EIA begins monthly survey-based reporting of U.S. crude oil production
With the release of today’s Petroleum Supply Monthly, EIA is incorporating the first survey-based reporting of monthly U.S. crude oil production statistics. Today’s Petroleum Supply Monthly includes estimates for June 2015 crude oil production using new survey data for 13 states and the federal Gulf of Mexico, and revises figures previously reported for January through May 2015.
From the EIA’s Monthly Crude Oil and Natural Gas Production webpage.
Beginning with the June 2015 data, EIA is providing estimates for crude oil production (including lease condensate) based on data from the EIA-914 survey. Survey-based monthly production estimates starting with January 2015 are provided for Arkansas, California, Colorado, Kansas, Louisiana, Montana, New Mexico, North Dakota, Ohio, Pennsylvania, Texas, Utah, Wyoming, and the Federal Gulf of Mexico. For two states covered by the EIA-914—Oklahoma and West Virginia—and all remaining oil-producing states and areas not individually covered by the EIA-914, production estimates are based on the previous methodology (using lagged state data). When EIA completes its validation of Oklahoma and West Virginia data, estimates for these states will also be based on EIA-914 data. For all states and areas, production data prior to 2015 are estimates published in the Petroleum Supply Monthly. Later in 2015, EIA will report monthly crude oil production by API gravity category for the individually-surveyed EIA-914 states.
This is great news for those of us who have been complaining for years about the EIA’s poor and misleading data collection methods.
June C+C production, according to the Monthly Energy Review, was almost 9.6 million barrels per day. But the Petroleum Supply Monthly cuts that by 303,000 bpd. And they have production dropping by 316,000 barrels per day in the last two months, May and June.
The Petroleum Supply Monthly reports the exact same data for North Dakota as the NDIC reports in their data release.
Texas peaked in March at 3,644,000 barrels per day but has since dropped by 184,000 bpd to 3,460,000 bpf.
The oil price decline has had little effect on Alaska production. They just continue their sure but steady decline.
California dropped by 19,000 bpd in June.
Pacific Offshore is down to 18,000 barrels per day.
The Gulf of Mexico is trending slightly upward.
New Mexico, who’s production come partially from the Permian, was bucking the trend through April but has since dropped 16,000 barrels per day to 421,000 bpd.
Oklahoma is not yet part of the new survey method but this estimate is likely very close. They seem to be holding their own despite the price collapse.
Louisiana continues its natural decline.
Louisiana once produced 560,000 barrels per day but what happened to Louisiana eventually happens to all producing states and nations.
US production was down 119,000 bpd last week. However only 19,000 of that was the lower 48. Alaska was down 100,000 bpd. That was likely due to their usual summer maintenance. The EIA says US C+C production for week ending 8/28/15 was 9,218,000 barrels per day. That is approximately one million barrels per day less than either Saudi Arabia or Russia is producing.
Iraqi Oil Output Declining as of 2018 in Morgan Stanley’s View
Iraq’s crude production will start to decline in 2018 because of a slowdown in investment due to lower oil prices and a costly war on Islamist militants, according to Morgan Stanley.
OPEC’s second-largest crude producer will pump 4.18 million barrels a day in 2017, with output then falling to 4.132 million in 2018 and to 4.127 million by 2020, Haythem Rashed, a Morgan Stanley analyst in London, said in a Sept. 2 report. The bank had previously forecast rising output every year to 4.6 million barrels by 2020.
Iraq’s production has climbed 1 million barrels a day by July from a year earlier, becoming the strongest contributor to global supply, Morgan Stanley said. The removal of export constraints in the south, increased pipeline capacity in the semi-autonomous Kurdish region and the separation of heavy and light crude streams all contributed to growth, according to the report.
“With these infrastructure and crude marketing tailwinds now largely played out, we see limited prospects for further production growth,” Rashed said in the report.
Iraq was one of great hopes for cornucopian crowd. Leonardo Maugeri has Iraq at 7.6 million barrels per day in 2020. They are at 4 mbd today and I don’t expect them to ever reach 5 mbd.
Thanks Ron.
I can’t seem to do a new comment.
Hello Energy Experts,
I’m running for the most powerful office in the land and need your help. It’s not easy communicating with most of Americans about Climate Change and Energy policy. So I’m here trying to put together a 10 point policy list for my stump speeches. On what needs to done to save the country and world from a dismal future. Each point needs to simple, short and understandable. You know, something like “Drill Baby Drill” or “Carbon Tax”. Then a short paragraph telling me what you mean by it.
Each one of you don’t need to give me 10 phrases. Just one good one from each of you would be fantastic. I’m looking forward to hearing this groups 10 best ideas to save the plant and future humans from themselves.
Thank you
“Let’s all congeal around oil”.
“Clean energy to create well paying jobs”.
It’s a very slick message, it gets traction with watermelons, union labor, the oil and gas industry, republicans, democrats, the military industrial complex, the Israel Lobby, farmers, Hollywood, the solar power lobby, the wind lobby, the ethanol lobby, and retirees.
“Hike, Bike or EV’s by 2030”
“Panels on roof and an EV in every garage”
“Transform the Transportation Industry by 2030”
“Let’s stop cooking ourselves”
Outlaw the production of fossil fuel dependent personal transportation vehicles by 2030.
FUCK OFF AND HUG A TREE
Dear Presidential Candidate,
Before running for the most powerful office in the land and trying your hand at saving humans from themselves, you might want to take a refresher course in basic writing skills.
Either that, or hire a competent copy writer and editor…
Just sayin!
Is anyone else having problems doing a new comment?
I couldn’t the other day.
It was saying something like “can’t find the link/page/contents/…”
But I just went back to the home page, reloaded,
the went down the link to the article, reloaded, then was able to post a new comment.
From their short term energy outlook page:
“EIA estimates total U.S. crude oil production declined by 100,000 barrels per day (b/d) in July compared with June. Production is expected to continue decreasing through mid-2016 before growth resumes late in 2016. Projected U.S. crude oil production averages 9.4 million b/d in 2015 and 9.0 million b/d in 2016, 0.1 million b/d and 0.4 million b/d lower, respectively, than in July’s STEO. ”
“Before growth resumes” assumes they will have to have much more completions in order to offset the decline rates. If it keeps declining at this rate, production by December will be around 8.8 million, so how is the average going to work out to be 9.4 million for 2015?? Ouiji board answer, no doubt. Unless oil gets over 70, what is going to cause oil companies to expand capex to increase production to stop the drop??
Although, I was off on timing due to the use of hedges (which will soon expire), I still see production dropping from Dec high of over 9400k to close to a million.
Head scratch.
Survey? So they are going to ask entities with incentive to under report how much their production is? Are there penalties for inaccuracy? If so, fine. If not . . . …
Why isn’t this metered, at least to the states?
So they are going to ask entities with incentive to under report how much their production is?
Why would states have an incentive to under report? Eventually that’s where the EIA have always gotten their data. They always report, after the final data has finally come in, exactly what the states report. Now they are just going to ask them a lot earlier. They are going to ask each state what they think their production was for the latest month, or the month two months previous to the date they are asking. That is in August they asked for the June production estimate. By then each state should have a pretty good idea what their production was for that month.
I can think of no reason any state would under report. What did you have in mind?
I thought they were surveying companies, not states. Eliminates the point.
They were directly surveying companies, not state agencies.
About 450 largest producers accounting for at least 85% of total production in each of the named states.
Hi AlexS,
Nice summary, I could not have done better. Did you notice how the EIA estimates are now less than the DI data? The DI data reflects data from the RRC (including the “pending file”) and will always tend to be a little on the low side as there is always some unreported output for recent months. The EIA estimate should never be lower than the DI data and that is the case for January and February. For Texas the Jan and Feb survey data is about 89% of the DI data for all Texas. If we assume the March through June survey data is a similar percentage of actual output then we get a higher (and better) estimate of Texas C+C output.
Dennis,
I do not have access to the DI data, but DI numbers quoted by the EIA are below EIA’s own new estimate for Dec14 and March-May15, and only slightly higher for January-February.
The EIA’s new estimate methodology is clearly not perfect, and actual numbers can be lower or higher.
I am sure that DI’s numbers are not 100% correct as well
I encourage everyone to read about the new methodology at the EIA web page.
It looks to me like they are now underestimating Texas output. My estimate, based on the survey data and the Drilling info data is the following from Jan through June 2015 (TX C+C in kb/d.) The first two points are the drilling info data for Jan and Feb and the following 4 assumes the survey data times 1.138 is the best estimate. The drilling info data is an average of 13.8% higher than the survey data for Jan and Feb and I assume this ratio remains the same for March through June (companies surveyed produce 87.9% of TX C+C output).
3384
3482
3679
3645
3596
3529
No problem with a new comment.
Comparison of new and old methodologies. The case of Texas
The % should remain at 88.2% for all months.
Some time this week, when downloading an EIA report, I was asked to take a little survey and I did. They asked what percentage of petroleum products were foreign-sourced, and two of the multiple-choices were “27%” and “39%”. I answered 39%, though in my opinion it’s higher than that.
They said the correct answer was “27%”. Then asked for comments. I accused them of intellectual dishonesty, and, as an example used “refinery gain”. If 45% of the refinery inputs are foreign-sourced, then 45% of the “refinery gains” should also be marked as foreign-sourced. Further, if 45% of the diesel used in the agricultural segment produced ‘biodiesel’ is ultimately foreign-sourced, then (probably) about 20% of the ‘biodiesel’ should be marked foreign-sourced.
I then concluded the comment by stating that I need **accuracy** in these reports, not cheerleading.
Reason for the anecdote: Perhaps they’re catching some flack?? And hoping to reduce it?
In a comment on 09/02/2015 at 1:58 pm, in response to Mike announcing that he will no longer be participating in these discussions, I made reference to this survey. In composing that comment I went to the EIA web site to copy their mission statement which is when I was presented with the survey. Here’s what I wrote about it in my comment:
Edit:When I went to the EIA web site to copy their mission statement, up pops a user survey! Boy, did I give them a piece of my mind! One question asked about the percentage of US oil consumption that was imported and when I guessed right, the response was “Congratulations, you got it right! How did you know the answer?” So, I proceeded to tell them about this awesome web site and all the awesome analysis of their data that goes on around here! ? I actually told them that EIA staffers might learn a thing or two from this site!
My reasoning for choosing 27% instead of 39% was that prior to the surge in production from fracking, the US was importing about one third of it’s oil consumption. The surge had reduced the level of imports so, the new figure could not be 39%, it would have to be the lower of the two, 27%. The other choices were way out there, like 5% and some other entirely unrealistic figure!
Oops! Major brain fart! Prior to the surge in production the US imported two thirds of production, not one third!
According to Jeff’s 09/04/2015 at 7:34 am post below, the one that starts with “All glory is fleeting”, “The EIA shows that US C+C production was 5.0 MMBPD in 2008. Let’s assume that the current estimate of 9.6 MMBPD in US C+C production in April, 2015 is correct.” In his 09/04/2015 at 9:53 am post further down he posts:
Late August US net crude oil imports (four week running average data, MMBPD):
2008: 10.1
.
.
2014: 7.3
2015: 7.1
That would make 2008 crude imports two thirds of 2008 imports + production and using the EIA’s 2014 figure for crude oil production of 8.7 MMBPD, along with the late August 2014 figure above, 7.3 MMBPD, 2014 imports would be 45% of imports + production!
However, according to a web page in the FAQ section of the EIA’s web site:
How much petroleum does the United States import and from where?
The United States imported approximately 9 million barrels per day (MMbbl/d) of petroleum in 2014 from about 80 countries. Petroleum includes crude oil, natural gas plant liquids, liquefied refinery gases, refined petroleum products such as gasoline and diesel fuel, and biofuels, including ethanol and biodiesel. In 2014, about 80% of gross petroleum imports were crude oil, and about 44% of the crude oil that was processed in U.S. refineries was imported.
The United States exported about 4 MMbbl/d of crude oil and petroleum products in 2014, resulting in net imports (imports minus exports) of about 5 MMbbl/d in 2014. Net imports accounted for 27% of the petroleum consumed in the United States, the lowest annual average since 1985.
I guess if you can define petroleum any damned way you want to, you can get any number you want to! Now I’m even more confused than ever!
A good portion of those foreign imports are exported as product. The net import after subtracting exports (which include refinery gain) is about 5 million bpd.
Aha! Thanks for pointing that out. I was just looking at raw domestic extraction (~9.3) and the usual import (~7.3) and could not imagine how that worked out to 27%.
But I still think that foreign sourced crude should be tracked through refinery gain and biodiesel. As a thought experiment, imagine that all imports were halted. If biodiesel is *really* domestic production, then the halt in imports should have no impact on biodiesel production. But we all know that’s not true. Similarly, if ‘refinery gain’ was *really* domestic production, the halt in imports should also have no impact on *that*. But we also know *that* to be untrue.
net imports = crude imports + product imports – crude exports – product exports
The refinery gain comes from splitting up molecules and adding hydrogen. The hydrogen is sourced from USA produced methane. Also, we have to consider which molecules are split and turned into lighter molecules. I suspect the foreign cruces have a higher content of “splittable” molecules, which means they “swell” more than the light domestic crudes and condensates. This topic is so complex I would keep refinery gain in a separate column.
Why does this blog believe that Iran and Iraq are anywhere near their full potential? If Iraq could increase its oil production so much under horrific conditions and Iran can maintain it under full spectrum sanctions, then one can imagine their true potential. In my view, this is the reason why the West is so obsessed with these countries. The same must apply to Russia and to a lesser extent Kazakhstan. Those two countries can also boost their production in the future. If Russia was anywhere near her peak in relation to oil output, then the West would be much less inclined to keep provoking the country with the world’s largest nuclear arsenal. There is a reason behind everything.
