makes no sense: breathing is part of a cycle of use and re-use of CO2: there’s no net addition to the atmosphere.

          That’s very different from fossil fuels.

          • clueless says:

            Once again – What do you mean, “Breathing is a useful bulk application? ”

            • Nick G says:

              That wasn’t my phrase. I think it just meant that oxygen in the atmosphere is a good thing.

            • MarbleZeppelin says:

              Clueless, I will try to explain. If you look back at the start of this thread Old Farmer said “Using it to make a boiler run hotter on less fuel might be a good use for it if it is available in large quantities with few other useful bulk applications for it.”

              Yes, oxygen has been used by animals throughout history. I consider life a very useful bulk application of oxygen. Much superior to making electricity or moving cars around.

        • wharf rat says:

          “clueless”
          Yes, you really are.

          “I am happy that someone as astute as you, recognizes that there is no harm in CO2.”

          Let’s forget global warming for a minute. I spent 35 years as a respiratory therapist saving people from death by CO2…. hypercapnia.

          CO2 retention is a pathophysiological process in which too little carbon dioxide is removed from the blood by the lungs. The end result is hypercapnia, an elevated level of carbon dioxide dissolved in the bloodstream. Various diseases may lead to this state; disturbed gas exchange may lead to impaired excretion of the gas. In addition, breathing air with a high carbon dioxide concentration may also lead to hypercapnia.

          The principal result of the increased amount of dissolved CO2 is acidosis (respiratory acidosis when caused by impaired lung function); other effects include tachycardia (rapid heart rate) seizures, coma, respiratory arrest, and death.
          http://en.wikipedia.org/wiki/CO%E2%82%82_retention

  18. robert wilson says:

    The installation of this unit was delayed by a world-wide shortage of helium. 20,000 liters of liquid helium are required to cool the magnet. Much of the world’s helium was found in the natural gas near my hometown, Amarillo, Texas. http://consultqd.clevelandclinic.org/2014/06/heres-what-the-future-of-neuroimaging-research-looks-like/?utm_campaign=qd+tweets&utm_medium=social&utm_source=twitter&utm_content=140819+future+neuroimaging+research&dynid=twitter-_-qd+tweets-_-social-_-social-_-140819+future+neuroimaging+research

  19. Political Economist says:

    Has any one tried EIA’s so-called new interenational portal. It’s very difficult to use, not straightforward at all, and lots of data (like monthly production) cannot be located

    • Watcher says:

      haha but other than that . . . . .

    • Dennis Coyne says:

      Hi PE,

      Haven’t tried the “new” portal, but the old one still works for petroleum (haven’t tried other fuels recently), have you tried the old portal?

      • Political Economist says:

        The old one is still working for now (not only oil, but also everything else). But I am concerned they’ll stop updating the old one and the new one will be less than satisfactory

  20. Watcher says:

    Details on Argentina’s oil production subsidy:

    http://www.argusmedia.com/News/Article?id=987877

  21. Ronald Walter says:

    Subsidies to the oil industry to continue operations, production, what have you, are just a bailout but not called a bailout.

    Oil is too big and much too important to fail.

    The money will be there, the way it is provided, subsidies, bailouts, it just won’t matter what you call it, oil will receive whatever is needed to make sure the flow is there.

    Bailout sounds worse than subsidy, so the word is avoided.

    • MarbleZeppelin says:

      Subsidy is just another word for paying for something twice.

    • Nick G says:

      Oil is too big and much too important to fail.

      Oil is way too expensive, dirty and risky to allow to continue. We have better and cheaper alternatives.

      • Lots of things can replace oil. However the world uses about one thousand barrels a second. Nothing will ever replace that much oil.

        • Nick G says:

          There’s no need to: electricity is about 5x as efficient, joule for joule.

          The US would only need to expand power generation by about 25% to replace all of the ICEs on the road with EVs.

          That’s only about 11 years at the traditional 2% growth rate of US generation – that would make the utilities ecstatic, faced as they are with stagnant power consumption (all those home owners doing annoying things like buying LED bulbs).

  22. Anonymous says:

    I am definitely not a free market type, but the amount of subsidies the fossil fuel industry has received over the years is sickening.

    You have direct subsidies (tax breaks), indirect subsidies (automobile industry), and subsidies which happen to overwhelmingly benefit the fossil fuel industry (highway funds, roads, and so on).

    Human needs to live closer together, in larger, more robust cities. We need more high rises, more community parks, more rail cars, fewer cars on the road, faster and more efficient train services.

    • Watcher says:

      Who is we?

    • Nick G says:

      Well, I think most people would be happier, healthier and wealthier living that way – I do. And, as a secondary benefit, it would reduce FF and energy consumption.

      But….that kind of change in urban form is relatively slow and expensive. So, it’s important to keep in mind that EVs in their various forms are faster and cheaper if your primary goal is to reduce FF/oil consumption.

      • MarbleZeppelin says:

        China is building apartment towers like crazy in it’s cities, and I am not talking about ghost cities.
        Cities are not efficient nor do they use less energy or resources. That is a bunch of number fudging. Actually they are draining the resources from the world around them, depending on the suburbs and rural areas for their power, water, food and products. Once you add in all those things it becomes clear that cities are not efficient or self-sustaining. Does anyone seriously thing the infrastructure came from the city or the energy to make and transport it? The whole thing is a giant sucking conglomeration that provides little and takes up huge amounts of resources and energy.

        • Caelan MacIntyre says:

          That’s what is said about cities; dead zones and resource vacuum-cleaners. Why advocate living in a dead zone?

          Parents: “Hey kids!? Wanna live in a dead zone!?”
          Kids: “What?!

          “Someone has written a book about the children and their need for their, just simply, emotional and mental development to have contact with the mountains, with the air, the sea, with the dawn, the sunset, the trees, the birds, the song of the birds. Children that don’t have these experiences have no real idea of the world they live in. They live in a house, in a school, in a city that’s all manufactured. And they begin to be progressively isolated from the basic dynamics of what human life is all about.” ~ Thomas Berry

          I keep writing that it is better to bring people to the resources than vice-versa.
          There are also the positive effects (mutual interactions, understandings, connections, nurturing, etc.) of natural surroundings on people, and so forth. Like where does human waste go in a city context versus natural, and where does water come from in a city context versus natural. Cities strip many things away from what people need to understand and become in touch with again. (But little to none of this context is ever discussed, just a whole lot of techno-statistics– that some of you lot niggle over anyway– as if these things are the priorities of human existence.)
          Why is this apparently so hard for some to understand/accept?
          And yet the myopic talk and the kicking of the BAU can down the road continues…

          “All political systems that I know of, and most kings, have moved their whole nation to desert. And the things that we saw as most proud– the cities and the canals and irrigation and so on– are the things that killed their cultures. And it continues, unabated. If people don’t seize power back, and make their own gardens, and sit in their own gardens of Eden, then we’re all doomed, and the whole world ends in dust.” ~ Bill Mollison, ‘The Permaculture Concept’

          • Old farmer mac says:

            ”Nothing will ever replace that much oil.”

            Dead on. But when the population crashes and the survivors learn to get by ok on a tenth of our current per capita energy consumption life won’t be too bad.It might even be pretty good again after a while.

            • Dennis Coyne says:

              Hi Old Farmer Mac,

              As Nick said, electricity for transportation (about 65% of oil use) is about 5 times more efficient, so for that 65% of oil use only one fifth of the energy needs to be replaced.

              Also it does not have to happen overnight. We will not go from 28 Gb of oil per year to 10 Gb per year over a short period of time, it will take 30 years, so maybe that oil cannot be replaced with solar wind and nuclear energy over a 30 year period, but I think it is far from certain. One possible future oil scenario if C+C URR=3400 Gb (including 600 Gb of oil sands from Canada and Venezuela combined) in chart below.

              • Glenn Stehle says:

                I have to throw my hat in the ring with Old farmer mac on this one, because I’m a big fan of chaos and complexity theory and believe major changes rarely happen gradually in a planned and controlled manner.

                As Benoit Mandelbrot, pioneer of chaos theory, and his disciple, Nicholas Nassim Taleb, explain in this interview, the world moves in fits and starts, and especially the human world:

                Tools have been developed for which changes are always very small. If one of them comes nothing bad happens. But if several of them come together very bad things can happen, and the theory does not take account of that. And the theory doesn’t take account of very large and sudden changes in anything. The theory thinks that things move slowly, gradually, and can be corrected as they change. But the fact is they may change extremely brutally.

                • Nick G says:

                  Yes, with a little luck the Fossil Fuel industry will encounter disruptive change from EVs, wind, solar, kids using phones instead of cruising, etc., etc.

                • Dennis Coyne says:

                  Hi Glenn,

                  So you think it is virtually certain there will be collapse due to oil depletion? I admit that things will not move smoothly and continuously, it is impossible to predict such changes and when they will occur in advance.

                  Essentially in the oil shock model these would simply be modelled as a shock. One likely scenario is that even without a black swan event, that once oil supply begins to decline that oil prices will spike to high levels temporararily and along with other potential events such as war or financial crisis a Great Depression will result. If oil peaks around 2020 and the rate of decline picks up speed by 2025, the Depression will begin within 5 years.

                  Once the reality of Peak Oil becomes apparent to all, maybe a transition to alternative forms of transportation will begin. Public investment in mass transit and rail would be a great way to get some of the unemployed back to work. Maybe we could plan and build a modern HVDC transmission network and have tax incentives to boost investment in Wind and Solar power.

                  I think the coming transition will be very difficult, but think there is a good chance we will muddle through.

                  • Glenn Stehle says:

                    Dennis,

                    I have no doubt that what Old farmer mac says is true, that when “the survivors,” if there are any, “learn to get by ok on a tenth of our current per capita energy consumption life won’t be too bad.”

                    But my reading of history tells me these downsizings and cultural adjustments happen unexpectedly in fits and starts, and not gradually according to some master plan.

                  • Dennis Coyne says:

                    Hi Glenn,

                    Then I agree with both you and Old Farmer Mac, except the part about Ron being dead on, Ron may be correct that the oil will not be replaced, it will certainly not be easy and will happen in fits and starts, likely with a great deal of difficulty. I am not convinced that it cannot be done, but I do agree it will be far from easy and many unexpected obstacles will need to be overcome.

          • MarbleZeppelin says:

            Agree with most of what you said Caelan. The advantages of living in rural and suburb areas is one can often provide their own water, power (which now will move their cars too), septic, grow some of their own food and get the rest locally, and enjoy much greater contact with the natural world.
            Cities are badlands, almost no life exists there naturally.
            As the oceans swallow many of them, I wonder what the world will be like then.

            • Caelan MacIntyre says:

              I am unsure suburbia is going to pan out quite as James Howard Kunstler might think. It could end up going the way of the neo-homestead.

              • MarbleZeppelin says:

                Jim Kunstler is an interesting character and has some good ideas. A real curmudgeon when it comes to suburbia and real promoter of city life, although quaintly he lives in a small town, almost rural.
                I do love his pointing out architectural errors, he is very good at that.
                I do think that he has overdone his view of suburbia and is confusing it with the subset, the bedroom community. Suburbia started out as almost small villages with small stores and businesses located throughout them. The corner store, corner gas station, small garage business, often got moved out and zoned out. Mostly because the car allowed larger business to conglomerate. The mall with it’s huge parking lots is the direct consequence of the automobile’s success and fits the current reality.
                As reality changes the suburbs have a good chance of converting back into a small town/village type system.
                The malls can be converted into solar PV farms and the strip malls will sometimes just be demolished or repurposed.
                He does hit on a large error in building, the flat roof building is more susceptible to leaks. He especially points out the vulnerability of libraries. I was quite glad when the county built it’s new main library in a traditional fashion rather than the flat roof so commonly seen since the 1950’s modern low level buildings came into style.
                Their is a lot to said about taking pride and putting art into architecture, it shows that the contents and purpose of the building have a strong meaning to the culture.

                • Caelan MacIntyre says:

                  The treatment of chronic illness generates profit. Art into architecture? But that would make people happier.

                  This uneconomy is a flat roof on a deliberately-inferior building designed to be as cheaply-designed and manufactured as possible to save money and repaired and maintained as often as possible to make money, as a cash-cow for industry.

                  This is built into the land-grab-by-uneven-money, upheld-by-force logic of this musical chairs system that thumbs its nose to the fact that we all need somewhere to sit or we have little worth sitting on because it’s eventually all rental.

                  Of course, by then, the entire planet could be flipped by the one remaining on the last chair, and sold off to rich aliens.

                  Maybe that’s why this unsustainable game now needs more than one Earth. Its logic has about run its course and there are no extra planets or rich aliens. And Mars is too little too late.

                  For those of you who do, you can talk about your PV’s and EV’s all you want, just so you know that it’s in the context of a madman’s game.

                  • Ves says:

                    Just 25 years ago you could even disposable Gillette razors use more than once 🙂
                    Now everything is disposable after one use. Sometimes you don’t even have to use it, just leave it on the side and it fades, melts or disintegrate away 🙂

                  • Caelan MacIntyre says:

                    Or, at least in the mean time, ends up in the ocean and in the bellies of animals.

                  • MarbleZeppelin says:

                    Caelan,
                    You can rant about PV and EV and windpower being a madman’s talk. In reality it will save more species and environment by allowing a slower transistion from fossil fuels than the total collapse you rant on about. Collapse is a madman’s dream and everything else’s nightmare.
                    So jump off the cliff if you want to, I won’t follow.

                  • Boomer II says:

                    Seems like a permaculture community can proceed on its own without regard to whether or not the rest of the world follows. If each community demonstrates sustainability, they can serve as models to others.

                    Seems like trying to organize a revolution at the same time one is organizing a collection of small communities would just be a distraction.

                    And if you think everyone is doomed if they don’t follow the permaculture model, then that problem takes care of itself anyway. They are gone and you survive.

                    I’ve been reading about intentional communities since the 1960s and what seems to doom them is lack of long-term internal cohesion. They fall apart because keeping everyone working together for decades is a major challenge.

                  • Caelan MacIntyre says:

                    “You can rant about PV and EV and windpower being a madman’s talk.” ~ MarbleZeppelin

                    I wrote, “it’s in the context of a madman’s game.”. This affects what happens and how.

                    And I’ve already written time and time again about ethics, real/pure/direct democracy and simplicity, for examples. When things get too complex, you lose control over them; when things are not democratic, you lose control over them.

                    Collapse, by the way, depending on how it is defined (context!) is already happening, and is doing so in part because people are ignoring contexts.

                    Specialization, for example, by design/definition, generally ignores context. And many people have become specialized in their respective fields– to the exclusion of holistic/systemic ways of looking at things. PV’s and EV’s don’t exist in a vacuum.

                  • Caelan MacIntyre says:

                    Permaculture, in a nutshell, is Care of Earth and Care of People.

                    These are ethical considerations put first and foremost, up-front. So they seemed to have gotten it, Mollison and Holmgren and the rest.

                    Any system/culture that puts ethics first might end up being permanent, IOW, not collapse-prone.

                    EV’s and PV’s in the context of an ethical system seem fine, but that’s not what we have. Again, we have a madman’s game and they are no point in such a game. IOW, the game needs to be changed first.

          • Doug Leighton says:

            Caelan: “That’s what is said about cities; dead zones and resource vacuum-cleaners. Why advocate living in a dead zone?”

            Totally agree. Being an eccentric exploration guy (retired) I’ve seen it all, big cities (we lived most or our lives in cities), mega-cities, remote villages, barren lands, the arctic, etc. and decided to retire (and die) in the sticks. We can’t see our neighbors but you know where they are if you need them. In fact, I think the happiest and best adjusted people I witnessed were villagers living in remote parts of Vietnam — no power even but excellent food and genuine smiles. ‘Course they’re all probably addicted to i-somethings now.

            • Caelan MacIntyre says:

              Hi Doug,
              Good on ya. We’re apparently wired for the tribe and the basics, so small-scale with some elbow room is the way to go. And I was thinking of something else today about cities too; that they might be rather vulnerable to many upcoming issues, like social unrest (Baltimore?), electrical grid (and other infrastructure) instabilities, climate change/weather patterns, and the movement of materials in and out in light of these concerns, and so forth; whereas if one is close (and intimately-tied) to one’s basics, like food, clothing, shelter and real community, what do you care about city problems? Frankly, the more is though about it, the more cities make less and less sense now and moving forward.

              • Glenn Stehle says:

                I too suspect the large densely populated cities will prove as unsustainable as the suburbs.

                Mexico City is experiencing many, many problems as single family residences are being demolished to build high-rise condo and apartment buildings. I could probably find some information on this if you’re interested and speak Spanish.

                I shudder to think what will happen to all the people living in the cities and suburbs if no silver bullet is found to slay the energy vampire.

                • Caelan MacIntyre says:

                  The silver bullet, if we want to call it that, is to get the hell out of cities ASAP, and onto decent land and into real communities.
                  Again, this is Peak Oil 101, and what we’ve been advocating forever. Decentralize, relocalize, build community resilience, etc..

                  Over time, there has apparently been a mass exodus into cities. If this process hasn’t started to reverse yet, it is highly suspected that it will as many cities become increasingly intolerable.

                  Chicken-cooping up in a condo on the 29th floor of some highrise in the middle of a squatting metropolis deathtrap and driving into work in your musk-scented EV to work for ‘Da Man’ and lick his boots, and getting your salary taxed, is like throwing out your adulthood, sticking your thumb in your mouth, and putting on diapers. You are relying on everyone else to feed, clothe and shelter you in exchange for knowing little of anything else but your crib cubicle workplace and crib condo existence. The city even takes care of your piss and shit for you, like a real baby. You don’t have to worry about it until sewage infrastructure declines. Or there’s a riot. Or maintenance funding gets pulled. You don’t have to worry about composting it and adding it to the garden or where what your nanny is sliding into your gullet is coming from. You can worry about fossil fuel based fertilizers and Monsanto frankenfood for your pitiful, sorry and tragic life.

                  • Boomer II says:

                    I’m not a city person myself. I want to have somewhere to grow my own food, if necessary.

                    I also worry about being very vulnerable if I’m in a city that loses power, or some other important public service.

                    I don’t resent people living in cities. And I don’t have a problem with those who think city living is more efficient, more creative, and more social.

                    But it’s not a lifestyle for me.

                  • Caelan MacIntyre says:

                    .

                  • Glenn Stehle says:

                    Caelan MacIntyre,

                    People in places like Mexico and India are being forced off the land. It’s all part of what we call “development” and “progress.”

                    And if these people cling too tenaciously to their land, and their ancient ways of thinking and doing things, and refuse to abandon their land voluntarily? Well of course then they become “terrorists,” or even worse “communists,” and are systematically exterminated.

                    This is what the massacre here in Mexico a few months ago in Iguala was all about. A film debut this week tells the story: Un día en Ayotzinapa.

                    These are indigenous rural people — many who Spanish isn’t even their native language — who the US government’s client state in Mexico wants off their mineral-rich land. Some even alledge the US deep state was present before and after the operation, involved in the planning and execution of the massacre, and in the systematic cover-up afterwards.

                    It’s another example of the resource curse which Michael Parenti describes here.

                    Probably no one has written more poignantly about this than Arundhati Roy:

                    A few weeks ago the Indian government announced its plans to raise 26,000 paramilitary troops to mount a military operation against Maoist ‘terrorists’ in the dense, mineral rich forests of Central India….

                    The Operation —which incidentally, is what wars are called these days—is scheduled to begin in October, when the monsoon rains come to an end and the rivers are less angry and the terrain more accessible. The people who live in these forests, including the Maoists who see themselves as waging war against the Indian state, are tribal people, the poorest people in the country. They have lived on these lands for centuries with no schools, no hospitals, no roads, no running water. Their crime is an old one —they live on the land that is rich with iron-ore, bauxite, uranium and tin, all of it desperately desired by major mining corporations, among them Tata, Vedanta, Essar and Sterlite. The Prime Minister has declared that his government is duty bound to exploit India’s mineral wealth to fuel India’s economic boom.

                    He has called the Maoists the ‘single largest internal security threat to India.’ In the corporate press words like ‘stamp-out’ and ‘exterminate’ are commonly used in discussions about what ought to be done to them.

                    Democracy’s Failing Light

                  • Glenn Stehle says:

                    And our political class makes no bones about its intention to colonize Mexico’s and Canada’s vast energy resources as part of the US’s long-range energy plan.

                    http://i.imgur.com/EY1SIXO.jpg

                  • Nick G says:

                    You shouldn’t pay too much attention to silly political campaign materials like this.

                    After all, look how large a contribution is shown from something completely unrealistic: the Green River shale.

                  • Caelan MacIntyre says:

                    But in Nick G’s world, do all roads lead to Rome government?

      • shallow sand says:

        Hopefully a few of us will be allowed to remain living in the sticks to produce food and energy. Even if fossil fuels are nixed, the city dwellers will still need us country types, no? More room for wind and solar?

        • Nick G says:

          I did say most people…

          • shallow sand says:

            Nick G. I know. Just poking fun. At this point would be tough for me to adjust, having never lived in a major city. Do like to visit though.

  23. Longtimber says:

    Investment begging Spam in Inbox this am: Saudi led gang of 24 threatens to kill off the Petrodollar.
    http://pro.oxfordclub.com/OPEC3RD49BRKCAPESDBNIUPS4/MORER544/?a=13&o=56010&s=59575&u=2292610&l=190443&r=MC&g=0&h=true

  24. Watcher says:

    Argentina numbers as a notorious basketcase country.

    Population growth rate (2013) 0.9%. Population 2000 36 million. Population 2010 40 million. That’s during a decade of economic blah blah.

    Life expectancy avg 77.14 yrs. (Peru 73, Uruguay 76.8) 66th in the world, the US is 43rd. This is far above the Bahamas just a few miles offshore Florida. FYI #1 is Monaco at 89.

    Immigration is there like all haha rich countries. 4.5% of the population immigrated.

    If we just re-adjust our mindsets of measuring things with a yardstick that changes (dollars), different appearances emerge. The mazama chart shows Argentina oil production falling and consumption rising. They are essentially at breakeven now, hence the necessary subsidy.

  25. Ronald Walter says:

    Just be glad the oil is still flowing at breakneck speed again today. If it ever stops, it’ll be bad.

    Expedition 43

    The International Space Station has a crew of three Russian cosmonauts, one ESA astronaut, and two NASA astronauts.

    The Russian cosmonauts have the NASA astronauts outnumbered, so the Russian cosmonauts should beat the bejesus out of the American astronauts, knock down, drag out style, that’ll show those exceptional Americans what’s what!

    Maybe Putin could become the supreme cosmonaut and be commander of the space station too.

    Methinks the war talk between Russia and the US is all horse feathers.

    I’d worry more about rival biker gangs dukin’ it out somewhere in Texas. The chances of that happening are much greater.

  26. Dean says:

    US crude up to 9401 kb/d in March 2015 according to Jodi data, SaudiArabia oil production up to 10294 kb/d

    http://www.jodidb.org/ReportFolders/reportFolders.aspx?sCS_referer=&sCS_ChosenLang=en

    • Jodi gets their US data from the EIA’s Monthly Energy Review
      Not to worry, this data will be revised downward. No way did the US produce 9,401,000 bpd in March.

      The left hand column is US lower 48, the center is Alaska and the right hand column is total US. Notice the RE’s (Revised Estimate) and the E’s (Estimate). These revisions go bac 27 months, to January 2013. So March 2015 will be revised many times before we settle on the final data.

  27. The Wet One says:

    Just a follow up on an earlier post (a few topics back):

    http://www.vox.com/2015/5/19/8624229/the-news-on-climate-is-awful-so-now-what

    While we’re still screwed on the topic of long term sustained temperature change (maybe that wording will throw off the bots), hope springs eternal as shown in this article.