Stavros, no one is saying Iran or Iraq could not produce what they are currently producing.
As far as Iran goes, they deserve no medal for producing under sanctions. Sanctions only cover a very small part of their oil production. So I have no idea what you are talking about there.
Iraq!!! Iraq said they could and would produce 12 million barrels per day. That is pure bullshit. They will not produce half that amount. They are producing 4 million barrels per day, about one third what they said, back in 2009, of what they said they would produce. I said back then that they would produce about 4 million barrels per day but never reach 5 million barrels per day. I am standing by that prediction. Of course I could be wrong. I have been wrong before. But 12 million barrels per day, or even 10 million barrels per day, or even 8 million barrels per day. I have been wrong but never that wrong. That is nothing but bullshit that only a bullshitter himself would believe.
I remember a 17 mbpd prediction from an Iraqi oil minister, and by 2015, and only about 6 yrs ago.
The Russia thing is probably the core issue of oil. If the US Fed funneled lenders can lend money to loss generating shale operations, then lower paid Russian oil workers should generate less of a ruble denominated loss for their shale ops, when they get around to them. They could get quite a flow out of that B. shale if it doesn’t matter what it costs.
The old economic vs geologic peak issue.
when they get around to them.
Russia is unlikely to ever “get around to them” when any company has to pay 60% of revenue on every barrel lifted.
http://www.bloomberg.com/news/articles/2015-01-05/russian-shale-beating-u-s-is-ongc-s-last-bet-corporate-india
I have been wondering why other countries have not succeeded in working with shale. However, with Russia the reason is obvious. They seem to have much more oily shale than the US. So this might just require a change in Russian law to free up another 5 billion barrels plus per day in new capacity.
I think this passage from the Bloomberg article pretty much tells the story:
Russia can develop its shale oil resources even without foreign partners, Interfax reported Dec. 29, citing Lukoil President Vagit Alekperov. The development is not profitable at current oil prices, Interfax reported in the interview.
The Russian government apparently took a look at shale oil and decided it wasn’t feasible to produce at $100 a barrel or less.
This does not mean, however, that it believes oil will always be at $100 or less, or that it is willing to give those reserves away to the transnational oil companies the way Mexico is.
Glenn, that is not my reading. The tax rates seem to assume a very low extraction cost such that a tax of 60% of revenue is reasonable. The drilling and fracking costs must be subtracted from the taxed amounts for shale resources to be cost effectively developed. My guess is that much of this massive shale resource could be developed right now with American technology if the tax rates and structure resulted in American level taxes and fees.
A few years ago I googled up some charts from the Iraqis them selves. Those 10 or so million barrels of oil is supposed to come from south Iraq. This is part of the same geological trend that produces the bulk of Irans oil. Look at the amount of oil they produce, and you get a hint of the maximum potential of that field. Beeing no expert I need margins to not be wrong, so I said they will never be above 6 million barrels. It simply is not possible to squeeze out that amount oil from those rocks. Unless the Iraqis know something the Iranians don’t.
According to Cheney’s Energy Task Force, convened by president George W. Bush in 2001 during his second week in office, this largely unexplored area of Iraq held oil fields which had the potential to double Iraq’s oil reserves.
To my knowledge, the area still remains unexplored.
Check to see how much oil is produced on the Saudi side of the border.
Cheney turned out to be a dishonest jerk.
You mean Cheney would be more appropriately described as a member of the War Party than the Oil Lobby?
Sometimes it gets to be just too difficult to tell the difference between the two.
Cheney is that thing that sat on top of a tower looking like an evil eye in the lord of the rings.
Stavros, it depends on how one defines full potential. I think Russia is at full potential at 10 million BOPD. Producing a higher rate is bad for Russia. As regards Iraq, I wouldn’t take it higher than 4 million BOPD. I feel Iran would do better at 4 million BOPD as well. Anything higher is counterproductive.
Let me ask you, what is your background?
Ha! Morgan Stanley predict production down to the nearest 10,000bpd in 5 years time and expect to be taken seriously?
I want to do a fossil fuel post. Earlier in this year I supported Ron’s projection that we would have an intermediate term peak in oil production at least in the US this year. I had near zero expertise in this field but it seemed to be of significant importance for our civilization. I came here because Ron Patterson seemed to be by far the single person best nurturing a rational evidence based evaluation of what is going on with this issue. I think all of us should have an immense sense of gratitude for Ron’s efforts. He is a treasure for all of humanity in his eclectic use of data from many sources to present an understanding that seems to be better than any other single source. The many people who come here from around the world is confirmation of this shared understanding.
My support for a short to intermediate term peak was due in large part to the projections from the EIA such as their Drilling Productivity Report. I fully included natural gas in my understanding of this peak production assumption. Well we have learned that the EIA is quite inaccurate in many ways. I was astonished to learn that the EIA could not accurately include the Baker Hughes drilling rig counts even when they are very public and the EIA is explicitly asserting that they are using that data. This recent post highlights how wrong they have been in the past.
The energy content of US natural gas production is well in excess of our oil production. The roughly 72bcf/d of dry natural gas is equal to about 12m barrels of oil per day (given 6,000 cf equal to one barrel). Obviously the natural gas liquids from gas production would substantially add to this energy inequality. Well we may be looking at a massive increase in gas production to a much higher level.
Bentek is a highly respected market analysis organization. Consider the following quotes attributed to Bentek in one article:
http://powersource.post-gazette.com/powersource/companies/2015/09/01/Marcellus-Shale-to-become-a-net-exporter-of-natural-gas-this-year/stories/201509010013
“The Marcellus reached a record high of 20.4 Bcf/d on Aug. 24”. “There are about 2,300 wells in the inventory, representing about 14 Bcf/d of trapped production.” “In November, infrastructure projects should bring about 3.9 Bcf/d of new capacity to the Northeast, with production forecasted to grow about 3.4 Bcf/d at that time”.
This will be a 5% increase in relatively short order. If we cannot export this production it will result in a further massive decline in pricing for natural gas. Obviously there is the capacity for much greater increases in production in subsequent years. In terms of total fossil fuel energy content, oil and gas may continue to produce new annual records for a good number of upcoming years. The apparent short term decline in oil output does not seem to be enough for the US to post a decline in total oil and gas energy produced.
I want to do a fossil fuel post.
Have at it. Send it to me and if it fits what this blog is about I will post it. But remember I like a lot of graphs.
If we cannot export this production it will result in a further massive decline in pricing for natural gas.
There is no law that prevents export of natural gas. But currently we don’t have any LNG plants to liquefy natural gas for shipment. And there are none in the planning stage as far as I know. So I just don’t think it is going to happen.
Ron, I don’t see that my modest expertise could approach the quality required for a top line post on your wonderful blog. I just wanted to have a modest FF post here in the comment stream. I came here for the fossil fuel expertise. Since I have a much greater lay understanding of global warming and renewable energy it has been excessively easy for me to join the digressions from FF. We do need a strong focus on what is happening with fossil fuels.
Yes, there is not LNG export capacity in place at this time. However, there are plants with nameplate capacity for 9Bcf/d under construction (completion this decade) with the first one coming on-line in a few months with another several Bcf/d in 2016. We also have a substantial increase in pipeline export facilities into Mexico. If Bentek is right the supply will still be far above these incremental export options.
Further replying to Jeffrey:
David Hughes in his Drilling Deeper report says of the Marcellus, “The first-year decline rate is 32%, which is on the low end of field decline rates observed for shale plays.” This would suggest a one year field decline of only 6.5 Bcf/d, much less than your 8 Bcf/d. Beyond that I recall that Ohio is reporting a 160% increase year over year in production. The Utica formation is physically more massive than the Marcellus. I have great respect for what Hughes did with his report but he totally ignored the impact of the Utica. It was an insignificant formation in his opinion when he did his research and a year later this can be seen as a massive mistake.
My expectation is Louisiana and some other areas can be expected to have a year over year decline. However, I see a very low chance that that those declines will equal the massive increases that some see in the American northeast. Don’t forget that many drillers have been getting less than $1 in the northeast for their gas when Henry Hub was over $2.50. What is going to happen when these monster formations have enough takeaway so that drillers can get near the gas prices at Henry Hub? Not all gas drillers in the US will be happy. However, my expectation is that the drillers in the Marcellus and Utica can be extremely happy for years to come.
“Much” less?
In any case, I was referencing the EIA’s estimates in regard to the Marcellus. As of August, 2015, their estimate for the annualized legacy decline from existing production is 8.3 BCF/day per year:
http://www.eia.gov/petroleum/drilling/pdf/marcellus.pdf
Excerpt from my comment below:
With an underlying gross decline rate of about 24%/year, the US needs about 17 BCF/day of new production per year, just to offset the declines from existing production. Note that this volume of gas–that the US needs just to offset declines from existing wells–exceeds the dry gas production levels of every country in the world, except for the US and Russia. In other words, in order to maintain current gas production, we need to put on line–every year–more gas production than Canada, or Norway, or Iran, or Qater, etc.
Incidentally, a volumetric annualized decline of 6.5 BCF/day from just existing Marcellus wells would exceed the volume of all of Mexico’s 2014 dry natural gas production, and it would exceed the 2014 gas production from every country in the Americas, except for Canada the US.
Jeffrey, you cannot multiply a monthly legacy decline by 12 to get an annualized field decline rate. That is not how things work. I will stand with David Hughes and his field decline rate. Subsequent declines in a given well will almost always be somewhat less than a prior month’s decline rate. Mr. Hughes’ calculations of annual field decline rates take this into consideration. The 1.5 Bcf/d difference in our calculation may seem small. However, in terms of price impact such a difference is major. Also, the comparison with other countries is irrelevant. We have two massive resources in the American northeast and a very robust capacity to make use of them. If we want to be realistic we need to accept reality as it is.
Thanks for explaining that. After 36 years in the oil and gas business, now I finally understand the difference between hyperbolic and exponential decline rates.
Of course, that’s irrelevant to the point I was making.
At stable production levels, if existing Marcellus wells are declining at about 0.7 BCF/day per month (the EIA’s number), how much new gas did operators have to add in 12 months in order to maintain production?
Jeffrey, I semi-agree that our difference in calculating the field decline rate does not obviate the large amount of new capacity that must come on-line. The point that I was making reflected the Bentec analysis. If they are right obviously we are talking about massive additions to total capacity. Are they right? Do you have any evidence that they are not right? If we have over 16Bcf/d when the producers are getting extremely little, what will happen when they can get a price closer to Henry Hub?
I presume that you know that the new capacity produced with a rig in a month of drilling in these two regions is greater than in any other shale formation. The only one that is close is Haynesville which is way beyond its 2011 peak production. Utica has just started to ramp up. As I pointed out the Utica is more massive than the Marcellus and it currently is just a bit over 2.5 Bcf/d. The potential for further increases in from these two formations seem to be massive.
I have read that there are actually 40 planned pipeline projects over the next five years. The total incremental takeaway capacity can be close to double what currently exists. Why would people build that capacity if they do not think people will use it? I think the Bentec analysis seems to be quite plausible. If you have evidence against their claims please present it.
To be clear here, any disagreement that we may have about the incremental production needed to balance the field decline rates seems to be beside the point. The drilling rigs that were there can return quickly. They are increasing in productivity at a rate that suggests these fields are not in any decline. The implications for pricing delivered to the producers is that there could be a massive increase in effort to deliver a more lucrative product.
Let me add that David Hughes projected peak production from the Marcellus in 2018. A few months ago he revisited his analysis and confirmed that expectation. Mr. Hughes is a firm supporter of the theory that we will be seeing a peak in oil and gas production. He just does not see in coming now from the evidence he sees.
Don,
“Re: Mr Hughes does not see it coming now from the evidence he sees”
Where has Mr Hughes expressed that opinion?
I am Ron’s “special or most dense” blog participant and sometimes needs a little extra help.
Please don’t consider yourself to be dense. The community that comes here does so to increase our understanding concerning energy. I am delighted to share any information that I have and my sense is that others here would be likewise delighted to share their information and sources.
David Hughes published his 300+ page masterpiece, Drilling Deeper,on the Post carbon web site.
http://www.postcarbon.org/wp-content/uploads/2014/10/Drilling-Deeper_FULL.pdf
His analysis of the Marcellus starts on page 259. He did reconfirm his analysis of the Marcellus earlier this year. I will find that reference if you wish but it is not substantively different than his 2014 treatment.
Don, the “shale” well decline rates are hyperbolic. This means the total field decline depends on the cumulative production each well has achieved. Plus we have to consider the well design, whether it’s on choke (they usually are), and equipment / pipeline restrictions.
I have in my head the architecture for a program which can estimate the decline in production capacity for a large well population. To get it to work, I need about 4000 man hours. When it’s done, I need confidential data from all producers. And when that great opus cranks up, the production capacity decline rate it predicts for the Marcellus will have plus/minus 10 % error bars. I guess.
Fernando, my guess is that you are quite right about the chokes. If I owned wells and were getting less than $1 for my product I would have a massively restricted choke on my wells. Many of the wells might be opened up significantly when higher prices for their product become available. My support for David Hughes’ field decline rate is contingent on all other things being equal. We may be going into a future where things will be massively changing in these two major formations.
Choking is used to increase the flowing bottom hole pressures and reduce condensate banking around the fracture face.
It’s also used to reduce wellhead flowing tubing pressure and allow the use of a reasonable wall thickness for the flowline and other downstream equipment. Sometimes flow has to be reduced to avoid exceeding erosion limits. And sometimes it’s done to cool the flow down and allow better condensate recovery.
There are quite a few reasons when I think of it. But it’s also useful to set well production to meet the buyers’ call, save gas reserves for later, etc. (it gets complicated).
I hardly know where to start.