    We’ll probably need that hope. I’m growing increasingly convinced that my grandkids will need all the hope I and their as of yet non-existent parents, can muster. It will be a rough ride going forward. Ah well, such is life. It’s never been easy and probably isn’t supposed to be, otherwise it would be.

    • You are writing in a peak oil blog. Nobody believes those temperature projections if they think we are close to peak oil. That high end curve you guys like to show goes up to 175 mm bopd. Need I say more?

      • Nick G says:

        Could you provide a good link/source for that 175M bpd figure?

      • Fred Magyar says:

        http://bigthink.com/Mind-Matters/why-smart-people-deny-climate-change

        We needn’t accept every damn fool argument that comes down the road, but we do need to accept that we’re all inclined to protect damn fool arguments that are associated with our identities.

        And that is a really really hard thing to do! Yes, it applies to all of us.

        On the other hand, I have spent a lifetime observing nature from a very privileged position, both from having a scientific knowledge based perspective and also from having been able to visit and revisit places such as coral reefs and rainforest ecosystems in many parts of the world. I have personally witnessed the decline and demise of many of these places in a the very short time frame of a half a century. The only possible reason for someone to deny reality is because they haven’t been looking!

        • Old farmer mac says:

          Hi Fred,

          I have been hammering the ” us” and ” them ” since so far back I can’t remember when.

          Every good novelist and playwright since the invention of writing has been well aware of this simple but deep truth .

          But it still blows me away that so few people recognize it.

          All my liberal acquaintances deny some obviously true things . Ditto my conservative acquaintances.I can say with ninety five percent plus accuracy what a person thinks about a considerable number of issues if I know his politics.

          The most interesting thing about this phenomenon in my opinion is that the level of education and professional training a person has under his or her belt matters hardly not at all when it comes to what they believe and the us / them divide.

          • Fred Magyar says:

            Hi OFM,
            Yeah, it is a really tough nut to crack. There is a Brazilian saying which roughly translated is: ” Soft water, on a hard rock, drips until it makes a hole.”

            Slightly off topic. I have looked at bamboo architecture and it’s use as a building material for many years, ever since I read a book titled ‘Grow Your Own House’ by Colombian Architect, Simon Velez. Ran across this presentation recently.

            http://www.ted.com/talks/elora_hardy_magical_houses_made_of_bamboo

            I’m sure there will be plenty of people who will criticize a six story luxury palace built from bamboo for someone who is obviously quite wealthy. However if they do they will have missed the point. Much like criticizing Elon Musk for building Teslas which supposedly are toys for the rich. I guess one could even argue that building with bamboo like this is just an extender for the traditional building techniques of the orthogonal boxy buildings most of us inhabit.

            I have a different perspective about all of this and I do ride a bamboo bicycle whenever I can. Oh, an important disclaimer: it does have some steel and aluminum components. Though still far fewer than say, your typical ICE powered beer wagon or an F150 pick up… Gosh darn it imagine if I added an electric hub motor to it and Dog forbid charged it’s battery with a solar panel, I’d probably be struck down with a bolt of lightning >;-)

            So I guess I’m not perfect but you know what, I really don’t care what anyone else thinks. We in the west and especially in the US live in a world with so many resources and I’m really tired of the constant drum beat of we can’t do anything differently, blah, blah, blah. I meet people every day who are doing things differently, thank The Flying Spaghetti Monster!

            • Old farmer mac says:

              Hi Fred , I don’t know much about bamboo but I do know it is easily used for rough primitive construction such as farm sheds and that it is very strong and hard.

              I also know that at least one species will grow to sixty feet and well over six inches in diameter in Virginia having seen it personally.

              I am reluctant to plant any at my age on my place though. It is harder to get rid of it than just about anything else I have ever heard of. Five years mowing it close and often with a lawn mower is not necessarily enough to kill it.

              If you have a link to an in depth discussion of the uses of bamboo, please post it. Thanks.

              • Watcher says:

                Termite food.

                • Fred Magyar says:

                  And humans are worm food but if properly prepared can last for centuries. And your point was?

              • Fred Magyar says:

                I highly recommend this book:
                Grow Your Own House: Simon Velez and Bamboo Architecture (English and German Edition)

                I do have lots of material on Bamboo everything from cultivation, agricultural practices,preservation, construction techniques, etc… etc…

              • Caelan MacIntyre says:

                I have a thing for old and small houses, garages, barns and the like, and even abandoned stuff, and visited one a couple of years ago, and even took pics, and a few beams were ravaged by what may have been carpenter ants. The house has a curious charm to me, but may be too far gone to renovate, and it’s out of plumb too by sight, apparently from an apple tree’s branches growing against the electrical lines to the house, pulling the whole thing to one side … At what point and how does a house become demolishing material versus salvageable as-is? Many things can be salvageable of course even if the house gets ‘demolished’.

            • wimbi says:

              Fred, I spent a fair fraction of my youth in a mucky little town in Louisiana, where my mother planted some bamboo, was appalled at the resulting takeover of the garden, and set me the task of getting rid of it.

              I developed a huge respect for bamboo- and its multiple uses, many of which were weapons of a great variety, given my predilections of the time.

              Now I am having fun making low or zero carbon energy things, one of the best being a pyrolyzer, which takes anything organic and turns it into a fuel gas and carbon, which can then go into the ground, having come by way of solar from the air.

              I visualize a bamboo eating pyrolyzer- in to it on end, mixed with yard debris, old boots, and waste basket trash, out the other as carbon, and the gas coming out of the heated middle, which of course goes to genset to keep my PV batteries up during cloud times.

              History repeats. My wife had planted some bamboo just north of our PV array to bolster our wind barrier, and even way up here 40 north, we see it taking over the other weed patches.

              But anyhow, any weeds = pyrolyzer food.

              • Fred Magyar says:

                I visualize a bamboo eating pyrolyzer- in to it on end, mixed with yard debris, old boots, and waste basket trash, out the other as carbon, and the gas coming out of the heated middle, which of course goes to genset to keep my PV batteries up during cloud times.

                I could see that working down in Brazil for me…

          • Nick G says:

            All my liberal acquaintances deny some obviously true things . Ditto my conservative acquaintances.

            It might be fun to create a simple list of these things, for both groups. One short sentence for each item.

    • MarbleZeppelin says:

      First of all, I disagree with a major premise of the article. There is no way to stop at 2 degrees C rise, in fact if we stopped all the pollution now the temps would rise to 2 degree C very quickly. Also, it’s not just CO2, it’s H2O, methane, NOx, and albedo changes. The list is longer than that but that is more than enough to run up the temps to well above 3 degree C if we stopped CO2 generation right now. Natural feedbacks are already in play. We are not the only players (typical egocentric human view). The Arctic regions now have more control than we do.
      Anyway, oil, coal and natural gas are not going to stop for quite a while. Even the most optimistic scenarios have them continuing to 2050 and later. Maybe not as much but still being used.
      People keep forgetting there is a 40 year delay in the earth climate system. We are seeing the results of what was done In 1975.
      If you think the weather is chaotic now, wait a few years. More energy in the system means more variability, at least until it stabilizes in the far future. Oh yeah, as the atmospheric pollution gets cleared up, expect big changes too.
      As I was told by a woman in Maine as I entered a big forest area ” Be careful, you can’t depend on the weather.”

      • Old farmer mac says:

        MZ is in the ten ring this time. Dead on bullseye.

        There is just about a zero chance that we will get together on a world wide basis and do something DELIBERATELY with afore thought to cut back substantially on the use of fossil fuels.

        Believing this is possible is in my opinion the sign of a person who is extremely naive when it comes to world politics.

        The benefits to be gained by individual players abusing the environmental commons in this case are so overwhelming that no up and coming or poor country is going to voluntarily give up fossil fuels.

        The citizens of any country doing without cheap dependable electricity are going to continue to give rich western countries a double bird when the time comes that we rich folks ask them to give using as much coal , oil , and gas as they can obtain by any means.

        Some people who seem to believe that governments can get together to accomplish this sort of goal also seem to believe that I am naive myself when I talk about the powers of LEVIATHAN.

        LEVIATHAN does indeed have awesome powers once aroused sufficiently to act decisively.

        But there is a HELL of a DIFFERENCE between one or a few governments acting decisively to save THEMSELVES and their own citizens as opposed to a planets worth of governments acting together.

        If various LEVIATHANS are unable to act decisively on a unilateral basis how could anybody who can think a bit imagine they can act decisively in concert?

        I do recognize that there is a POSSIBILITY that one powerful world wide government could arise. But the odds of this happening appear to be between minuscule and zero.

        • Fred Magyar says:

          But the odds of this happening appear to be between minuscule and zero.
          LOL!

      • I’m not worried about the 2 degree C figure. It’s an anal extraction. Right now we are 1.2 degrees C from that arbitrary ceiling and we are doing fine. CO2 is 120 ppm higher, net forcing 0.5 to 0.6 watts per m2, we are running out of fossil fuels, so the market will take care of the problem before it gets out of hand. I’m more worried about overpopulation, human rights abuses, and the lousy quality of modern music.

        • Fred Magyar says:

          Well I do agree about the lousy quality of most modern music made for commercial consumption… well, also about over population >:-) And it then follows that the more people you have the less value they have as individuals so democratic ideals tend to fall by the wayside.

          Right now we are 1.2 degrees C from that arbitrary ceiling and we are doing fine

          Yeah, there’s a cartoon out there about a guy who says all is fine as he is falling from the top of a 50 story building and he passes the 25th story on the way to the ground… But you are 100% correct 2c isn’t the point and it is a political ploy, which doesn’t change the fact that we are having problems right now!

          • We are not having problems right now. That’s baloney. Right now we are doing just fine. What we got is a pile of made up material claiming this or that harm. Nobody can put numbers to it.

            Studies show things get better until temperature increases another 0.5 degrees to 0.8 degrees C. After that it gets fuzzy. If we tack on 1.2 on top of today’s average we are supposed to be around break even. After that, it’s supposed to be bad.

            But at the current warming rate we are not going to see that 2 degrees in this century. So it’s not exactly something that’s really bugging me that much. By 2050 we should be doing a pretty good job waging wars and cutting back population due to energy shortages.

            • Fred Magyar says:

              We are not having problems right now. That’s baloney. Right now we are doing just fine. What we got is a pile of made up material claiming this or that harm. Nobody can put numbers to it.

              Sorry, Fernando! You are the one peddling the baloney! I’ve lived in South Florida for the last twenty years and either Florida is sinking or the sea level is rising. When I moved here there were no regular flooding events at high tide down in South Beach now there are. I know, because I have to wade or drive through it on a regular basis.

              http://www.wri.org/publication/sea-level-rise-and-its-impact-miami-dade-county

              Miami has the largest amount of exposed assets and the fourth-largest population vulnerable to sea-level rise in the world. Sea-level rise is already causing significant impacts in Miami-Dade County, where prolonged flooding from strong storms has become a frequent enough event that Miami Beach city officials are considering a $206 million renovation of their drainage system. With estimated beachfront property of more than $14.7 billion (not including infrastructure), and the expected need of more than 23 million cubic yards of beach renourishment (or the equivalent of more than 10,781 football fields covered in 1 foot of sand) over the next 50 years, the urgency to address the issue is dire. However, while being located at the frontlines of sea-level rise has presented Miami-Dade with these daunting challenges, the leadership and action being taken by local officials, governments, universities, and organizations have laid a foundation of planning, policy, and awareness that can be built upon to help ensure a sustainable future for the county and Southeast Florida.

              Either this is due to sea level rise caused by climate change or maybe God is mad at all the homosexuals who live in South Beach…

              • Andy Hamilton says:

                Indeed. The cost from flooding just in one state (Florida) in one nation (the US) is going to be gargantuan (so please don’t peddle your denial clap trap here). Data recently out suggests rises of over 2.5cm A YEAR are now occurring:
                http://www.wired.com/2015/02/rising-sea-levels-already-making-miamis-floods-worse/

                ”First: Sea level rise is accelerating—perhaps faster than the IPCC has projected. When McNoldy tracked the average daily high water mark, when flooding events are most likely to occur, he saw it increase over time—but he also saw the rate of that increase go up. The last five years saw an average increase of 1.27 inches of water per year. If that rate holds steady for the next 50 years (and if McNoldy is right, it will only get worse), high tide levels in Miami would go up over five feet.”

                • Boomer II says:

                  Norfolk is another problem area. The water level is rising and there are a lot of military bases there.

                • Fred Magyar says:

                  Yeah, a lot of denialists have been changing their tune down here in South Florida, there’s something about ruining all those pairs of fine Italian shoes while wading through saltwater on the sidewalks of Collins Avenue that makes them see things in a different light. Not to mention the corrosion damage to all those Ferraris, Lamborghinis and Masseratis…
                  Then again, if you live up in the Pyrenees, sea level rise probably isn’t that big of a concern for you…

              • WilVal says:

                Please read this carefully, it will indeed disprove some of that baloney being peddled.

                Meet the scientists who sat Governor Rick Scott down & explained the CAGW scam

                Claiming Florida is facing an impending disaster from sea level rise.

                Global sea levels have been naturally rising for ~20,000 years and have decelerated over the past 8,000 years, decelerated over the 20th century, decelerated 31% since 2002 and decelerated 44% since 2004 to less than 7 inches per century. There is no evidence of an acceleration of sea level rise, and therefore no evidence of any effect of mankind on sea levels. Sea level rise is primarily a local phenomenon related to land subsidence, not CO2 levels. Therefore, areas like Miami Florida which is built on soft limestone have higher rates of relative sea level rise, but this has absolutely nothing to do with man-made CO2.

                • Fred Magyar says:

                  LOL! From the “THE HOCKEY SCHTICK”?!
                  Judith Curry? That’s a satire site right? It’s better than the Onion!
                  Thanks for sharing and the good laugh!

                • Caelan MacIntyre says:

                  ‘Our’ lifestyle is killing us anyway, to many more effects than climate change.
                  I mean, what if we want to talk about, say, increasing species extinctions? Do we get another select set of drive-by’s?

                  WilVal, I don’t recognize you. Could you give us the lowdown on your background vis-a-vis Peak Oil Barrel?

                • MarbleZeppelin says:

                  Claptrap and hokum.

              • Yes, sea level has been rising since the end of the ice age. I own a house in Ft Lauderdale, but it’s built on hard lime and sand. So, in 50 years that house hasn’t had any problems.

                On the other hand houses built on the barrier island, crossing the intracoastal, tend to sink. They ought to sink, those barrier islands are sand piles, and sand subsides. The same thing happens to the turkeys who built on mud over by 441 all the way to Weston, what used to be Seminole and gator swamp when I was a teenager.

                So you see, these little anecdotes aren’t exactly a big deal. They may convince some folk, but I’ve studied the subject. If you own a house on the island, sell it and come buy a house here in Spain. I got me a place overlooking the beach, built on hard rock, about 5 meters above sea level.

                • Stan says:

                  Right, it is just subsidence and after 400 plus years of not sinking, the ground is suddenly giving way in St. Augustine: http://www.wral.com/sea-rise-threatens-florida-coast-but-no-statewide-plan/14635433/

                  It isn’t like petroleum geologists are the only ones who can measure things. We have a number of measurements of sea level rise: http://tidesandcurrents.noaa.gov/sltrends/sltrends.html

                  http://climate.nasa.gov/vital-signs/sea-level/

                  Your knowledge outside your field isn’t particularly strong, yet you seem to feel inclined to a hubris of claiming greater knowledge than equally bright people studying these issues in depth.

                  • My field happens to be engineering. And as it turns out geomechanics, subsidence and sediment transport happen to be very important when we build offshore structures and shore bases. The basic problem is that most civilians don’t really have the ability to differentiate subsidence, isostatic rebound, sea level rise, change in drainage patterns, excessive compaction from overdrawing water from acquifers and similar issues. Sea level is rising. But most of the examples I see are caused by poor practices.

                  • Stan says:

                    Fernando, “My field happens to be engineering.”

                    You are an excellent petroleum engineer.

                    “But most of the examples I see are caused by poor practices.”

                    You obviously aren’t looking very hard.

                  • On the other hand, i dont see anybody with a coherent argument to support the climate hysteria about the world being worse off right now. What I read here is little tantrums, personal attacks, and meaningless anecdotes. I think there’s frustration on the hysteria side because it’s caught in an endless loop of self reinforcing meaninglessness. It doesn’t work with me.

                    The climate, as of right now, is just fine. It’s better than 100 years ago. If it keeps warming a time will come when the positives we see today will be reversed, and eventually we will be worse off. But the extreme extrapolations being peddled by Obama et al are bs. We simply lack the fossil fuels to reach those extremes.

            • Dennis Coyne says:

              Hi Fernando,

              It is true that the transient climate response is less than the equilibrium climate sensitivity, but with the fossil fuels that we have there will eventually be plenty of CO2 in the atmosphere to cause 3C of warming as the ocean surface warms up and absorbs less of the excess incoming energy. It takes many thousands of years for carbon dioxide levels to fall to the point that the earth will cool back to 2 C above pre-industrial.

              There is also a possibility that the equilibrium climate sensitivity is higher than 3C. It is difficult and expensive to attempt to put the Genie back in the bottle.

              • Dennis, I simply don’t believe your numbers, nor do I believe what they are based on. A lot of what you use is based on models I happen to think are running hot. And this isn’t really an argument you can have with me here. As far as I can see, we are headed for about 2.5 degrees C peak. After that, it’s downhill to the next ice age.

                • Jef says:

                  What are your thoughts/beliefs on gravity?

                • Dennis Coyne says:

                  Hi Fernando,

                  As I have said many times, there is uncertainty about the equilibrium climate sensitivity to a doubling of CO2 above the average preindustial Holocene level of about 280 ppm. You yourself have suggested we have enough carbon to burn to reach 600 ppm, my guess is more conservative at about 550 ppm.

                  The experts in the field believe that more than 2C of warming will be a problem and that a doubling of CO2 will lead to 1.5 to 4.5C of warming once the system reaches equilibrium (about 200 years after reaching 560 ppm of CO2 in the atmosphere).

                  In the face of large uncertainty it makes sense to err on the side of caution. There are also earth system effects (changes in vegetation and ice) which may have further positive feed backs, though these will take thousands of years to become apparent.

                  Not sure which numbers you don’t believe, maybe you lack a good understanding of the Carbon cycle.
                  In the models below fossil fuel emissions stop by 2100, 1200 Gt C, 1000 Gt C, and 750 Gt C from fossil fuels, cement production and land use change from 1750 to 2100 (this is carbon, not CO2).

                  • Dennis, I don’t think I should have to repeat over and over that I don’t agree with your experts. I read several papers every day about this subject. What you post here isn’t about to convince me. Let me ask you, have you seen the misties between the cmip5 ensemble and the actual temperature trends? Do you realize how far off they are?

                  • Denis: Here’s a paper you may wish to read about scientific methodology

                    http://www.auburn.edu/~tds0009/Articles/Chamberlain%201965.pdf

                    It’s an old 1965 Science magazine article. If you don’t want to read it, go to page 4, read the section on working hypotheses.

                    I’m trying to get you to understand that the repressive nearly religious approach, referral to authority, and mumbo jumbo we get isn’t unique. Everytime the “conventional wisdom” is challenged, a significant portion of the population reacts somewhat violently to any challenges. It has always happened.

                    I like to discuss this topic because as you know there seems to be a conventional wisdom that fossil fuel resources are limitless. Whenever I mention the IPCC blew a gasket with the fossil resources I get blank stares, I’m insulted, or told I’m just an engineer. As it turns out, the reactions are similar whenever there is a challenge to conventional wisdom. People laughed at Wegener, they think Ron and you are goofy, and they think Bekenstein is nuts (Bekenstein is trying to rework special relativity, something that’s clearly needed, but meets resistance in some quarters).

                  • Glenn Stehle says:

                    Fernando Leanme,

                    For much more on the Wegener story, the historian of science Naomi Oreskes wrote two books on the subject, Plate Tectonics: An Insider’s History Of The Modern Theory Of The Earth and The Rejection of Continental Drift: Theory and Method in American Earth Science.

                    For those who don’t have the time or desire to read the books, the editorial reviews, as well as the first couple of customer reviews, all which can be found here, are excellent.

                    Oreskes is more interested in how science works in practice than how it works in theory. In practice, it is a tortuous and often highly contentious process which involves our various ways of knowing: revelation, rationalism, empiricism and dialect.

                    “Remarkably, the author manages to present a sympathetic side to the human dilemmas of the story, while not at all mitigating the really profound implications of a story that goes far beyond geology – the weakness, even fragility, of the scientific method,” concludes the first customer review. “This masterfully told story suggests a paraphrase of arch-conservative William F. Buckley’s critique of capitalism and capitalists: the trouble with science is scientists.”

                    “Oreskes (Univ. of California, San Diego) argues that ‘science is about how belief gets formulated,’ and that the criteria used in the formulation of belief are historically contingent and play a significant role in constraining the boundaries of scientific knowledge in a cultural and social context,” reads the first editorial review.

                    “European colleagues actually bent their effort toward developing physical models in support of drift…. Americans appear to have been committed to demonstrating the impossibility of drift,” notes the American Scientist review.

                    What I don’t understand, Fernando, is how you believe bringing all this up helps your argument, because you very much have the appearance of a partisan in the global warming debate. There’s not even so much as a whiff of disinterested inquiry in your comments.

                    And furthermore, you invariably seem to be on the side of powerful entrenched interests and cultural inertia. There is nothing subversive about your position.

                  • I don’t read anything by Oreskes. I tried, but what she writes tends to be mumbo jumbo.

              • MarbleZeppelin says:

                The problem with determining the climate sensitivity of the troposphere is primarily three things, it’s low mass, it’s high degree of transport and it’s almost direct exposure to space. Transfer of energy is very rapid in the atmosphere compared to the ocean and land masses. It’s exposure to both space and terrestrial mass makes it even more variable.
                For instance, heat can be acquired from the Pacific Ocean, moved to the Arctic or sub-arctic regions where it loses the energy then shortly that same air current will be back over a continent much further south absorbing energy from soil, rock, and infrared radiation. All in a very short time. Due to this exposure to various latitudes, land and ocean and the cold upper reaches of near space, it’s energy and temperature differentials vary significantly and quickly in all directions. Just measuring such a dynamic system is an incredibly complex task.
                To add to all this complexity, the very composition is changing and the degree of reflectance is changed by pollutants. It is estimated that we now lose 10 percent of solar radiation to reflectance due to atmospheric pollutants that change cloud formation and character.

                So determining the actual climate sensitivity is probably beyond our current abilities. Best guesses is all we get and we rely more and more on satellite data that has to take into account the many variables within the upper layers of the atmosphere and how they affect radiation passing to the satellite. An admirable job is being done, but we are not placing enough resources and effort into monitoring our own earth. People are more interested in spending huge amounts of money to chatter to one another than to see what is happening to the earth system.

                I like to take the obvious and simpler approach, the major variable in the system, SOx and other aerosols that block sunlight. Pollution from burning dirty fuel in other words. The major rise of air temperature that started back in the early 1900’s was interrupted in the 40’s through the 70’s by severe pollution, resumed as the atmosphere was cleaned somewhat and has now been interrupted again by the extravagant burning of coal and other dirty fuels on an even larger scale.
                However the air is only a small portion of the energy equation, the ocean is much more massive. Despite the decrease in sunlight, the ocean has been gaining energy at an alarming rate. The ocean heating has taken no pause despite lower solar radiation.

              • John B says:

                The 3C number comes from the mistaken assumption that CO2 drives temps, and the ice core data.

                The fact that the IPCC had to “lower” their range of estimates to 1.5, shows that the so called “experts” have no idea what they’re talking about.