The notion that there is currently 14Bcf/d of trapped production in the Marcellus is absurd. I’m not sure what exactly the number is, but it should be in the range 2-5, and it is rapidly decreasing.
The 2,300 number of wells spud but not productive is mentioned as if it was something unusual. In fact, this number was over 3,000 in 2012, and hasn’t been this low since 2011.
Ramp-up of a new pipeline or a new pipeline expansion isn’t a step function increase. It’s more of a slow process of de-bottlenecking proceeding backwards from the main pipeline. See here for details on the REX reversal which as nominally been at 1.8 Bcf/d for some time but is still pumping out only around 1.4 Bcf/d. As it ramps up, we keep setting new Marcellus production highs by very tiny amounts.
Those numbers from David Hughes are old. The Marcellus field decline rate has been increasing rapidly, due to both an increase within the same regions and a shift in activity from the NE dry to SW wet area. The EIA Drilling Productivity Report gives field decline numbers, although inexplicably they refuse to provide the actual numbers but only give the results after they are smoothed by an undisclosed smoothing algorithm. Just take the “Legacy Production Change” and divide by the previous month’s production and you have the monthly decline rate, which is currently running around 4% per month, or around 38% annually.
I took a look at the PA production numbers from Susquehanna County, which is the deepest core of the NE dry area. The decline is fairly slow for the first six months or so, and then becomes almost exponential, at around 30% annually, with very little sign of any kind of hyperbolic slowing. I’m guessing the initial slow decline is a result of extensive formation damage due to injected water, which gradually dissipates somewhat. In any event, with a hyperbolic decline curve, a decrease in drilling would lead to a decrease of the decline rate, not the increase which we observe. The same type of effect is seen with the very young “Utica” region, where the decline rate is rapidly increasing, but still only 2% monthly.
The EIA’s “Utica Region” and “Marcellus Region” don’t seem refer to wells in the Utica and wells in the Marcellus. Rather, EIA “Utica” appears to refer to Utica and Marcellus in Ohio, while “Marcellus” appears to refer to Utiaca and Marcellus in PA and MD.
The more sane of the companies in the Marcellus and Utica are receiving much more than local spot prices even without hedges, because they have arranged for firm transport commitments for most of their production. This does not include CHK.
We currently don’t have enough production to satisfy demand without interannual storage draws, except with an unusually warm winter. Increased transport out of the Marcellus region will help, but we currently don’t have nearly enough investment to keep production steady, let alone increase it. As transport from the Marcellus to NYC and the Northeast increases, we’ll see increased seasonality of demand in the depressed price region. The initial response isn’t to from depressed prices to Henry Hub prices all the time, but only in winter, which still doesn’t leave a good price environment.
Eventually, of course, the price will have to increase, and drillers will respond to the price increase. For the moment this is delayed because of the myth of the tidal wave of stranded Marcellus gas at current drilling levels. Lease holders in the western Woodford and northern Haynesville seem to want to satisfy Held by Production requirements if the price goes up a bit. Maybe CHK will drill that oil fairway Utica stuff that nobody else seems to think is worth that much. Maybe we’ll see infill in the core SW or NE Marcellus. I just know that this current gas investment level won’t be enough.
Slow early life decline can also be caused by the fact that the producing formation is restricted by the completion tubulars, and the well choke. Sometimes the well choke has to be used because the separator won’t handle the initial well capacity. This is the reason why gas well decline rates aren’t possible to pin down with a simple decline curve analysis.
Yes, a choke could cause that as well, but it seems to be unrelated to IP and I thought these wells in particular were quite low in total liquids.
Blaine
Thanks for taking the time to post this info.
Why would a choke setting be unrelated to the initial potential you see in public records? In some jurisdictions we do a multi rate test and use that data to estimate an “absolute open flow” (AOF). But the production records you see (the monthly production, or the well test) are usually the result of producing a gas well with a choke.
Old gas wells may not have a choke, but in new wells it’s highly unusual not to use one. There’s also the choking or restriction caused by well tubulars. Quite often, especially if the operator is looking long term, the well is completed with a smaller tubing size to optimize lift later in well life. This means a well will not be flowing at full capacity early in life. This in turn reduces the decline rate.
And this is why estimating the decline rates for large gas well populations is so hard to accomplish.
Thank you Fernando. I was thinking that this logically had to be the case. However, without the hands on expertise I did not want to say so. There are gas wells 2.5 miles deep, producing pressures of over 9,000 pounds per square inch. With that much weight on top of the formation it is almost logically certain that we would find such pressures. It would be insane to install take away pipes that were ten time stronger than the ones now actually required in the field. The costs to get the gas away would skyrocket.
Blaine,
Thanks so much for your long and thoughtful sharing of your perspective. I regarded the Bentek claims as outliers that either demonstrated substantial and continuing new high in net petroleum energy production for the US or claims that needed to be debunked. It is good to see an attempt at debunking them. I very much was looking to find expertise from others that could fill in my massive ignorance about this field.
However, I do have a range of questions in response to your various claims. David Hughes had over 4 Mcf/d per well for the first 12 months of production for a new well in Pennsylvania at the end of 2013. His graph suggested per well production was continuously increasing. In fact the graph had only 3 Mcf/d for 2012. The EIA Drilling Productivity Report does not report production by well. As you know they report new production by drilling rig. However, their 3,220 figure per rig at the beginning of 2012 is now 8,350 per rig. This is a rather furious rate of increase in productivity over recent years. If we use the obviously archaic (2013) per well data from Mr. Hughes and multiply this by the 2,300 wells not currently producing that would suggest 9.2 Bcf/d. Given modest assumptions about probable per well improvements, this does imply that Bentek’s 14 Bcf/d could be quite realistic. I would appreciate any data that you have to document your suggestion that the actual number “should be in the range 2-5.”
I am sure that you have heard that well decline rates can be radically reduced in later years. Mr. Hughes had a very low 8% per year decline rate in the Marcellus for wells after the first three years. Can I ask you where you got the data showing that wells in Susquehanna after the first six months “becomes almost exponential, at around 30% annually, with very little sign of any kind of hyperbolic slowing.” The suggestion that there is no slowing in later years would seem to be radically different than than any other field on our planet. I look forward to your data documenting this claim.
I was a bit stunned by this claim:
“The EIA’s “Utica Region” and “Marcellus Region” don’t seem refer to wells in the Utica and wells in the Marcellus. Rather, EIA “Utica” appears to refer to Utica and Marcellus in Ohio, while “Marcellus” appears to refer to Utiaca and Marcellus in PA and MD.”
EIA has been less than competent in many ways. However, can you present evidence that they are not actually reporting production from the Utica and Marcellus formations as they claim. Also to my knowledge Maryland has yet to allow any shale based drilling at all. Did you mean to refer to West Virginia? My recollection is that there are massive year over year increases in some WV counties.
I fully accept what Fernando has been saying about choking wells back. That is a wild card in any predictions about future field decline rates. However, an increase in field decline rates may correlate with substantial increases in actual field production because of more attractive pricing for producers. We will see about that. In the meantime, let’s figure what is happening now and in the immediate future.
By the way, I am reading the Bentek claim as predicting an additional 3.4 Bcf/d to apply to November of 2017, not this year. It can take a long time to fully integrate these new pipeline projects.
Mr. Wharton
The site Marcellusgasdotorg contains comprehensive production data on all 6 1/2 thousand producing unconventional wells in Pennsylvania, in addition to the near 15,000 total that have already been permitted.
To substantially augment the report from Bentek, the University of West Virginia just released a report on the Utica. This work was a compilation of data emanating from a dozen or so sources … governmental, educational, private industry. Exceptionally informative. They feel the technically recoverable amount will be about 800 Tcf, comparable to the Marcellus in their estimation.
An additional data source is the release this past May by Wrightstone Energy on the shallower Upper Devonian formations. They feel there is over 30 Tcf recoverable in the southwest portion alone.
To put these numbers in some context, the hype surrounding ENI’s Mediterranean find claimed an amount of 30 Tcf.
I know little about gas. But this discussion brings up an issue I have pointed out regarding oil.
Should otherwise productive wells with good casing be plugged merely due to low commodity prices?
I know that state regulations and lease terms require this. But should this be rethought?
Most mineral owners want production now, low prices or not. Did have one who told us recently if we wanted to shut wells down (not a waterflood) he was ok and would sign an agreement. Ironically, it is one of the very low cost leases.
I have seen several conventional gas leases for sale in the last couple years, low decline but losing money badly. Removing the state/contract issues, should those all be plugged, or is that a waste.
Thousands of wells have been plugged within a 30 mile radius of us over the years. Many needed to be for casing issues. However, many good ones were plugged due to 1990s oil price issues. 2010-2014 several of those areas were redrilled, at major expense. Seems like a waste to me.
Would appreciate comments about this issue. I agree there should be solid regulation of temporarily abandoned wells which would include surface and mineral owner protections.
Shallow
I’ve been getting a good education about some of that by occasionally checking in on some sites that cater to mineral rights owners. Go Marcellus shale dotcom is one, the EF also has one. The Bakken has had a few come and go.
The temperament of the people seems to be all over the place, as is the treatment/ethics (or lack) of the various companies.
But to address your curiosity about lessees’ flexibility in down times, it sure seems as if they collectively would be. Some may be greedy, but the majority may postpone payment now if it meant jepordizing future income.
Good luck.
Thanks coffee. I have seen the Marcellusgas site. it seems to be largely very detailed data. For our purposes we would need global aggregates in a form that could be used to abstract a more general understanding. I had also seen the WV report but I had not seen the Wrightstone Energy one. Your comment seem in general supportive of the Bentek projections.
I have another question that can only be answered by professionals who understand drilling. Obviously there are over 7,000 producing well in the Marcellus with most of them physically above the Utica. Is is possible to go back and extend those wells into the lower formation? The Utica at it deepest goes down 3 miles. It might not be cost effective to drill to that depth for a new well. However, the incremental depth beyond an existing well would be much less. I am profoundly ignorant of what might be possible with that. My guess is that there might be a similar issue with Bakken/Three Forks configuration.
The Marcellus is expected to produce 120 TCF by 2040 in Drilling Deeper according to the most likely scenario. David Hughes models a 20% annual decrease when the wells reach the exponential phase of their decline. probably after year 5 (though this is a guess by me, I will defer to the oil experts as to when the typical terminal decline rate begins for the average gas well.)
Note that the URR will be higher than 120 TCF as drilling and production will continue beyond 2040. It is expected that another 30,000 wells will be drilled after 2040 in Hughes’ most likely scenario (63,000 total wells and 32,000 wells by 2040) see pages 276-280 od Drilling Deeper.
Chart for Marcellus scenarios by Hughes.
Thank you Dennis. This analysis is an excellent analysis from the early 2014 perspective. The major problem with it that I see now is that it may underestimate the rate of technological change. The changes just over the last several years have been ferocious in the extreme. I am now hearing of automated technology where a single person manages the drilling of five wells from a single iPhone. That is not mainstream now but units working on such futures are rapidly adding to workers and revenue. The 3,220 cf added per rig per month at the beginning of 2012 is now 8,350 cf per rig. That is over 2.5 times the productivity in less than four years. I don’t think Hughes adequately took the rate of technological change into consideration. I don’t know if it can adequately be taken into consideration. Does anyone have any view about how the Hughes analysis would be changed if we had a coherent expectation about what the technology might be?
A single person can “manage” 10 rigs with a radio and a portable computer if the rig supervisors and personnel are very skilled. You know, it all depends on what you mean by managers. I’ve been in drilling ops where the managers couldn’t tell a bit from a pup.
Hi Don
The increase in rig productivity may reduce cost but does not increase trr.
Probably 200 TCF urr is optimistic through 2060.
Dennis, obviously a large part of natural gas in the Marcellus formation will be left there in large part because it will be too expensive to get it out. 200 TCF URR is an good optimistic guesstimate of what might be extracted by 2060. However, cost is a big variable. There is talk about rigs that can walk to a new location or self-assemble. Other are talking about total automation. It is a bit hard even to imagine what they mean by that.
Fernando, I fully understand that it is possible for a “manager” to have little knowledge or involvement with the operation. However, the particular case that I referenced presumed real time data in the deep hole with control over what happened with the bit. That is pretty hands on. Apparently there is an accepted protocol in place for getting info from deep in the hole.
It’s kind of rediculous that the data is not reported on a per well basis in the first place, since the rig is usually not a large fraction of the costs. They might as reasonably report per ton of sand to give a downward trend.
Average wells drilled per rig in the Marcellus area was very nearly 2.0 was of Jan-March 2015. You can divide the 8,350 Mcf/d by 2.0 to get 4,175 Mcf/d IP average, which isn’t much different from what Hughes had. Multiplying by this 2,300 does in fact give a result close to that quoted.
My objection wasn’t that the number is wrong, but that it but that it isn’t a good representation of trapped production as I would define it. There are always quite a lot of wells under development, even in areas without transportation bottlenecks. Unless they’ve taken them out specially, this number includes around 450 shut-in wells. The companies don’t have money budgeted to develop these wells with any kind of rapidity. If you’re going to include wells that they don’t presently have money to complete, why not include drilling permits too? My 2-5 Mcf/d was just a hand-waving estimate of the amount of actual capacity that could be deliverable on relatively short notice in the absence of trunk pipeline congestion, based on observed price/demand response.
My estimate 30% annually was from random sampling of initially high IP wells in Susquehanna using the publicly available PA DEP data. Admittedly a more comprehensive survey would be preferable, and it would be nice to have pressure and choke data, but that data is not generally available. It did seem to be rather consistent, however. I was mostly looking at wells starting production 2011 and later. The earlier wells which were not as tightly packed do seem to have had slower decline curves.