                UAH data shows NO increase in temps for the past 35 years. RSS numbers agree.

                http://www.drroyspencer.com/wp-content/uploads/UAH_LT_1979_thru_April_2015_v61.png

                GISS can’t keep fudging their numbers forever. Sooner or later, the whole house of cards will come falling down. Likely sooner.

                • Dennis Coyne says:

                  Hi JohnB,

                  I downloaded Global satellite temperature data from University of Alabama/Huntsville (link below)

                  http://nsstc.uah.edu/climate/

                  click on link with monthly data.

                  I calculated the 60 month centered moving average and plotted on the chart below, the trendline suggests about a 0.45C increase in global temperature from 1983 to 2012.

                • Boltzmann Brain IV says:

                  “The 3C number comes from the mistaken assumption that CO2 drives temps, and the ice core data. “.

                  John B,

                  This is bread and butter science. Putting greenhouse gases in the atmosphere will unquestionably raise the temperature, all other things being equal.

                  How anyone could doubt the greenhouse effect is laughable. This is amazingly straight forward.

                  That 10,000 (or whatever) PHD physicists, chemists and mathematicians, aka Climate Scientists, who all agree on this are wrong is stunning.

                  I can’t get 5 people to agree on anything where I work! Let alone an entire industry in different cultures, different countries, different religious backgrounds…

                  self-deception is amazing.

                  Hey John B, let me guess you believe that 3 wise men followed a star to find the messiah! On a rotating planet, that wouldn’t be very wise!!!!

                  If I have mischaracterized your opinion, sorry, I am an idiot who loves science.

                  • John B says:

                    This is bread and butter science. Putting greenhouse gases in the atmosphere will unquestionably raise the temperature, all other things being equal.

                    More like the classic bait and switch. The question is, how much?

                    Is sensitivity 3 degrees C?

                    If yes, then why did the IPCC lower their estimate range to 1.5?

                    (Answer: Because the IPCC doesn’t really know what the sensitivity number is.)

                    And more importantly, why aren’t we seeing those increases in the actual measured temps? Why are all the GCMs wrong?

                    (Answer to both questions: Because the sensitivity numbers are vastly overstated.)

                    You may love Science, but I don’t think you really understand the issue. So I filled in the answers for you.

                    http://dailycaller.com/2015/03/31/scientists-say-new-study-is-a-death-blow-to-global-warming-hysteria/

                • Dennis, here’s the data they plotted on the page you linked, there was no need to cherry pick the plot

                  • Dennis Coyne says:

                    Hi Fernando,

                    I used all the data with a centered moving average, no cherry picking at all.
                    In fact if you draw a trendline through the data it will be exactly as I have shown.

                    Chart further down thread with raw data.

                • Dennis Coyne says:

                  Temp plot with University of Alabama-Huntsville Satellite data from dec 1978 to April 2015 and linear trendline.

            • Old farmer mac says:

              ”By 2050 we should be doing a pretty good job waging wars and cutting back population due to energy shortages.”

              GOTCHA -you have finally admitted that you DO have an opinion as to how much longer we can depend on fossil fuels to provide most of our energy without BIG problems.

              Not more than thirty five years or so.

              My own seat of the pants impression is that we are going to be experiencing big time depletion troubles by then at the very latest. Maybe much sooner.

              For what it is worth I also believe that while a runaway climate is a grave existential danger, resource wars are a bigger one that we are going to have to deal with SOONER.

              • MarbleZeppelin says:

                I am going to miss maple syrup and apples. The bird species are shifting here already.

                • MarbleZeppelin says:

                  Looks like the DOE is pushing for higher bigger wind towers. That will expand the amount of viable area for wind power tremendously.
                  Why is the US mostly behind Europe anymore in developing and implementing technology? Have we lost our motivation? Or is it all getting sucked up in this big drive to get the last of the oil so rich men can line their vaults with gold?

                  • wharf rat says:

                    “Why is the US mostly behind Europe anymore in developing and implementing technology?”

                    Raygun

                    “Your President Jimmy Carter was the first politician to promote an industrial revolution with renewables,” Fell said when we met in his Berlin office in April. “I looked to the USA in the 1970s. There was wind power in California and solar power on the White House. I thought, ‘Oh, this is wonderful! Why can’t we have this in Germany?'”

                    For a time, the United States led the world in developing renewable energy. At one point the Carter administration’s Solar Energy Research Institute (SERI) made the dream of a renewable energy economy so real that it set off alarms in the oil-rich countries of the Middle East.

                    “The big powers are seriously trying to find alternatives to oil by seeking to draw energy from the sun,” Saudi Arabia’s oil minister Sheikh Ahmad Zaki Yamani warned his colleagues. “We hope to God they will not succeed quickly because our position in that case will be painful.”

                    Four years later, Carter was defeated by Ronald Reagan. The new administration considered SERI a prime example of what it derided as “solar socialism.” The budget of the world’s leading solar institute was slashed and before long it was back to (oil) business as usual.

                    As Fell tells it: “Reagan said, ‘Go away with this shit of renewables.’ And that was that.”

                    A generation of Germans picked up the renewable torch that the Reagan administration tossed aside and bought up SERI-produced patents at fire-sale prices. The renewable energy revolution didn’t end. It moved overseas and was renamed die Energiewende.

                    http://www.bloomberg.com/news/2012-11-23/can-the-u-s-create-its-own-german-style-energy-revolution-.html

                  • Glenn Stehle says:

                    wharf rat,

                    Carter tried to do what, IMHO, is the intelligent and moral thing.

                    Remember the “Crisis of Confidence” speech back on July 15, 1979, where Carter told the American people that they must conserve, ratchet down their high-consumption lifestyles?

                    https://www.youtube.com/watch?v=v7ysc1P1sH4

                    But it was political suicide.

                    Reagan, whose political career consisted of little more than telling people what they wanted to hear, proclaimed “moning in America.” The American people chose to take a prolonged mental holiday, and fell for Reagan’s demagoguery.

                    Carter, realizing his mistake, did a 180 and announced the Carter Doctrine, which militarized US energy policy. and unleashed a brutal and ruthless war on those in the middle-middle to working classes by appointing Paul Vockler as chairman of the Federal Reserve.

                    But it was too late.

                    The “modern prophet of profligacy,” as Andrew Bacevich calls him, became the US’s next president, and rank demagoguery became a hallmark of US politics.

                    There happens to be a name for this debauchery. It’s called imperial decadence and decline.

                    And as Kevin Phillips laments, historically speaking, once it sets in it has invariably proved to be terminal.

                  • Marble Z, fact is the USA isn’t behind. If the USA wants to it can build 500 meter tall wind turbines.

                    The little brochure we have doesn’t give me confidence the taller tower works. I would need to see data such as the present value at 3 % of the estimated cost over a 30 year period versus energy generated in different locations.

                • The U.S. isnt behind the Europeans in most areas. The French have automated surrender robots they will use to wave white flags, the British have new technology to build pickle shaped buildings, and here in Spain we got super technology we use to make sausages. But the Americans got those plastic planes, and much better gaming software.

                  • MarbleZeppelin says:

                    Fernando, even for you that comment is really a low point. Come on, you can do better.

                  • Synapsid says:

                    Fernando,

                    Can you get some of those sausages exported? I’d love a good Spanish chorizo.

          • Caelan MacIntyre says:

            Hi John B,
            Ron Patterson explicitly mentioned no embedded art, poetry or music videos and related stuff. What I do sometimes is simply HTML-encode some text (that has its own added-value as well) to a video, rather than embedding it in the page like this, which may interrupt the flow somewhat. I suppose we should do the same for general images too, if they are not very peak-oil/FF-industry/climate/etc.-related graphs and the like, which I will do myself from hereon in.
            Anyway, thanks for sharing just the same.

  28. Ronald Walter says:

    Texas oil production 2009-2014

    Texas has been going gangbusters increasing production of oil since 2009.

  29. learner2 says:

    http://www.bloomberg.com/news/articles/2015-05-19/goldman-sees-oil-at-45-by-october-after-self-defeating-rally

    Goldman Sees Oil at $45 by October After ‘Self-Defeating’ Rally

    Last time they came out with $30 prediction was march 11 or so, just before rally started. I am a strong believer in doing the opposite of what GS says.

    If they are right however, shale players will make money due to lower costs. If GS is wrong, shale players will make money at higher WTI. So shale players are a buy now? Is that a logical conclusion now? GS did upgrade CLR couple of days ago.

    • Watcher says:

      You do realize lower costs are achieved by not fracking wells?

      The swaggering necessity is the mother of invention meme doesn’t really hold water when the techniques are 20 years old and the ballyhooed technology has trucks hauling water, proppant and oil to and from wellsites for the first year of operation . . . altogether now . . .

      2 0 0 0 times. 2000 truck trips to deal with a well’s creation and first year of operations. That look like hyper efficiency to you in a world of pipeline norms?

      If costs are reduced, it’s because somewhere in the chain of supply someone got fired and isn’t doing his job anymore, or more powerfully, holes didn’t get fracked. You can save a lot of money if you don’t produce oil.

    • shallow sand says:

      How could a firm predict return to $45 oil and upgrade CLR at the same time? Did they read CLR 10Q from Q1 2015 when WTI averaged $48?

      Of course CLR is winning the “oil battle” to get US to energy independence. And they will be successful in killing small conventional producers, as that is who needs to shut in production, not the shale producers, who stand for the new American Energy Renaissance.

      $7 billion of debt and counting to drill 20,000 feet plus wells that still cost $8 million plus each that will be producing 10 bopd in 10 years absent another $3+ million refrack. Yes $45 oil does CLR a lot of good.

      Mr. Hamm surely remembers how good the 1990s were to the US oil industry. He attempted to sue KSA for dumping oil back then, claiming they were selling below cost. Maybe he will be sued for doing the same thing, appears his company has been selling oil below cost for the last ten years, when the debt of CLR rose from $160 million to over $7 billion. Is that not the definition of dumping? LOL!

      • Dennis Coyne says:

        Hi Shallow sands,

        after 8 years or so, I assume an exponential decline at 9.5% per year for the average ND Bakken/Three Forks well, this results in 10 b/d at about 20 years, at 10 years the average well will be producing about 28 b/d, at the start of exponential decline (hyperbolic before that) at the end of year 8, output is 34 b/d.

        • shallow sand says:

          Dennis, sorry, I was exaggerating, trying to be humorous. Some will be below 10, some at 10, the majority likely above, and we will be finding out in the next ten years or less for sure. I had just read some information about Continental indicating they were able to make very high returns in the SCOOP area of OK even at current WTI and natural gas prices and then saw the Goldman note.

          I will back off on CLR, they are just doing what they think they need to do to survive.

    • shallow sand says:

      How could a firm predict return to $45 oil and upgrade CLR at the same time? Did they read CLR 10Q from Q1 2015 when WTI averaged $48?

      Of course CLR is winning the “oil battle” to get US to energy independence. And they will be successful in killing small conventional producers, as that is who needs to shut in production, not the shale producers, who stand for the new American Energy Renaissance.

      $7 billion of debt and counting to drill 20,000 feet plus wells that still cost $8 million plus each that will be producing 10 bopd in 10 years absent another $3+ million refrack. Yes $45 oil does CLR a lot of good.

      Mr. Hamm surely remembers how good the 1990s were to the US oil industry. He attempted to sue KSA for dumping oil back then, claiming they were selling below cost. Maybe he will be sued for doing the same thing, appears his company has been selling oil below cost for the last ten years, when the debt of CLR rose from $160 million to over $7 billion. Is that not the definition of dumping? LOL!

      Ah irony.

    • AlexS says:

      Goldman has a long record of wrong oil price predictions

  30. dmg555 says:

    Arthur Berman’s is Nearsighted

    In Arthur Berman’s most recent article, “Oil Prices Will Fall: A Lesson in Gravity,” Mr Berman suggests that due to the current 2 million barrel surplus, oil prices are headed lower. He may be correct, based upon his numerical figures and graphs, but oil is a slippery business and a lot can change in a day due to “Geopolitical Events”. Perhaps China’s recent additions to their own storage capacity is a hedge or insurance policy against the likelihood that changing political events in the Middle East might soon spin out of control? I believe that the political risks in the Middle East are growing in force and can not be ignored, especially when forecasting oil prices. His analysis excludes any of these potential geopolitical concerns.