By no slowing, I meant no slowing of the exponential decline rate in these wells which are after all only around 4 years old. A hyperbolic decline rate would be slower. Since an exponential decline is one of the commonly used exact diffusion solutions, I’m not sure why this should be seen as exceptional. Perhaps some hyperbolic slowing of the decline rate will be evident later.
Re: EIA regions: Read the product description. They are presenting data by region and never claim that it is by formation. You just assumed that was what they meant. I should have said all production from the appropriate counties, for Marcellus in PA, NY, MD, and WV, and yes, of course PA and WV would be much larger than NY and MD.
It’s kind of rediculous that the data is not reported on a per well basis in the first place, since the rig is usually not a large fraction of the costs. Average wells drilled per rig in the Marcellus area was very nearly 2.0 was of Jan-March 2015. You can divide the 8,350 Mcf/d by 2.0 to get 4,175 Mcf/d IP average, which isn’t much different from what Hughes had. Multiplying by this 2,300 does in fact give a result close to that quoted.
My objection wasn’t that the number is wrong, but that it but that it isn’t a good representation of trapped production as I would define it. There are always quite a lot of wells under development, even in areas without transporation bottlenecks. Unless the’ve taken them out specially, this number includes around 450 shut-in wells. The companies don’t have money budgeted to develop these wells with any kind of rapidity. My 2-5 Mcf/d was just a hand-waving estimate of the amount of actual capacity that could be deliverable on relatively short notice in the absence of trunk pipelien congestion, based on observed price/demand response.
My estimate 30% annually was from random sampling of initially high IP wells in Susquehanna using the publicly available PA DEP data. Admittedly a more comprehensive survey would be preferable, and it would be nice to have pressure and choke data, but that data is not generally available. It did seem to be rather consistent, however. I was mostly looking at wells starting production 2011 and later. The earlier wells which were not as tightly packed do soom to have had slower decline curves.
By no slowing, I meant no slowing of the exponential decline rate in these wells which are after all only around 4 years old. A hyperbolic decline rate would be slower. Since an exponential decline is one of the commonly used exact diffusion solutions, I’m not sure why this should be seen as exceptional. Perhaps some hyperbolic slowing of the decline rate will be evident later.
Re: EIA regions: Read the product description. They are presenting data by region and never claim that it is by formation. You just assumed that was what they meant. I should have said all production from the appropriate counties, for Marcellus in PA, NY, MD, and WV, and yes, of course PA and WV would be much larger than NY and MD.
From Bloomberg
“Houston-based Cheniere Energy Inc. plans to ship its first LNG cargo in December from Sabine Pass on the U.S. Gulf Coast, marking the start of a wave of projects forecast to turn the nation into a major gas exporter. More than 50 applications have been filed to ship gas from the U.S.”
Note the stock symbol for this company on the NYSE is LNG.
Ovi, I expect that relatively few of the 50 will actually be built. LNG prices have crashed. The plants that have been approved with construction actually started are likely to go to completion. Most of the nameplate capacity on them is already contracted for with long term contracts and are thus relatively safe investments. That does not mean that the LNG will actually be exported. However, it does mean that fees will be paid if the companies who have contracted for the LNG don’t take it. As I see this market, anyone that builds a LNG export facility will be crazy to do it without long term contracts to take the product. The world-wide capacity is likely to much exceed the demand. Frankly, I think the LNG importers would be crazy at this point to sign a long term contract. The spot market is likely to be dirt cheap.
If memory serves, the EIA put the annual decline from existing wells in the Marcellus somewhere on the order of about 8 BCF/day per year.
An Interesting Gas Play Case History
The Haynesville Shale Gas Play, which covers part of both Texas and Louisiana, is an interesting case history. Following is a chart showing the monthly production versus the rig count. Note the significant time lag, a little more than a year, between the beginning of the decline in the rig count (late 2010) and the beginning of the decline in production (early 2012). Also, note that that there was about a three year gap between the beginning of the late 2010 decline in the rig count and the end of the steep production decline (late 2013):
http://i1095.photobucket.com/albums/i475/westexas/Haynesville-rig-count-and-natural-gas-production1_zpsb1n95tiz.jpg
In any case, the decline in production from the Haynesville Play contributed to the observed 20%/year exponential rate of decline in marketed gas production from Louisiana from 2012 to 2014 (dry gas production for 2014 not yet available). Note that this was the net rate of decline in gas production, after new wells were put on line (for both conventional and unconventional production). The gross underlying decline rate from existing wells in 2012 and 2013 in Louisiana was even higher than 20%/year.
The Louisiana data provide strong support for the Citi Research estimate that this gross underlying rate of decline in existing US gas production is on the order of about 24%/year (again, gross being the rate of decline, before new wells are added).
With an underlying gross decline rate of about 24%/year, the US needs about 17 BCF/day of new production per year, just to offset the declines from existing production. Note that this volume of gas–that the US needs just to offset declines from existing wells–exceeds the dry gas production levels of every country in the world, except for the US and Russia. In other words, in order to maintain current gas production, we need to put on line–every year–more gas production than Canada, or Norway, or Iran, or Qater, etc.
Don,
Natural gas production in the US is actually in a sharp decline since December 2014 (production over 74 bcf/d) towards 72 bcf/d this week. Despite FERC, REX…. pipelines reversed and coming online, production did not increase nor pricing changed very much. Although the record production of Marcellus seems to be impressive, Marcellus stagnates since the last few months , just touching the record with a marginal production increase for one day and then falling back below 20 bcf/d again. This goes on now for months. The US is still a net importer of natgas and imports are strongly on the rise over this summer (imports from Canada up over 25% from last year in some weeks). It would be first a good showing if net imports can be reduced before talking about exports. The next few months will show, if the predictions of a huge production increase will become true. So far this has not been the case. Alaska for instance went down in June by 2bcf/d from April. In my assessment we will see an extreme natural gas shortage this winter.
I agree. It looks like gas production is declining 0.2% week over week. I expect the declines to increase as the fracklog is being worked off and the decline in rig counts from earlier in the year kick in more. I also think the EIA will readjust their numbers soon. LNG to Sabine will actually begin flowing in October or November with first LNG shipped in Dec. More capital will be taken out of the system next month with borrowing bases redetermined and companies just going flat out broke. A lot of companies are producing gas that shouldn’t be-SFY, PVA, SD, HK, XCO etc. There are numerous private equity backed companies in trouble as well that you just don’t read about because they are private.
Heinrich, I hope you are right. However, I assume that you are familiar with Bentec and their reputation. Note that that I am not assuming any personal expertise here. Frankly, given the record of EIA, it seems reasonable to play our confidence in the more highly respected private analysts. Also consider that there is massive work still to be done to integrate pipeline investments into the actual field flow.
CARACAS, Sept 1 (Reuters) – Venezuela and China have signed a deal for a $5 billion loan….
Venezuela has borrowed $50 billion from China through an oil-for-loans agreement….
That financing has been especially crucial for Caracas since last year’s oil market rout, which aggravated the country’s severe economic crisis. – See more at: http://www.rigzone.com/news/oil_gas/a/140403/Maduro_China_Signs_Off_on_5B_Loan_to_Boost_Venezuela_Oil_Output#sthash.jrzikk22.dpuf
$50 billion is the total of what they have borrowed in the past to be paid back in oil. The current loan is $5 billion.
A source at Venezuelan state-run oil company PDVSA told Reuters in March that China was set to extend a “special” $5 billion loan that would likely stipulate hiring Chinese companies to boost output in the company’s mature oil fields.
Venezuela has borrowed $50 billion from China through an oil-for-loans agreement created by late socialist leader Hugo Chavez in 2007, which has helped Chinese companies expand into Venezuelan markets amid chronic shortages of consumer goods there.
Well according to this article in Deutsche Wirtschafts Nachrichten, it appears to be the second installment of a deal Maduro and Xi Jiping cut earlier this year.
http://deutsche-wirtschafts-nachrichten.de/2015/03/21/gegen-usa-china-gibt-venezuela-milliarden-kredit/
The article is in German, but here’s an English translation:
In the coming months China will lend Venezuela, which faces bankruptcy, ten billion dollars. These funds are part of a bilateral agreement. For China it’s a way to quench its energy needs, while the US continues its confrontational line with Venezuela.
Venezuela is under the threat of soverign default. In providing two five-billion dollar loans, China has become an important partner for the struggling country. The first part of the loan is the joint Chinese-Venezuelan Fund, and will be directed into major projects, CNBC reported. The agreement will be signed later this month. China extended the terms of the loan to five years, giving Venezuela more breathing room, as the terms are typically limited to three years.
The second part of the loan will be used in the oil industry. China will support investments in oil fields, intended to help Venezuelan oil company PDVSA increase production, the official said. Ninety-six percent of Venezuela’s foreign exchange revenue comes from the export of raw materials.
The recent fall in oil prices is one contributor to the financial pressure on Venezuela. Interest rates on bonds have risen again. Venezuelan President Nicolás Maduro claimed the US is responsible for the fall in oil prices late last year. “Are you aware that an oil war rages?” said Maduro on Monday in a broadcast speech to businessmen. “This war has one goal – to destroy Russia.” In addition, it is also directed against Venezuela “to destroy our revolution and bring about a collapse of the economy.”
In March Obama called Venezuela a threat to the US national security. Domestically Maduro is under pressure. There were regularly scheduled demonstrations against the government of the country last year. In February 2015, a 14-year-old died in protests. Last week there were protests in Caracas again.
Venezuela is extremely lucrative for China’s investment interests. This is the country with the highest oil reserves in general, and China’s energy demand will increase with the increasing rural-urban migration in the coming years. China has already given Venezuela $45 billion in exchange for oil and fuel.
With the new loans for Venezuela, China finds itself in opposition to the United States. It was only in February that China promised loans to Russia to support Moscow in a similar fashion.
The loans are intended to generate business for Chinese companies, and allow them to import Chinese laborers not protected by Venezuelan Union rules.
The terms require Pdvsa to ship crude at heavily discounted prices, my sources say the payments this year involved shipping about 400,000 BOPD at heavy discounts, and that new loans were in a sense intended to keep the $50 billion topped off.
Chinese moves in Venezuela are a form of colonization. The new agreement includes setting up centers to teach mandarin to Venezuelans. Also, the Venezuelan army sent soldiers to Beijing to participate in the Chinese military parade celebrating the end of WWII.
Another tidbit: Colombia has filed criminal charges against Maduro for the ethnic cleansing of Colombians. The papers were turned into the international criminal court last night. I don’t expect much to come from this action. The only thing I think will make the Maduro regime collapse, in spite of Chinese efforts to prop it up, is to put pressure on the Castro family dictatorship. The Castros have placed over 30 thousand Cubans in Venezuela, many of them in the security services and the Venezuelan military. This allows them to have the means to stop Venezuelans from trying to force Maduro and his clique out of power.
Latin America for the past five centuries has been a chessboard upon which the world’s great hegemonic empires — Spain, Holland, France, Britain, the United States — have played their imperial games.
The perfect example of this is Mexico. For over 500 years its people have never had a state which represented them. Porfirio Díaz summed it up succinctly: “Pobre de México, tan lejos de Dios y tan cerca de los Estados Unidos.” (Poor Mexico, so far from God and so close to the United States.)
Now China and Russia are joining the fray.
Russia isn’t really into it other than to have a card to play as it reacts to USA pressure around its borders.
The USA for the most part isn’t into that “fray” in Latam.
China on the other hand has a very transparent mercantilist imperial policy. And they are very willing to encourage dictatorships, human rights abuses, corruption, etc. China is a throwback. I see them as an agent for evil.
Fernando Leanme says:
The USA for the most part isn’t into that “fray” in Latam.
Fernando, I don’t know what planet you live on, but it surely isn’t planet Earth.
With everything going on in Guatemala as we speak — with the people of that country struggling to wiggle out from under the imperial jack boot of the United States — statements like yours show you have completely departed from factual reality.
Good grief man, Guatemala’s president (that is up until a couple of days ago) was on the friggin’ CIA payroll back in the 80s when he conducted his genocides and mass murders.
Your view that the US’s shit don’t stink, or the even more fact-free view that it is not even involved in Latin America, defies all reality and all common sense.
Heck, at least old farmer mac attempts to construct a moral and intellectual defense for US aggression, and doesn’t just bury his head in the sand and depart completely from factual reality.
These headlines pretty much tell the story:
“In Guatemala, Protests Threaten to Unseat President, a U.S.-Backed General Implicated in Mass Murder”
http://www.democracynow.org/2015/8/24/in_guatemala_protests_threaten_to_unseat
“Guatemala President Faces Arrest as Business Interests and U.S. Scramble to Contain Uprising”
http://www.democracynow.org/2015/8/27/uprising_in_guatemala_could_anti_corruption
“Is Guatemala’s President Going to Jail? Legislature Strips Pérez Molina of Immunity After Protests”
http://www.democracynow.org/2015/9/2/is_guatemalas_president_going_to_jail
“Guatemalan President Resigns in ‘Huge Victory’ for Popular Uprising”
http://www.democracynow.org/2015/9/3/guatemalan_president_resigns_in_huge_victory
“Allan Nairn: U.S. Backers of Guatemalan Death Squads Should Be Jailed Alongside Ex-President”
http://www.democracynow.org/2015/9/4/allan_nairn_us_backers_of_guatemalan
Glenn, in fairness to Fernando, he is unlikely to accept Democracy Now as a fair and balanced view of Latin America. Also, the 1980s are a long time back and hardly represent current American priorities. We have pivoted toward Asia and we have much greater concerns about the Mideast and a newly bellicose Russia. I just do not see Guatemala as a great priority and my guess is that American governmental observers are not greatly engaged with this minor but passionate response to reprehensible corruption. If a corrupt leader goes to jail and new elections occur, my guess is that our State Department will adequately happy.
It is hard for me to believe that I am supporting Fernando. However, I do agree with him that America is not much concerned about the fray here.