    The only complaint I have about Mr. Berman’s perspective is that his current article is primarily short term in nature. Within his article, he presents a graph showing oil surplus and deficit figures back to 2006 and while he correctly shows us that there is a current surplus of 2 million barrels, from his own graph one can see that in 20 of the past 36 quarters he references, oil demand outpaced oil supply. In only 16 quarters from his chart, did we have a surplus. While Mr. Berman may be correct with regard to oil prices over the next year, he makes no reference to where he thinks they might be in two, five, or even ten years from now.

    I have great respect for Mr. Berman’s work. I believe in previous articles he has diligently and accurately shown us that the tight oil companies in the US have already picked much of the low hanging oil reserve fruit, and that although large additional reserves may exist, their extraction costs make them worthless in the current pricing environment.

    I look forward to Mr. Berman’s next article, and hope that he will provide us with some additional insight into where he feels oil prices are headed in the longer term inclusive of potential geopolitical events.

    • Jeffrey J. Brown says:

      The recent increase in monthly Brent crude oil prices, at an annualized rate of about 90%/year from 1/15 to 5/15*, is consistent with Stephen Kopits’ scenario, which he prepared in January, 2015 (Prienga is Kopits’ work):

      *Assuming that Brent averages about $65 for May

    • What 2 mmbopd surplus? Demand should be up by around 0.5 mmbopd, and I just finger counted another 1 mmbopd drop all over the world. Tack back on the OPEC increase and the surplus is evaporating. By the end if the year it’ll be poof.

    • Jeffrey J. Brown says:

      Saudi Arabia, OPEC partners turn down Chinese requests for extra oil

      http://www.arabianbusiness.com/saudi-arabia-opec-partners-turn-down-chinese-requests-for-extra-oil-593431.html

      Saudi Arabia and its main Middle East OPEC partners are turning down Chinese requests for extra oil as they hold back fuel for their own refineries just as demand from the world’s biggest crude importer hits new records.

      While the Saudi and other refusals for additional crude supplies may not be part of a new pricing strategy, the rejections to their biggest client help explain a 40 percent rise in oil prices this year as Chinese importers have had to seek more oil from other suppliers in what analysts say is still an oversupplied market.

      Senior Chinese oil traders told Reuters the Saudis have turned down requests from Chinaoil and Unipec – the respective trading arms of PetroChina and Sinopec – for extra cargoes of crude for May and June loadings, forcing them to seek supplies from producers in West Africa, Oman and Russia. Saudi Arabia “used to provide as and if we asked for extra cargoes on top of contract during the first four months of the year, but not for May and June,” said a trader with one of China’s biggest oil importers on condition of anonymity as he had no permission to talk to media.

      Another source with a Chinese refinery that takes Saudi oil said Saudi heavy crude was “a bit tight” in May and June. . . .

      Saudi Aramco, which was not available for comment, had already reduced contractual supplies to some Japanese and South Korean customers in April.

      The trader with one of China’s big importers said requests for more crude to Kuwait and the United Arab Emirates – Saudi Arabia’s closest partners in the Organization of the Petroleum Exporting Countries (OPEC) – were similarly turned down.

      • Old farmer mac says:

        Personal opinion -The Chinese are probably putting every barrel they can put their hands on into storage in the expectation that prices will be going up soon. They can’t earn much if anything in interest on their holdings of dollars and other currencies but buying oil five or ten bucks a barrel cheaper than they can buy it next year or the year after is a great deal for them.

        Likewise the Saudis are probably not interested in sending any more oil out than they have to for now to maintain their market position. They are probably expecting to get a higher price later.

        If it weren’t for the Saudis wanting to put a hurting on their enemies, Iran and Russia in particular, they probably would have cut production to force prices up.

        But there are always a few more considerations to be taken into account. Uncle Sam is no doubt very glad for the extra economic stimulus of low oil prices and we are the Saudi royal family guarantee of staying in power.

        Yet another consideration is that they by not cutting production they are serving notice on other OPEC countries that they will not tolerate cheating on quotas if and when the next time around.

  31. The EIA’s Weekly Petroleum Status Report is out. Storage was 482,165,000, down 2,674,000 barrels per day. Production was 9,267,000 barrels per day, d0wn 112,000 barrels per day.

    However the big drop was in Alaska. They have the lower 48 the same as last week.

                     US   Alaska   Lower 48
    Feb 20, 2015	9285	501	8784
    Feb 27, 2015	9324	499	8825
    Mar 06, 2015	9366	494	8872
    Mar 13, 2015	9419	508	8911
    Mar 20, 2015	9422	511	8911
    Mar 27, 2015	9386	512	8874
    Apr 03, 2015	9404	522	8882
    Apr 10, 2015	9384	523	8861
    Apr 17, 2015	9366	505	8861
    Apr 24, 2015	9373	512	8861
    May 01, 2015	9369	515	8854
    May 08, 2015	9374	504	8870
    May 15, 2015	9262	392	8870
    

    • Political Economist says:

      What’s going on in Alaska?

      • MarbleZeppelin says:

        Alaska seems to have repetitive drops in production this time of year. Maybe pipeline maintenance.

      • It’s routine to schedule plant turn around for the long daylight and relatively mild weather. You’ll see a similar drop in the North Sea platforms.

    • MarbleZeppelin says:

      Looks like the US is back down to February 2015 production levels. Wonder how far it will fall this year?

  32. Boomer II says:

    I have mentioned that I started reading this blog to gain insight into the economics of fracking. I was concerned that there would be a rush to approve fracking in populated areas and then the bubble would burst, leaving messes that had to be cleaned up.

    The citizen protests against fracking in their communities slowed things down enough that now it is become more evident that fracking probably isn’t sustainable and therefore there’s little value in pushing it into communities that don’t want it.

    As you can see, not much has been done, which is a good thing, to allow more time to see where the industry is really headed.

    It Was A Quiet Session At The Colorado Statehouse For Oil & Gas | KUNC

    • Watcher says:

      If the price rises, the oil will come out regardless of any environmental issues.

      If the price does not rise, it will not, regardless of any environmental issues.

      • Boomer II says:

        If the price rises, the oil will come out regardless of any environmental issues.

        If the price does not rise, it will not, regardless of any environmental issues.

        That’s not true.

        1. If no one wants to lend money for fracking, it won’t be done.

        2. If someone wants to frack in a suburban neighborhood and it will diminish the quality of life there to such an extent that property values crash, fracking isn’t going to happen, especially if it is going to be a short-lived venture.

        You’ve got competing interests in some of these communities and oil interests won’t always dominate.

        • Boomer II says:

          Let me put it another way. If someone found oil under the White House, you think the oil companies will be given the opportunity to frack there if the price is right? No.

          • Jef says:

            Have you ever heard the term “I drink you milkshake?”

            If there was large quantities of oil under the White House it would be sucked out damn straight.

    • Fracturing rocks is viable. I find the whole argument you guys use to be really bogus.

      What you need to focus on is truck traffic regulations, have them use nicely disguised multi well pads, keep the noise down, centralize facilities away from existing houses, forbid flaring beyond a tiny amount early in a well’s life, and make sure they don’t emit hydrocarbons from their tanks. If you want my consulting services to show you how to get smart I’ll do it for free, just to make sure you don’t miss the big ticket items while you focus on something that has no real impact. I own property on a shale field and that’s what I try to get the town to focus on. But we got a bunch of greenhorn experts trained watching gasland movies, and they sure get in the way.

  33. ezrydermike says:

    from today’s LA Times….

    “The economy is thought to have shrunk in the January-March quarter and may barely grow for the first half of 2015, thanks in part to sharp cuts in energy drilling. And despite their savings at the gas pump, consumers have slowed their spending.

    At $2.71 a gallon, the average price of gas nationwide is nearly $1 lower than it was a year ago. In January, the average briefly reached $2.03, the lowest in five years.

    Cheaper oil and gas had been expected to turbocharge spending and drive growth, more than making up for any economic damage caused by cutbacks in the U.S. oil patch.
    …..
    It turns out that the economic effects of lower energy prices have evolved since the Great Recession. Corporate spending on drill rigs, steel piping for wells and rail cars to transport oil has become an increasingly vital driver of economic growth. So when oil prices fall and energy companies retrench, the economy suffers.

    The drilling boom that erupted in 2008 has boosted U.S. oil production nearly 75% and natural gas 30%, and made the United States the world’s largest combined producer of oil and natural gas. Energy production contributes about 2% to economic output, up from less than 1% in 2000.

    Yet in recent months, industry activity has dropped more sharply than predicted.
    ….
    For the economy, the technological breakthroughs that allowed the energy industry to power growth now help explain the slowdown. As the 2008-09 recession ended, companies used hydraulic fracturing, or fracking, to unlock underground reserves. Oil, at $100 a barrel or more, made such efforts profitable.

    Jim Burkhard of IHS Energy estimates that U.S. and Canadian energy companies increased investment in production to $363 billion last year from $98 billion in 2005. U.S. oil and gas jobs nearly doubled to 537,000. In addition, jobs were added at steel mills, at sand pits to process sand for fracking and at restaurants and service companies in areas with newfound oil and gas fields, like North Dakota and Pennsylvania.

    But the industry’s breakneck growth was thrown into reverse by a 50% drop in oil prices from June through January. Doug Suttles, chief executive of Encana Corp., a Canadian-based driller that operates in the United States, says the pullback in drilling “happened more rapidly than I’ve seen in 32 years.”

    As recently as December, Suttles says, experts had forecast that the number of rigs would drop by a third in the spring from a year earlier. Instead, it’s plunged by more than half, according to Baker Hughes, an oil-field services firm.

    That’s led companies such as U.S. Steel to temporarily close factories that make the steel pipe used in oil wells. Texas-based Superior Silica Sands, which makes fracking sand, has canceled the building of a factory and has slashed capital spending plans.

    Investment in wells and production facilities collapsed nearly 50% last quarter, the government says, and cut the quarter’s annual economic growth by three-quarters of a percentage point. Goldman Sachs estimates that three jobs will be lost in other industries for every position shed by energy companies as laid-off workers spend less.”

    http://www.latimes.com/business/la-fi-cheap-oil-20150520-story.html

    • Boomer II says:

      From the article: Yet in recent months, industry activity has dropped more sharply than predicted.

      I think economists need to catch on here. If the only industrial spending is happening in areas related to gas and oil, our economy is in serious trouble. If our country’s economy lives or dies now based on the oil industry, we’re not much different than other oil producing countries. Apparently we’ve got nothing else that matters much to the economy. That’s bad. Very bad.

      • Boomer II says:

        Also, it means that whatever economic benefits we’ve had over the decades from gas and oil, we haven’t invested it wisely enough to carry us through during tough times. If we need today’s gas and oil industry spending to prop up our economy, we’ve wasted more than just burning the fuel we’ve used.

        I’m still not a hardcore doomer. I think there are things we can do. But, really, economists should be figuring this out. If we are that dependent on gas and oil industry spending, our economy has too little going for it.

        • Jef says:

          This is what Steve From Virginia talks about when he says that gas consumption is non-remunerative.

        • MarbleZeppelin says:

          Buried deep in the larger economy is an economy that works. The larger economy of mass consumerism, military production and vast infrastructure is just a dream dependent upon eternal growth and massive destruction. As we know that larger economy will fade and newer better, more sensible and less destructive ones will follow. That change is happening now, so encourage it.

          • Watcher says:

            what change? Look below at the graphs of single family home sales and real income I linked below.

            There is no change. There is no improvement. There is printed money.

            There is no core purity that will emerge.

            There is oil scarcity and its attendant death, enroute.

            • MarbleZeppelin says:

              Really hitting Revelations today watcher. Do you have your signs made up for the end of the world yet? Sorry, not a believer, I go with the facts.