Most politilogues from Latin America, I do believe, would agree that the US’s failures and embroilments in other parts of the world drew the US’s attention away from Latin America. This gave various progressive governments in Latin American breathing room, something they probably would not have had if the US had not had its hands full in other parts of the world.
Hugo Chávez came to power in Venezuela in 1998, Néstor Kirchner in Argentina and Luiz Lula da Silva in Brazil in 2003, Evo Morales in Bolivia and Tabaré Vázquez in Uruguay in 2005, and Rafael Correa in Ecuador in 2007. All of these are “progressive” governments which are united in their defiance of the Washington Consensus.
To claim though, as Fernando does, that the “The USA for the most part isn’t into that ‘fray’ in Latam,” is quite the exaggeration, and flies in the face of all reality and all common sense, at least for anyone with a rudimentary knowledge of what is going on in Latin America.
Also I noticed you attacked the messenger — Democracy Now — and not the message.
Notwithstanding this distraction, the bottom line is that there is more than ample evidence, from any number of credible sources, to demonstrate that the United States is still involved in Latin America, and not in a minor way.
Whether the US is successful in turning back the tide in Latin America, however, is an open question.
I would imagine some of you here may have heard of the U.S. Southern Command. Perhaps also the School of the Americas? A lot of you are old enough to remember being taught about the Monroe Doctrine.
It is true that U.S. interests are spread thin around the World. We need to engage in Africa to combat radical Islam (and also aggressive mercantilism by China)…we need to pivot to the Pacific (contain China)…wait, we need to check Russia’s adventurism in Ukraine. Be all that as it may, we will always have core equities in the rest of the Western Hemisphere. Our involvement in Central and SouthAm affairs is usually much broader spectrum and subtle than blatant military actions. Notice I said ‘blatant’. Certain aspects of the U.S. military specialize in executing key operations that are quite discreet.
I tend to view political (including low-vis mil ops) as a symptom/sideshow of overpopulation and resource depletion.
Jesus. I lived in Venezuela for a decade. Helped manage huge assets. Had access to intelligence you have no idea exists. And you come back quoting democracy now dot org about Guaremala to teach me about Venezuela?
These personal anecdotes, however, do nothing to counter the overwhelming amount of evidence on record which demonstrates that the United States is still very much “in the fray” in Latin America.
Glenn, I told you that Fernando would be unlikely to accept Democracy Now as a fair and balanced view of Latin America. I hate to say I told you so but that is what I said. Personally I treasure Democracy Now. On many issues I am a quite liberal. Also I have no doubt that we are doing some things that would not look good from that liberal perspective. I think you do understand my central point that the US government cares very much less about such things compared our focus decades ago. Beyond that the impact that we do have as a government is far less likely to be definitive. The people of Guatemala have spoken and I don’t see that anything our government does will change that outcome. And yes that does mean that America is much less concerned “about the fray down there.” Obviously our government is still engaged to some extent. However, if you were to talk with high level management in the State Department privately I think it is quite likely that they would voice a view similar to what Fernando and I are saying here. If they are on a LATAM desk they would likely be less than happy about that situation.
Glenn, you present nothing relevant to Venezuela worth a single bean.
Those populists you listed are completely irrelevant to a discussion as to whether the USA is in a “fray” in Venezuela. But I guess once one guess bitten by the red bug and turns into a red zombie there’s no sound argument one can use. ?
EIA has not been costing us lunch money. They have been costing us real money. And the CPA guy above mentioned that the EIA expects production to accelerate in late 16. How? Is Disneyland coming to the oil patch? On what is this claim based? Does anybody know?
The EIA expects oil production in the GoM to increase by 290 kb/d from May 2015 to December 2016 as a result of new project start-ups (presumably non-affected by low oil prices).
Crude + condensate production in the Lower 48 states is expected to decline by 810 kb/d between May 2015 and June 2016 (from 7.63 to 6.82 mb/d) and then slightly increase in 2H16 to 7.07mb/d in December 2016 due to higher oil prices.
Note that the IEA recently revised downward its historical numbers for the U.S. oil production, so their forecast in September STEO should also be lower.
U.S. oil production and WTI spot price forecast: EIA STEO August 2015
AlexS. I just do not see why WTI in the high 50s would cause a large number of rigs to return to the EFS or Bakken. I cannot figure out why there are more than a handful there now.
I know I have beaten this to death, but we are high cost and we have been taken out to the wood shed. However, when I compare us to shale, the cost is even higher.
I’ll pick on HK again. They have 40K BOEPD and did an agreed default, reducing their debt from $3.5 to $3.1 billion. They claim their bank operating line of credit will be remain as is, at $850 million, despite the default and despite that unsecured debt is trading for 30 cents on the dollar. So apparently banks are going to allow them to drill wells that cost $7-8 million, will make 200K+/- in 60 months, with oil in the $30s and gas under $2 in the field.
Let’s equate all of this to a small producer who is 1/1000 the size of HK.
ABC Oil Company has 40 BOEPD. They had $3.5 million of debt, but defaulted on part, and therefore it is reduced to $3.1 million. Their production will generate about $250K of income the next 12 months, and will be down to 26 BOEPD in 12 months without further drilling. The interest expense on the $3.1 million will be $300,000 annually if principal is not reduced.
ABC wants the bank to loan it $850K so it can drill 11 wells that will produce 2,000 or so barrels of oil each from now till the end of 2020.
Now why would a bank loan anything to ABC, let alone for them to drill more?
I do not understand how the Office of the Comptroller of the Currency would not write up a bank that loaned a part of $850 million to a shale company who has just defaulted on $400 million of loan principal, that will have at least three times the $$ of long term debt as PDP PV10 and is going to use the funds not to pay down 13% interest third lien bonds, but is instead going to use the $850 million to drill more wells that will not come close to payout in 60 months.
I cannot understand how things have gotten so far from reality, especially as we are just 7 years removed from the exact same debacle in the US housing industry.
Rant over.
Shallow, I suspect that the people who preside over these affair are psychopaths or something. I recall asking questions about the nature of the participants over at TOD because of our ability to sift through the BS presented by the media and understand the concepts involved in Peak Oil.
It seems that most of us who participate here on this blog are of a certain rare personality type (INTP/INTJ?) while Wall Street types are generally not. It strikes me that there are some people who just cannot see “the writing on the wall” simply because it interferes with their preferred world view while, most of us find it difficult to blindly engage in folly because, we cannot bring ourselves to ignore “the writing on the wall”.
I dunno. What is it about most of us here that makes it possible for us to understand Peak Oil and limits to growth when there appear to be vastly more people who cannot wrap their heads around these concepts and even vastly more who just plumb don’t give a shit?
I’m concerned, for example, that modern civilization has disrupted so many natural cycles and introduced so many strange and wonderful 😉 new compounds to environment that we are fouling our nest so to speak. I see the Sargassum seaweed problem currently being experienced in the Caribbean, as natures response to more CO2, more nutrients and more warmth in the sea water. I find it somewhat disturbing and think that humanity had better try to help nature restore balance, by putting this biomass (seaweed) back on land from whence the nutrients and carbon originated that, are causing the problem to begin with. I guess that makes me probably about one in a million!
You see, we will never understand how that stuff works because we just cannot think like them and they will never be able to explain anything to us because, they just cannot think like us. We will get up in the morning and ponder about what is going to happen when the “chickens come home to roost” and they will get up and think about how much money they are going to earn (personally) so that they can buy that new SUV or boat or take that next vacation to Cancun (or at least somewhere that doesn’t have that awful, stinky, seaweed nuisance!).
Like you, I suppose, many of us here “cannot understand how things have gotten so far from reality”.
I’m concerned, for example, that modern civilization has disrupted so many natural cycles and introduced so many strange and wonderful new compounds to environment that we are fouling our nest so to speak.
THE PROBLEMS WITH WASTE
http://www.toxicsaction.org/problems-and-solutions/waste
Our Waste Is Toxic
Due to largely to lax governmental regulation on an ever-growing chemical industry, everyday products that are used and thrown away contain more dangerous and health-affecting chemicals than ever before. More than 60,000 untested chemicals pervade the consumer products on our shelves and in our homes. Even those chemicals whose health implications are at this point clear, such as Biphenyl-A (BPA), commonly found in plastics like toys, are poorly regulated. The unprecedented toxicity of garbage exacerbates the problem that nationally we have no clear solution for dealing with waste.
And if that weren’t bad enough… We have very little understanding as to how all those chemicals interact with each other in the environment.
While the number of people who might understand the implications of things like Peak Oil and Climate Change are rather small, the number of people who grasp chaos math, complex systems, feedback loops and non linear dynamics seems to be even smaller…
Along the same lines:
Industrial Toxins Silently Poisoning Americans: Largest Uncontrolled Experiment in History
The culprit behind this silent killer is lead. And vinyl. And formaldehyde. And asbestos. And Bisphenol A. And polychlorinated biphenyls (PCBs). And thousands more innovations brought to us by the industries that once promised “better living through chemistry,” but instead produced a toxic stew that has made every American a guinea pig and has turned the United States into one grand unnatural experiment.
I have heard that on average there are over 200 toxic or cancer producing chemicals that can be found in the blood of the average person. To say the least, this is not good. In a rational world this would not happen.
Why are people surprised that humans are predators? This is not a deviant mindset, it is a very old tried and true mindset. They are preying upon other human’s accumulated resources since those are the best available and easiest to obtain.
The newly evolving mindset is one of ethical and moral long range planning and action. The mindset that cares about it’s effects upon the world and future viability.
So we have two evolutionary characteristics colliding. An older one that appears amoral and selfish to the new one, which in turn appears weak and harmful to the old one.
”Why are people surprised that humans are predators?”
Could it be that people have been brainwashed by leftish liberal thinking into believing that the world is NOT a darwinian place?
In SPITE of the utterly and absolutely OVERWHELMING evidence that it IS?
To Steal a line from one such superidiot REVERED for being such an idiot, Kurt Vonnegut, Methinks maybe so.
Now I personally revere Vonnegut as a superbly gifted writer and painter of certain visions of what he would like for the world to be – but he is extraordinarily skillful at avoiding any descriptions of actual REALITY that interfere with his dreamworld.
So – gun equals BAD. NEVER a line I can remember in all his work where a gun was used in a useful way, for instance to stop a robbery rather than commit one.
Recognizing reality these days is to be accused of being one of the bad guys by idiots who think they can control the world via their dreamy thoughts.
If you are to have any real hope of SOLVING a problem it is almost always necessary that you first UNDERSTAND the problem.
No offense intended to any practicing witch doctors with their masks and rattles, they actually do sometimes ( not very often) get good results.
But doctors that know about microbes, they way they spread, and medicines that can kill them get BETTER results.
WELL said MZ
Realists are not surprised that people are predators.
Thus REALISTS are a long march ahead of the wishy washy element in actually SOLVING the problem of controlling predation among ourselves.
Predation is a totally natural behavior in humans rather than an intrinsically evil behavior.
Nature does DEAL in good and evil.
Now somebody go ahead and post a long sermon intended to make me out the bad guy.
A thinking realist with data between his ears to feed his thinking grist meal DOES understand that times and circumstances have changed, that predation IS ,nowadays since the development of modern industrial society, a THREAT to EVERYBODY, that in the end there may be no winners at all as the result of uncontrolled predation.
Which sort of doctor do you want calling the shots, a witch doctor or a doctor who knows more about reality?
Humpty Dumpty says it’s all about who shall be master. Humpty Dumpty was pretty smart for a simple egghead.
The simple rule to tell whether an animal (which humans are) is to look at the eyes. Predator eyes are set closer together and aimed forward to allow greater focus, visual acuity and depth perception. Prey eyes are set wide and at angles to the longitudinal axis of the body. The predator is a torpedo.
This give a wide field of vision to better see approaching predators or territorial invaders. The prey is a souped up runner (like those hot cars used to carry hooch during prohibition) designed for escape with some defensive capability.
Old Farmer said “Could it be that people have been brainwashed by leftish liberal thinking into believing that the world is NOT a darwinian place?”
Old Farmer, you are not talking about some political stance or brainwashing, you are talking about a fairly new evolutionary change. Probably one that existed in the past but rarely came to the forefront.
It is a Darwinian world, so recognize that evolution has produced a different mindset and view, those capable of taking in extended knowledge of the world and are driven to act upon it. The older type human predator (and both types are predators) is more focused on immediate survival and self-preservation at a lower level. Much like my hound, they can easily ignore anything that does not fulfill the current short term objective. Unlike my hound they actively fight against long term thinking and action.
Think about which one works better in our current situation.
MZ,
Of course we need a new vision. But who do you think is more likely to actually succeed in bringing it about, witch doctors or people such as evolutionary psychologists?
The masses ARE hopefully evolving the consciousness needed to control the TOP predators. In chimp society there is often one alpha chimp who bullies all the other chimps- but sometimes three or four chimps a little way down the power ladder get together and whip his bullying ass so as to teach him better manners.
I am all in favor of such a development in human affairs and there is some evidence- considerable evidence that it is a RISING development.
But except in the minds of men there is no such thing as good and evil. Foxes are not evil because they eat baby rabbits.
Problems are more easily solved if one understands the nature of the problem. Put a bunch of priests in charge of a small community and it is apt to be a peaceful community that looks after the unfortunate to some extent at least.
Put the priests in charge of the larger community and you wind up with the Borgia family in charge.
Reality rules. Aggression is a natural behavior with HUGE fitness value if you are a SUCCESSFUL aggressor.
The Romans Patton talked about lived that thousand years as very successful predators.
ALL the moralizing in history past and history future will not change this fact.
old farmer mac said:
But except in the minds of men there is no such thing as good and evil. Foxes are not evil because they eat baby rabbits.
Problems are more easily solved if one understands the nature of the problem.
Well yes, but even if we accept the metaphysics of naturalism, can we not have an inquiry about what nature is?
Isn’t that what scientists supposedly do?
Or is the only option on the table the “red in tooth and claw” Darwinian world, as Richard Dawkins puts it?
Old Farmer said”Of course we need a new vision. But who do you think is more likely to actually succeed in bringing it about, witch doctors or people such as evolutionary psychologists? ”
I really wish we could sit down and have a number of face to face discussions on this subject. I think you are grossly underestimating the knowledge and abilities of primitive cultures. And this from someone from a culture that does not even know enough not to shit in it’s own nest.
Pride goes before a fall. Hubris leads to downfall.
That is why, the US will have a hand in Venezuela by middle of this century. We will need their extra heavy crude for us. I keep looking at a map of Venezuela and they have eyes on the side of their country, when I fold the map just right.
The USA doesn’t need to “have a hand in Venezuela” to purchase Venezuelan oil. And unless the Venezuelan people can free itself from the Chinese colonization the hand in Venezuela will speak mandarin and behave like the really ruthless sob’s these former communists turned out to be. So the key for Venezuela is to utterly destroy the Chavista regime, execute its leaders, and make sure they give Chinese imperialists a solid kick in the behind.
The US already “has a hand in Venezuela.”
But so do Russia and China.
Russia and China now appear to have the upper hand in Venezuela, but the US is not down and out.
The best thing for a majority of the people of Venezuela, of course, would be for it to be able to do business with anybody it wants to, to let the great powers bid it up for the country’s vast oil reserves.
But that would mean the country would no longer be a colony or neo-colony, under the domination of some great power. And that is not so easy to achieve, especially for a country which lives from the production and export of primary materials like Venezuela does.
Venezuela can be considered a Castroite satrapy. The Chinese are trying to colonize it using loans and developing business for Chinese corporations. Given China’s neofascist regime’s centralized power structure those Chinese corporate interests work as state agents.
Your concepts about Venezuela are based on the typical Latinamerican left set of legends and commie bullshit. The Russians and the USA have absolutely no power in Venezuela.
Fernando Leanme says:
Your concepts about Venezuela are based on the typical Latinamerican left set of legends and commie bullshit. The Russians and the USA have absolutely no power in Venezuela.
Oh really?
“Venezuela, Russian oil company ink $14B deal to double country’s output”
http://latino.foxnews.com/latino/money/2015/05/29/venezuela-russian-oil-company-ink-14b-deal-to-double-country-output/
And this photo was taken in China only a couple of days ago.
http://ultimahoradigital.com/maduro-necesitamos-ayuda-de-la-onu-para-parar-exodo-masivo-de-colombia/
Yes really. Rosneft signing a deal in Venezuela means diddly. Repsol is investing more at this time.
Below is a link to my analysis of the Rosneft deal:
http://21stcenturysocialcritic.blogspot.com.es/2015/05/venezuelas-heavy-oil-scam.html
Fernando,
NIce try at an ad hoc rescue, Fernando, but that post does not argue that Russia is absent in Venezuela.
Quite the contrary, it confirms Russia’s presence in Venezuela.
Now granted, it may seek to minimize the importance of Russia’s presence in Venezuela, but it certainly doesn’t deny that presence.
I don’t believe that Vonnegut’s vision was a dream. In the end we are all dead. The question is how do you wish to have lived your life?
Old Farmer, as long as you are bringing up what kind of doctors I want, I want the kind that was around when I was young. They knew how to think and analyze. They could determine disease with just a physical exam, maybe a simple blood test done in their office or an x-ray. Diseases that stump the common run of the mill, test driven mindset I see today. They took their time and tried to solve problems. They were not as interested in their profits back then.
I have had doctors make huge errors because the testing did not show anything (wrong tests) and they could not interpret major physical problems that were glaringly evident. Now I go to the doctor, they give a battery of tests and then give canned responses dependent upon test results, even though the answers are often not making a change in the overall outcome! Machine diagnosis is becoming the norm.
Heck, I have come up with more real info from the internet on a problem than four physicians did from office visits. They do not even recognize things because they are not taught that way anymore. No real thinking and no reactionary response to not knowing.
Pretty poor in many ways. Depend on the machines, that is the new medicine. Move them through as quickly as possible. Next.
ALL TOO TRUE MZ, but the machines are still better than the rattles and the mask.
Some time back having time and money enough on hand, I enrolled in nursing school as part of my long range plans to be as ready as possible for future hard times. Plus just enjoying myself and maybe meeting lots of women, nursing school is just the place for that.
While studying a first semester basic text and talking on the phone with one of my best friends he mentioned that he was still not getting results from treating a supposed case of bursitis in his right shoulder after three years. I happened to be looking at a flow chart used by nurses to screen patients immediately previous to getting a physical exam in this FRESHMAN nursing text.
PLAIN as day- Pain in the shoulder unexplained can be phantom pain and related to liver problems.
So -I suggested he ask for a liver panel. A couple of days later he got a call, his doc made an appointment with a specialist without even asking, he went, he got ANOTHER call the specialist made an appointment with an oncologist.
Diagnosis pancreatic cancer already spreading.
Dead in a year and a half, if the docs and nurses looking after him had really been doing their job he would have gotten the RIGHT tests three or four years sooner and probably lived that much longer.
Perhaps the best lesson to be drawn from this story is that the witch doctors patients are extremely unlikely to ever get pancreatic cancer in the first place since they are not exposed to all the pollutants we eat drink and breathe in day after day.
old farmer mac said:
”Why are people surprised that humans are predators?”
Could it be that people have been brainwashed by leftish liberal thinking into believing that the world is NOT a darwinian place?
In SPITE of the utterly and absolutely OVERWHELMING evidence that it IS?
You mean evidence like this?
http://thesciencenetwork.org/programs/beyond-belief-candles-in-the-dark/paul-zak
It never ceases to amaze how right-wing ideologues have managed to hijack evolutionary science, and this has been the case almost since the inception of the field some 150 years ago. They’ve managed to give evolutionary science a very bad name.
A great deal of recent scientific research, however, is providing overwhelming evidence that the right-wing ideologues’ notion of evolution is, at best, a partial truth.
..
I tried to move this to the right place in answer to Islandboy
o9/04/2015 4:25 but it’s still way down here dangling in nowhere. Ah well–
Wimbi try again you didn’t actually post anything.
“I can call spirits from the vasty deep”
“Why so can I, and so can any man, but will they come when you do call for them?”
Hopefully this comment will appear dead last.
Anybody contemplating doing business with Solar City ought to read it.
No doubt the company is the current market leader, but it has always been my experience the best deal, if money matters at all, is with a solid second tier company.
Read this link carefully to see why. Solar City for instance does not tell you who manufactures their hardware. If they go busted you HAVE NO WARRANTY from the manufacturer and their total cost appears to be way out of line just to get the company warranty.
I do not pretend to have any real expertise in this field but the example given on the overall cost and payment schedule for a system quoted by a smaller contractor makes Solar City look VERY EXPENSIVE.
http://cleantechnica.com/2015/09/06/solarcitys-mypower-home-solar-prices-far-above-average-pick-my-solar-finds/
In any event homeowners get a similar system in Germany for half the price. A person watching his money is almost for sure better off to delay a pv system purchase unless he is planning on installing it himself. Even then component costs are still coming down so fast I am delaying buying pv myself. I can save more by waiting by a mile than I can generating a few thousand kWh over the next two or three years.
The Russians may be ready to hold hands with the Saudis before too long but there are all sorts of feuds going on between them and various other players including Uncle Sam.
This article has some interesting quotes from high level Russian officials.
http://www.telegraph.co.uk/finance/11847300/Russia-flirts-with-Saudi-Arabia-as-OPEC-pain-deepens.html
The author or his editors do not seem to understand that American tight oil production is holding up mostly because of the large number of wells that were backlogged awaiting tracking when the price of oil crashed.
Thanks for the link. Article references American shale switching to sweet spots. I am very curious how that is going to work out in the mid and long term.
Sweet spots run out. But the process isn’t linear, because sometimes we identify new sweet spots.
Off topic: here’s a really neat website which provides a supercomputer weather simulation for the whole planet
http://earth.nullschool.net/#current/wind/surface/level/overlay=temp/orthographic=-32.60,84.81,584
To download new data click on earth, then click on now. This is set up for a North Pole projection downloaded at 11 am today (the download provides a 3 hour glimpse).
If you choose to look at surface temperature you can see the rough sea ice outline. Its really educational to rotate it to the pacific and observe the weather pattern causing drought in California. I’m also using it to learn about Antarctic weather phenomena. I hope you enjoy it.
From the article:
Do you really believe the Saudi royal family, or a guy like Putin, are ingenuous enough to buy into the “USA! USA! USA!” bullshit?
I find it difficult to believe that they don’t know exactly what the real score is.
“switch to higher-yielding “sweet spots”
For the last 7 years they were saving these “sweet spots” for rainy days. Hm. How does that relate to maximizing profits to the shareholders when you drill “crap spots” when the price is high. Yeah right.
Sweet spots aren’t necessarily identified early in a field’s life. Quite often it’s necessary to drill a significant number of wells before they are well delineated.
but once you find “sweet spots” you drill them you don’t keep them as sentimental value.
If you have purchased rights to a LOT of acreage you might find yourself drilling well away from any known sweet spots as a matter of necessity in order to hold the rights. The leases have due dates for production and if not met, they expire.
And while it does sound contradictory , a company might actually ”save ” some known sweet spots in order to drill them later hoping for higher prices – or to sell less productive acreage while holding onto the sweet spots.
It is my understanding that the regs require reporting production well by well, but it occurs to me that a smallish company might be able to cook the books a bit and report some wells producing MORE than actually happens – so as to HIDE the high production of some other wells in the event they are contemplating selling some leases..
One company that has bad earnings aka US shale is Tesla Motors. Analysts are predicting positive earnings as soon as December though.
I still can’t tell if Tesla is going to transform things or is just a hype machine. I still just know one person who owns one. But we are in the sticks. Are they really taking off in metro areas or still a novelty?
Global Capacity of 18650’s does not YET exist for mass production of Tesla design EV’s.
The Pak in my Dell is made from 5 – 18650’s .. it runs for hours.
We use Panasonic 3400 mAH Protected type cells for customer applications.
Cells on Ebay, etc labeled 5000mAh typically test out at 15% of Rated.
Avoid any Battery with Fire or Trust in the name.
The Vap Crowd has a handle on which cells perform, vapor cigs need high currents.
This is a great Flashlight – toss the Batteries in the Trash and get some real
Panasonic NCR18650B’s.
http://www.amazon.com/dp/B00BIYKHVO/ref=rr_xsim_1_1?ie=UTF8&qid=1441653217&sr=0
This is great universal Battery charger since you can measure actual capacity.
http://www.amazon.com/dp/B00OCCNBOE/ref=sr_ph?ie=UTF8&qid=1441649870&sr=1&keywords=18650+charger
Tesla is highly competitive in the Model S price class, selling about as many cars as any manufacturer sells of any GIVEN comparable model.
WITHOUT spending a dime on media advertising, without having dealers in every large city and a good many smaller ones whereas the competition has dealers all over the place.
Without a loyal base of previous owners inclined to buy a second or third Tesla.
The question is whether Tesla will be able to ride the wave long enough to get a couple more models into production including a cheaper one before the rest of the industry gets up to speed on electrics.
Tesla is probably too small at present to survive in a truly electric car competitive market place but Musk and company are awesomely good at marketing their product and maybe they can keep on selling Teslas just on the basis of the brand name even if other companies have as good or better electric cars at lower prices.
There is no way to justify the DIFFERENCE in the price of a Cadillac and a top of the line Ford on the basis of comfort or durability or engineering but people keep on buying Caddy’s and paying a very big price difference for a car that is only a little better in actual fact. STATUS and EXCLUSIVITY are key properties.
Maybe Tesla will survive and thrive selling status and exclusivity. Lots of other companies survive this way. There are plenty of watches on the market that sell for thousands that will not keep time any better than a twenty dollar timex.
So far as I can see, peak oil is a present day or very near term reality and there is no way the auto industry is going to survive long term depending on oil fired engines. Some ice cars will be built for a LONG time yet but in the end – electrics pure and plug in hybrid are sure to rule- assuming Old Man Business As Usual lasts a couple more decades.
My guess is that Tesla will make it – most likely going it alone but maybe by merging with another auto company in need of Tesla’s engineering expertise – a company with established dealerships and customers.
Suppose oil spikes hard up and stay up- which I believe personally is likely within the next few years. With home grown solar as well as grid tied solar and wind power and off peak charging, electric car owners are going to make out like bandits when it comes to their cost per mile for electricity and maintenance compared to conventional cars.
Renewable electricity is already cheap enough in some places that electric cars will not NEED to be downsized for the foreseeable future.
WARNING! EV Link bomb!
A couple of weeks ago Consumer Reports did something quite strange. They scored a Tesla Model S P85D (85 kWh battery, performance model, dual motor AWD) 103 out of 100. Here’s the link to the story at insideevs.com
Tesla Model S Scores 103 Points On Consumer Reports’ 0-100 Rating Scale
Now Tesla easily dominates the news at insideevs, sort of what you would expect from a company who’s CEO has pronounced that the company’s mission is “to accelerate the advent of sustainable transport.” The CEO has been quite clear on his vision as to how to follow the stated mission. As to whether it is a hype machine or something else, I’ll present links to some of the articles on Tesla over at insideevs over the past week. You can look at them and read them if you’d like and decide for yourself whether you think this is all hype.