      • Ves says:

        Hi Boomer,

        Well they just confirmed what 6-7 months ago few of us here were saying that would happen. “Lower” oil prices did not change anything, even one iota, in terms of invigorating the economy. Very few believed here. They thought $50 WTI are going to somehow move economy by allowing average Joe one extra trip in a truck to the liquor store. Basically price of the oil is totally detached from the economic activity. The only thing that matters in terms of oil is “flow” or “no flow”. So oil will of course continue to “flow” but even at these “lower” prices we will be poorer and poorer as more and more marginal buyers are cut off from the credit.

        • Boomer II says:

          I can’t remember what was said here about low oil prices and the economy, but I have believed for quite awhile now that all that has been happening is that the rich have gotten richer and no one else has.

          Of course, I have also maintained that inequality is probably better for the environment because there’s less total consumption.

          What DC and economists have to grasp is that if the economy is only surviving on oil and gas industry money, no one is investing in the future. Apparently businesses don’t see a future for themselves. They aren’t expanding. They aren’t planning to expand. Government spending is being cut.

          This country is in trouble if the only thing propping it up is oil and gas industry money.

          • Ves says:

            ” Apparently businesses don’t see a future for themselves. They aren’t expanding”

            Businesses that are marginal buyers of oil are cut from the credit as well, not just individuals. And if they don’t have access to the credit they can’t expand. They are just servicing existing debt loads if they are lucky ones.

            • Watcher says:

              GDP will be redefined to hold the narrative together.

              • SAWDUST says:

                Watcher,

                Are you suggesting we will add hookers and blow towards our GDP number like some European countries do?

              • Boomer II says:

                GDP will be redefined to hold the narrative together.

                That could be true.

                And that’s the point of my comments. The article is saying something that should have been obvious to economists before this. Someone in the media is pointing out that the country has nothing going for it other than the gas and oil industry. And if this is true, then damn, it’s time for people to get scared.

                In other words, something significant was said in the article, most likely inadvertently, and is being said before the economists and DC have gotten out a new story.

                It may not be true that the country has nothing happening but oil and gas, but that’s what the article said.

                And yes, maybe someone in DC will say we have to prop up the oil and gas industry or the country will sink into a depression. Yes, we used to be told that housing was that important. Or the auto industry was that important.

                But now we’re being told that a declining resource is that important. That we don’t have anything else to fill in when that is gone.

                • Boomer II says:

                  I’ve been thinking about this a bit more.

                  Where I differ from some doomers is that I don’t see a collapse — as in a sudden falling apart.

                  What I see is that we’ve been heading downward for awhile now. And economists have been wrong about what is happening and what are the solutions.

                  And I don’t see our problems tied to peak oil. Right now we have enough oil and we still have problems. Our problems predate peak oil.

                  What I see happening is that those with plenty of money have no interest in activities that create jobs. There are plenty of projects that need doing (e.g., rebuilding infrastructure, improving health care, improving energy efficiency and conservation, more care for those who can’t care for themselves) but the money isn’t going to them.

                  The fact that the economy is focused on taking a resource out of the ground and burning it up and not investing that money and energy in sustainable projects seems less about animal urges to grow until resources are depleted and more about suicidal behavior. Less about blindness to the future and more about an economic death wish.

                  And I suppose those who believe the sooner we destroy the Earth, the faster they will be saved are putting their feet on the gas pedal so we’ll slam into the wall and then Jesus will come back.

                  And as we become dependent on gas and oil to run the economy, we also see our American Taliban equivalents getting more and more extreme in their reactionary behavior.

                  Yeah, peak oil will make things worse, but we have problems now.

                  • Hillson says:

                    What are you talking about peak oil not be our problem? Peak oil is a decade+ long process. Yes, we’re still on the peak plateau, so there’s more oil now than ever, but the peak oil dynamic (HT Rockman) has been well under way for several years. Another decade or so, and peak oil will be clear and the root of all these problems will be more obvious in hindsight. But I thought most of us here recognized by now this would be a complex drawn out process as the system fights the inevitable.

                  • Boomer II says:

                    What are you talking about peak oil not be our problem? Peak oil is a decade+ long process. Yes, we’re still on the peak plateau, but the peak oil dynamic (HT Rockman) has been well under way for several years.

                    What I am saying is that oil supply and the cost of oil aren’t killing our economy. There’s money sloshing around in the system, but that money isn’t being used productively. It’s going to jack up the price of real estate, art, etc. It isn’t being used to rebuild and strengthen the economy.

                    Having more oil and cheaper oil might not help if there are no jobs.

                    I’m just musing about the concept that the only thing driving the US economy is gas and oil extraction. For someone in the media to say this, that means our economy has not been doing enough to sustain itself beyond oil and gas and when those jobs end, there’s not enough of anything else to keep going. This situation appears not about the resource itself so much as the fact that the economy has been structured so that even when oil and gas are doing well, the money is not going to areas that can sustain themselves when the money gets scarce.

                    In other words, our boom times now mean nothing. Those boom times don’t filter down to strength the larger economy. More oil and cheap oil aren’t giving us a stronger over all economy.

                  • Boomer II says:

                    It’s kind of like burning oil to keep us warm, but not using that oil to create a sustainable legacy. Whatever energy, jobs, and wealth being created from gas and oil are being pissed away, not being channeled into long-term productivity and sustainability because the moment the money doesn’t flow into oil to keep those workers working, the system slows down. It’s not the oil itself that is keeping the economic system working. It’s the money producing the oil that is working because nothing else is. Without that money going to those people and industries tied to oil, that money doesn’t go elsewhere to provide jobs and productivity.

                    At least according to that article.

                    There appears to be no incentive to invest in much other than oil/gas or real estate or art or whatever other assets the wealthy like. There is no engine to multiply the oil/gas industry investment. If it stops, the system stops.

                  • Jef says:

                    Peak oil and just about every other FINITE resource is everything and is happening now.

                    We will never run out of anything but we ARE out of the cheap almost free energy that made the world what it is today.

                  • Ves says:

                    Hi Boomer,

                    I think what is bugging you is that you are mixing how current monetary system works and FF depletion. These are two different things. One we can change but the other we cannot. That’s why these talks about EV’s and solar panels are self assuring and cuddly but they don’t change much. If you don’t live in healthy environment eating little bit of carrots every morning will not help much 🙂

                  • Hillson says:

                    Without that money going to those people and industries tied to oil, that money doesn’t go elsewhere to provide jobs and productivity.

                    Money going elsewhere in society will either increase oil demand from the middle/lower classes or create inflation…with civil unrest following shortly. Thus, the imperial class is creating/circulating the money amongst themselves with no intention for this money to trickle down (see stock/bond/art/high end real estate bubbles, etc.). As Art Berman said, the shale revolution is really a retirement party.

                    And the whole point of peak oil (as Watcher frequently asserts) is that money doesn’t matter; it’s just numbers on screens that can be changed on a whim or by decree. Energy/Resource constraints are what matters, and these constraints are being felt; ergo, minimal gains in jobs or meaningful productivity regardless of how much money is sloshing around.

                  • Boomer II says:

                    Thus, the imperial class is creating/circulating the money amongst themselves with no intention for this money to trickle down (see stock/bond/art/high end real estate bubbles, etc.). As Art Berman said, the shale revolution is really a retirement party.

                    Yes, that has been my take on it. I’m not sure the rich are necessarily planning this out step-by-step, but they are shutting down the economy via the way they spend their money and make their investments.

                    On the one hand, it bothers me because I can see what is happening to the 99%. On the other hand, I know that the less money the 99% has, the less they consume and the better for the planet.

              • Ves says:

                Watcher,
                I stopped looking at GDP to figure out what is really going on. My only reference for the health of world economy is the “sales of underwear”- if sales goes down then I am pretty sure economy is going down and vice versa 🙂

                official GDP numbers are kind like collected number of “likes” on FB 🙂 Bogus.

      • Looks like the USA needs to join OPEC. Negotiate a minimum 9 mmbopd quota, and get after it.

    • SW says:

      So if the only thing propping up the economy is massive spending with borrowed money on a dubious enterprise that can never be paid back that is making a small number of people fabulously rich, and in the end the government is going to have to step in and make it all right we really don’t have a capitalist economy we have Chinese style socialism. Looks like the commies won.

  34. shallow sand says:

    I just noticed North Dakota is down to 80 rigs. XTO has one to stack that MIRU 5/8/15. Further, there are 16 rigs MIRU more than 30 days ago and several of those are more than 60 days ago.

    How many of those 16 are active? Worst case (or maybe best case) there will soon be just 63 rigs active in ND?

  35. shallow sand says:

    Also, have found at least one ND well still cranking out the oil after many years. Petro-Hunt, LLC, USA 2D-3-1H. Completed in Three Forks 10/9/2006, cumulative oil through 3/15: 1,498,519; cumulative gas: 2,262,808; cumulative water 65,404. Still producing 200 barrels of oil and 500 mcf gas per day, about 30 barrels of water per day.

    That one has paid out several times. Petro-Hunt has other high cumulative wells in the Charlson Field, where this one is located.

    • Watcher says:

      Not fracked or horiz?

      • MBP says:

        the 1H designates it’s a horizontal. Shallow didn’t mention a frac but there is no point in drilling a horizontal in an unconventional without fracing it, so assume that Hunt frac’d it.

        • Watcher says:

          in 2006?

          • Dennis Coyne says:

            Hi Watcher,

            The wells have been fracked since at least 2005, but fewer stages and not as much proppant until 2008 when the well profile stabilized over the 2008 to 2012 period.

  36. Old farmer mac says:

    There is a long lead article up today free on line at the Christian Science Monitor site.

    http://www.csmonitor.com/World/Middle-East/2015/0514/What-s-behind-Saudi-Arabia-s-new-muscularity

    Anybody interested in the politics of oil should read it.

    Here is an excerpt.

    ”The reason: By maintaining production and keeping oil prices low, the Saudis succeed in hurting Iran, which, unlike Riyadh, does not have billions of dollars in currency reserves to soften the blow. The oil-price plunge also harms economically ailing Russia, whose ties with Iran and unflagging support of Assad have heightened tensions between Riyadh and Moscow.

    While the Saudis have clearly kept the oil spigot open to undercut the upstart oil shale industry in the US as well, geopolitical interests remain a top focus.

    “The maintenance of oil production is Saudi Arabia’s new instrument in foreign policy,” says Hisham Melhem, Washington bureau chief of Saudi Arabia’s state-run Al Arabiya news network.”

    There is a LOT of good information about internal Saudi politics in this article. It goes into much greater depth than just about any newspaper coverage.

    It’s a new ball game in Sand Country.

    The roles of the major players are changing.

    My take is that the Saudis are now convinced that they cannot any longer rely on the USA and our allies to protect their national interests.

    This is what their spokesmen are saying and I see no reason to think they aren’t telling it like it is from their pov.

    None of Isreals neighbors want that country to exist. If they get to thinking they can get away with it , there will be another HOT Arab Isreali war within the foreseeable future.

    There is a very real possibility that Sand Country troubles could get so far out of hand that they result in WWIII.

    Chaos theory applies.

    The odds are pretty high against it but we could be fighting WWIII basically because of Sand Country oil within the next decade or two.

    The TRULY conservative thing to do would be to work like hell on freeing this country from the need for imported oil – and then the need after that, working towards using less and less domestically produced oil.

    It is going to get to be ever more expensive in real terms due to depletion ANYWAY.At some point it will simply cost so much to produce it that it can only be used in very limited amounts.

    Taking care of the environment is TRULY about the most CONSERVATIVE possible goal. If the term is properly defined rather than defined as it has been by politicians right and left. The right has hijacked the word in order to rally support in the culture war with the left – and to maintain the BAU game silmantaneouly.

    The left now uses it as a club to belittle SO CALLED conservatives the same way so called conservatives use the word ” liberal ” to tar and feather real liberals.

    And in case anybody wonders ,YES I AM a faithful adherent of the HUMPTY DUMPTY school of language. 😉

    xxxx

    “When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less.’