Consumer Reports: Tesla Model S Rated #1 In Customer Satisfaction
Elon Musk: Second Production Line At Fremont Gets Revamped With 542 Robots
Oprah Winfrey Buys A Tesla Model S
Tesla CEO: $35K Model 3 Pre-Orders/Debut In March, Model X Deliveries Sept 29th
Tesla’s Pure BEV Approach Favored Over German Luxury Plug-In Hybrids
Tesla Model S Leads Swiss Luxury-Segment In Sales
Tesla Signs Two Lithium Suppliers For Gigafactory
World’s 500th Tesla Supercharger Now Online
Forbes Ranks Tesla As World’s Most Innovative Company
IMO while many of the stories above are definitely hype, some show that the company is executing the measures necessary, if it is to approach it’s target of mass market adoption by producing 500,000 cars a year. It is also becoming obvious that they are disruptive, with other luxury cars looking decidedly “old fashioned” in comparison. The fact is that Tesla now makes the fastest accelerating four door sedan (0-60mph) in the world, in their most recent P90D variant (90 kWh battery, dual motor AWD) when optioned with the “Ludicrous acceleration” option. All this, in a rather conventional looking sedan that, is very comfortable and easy to drive. One ride in one is all it takes to convince most people that, this car is an impressive vehicle and many gearheads will think it’s worth the price since, the level of acceleration is comparable with cars costing several times more. Barring a major black swan event I would NOT bet against them.
I guess the reason I bring up Tesla is I drove over 600 miles this weekend round trip to visit relatives who live in a city. I could very well have missed them, but I made it a point to look out for Tesla’s and I didn’t see one. Didn’t see a Leaf or a Volt either.
500 miles or so was on interstates to and from, 100 roughly of city driving. Saw plenty of luxury vehicles when we went to a mall, including Lexus, Mercedes, BMW, Cadillac, Porsche, mazeratti (sp?) and even a Bentley. Not one Tesla. Not one Leaf or Volt. Did see several Prius hybrids, however.
I know, merely anecdotal.
Did see over 50 trucks pulling boats on the interstate. Lots of RVs. Trucks pulling trailers with jet skis, motorcycles, four wheelers, other stuff. Did not drive that close to a lake.
Also noticed that there is still ridiculous traffic in the middle of the city, even in the trendy urban neighborhoods. No street parking at all, every spot everywhere taken.
Paid $23.00 for a total of fours hours of parking. Compare that to gasoline cost of $61 for over 600 miles in a gas guzzling GMC Sierra.
Heck , the cost of eating out made gasoline look like nothing. Only one sit down meal and not a fancy place. Mostly fast food, mall food court. For four for 5 meals that ran over $200.
Folks, gasoline is dirt cheap. I know all the arguments about pollution, wars, conservation, etc. I don’t necessarily disagree.
However, 99+% of this country is not going to be bothered thinking about that stuff. To that group, plugging in a car all night or not running the air conditioner when it’s 90 degrees, like this weekend, is something they don’t want to mess with.
And for those who say there is lacking road work in this country, I sure don’t know if I agree. Roa construction was everywhere. Massive projects.
Just random thoughts, I know. No statistics to back any of my weekend observations up. Have a lot of time to think when driving that far, just think from observation we are a long way away from an EV driverless car world.
But I’m still keeping an open mind. Have to.
It will be a LONG time yet, probably ten years at least, before you see whole lot of electric cars on the road. You job or business producing oil will outlast you. Hopefully so will the oil, not wishing you any bad luck but most of us live to be less than ninety.
But when pictures were taken of city streets in New York at the turn of the last century, like 1902 or 1903, you had to look a while to spot a car among all the horses and buggies and wagons. Fifteen years later you had to look hard to spot a horse among the cars.
Even if electric vehicles sales double for the next three years there will still be less than a million a year sold , mixed in among a hundred million ice vehicles.
But once the ev industry gets to that million a year level, and people learn to trust them, and come to appreciate how cheap they are apt to be to charge up and maintain, ev sales are apt to EXPLODE and could be half of all cars within a decade after that.
I agree gasoline is dirt cheap for now, in comparison to just about everything else, but depletion never sleeps and the population will not stop growing for a couple or three decades. Depletion is apt to outrun ice efficiency gains imo.
People who can will prefer to drive a cheap regular sized electric such as a LEAF rather than a drastically downsized gasoline fueled golf cart – but the super small ice car might be a lot cheaper than an ordinary size ev and a lot of people might prefer the cheap upfront price and a hundred mpg on ten dollar gasoline.
Who knows?
Perhaps I am wrong, but I would guess that 60% of the people currently alive in the U.S. will never purchase an EV.
A quarter of us at least are too old already and half of the very young, or more, may never own a car at all, preferring to live without one or not being able to afford one.
Then there is the existing fleet of ice cars which are actually very reliable and durable, the newer ones especially, and as electrics gain market share, and gasoline gets to be more expensive, they will be for sale at low prices. People without a lot of money will hang onto them for a long time if they MUST have a car.
Some people who really need a car nevertheless drive it only a few thousand miles in a year, and an occasional tank of super expensive gasoline is less expensive than the payment and taxes on a new car.
In the future rental cars may be very cheap, cheaper than tags and insurance etc for an older car.
Your guess may be a very shrewd one indeed.
I would not bet against you.
OFM. I’m with you on the who knows part.
I am absolutely blown away by how low oil prices have been and for how long.
I am even more blown away by how low natural gas prices have been and for how long.
I guess this day in age, businesses are able to operate at a loss for a very long time and are able to keep borrowing even more money, despite the losses Uncle Sam does it, so why not US companies?
I’ve said before, we have other things we do, so this isn’t the end of the world. I’m not sure how those who have oil production only (or even worse, natural gas production only) are coping with things. I guess they have coped before and are again. Some small operators have let about everyone go and are back in the field, doing it all themselves.
I suppose this does happen all the time with capitalism. Many small factories have closed their doors over the years. Or moved over seas.
You seem to be pretty certain oil is headed back up. I’m not so sure. Natural gas has stayed very low for almost 7 years.
I think OPEC might have made a mistake. Again, who knows?
Shallow,
We ( natural gas) do it the same way you do. We don’t spend a nickel we don’t have to.
My wife deserves a lot of sympathy. She is sick of hearing me rant and rave about the insanity going on in the oil patch and she has been listening to me for the past seven years.
I won’t have much sympathy for these unconventional guys when they finally take a bullet. They love to tell me to just get over it and stop being so grumpy.
There will be a lot of +$mm dollar homes for sale here in the Permian Basin pretty soon. And Maseratis, Ferraris, Porsches, and planes for sale too.
But, I don’t mind saying that I have very few friends in the unconventional
I had a similar impression while on the family summer road trip. Sure are a lot of folks pulling camping trailers behind their pick-up truck.
Looking for Teslas or other EVs might bear fruit, depending on where you are. During my last couple of visits to the US, I have seen one in Rocklin just north of Sacramento, one in San Francisco and two parked in Sausalito, when my cousin’s step-dad took us out to diner there one evening. California is the state that mandated EVs in the first place so chances of sighting an EV in the places where I did are above average. Word is that Teslas are a fairly common sight in Palo Alto and San Jose (Silicon Valley).
While plug-in vehicles make up a little over 0.1% of the US vehicle fleet, their relative density varies widely as shown in the map below so, in California it’s actually about five per thousand while, in some states it’s more than three in a thousand and in most it’s less than one in a thousand. To get an idea of the odds of spotting a Tesla you can have a look at this map showing the locations of their “superchargers”. A high number of superchargers around a metro area is a good sign that numbers are probably high in that area. Some of the chargers are located to facilitate long distance driving so, those locations just indicate routes that the company thinks people are likely to use.
An interesting part of what Tesla is doing surrounds their data gathering surrounding the use of superchargers. I found a picture attached to a post at a Tesla enthusiasts blog that shows a picture of a “supercharger dashboard” showing stats on the use of the chargers. They actually ruffled a few feathers recently, by sending emails to select customers, asking that they not use the superchargers for routine charging of their cars, indicating that they had detected usage pasterns by those customers that, were not consistent with the network’s goal of facilitating long distance journeys, outside the cars stated range.
Tesla is not a Detroit company, they are a Silicon Valley company. Big difference. Think disruption.
I have not and never will bet against a particular company, or EVs for that matter, and that is not the point really.
The fact that Tesla exists is a sure sign that we are scraping the bottom of the barrel. Does anybody remember The Jetsons? Back to the Future? 2001 A Space Odyssey?
We were supposed to have flying cars. Flying cars, people. And space stations. And missions to Mars. The fact that we are celebrating driving around costly electric cars on crowded, deteriorating roads while we go to dead end jobs to service un-payable debts is not technological improvement, it’s a pretty clear regression.
A take on this theme by David Graeber:
http://thebaffler.com/salvos/of-flying-cars-and-the-declining-rate-of-profit
(don’t know why this post is at the bottom, was supposed to be a reaction to a post above)
Hi Islandboy,
Maybe you can repeat your EV linkbomb comment in the Non-oil open thread?
Thanks.
Dennis, I am not sure, but I think creating a non-oil post has several problems: first it seems to arise from the desire of “Oily” people to push EV’s and renewables out of “their” sight/site.
Second, it seems to be part of a fundamental misunderstanding of the importance of EV’s: they directly affect demand for and the future of oil consumption. Those who would like to not think about EV’s, would like to pretend that EV’s are not important to the oil industry.
Finally, this doesn’t appear to be the way Ron thinks about these matters: he sees oil, energy in general, as an integral part of a wide range of issues. And, I’d say that’s a realistic vision.
I think there is too much “propaganda of success”. It is advertising – the optimism of the company. Nobody verify?
http://shrinkthatfootprint.com/electric-cars-green
(The ‘electric cars aren’t green’ myth debunked )
http://www.fool.com/investing/general/2013/04/08/has-obamas-electric-car-revolution-failed.aspx
I am not sure why the media and many others are stating that the E&P companies are “high-grading” over the past several months and that is why production is not going down. I seem to recall that most E&P companies had maximum hedge protection at least through the first half of 2015 and perhaps somewhat less in the back half of 2015 and going forward. Would it not make more sense to postpone “high-grading” until around the point in time that your hedging was nearly gone? Now I understand that this is easier said than done, but given the high initial volumes the shale wells produce initially, it could have a dramatic impact on revenue, etc. Perhaps I misunderstand, but it would seem that the “high-grading” effect would start in the near future.
Fernando
You may be wasting your time in any discussion regarding sweet spots.
I pointed out numerous times over the past year or so (before simply giving up trying) that there are many reasons companies have drilled outside of the best areas. The most obvious is the need to hold the acreage as per their leasing agreements by having a producing well on it. Using a rough figure of 12,000 sq. miles for the Bakken, and having Drilling Spacing Units (DSUs) of 2 sq. mile each, one has 6,000 wells right off the bat just for HBP purposes. (There are about 10k horizontals in ND at present.
The need to delineate the formations – especially the underlying Three Forks benches, which has yet to be done – necessitates drilling over a wide geographic area.
Heck, it can be easily seen on the constantly upgraded graphic that the ND DMR people have on the 60 day production results of every Bakken well drilled. This graphic is available for viewing on the ‘Presentations’ listing on the DMR site.
The mere fact that these companies are now all drilling in a very tight area should indicate that, prior, they were in less productive spots.
Ves. I’ve been looking at upstream earnings and then looking at earnings for stocks in other sectors.
Upstream looks like absolute crap compared to everything other than coal. Retreating to the core is BS. Earnings are still negative, cash flow still very negative.
Outside coal, nothing looks close to upstream oil and gas in terms of pathetic.
Shale is not resilient at $40s WTI and $2s HH. The only reason to invest in it is in anticipation of an OPEC cut. However, given cash flow negative even at $100 WTI, not a long term investment.
OPEC’s central banks can print as much money as any other central bank. There is no reason for OPEC to cut production unless the US does.
Question to you Sand and anyone else that feel the need to answer.
Are you surprised that production has not dropped more this year? I am at least. But I don’t have the knowledge on time it takes from drilling to production. Thought we would see a skydive in production after now in July. But there seem to be much lagging in both production and data. Probably been discussed here before but is there so many previous wells that been drilled last year that now can be put i production? Thanks for all the contribution to the forum.
There’s basically a ~6 month lag from when you see the results of reduced or increased drilling show up in data. If you look at the most recent data, production has started to fall off a cliff already down close to ~400k barrels. It’ll likely fall off a lot more from here on out. At the beginning of the year the rig count had just started to fall and there were a ton of drilled wells waiting to be fracked. Rig count bottomed in may or june so 6 months after that (november & december) is when you really see the results of that. I follow close to 20 different companies and what I’ve noticed is they cut capex early in the year, but didn’t cut production forecasts, likely thinking their fracklogs would allow them to maintain production for a while til prices came up and they could increase drilling again. But that didn’t happen & now recently most of those companies have cut capex again. I expect most companies production for the next 2 quarters to go down considerably.
Additionally, it seems to take at least 3 months (maybe longer) for the e.i.a. and i.e.a to get their supply & demand figures right. So what I expect to happen is nov, dec, jan production to fall a lot more than anticipated but that won’t be known til feb, march, april. At that point it’ll be so late everyone will freak out worrying about a potential oil shortage which will send prices roaring back up. Also don’t discount a potential OPEC cut thrown into that whole scenario.
Kelly,
Another thing delaying the fall in oil production, and will lead to a more severe drop in the future, is the wells are being produced. I think it was Rune, who posted a chart of steeply rising Gas to Oil ratio. This rising GOR is an indication of of the chokes being when wide open, which will lead to higher initial production and once the gas drive is bleed off, a lot of the oil will be left behind.