    ’The question is,’ said Alice, ‘whether you can make words mean so many different things.’

    ’The question is,’ said Humpty Dumpty, ‘which is to be master — that’s all.”

    ― Lewis Carroll, Through the Looking Glass

    When you get right down to the nitty gritty , there is ONLY ONE really critical question.

    Who shall be the master?

    If it weren’t for the extremely unfortunate fact of the left right culture war, we could get seriously to work on our environmental problems.

    But the cultural right will refuse to do much on the environmental front because human nature is to oppose the enemy – the cultural left.

    We don’t make decisions based on reason and facts except when there is no other possible choice, under extreme stress.

    We make them on the basis of identity politics.

    • HVACman says:

      I agree the truly conservative US move would be to reduce reliance upon all these unstable foreign oil sources. Likewise, we should really expand the SPR. We don’t need oil for most of our daily driving – already PHEV’s like the Volt are showing what distances can be covered with just a plug + a gallon of gas. But we sure need it to power our military defense and food-production machines, which may be imperative in the long-term future. Oil has too much strategic importance for national survival to fritter away in vanity truck/SUV driving and energy-inefficient commercial transportation modes. We understood that in WWII. We will have to re-learn that if there is a WWIII.

      • Nick G says:

        the truly conservative US move would be to reduce reliance upon all these unstable foreign oil sources.

        Amen to that.

        we sure need it to power our military defense and food-production

        On the one hand, that’s a pretty small fraction of our current oil consumption. On the other, we could produce synthetic oil for about $10/gallon. The Navy is working on it for their carrier groups: the carrier has surplus nuclear power (which makes it cheaper than the $10 figure which includes a cost for power), and plenty of seawater to electrolyze.

        • Ves says:

          The “unstable” oil source is shale in the Bakken. It took less than 6 months of price declines to actually show that the whole thing is very very unstable not only for them but also for other conventional oil production in US.
          So no need to look under the bed for the “foreign unstable oil sources”

          • Nick G says:

            You’re absolutely right – both are very, very unstable.

            Which makes it all the more important that we transition away from all this risky, expensive oil just as soon as possible.

            Right?

        • Watcher says:

          Why don’t you guys refuse to vote for any candidate who does not stand up and demand confiscation of all F-150s. Y’all don’t really care about this stuff. You vote Democrat, and they don’t demand that confiscation.

          • Quis custodiet ipsos custodes? says:

            Really, the straw man reductio ad absurdum stuff should be beneath your contempt.

            Why don’t we try talking about much more practical ideas such as carbon taxes, fuel taxes, continuing to raise required fleet MPG averages (stop exempting light trucks), tax policy to subsidize more fuel efficient vehicles and make fuel hogs more expensive to purchase and title.

            Have a day.

    • wimbi says:

      Sand country is sun country. Saudi is the Saudi of Sun. And poor old Egypt, too.

      A little wits and a little capital turns those places into the almost-free source of all the sun energy we can use. And they are right on the sea, so that energy-intense stuff can come from and go to anywhere.

      No need for any nuclear task groups. Load ’em with bauxite.

      There’s lotsa capital to do the job. Where are the wits?

      PS- My bet- the climate will force a carbon tax right quick- a stampede to solar. Watch out oil guys or your’e gonna get trampled.

  37. Anonymous says:

    Our entire economy has been co-opted by corporations and the rich with extremely narrow interests.

    The solutions to our problems (massive investments in education, cleaner and more efficient infrastructure, demonopolization of many corporations, big tax increases, more stringent regulations, providing a basic liveable income, giving a job to anyone who wants one, and so on) are anathema to the political and moneyed classes and will never be done.

    The American Empire is rotting from within.

    • Watcher says:

      haha dood, why don’t YOU give a job to anyone that wants one.

      The rest of the tirade is not new, and newness is what matters. What changed in 2008 to explode various statistics and destroy others? For decades there was talk of the evils of capitalism, but those evils didn’t really mean anything for those decades. Then suddenly in 2008 ugliness arrived

      Going on 7 years of this stuff. Here’s some of the stuff:

      https://research.stlouisfed.org/fred2/series/HSN1F have a look at that graph, 1960s levels with a ton more people walking around. This has nothing to do with corporations that suddenly became evil. Remember this graph next time people tell you there’s a booming housing market. Landlords are buying multi family stuff.

      I won’t belabor jobs because that’s already getting politicized, but there is this:

      https://research.stlouisfed.org/fred2/series/MEHOINUSA672N
      No recovery. How can there be a housing boom when less money is being made?

      There has to be an underlying mechanism and it is oil scarcity, and geology doesn’t have any party affiliation.

      • Watcher says:

        Oh btw assorted and sundry, that 2nd graph above? Think about that.

        Lots of kids are moving back in with the parents. Their pay is additive, and the aging population is bringing more elderly into households, and their Soc Sec pension is additive.

        And yet the graph looks like that.

    • Boomer II says:

      The American Empire is rotting from within.

      Yes, that was my point with all the comments about the LA Times article and low prices.

      We’ve got problems that aren’t related to oil. Even when we have ample supply and low prices, the greater economy doesn’t respond.

      Now, the shutting down of the economy might be good preparation for the days when the oil is scarce and expensive, but we should be talking about that now. We should be talking about how there are problems that don’t relate to oil supply and prices because we have economic issues when the price is high and when the price is low.

      • clueless says:

        Who is “we?” Clue – Not me.

        • Boomer II says:

          Who is “we?” Clue – Not me.

          The US. We have oil; we have relatively low oil prices; we have problems.

          The article said that low oil prices result in layoffs and declining industrial production related to the gas and oil industry, but don’t generate industrial production and jobs elsewhere in the economy.

          • Boomer II says:

            What I have been saying is that according to the article, the US economy is gas and oil. When that declines, everything slows down.

            What I read into that comment is that the US might as well be Saudi Arabia.

            Now I haven’t run my own numbers to verify the conclusion that without spending by the oil and gas industry, there is insufficient spending throughout the economy. But if members of the media are now saying the US is a one industry economy, there are ramifications with that.

  38. Ron Short says:

    The US Navy is well aware of the geopolitical implications of sea level rise and loss of arctic ice –
    http://greenfleet.dodlive.mil/climate-change/

    No doubt someone here will feel that they have a better grasp of the science of climate change, but I doubt it.

    • The U.S. Navy global warming plan

      http://greenfleet.dodlive.mil/files/2010/08/US-Navy-Climate-Change-Roadmap-21-05-10.pdf

      It doesn’t support an iota of the comments above.

      • ezrydermike says:

        “It doesn’t support an iota of the comments above.”

        What are you saying?

        “1. Introduction

        A preponderance of global observational evidence shows the Arctic Ocean is losing sea
        ice, global temperatures are warming, sea level is rising, large landfast ice sheets
        (Greenland and Antarctic) are losing ice mass, and precipitation patterns are
        changing.1,2 While there has been criticism on the details of the methods and results
        found in reports published by the IPCC and other entities, the Navy acknowledges that
        climate change is a national security challenge with strategic implications for the Navy.3
        Climate change may influence the type, scope, and location of future Navy missions
        through its effects on the distribution and availability of natural resources (e.g., water,
        agriculture, fisheries, coastal areas, etc.). Economically unstable regions will be more
        vulnerable to the effects of climate change, and climate change will be one of several
        factors that may increase instability.
        Climate change is affecting, and will continue to affect, U.S. military installations world-wide. Melting permafrost is degrading roads, foundations, and structures on DoD and USCG installations in Alaska. Droughts in the southeast and southwest U.S. are challenging water resource management. Sea level rise and storm surge will lead to an increased likelihood of inundation of coastal infrastructure, and may limit the availability of overseas bases.”

        Wonder what the 2015 version says.

        • clueless says:

          It is a cycle. Arctic Ice is now rising again. Antarctic Ice is at record high levels. [Satellite]
          Note: Since the end of the last ice age, glaciers have been melting. Duh?? New York City was under one mile of ice at the end of the last ice age. NEWS FLASH!!! After an ice age ends, glaciers melt.
          NEWS FLASH!!! Scientists disagree about what a water molecule looks like.
          NEWS FLASH!!! Scientists say that at least 80% of the Universe is DARK MATTER & DARK ENERGY, WHICH THEY HAVE NO IDEA WHAT IT IS.
          NEWS FLASH – AL GORE KNOWS.

          • Jef says:

            NEWS FLASH – Gravity is up for interpretation… not a constant…don’t believe the lies…

        • That quote doesn’t say anything. I read the whole document, it just repeats by rote a series of ditties.

          Furthermore, I’m not imbued by a tendency to worship the U.S. Military, something which seems to prevail in the USA today. They are government employees, many of them are abused by their employer, and there’s a serious need to change the country’s culture to cut the military worship and instead respect them and stop sending them to lose their legs fighting stupid wars.

          • Here´s data (sea level anomaly measured in the Atlantic, two grid points offshore Saint Augustine, Florida. Sea level rise rate 2.2 mm per year

  39. learner2 says:

    What happened to oil today? Delayed reaction from EIA report yesterday? Stocks like OAS and SDRL up huge.

    • clueless says:

      It is a Ponzi Scheme.

      • Watcher says:

        GBPound slapped down the dollar. Price redenominated.

        • SAWDUST says:

          Watcher,

          Dollar is just taking a breather today. USD/JPY broke out of a couple of months of consolidation pattern two days ago. When USD/JPY is in a consolidation pattern like that it allows other currencies to gain against the dollar. But that consolidation pattern ended. USD/JPY is headed to 125.00 and above. GBP strength against the dollar will be short lived. although it should be one of the last to roll over and resume it’s downward trend against the dollar.

  40. Ronald Walter says:

    Remember when you could buy a brand spanking new Volkswagen ‘bug’ for 1,999.00 usd? I sure do. A nice new Ford LTD was a hefty 3500 dollars back around 1965. Gas was 19.9 cents per gallon during a gas war, the only kind of war that pays. Those were the good old days of 1970. Two dollars bought you ten gallons. You could pour your old oil on the gravel in the alley and nobody said a word. They didn’t call it ‘Gasoline Alley’ for nothing. The Oil Age, as it were.

    Now, a new Chevy pickup truck will run you some 45,000 usd, some are 55,000 dollars. The new Chevy Suburbans are flat out butt ugly, but don’t tell GM. However, the Chevy Malibu is a beautiful thing. The electric/hybrid version right there in the photo.

    Back when one of my relatives was a kid, probably 1940 or so, she would go for rides in an electric car that her uncle owned. It was for joy ride purposes, but she said it was a lot of fun.

    If there were electric cars back in 1935, then there can be electric cars in 2015. Might want to consider not using eighty million barrels of oil each day, might need to cut back a little, eventually, you will have to, so it should start now. Electricity, a lot of it, from coal of course, can power your electric car and you won’t be needing any gas.

    I see here the other day that Fairbanks, Alaska’s sunrise was 4:11 am. The sunset there was at 11:26 pm.

    Isn’t that something like 18 hours of sunshine? No wonder it is warming up up there, way up north.

    That’s far too many hours of sun in a day and it should change to something more reasonable. 12 hours of sun is plenty. Eighteen hours of the sun shining in the sky is absurd, unheard of, and if it doesn’t stop soon, like September, maybe the 21st or so, the Pope will have to issue a decree to stop the sun from shining so much in Alaska and places further north. Alaska could use a serious cutback on sunshine during the summer months up there. An Act of Congress might work for them.

    Midnight Sun is oxymoron territory. It would probably sound good in a song, though.

    Let’s get those 2 billion vehicles on the roads and in the fields again today. Burn some more gas and diesel all day long. Pour 500 thousand gallons of diesel into a cruise ship. It’s the only way to get things done so no one has to starve. Hells Bells, pour crude right into the Pacific off the coast of California. Plenty of it out there, just dump it into the ocean.

    Fire up the printing presses at the Fed and fund it all with money.

    Flip flop, it never stops.

  41. cytochrome C says:
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