Many on here seem to think, that oil producers, slow production during downturns, yet the incentive is for an oil producer to open the flood gates to try and increase short term cash flow to survive, as the oil producer has no other means to cover his bills
Hi Toolpush,
The rising gas oil ratio may indicate oil companies that are in distress. It is unlikely that this can continue forever. Eventually the weaker companies will go bankrupt, oil supply will decrease and oil prices will rise. Then the companies that are left standing will produce the oil at the appropriate rate that maximizes their profits over the long term.
But, are they essentially picking the low hanging fruit or is that not a good analogy?
For once I agree totally with GS.
But I would have used the word ”stupid ” rather than ”ingenuous”. It gets the point across a bit more forcefully.
The Saudis are not at all lacking in expertise of any kind, purchased or homegrown. They have sent many sons to the best universities around the world.
And as for Putin, well he is a master spy,an intelligence man from WAY BACK. Such men can fool themselves but they are SELDOM fooled by others.
Yep.
It looks to me like the US “little oil” industry is hurting big time. And even though this may be news on the pages of the Financial Times, I doubt seriously it’s news to the Saudi princes and the Russian intelligence agencies.
(I’m including almost the entire article, because it is behind a paywall and I think it’s all important.)
US shale oil industry hit by $30bn outflows
http://www.ft.com/intl/cms/s/0/5a8c9a4c-54b0-11e5-8642-453585f2cfcd.html#axzz3l5FiJMmf
Capital spending by listed US independent oil and gas companies exceeded their cash from operations by about $32bn in the six months to June, approaching the deficit of $37.7bn reported for the whole of 2014, according to data from Factset, an information service.
US oil production fell in May and June, according to the US Energy Information Administration, and some analysts expect it to continue falling as financial constraints limit companies’ ability to drill and complete new wells.
Companies have sold shares and assets and borrowed cash to increase production and add to their reserves. The aggregate net debt of US oil and gas production companies more than doubled from $81bn at the end of 2010 to $169bn by this June, according to Factset….
However, there are now signs that the flow of capital is slowing. US exploration and production companies sold $10.8bn of shares in the first quarter of the year, but that dropped to $3.7bn in the second quarter and under $1bn in July and August, according to Dealogic.
Similarly, those companies were selling an average of $6.5bn worth of bonds every month in the first half of the year, but the total for July and August was just $1.7bn.
The next hurdle facing many US oil companies is the resetting of their borrowing base: the valuation of their oil and gas reserves that banks use to determine how much they will lend.
Borrowing bases are generally set twice a year, and the new levels, which will typically take effect from October 1, will reflect significantly lower expectations for oil prices than the round agreed in the spring….
“Just as it drove the industry to spectacular growth, the financial sector is going to drive the industry to consolidate and contract,” he said….
Virendra Chauhan, of consultancy Energy Aspects, said he expected fourth-quarter oil production in the US to be running at a lower rate than in the same period last year.
Glenn. Thanks for the link!
Hi all,
I put up two new threads. One for Oil and Natural gas and a second for other energy related stuff (non-oil and non-gas).
The threading got messed up. I deleted a comment and probably should not have done that as it often messes things up.
Please post any interesting links in the appropriate thread. Thanks.
So what do we do? My solution, compatible with my MB personality above, is to JUST DO IT MYSELF, and then, following my favorite prof Orowan’s many one-line fundamentals of science/tech- “If it exists, it is possible”. And, next one “If it has been done, it can be done better”.
So I say “I did it, you do it–better.”
Seems to work pretty well around here, anyhow.
BTW, for some reason, I seem to like my solutions better than others.
Shallow Sand,
HK and ABC are the quite predictable outcome of years of expansionary monetary policy. There is nothing unusual or exceptional about them given the fact the Fed has kept interest rates near zero and implemented QE for many years.
Alicia García-Herrero points out that, due to similar policies in China, many Chinese corporations face the same dilemma:
On the corporate side, cheap money at home made it very – if not too – easy for companies to borrow. In fact, corporate debt has doubled as a percentage of GDP in the last 14 years. Beyond the stock of debt, its service is becoming an issue for corporations as the Chinese economy decelerates and their revenues are on the wane. Taking a very simple measure of stress in debt service, the ratio of EBITDA to interest expense has been below 1 for about one third of Chinese domestically-listed corporates, implying that their operating cash flow was insufficient to service their interest payments.
http://bruegel.org/2015/08/why-is-china-finding-it-hard-to-fight-the-markets/
shallow sand,
The EIA was actually expecting a very moderate recovery in oil production, of just 250 kb/d between June and December 2016, after a sharp drop in May 2015 – Jun 2016.
But I agree with you, even this cautious forecast could prove too optimistic.
Prices will likely remain low at least until the end of next year.
As we see, the recent weak rebound in drilling activity has reversed.
Hedges are expiring.
Further cost cuts will be much more difficult.
Shale companies’ financials are deteriorating, and access to capital will likely be more difficult
AlexS. If you would like to review just how poorly US oil and gas is performing economically, go to the energynet website and have a look.
There are interests in wells/multi-well leases for sale in many different locations, both conventional and unconventional. Conventional gas in PA losing money every month. Unconventional wells in OK drilled by major publicly traded companies that have not had cumulative production of 20,000 barrels of oil in 6-18 months of production. A steam project in CA that was doing quite well last fall, but is now near break even status on an operating basis. An Austin Chalk project that requires continuous drilling. Permain Basin conventional production that is under water on an operating basis.
You cannot just skim though, you have to look at recent lease operating statements. Many of the tabs show last 12 months average net, which can still skew things quite a bit, as including last summer/fall makes things look much better than its is now.
I personally think that US oil and natural gas production is going to nose dive. I know Watcher thinks that things will just continue on forever operating at a massive loss. I am not so sure about that.
There has been absolutely no attention paid to US onshore conventional oil and gas. It is not getting easy money financing. It is slowly but surely tanking.
If the easy shale money is pulled, who will be left drilling besides ExxonMobil, Shell and maybe a few private conventional deals where $30-40 oil might work?
On the whole, $40, $50, or $60 WTI does not work in the US for drilling. $70 IMO is also iffy.
shallow sand – “…how things have gotten so far from reality…”
Yep, you make good points.
Look at the story of Harry Markopolos – the attempted whistleblower on Bernie Madoff.
Markopolos went to the SEC, which at first did not respond.
He finally got the Boston branch to express interest, but Madoff was in the NYC jurisdiction, and Meaghan Cheung of the NYC branch was concerned he was just interesting in dinging a competitor, refused to ask any questions, and didn’t seem to know clearly what a stock or bond was.
He started telling the SEC et. al. about Madoff in 2000, and Madoff was only arrested in 2008!
https://en.wikipedia.org/wiki/Harry_Markopolos#Investigation_of_Madoff
The gov’t regulators seem innumerate, and remind me of
a great slide in David Einhorn’s 2015 Sohn Conference presentation.
on page 60 “Those fracking analysts”. Drawing of a guy pointing to a pie chart with two parts: 56% can’t do the math / 54% won’t do the math
(hint for the math/humor impaired: pie chart has to add up to 100%).
Anybody who hasn’t read this presentation about the economics (or not!) of the frackers – highly recommended.
https://www.greenlightcapital.com/926698.pdf
The EIA is fairly unsophisticated. Or they are sophisticated and play dumb? Federal Gulf of Mexico production will drop at current prices in spite of new projects. The EIA fails to take into account work over and development well drilling deferrals simply because the individual projects can’t be justified when prices are supposed to go up in the medium term.
Oh, many in EIA are well learned. IQ is not the same as common sense. As to their sophistication, I would ask the following:
They didn’t trust the estimates of Texas of what has not been reported, but they will trust the estimates of the same companies (90% of the production) who failed to report to Texas timely??
Or is the result of trying to get back to some kind of reality that they knew was off, all along?
Do they not know that permits in Texas are down 44% to July from what they were last year? Do they not know that drillers, support companies, and oil budgets don’t move on a dime? Do they not know that a large part of the production to June was fueled by hedges, which largely expire by Oct.?
Do they not know how much additional drilling it will take to offset decline rates?
Do they not know that the 800 or so wells, waiting to be completed, are being completed all along. They can’t wait that long on many, because of the lease agreements. I know of six of those wells on adjacent properties that have been finally completed, so that they don’t run afoul of the lease agreement.
Do they not read the capex budgets of the larger companies to see what is ahead?
Or are they playing dumb? Good question.
Hi everyone,
I was looking for Steve Kopits latest take on oil prices and found the following on China:
http://www.prienga.com/blog/2015/8/13/oil-and-chinas-devaluation-an-alternative-view
An excerpt:
The graph above suggests that they appreciated they had an incipient exchange rate problem no later than December of last year, when the creeping appreciation policy ended. Indeed, were one to speculate, PBOC analysts probably warned the government six months ago that, unless China could reduce its unit costs ten percentage points faster than the Koreans, China would experience deteriorating competitiveness and problems with exports within a few months. And so it proved. China’s export performance has been terrible recently, and in fact the impetus for the recent devaluation. This devaluation has been taken by the western media as reflecting weakness in the Chinese economy. The better interpretation is that the devaluation represents the correction of an earlier policy mistake–the failure to devalue in line with other economies in the region. The situation in China is not getting worse; the overdue devaluation suggests it just got better.
Chart referred to is below.
So Kravits claims “The devaluation of a broad range of currencies against the dollar does not reflect the weakness of the US’s trading partners individually. Rather, it reflects the strength of the US economy.”
And the source of this “strength of the US economy”? Apparently, the shale oil revolution: “the US trade deficit in oil has shrunk dramatically, from $30 bn per month from the dawn of the shale revolution in early 2012, to a mere $6 bn recently.”
And the fact that Americans spent “their oil savings on importing other things, like cars from Germany and Japan,” Kravits interprets as being another sign of the “strength of the US economy”?
Hum.
The interpretation of not taking advantage of our oil savings to reduce our trade defict as being “strength of the US economy” seems like a real stretch.
And as to explaining “the devaluation of a broad range of currencies against the dollar,” it seems like 1) the taper, which the Fed began in December 2013 and ended in October 2014 and 2) the Fed broaching the prospect in December 2014 of “beginning to normalize the stance of monetary policy,” the most direct formal reference to raising rates it had made in years, probably played much more important roles. In addition there were the effects of Abenomics and the looming Greek crisis.
China devalued its currency on August 11 and 12. Kravits wrote his article on August 13. But since then China has intervened in the currency markets to defend the RMB.
Alicia García-Herrero estimates that China’s cost of this foreign exchange intervention — to keep the RMB stable — is estimated at $200 billion.
http://bruegel.org/2015/08/why-is-china-finding-it-hard-to-fight-the-markets/
Perry Mehrling on his blog gives the example of Tuesday of last week, when the PBOC intervened in the currency markets and handed those shorting the RMB their heads on a platter.
I really don’t know how to explain all this. But Kravits’ explanation is not very plausible.
Hi Glenn,
It is Kopits, not Kravitz. And his explanation seems good to me.
You have a gift for taking things out of context.
The explanation given in the piece by Kopits is that a big increase in LTO output reduced net imports of petroleum. If there was no change in other imports and exports (aside from petroleum products and crude) this would reduce the supply of dollars on international currency exchange markets (ceteris paribus). On a supply and demand diagram this would be equivalent to a shift of the supply curve to the left which would increase the price of the dollar (a strengthening of the dollar relative to other currencies).
What happens to the price of Japanese and German cars in the US when the dollar becomes stronger? They become less expensive. And then what happens? People buy more of them.
I think you are confusing a strong currency with a strong economy.
The point of the article is that China made a policy mistake by keeping its currency strong when they should have devalued in line with other nations (South Korea, Europe, and Japan). They have finally done that and China’s economy will do better as a result.
The difference between Kopits and myself is that I don’t consider the ability to run massive, chronic trade and current-account deficits to be a sign of “the strength of the US economy.”
The ability to borrow and spend — to run chronic current-account deficits — may indeed be a sign of financial strength. But it is not a sign of economic strength.
Economic strength has to do with the productive might of a nation, not with its abillity to borrow and spend. Nevertheless, I do acknowledge that this is antithetical to what Ronald Reagan and Paul Krugman , and apparently Kopits, have said they believe.
My position is that articulated by Chris P. Dialynas and Marshall Auerback writing in “Renegade Economics: The Bretton Woods II Fiction:
The U.S. has been perfectly happy to accede to the current state of affairs in spite of the immense economic damage it has inflicted on its domestic manufacturing sector (and the concomitant evisceration of its middle class) because it has provided the country with a cheap form of war finance, a particularly important consideration as it has gradually militarized its energy policy.
”The U.S. has been perfectly happy to accede to the current state of affairs in spite of the immense economic damage it has inflicted on its domestic manufacturing sector (and the concomitant evisceration of its middle class) because it has provided the country with a cheap form of war finance, a particularly important consideration as it has gradually militarized its energy policy.”
I strongly agree with this quote up to the word because.
Nor do I disagree with the militarization of our energy policy.
BUT this damage was not done with the INTENT of having a militarized energy policy. It was done more so with the intent of enriching the owners and managers of the banking and money industries at the expense of the working classes.
Militarization is more of a secondary effect, a step that was viewed as necessary to keep the oil coming. And while it is extremely popular to blame this militarization on the conservative wing , the liberal wing has always gone along. Most liberals manage to conveniently forget this indisputable fact.
old farmer mac said:
And while it is extremely popular to blame this militarization on the conservative wing , the liberal wing has always gone along.
Yep. Here’s how Hannah Arendt put it:
Marx may have said that the proletarian has no country; it is well known that the proletarians have never shared this point of view. The lower social classes are especially susceptible to nationalism, chauvinism, and imperialistic policies.
Dennis Coyne said:
The explanation given in the piece by Kopits is that a big increase in LTO output reduced net imports of petroleum. If there was no change in other imports and exports (aside from petroleum products and crude) this would reduce the supply of dollars on international currency exchange markets (ceteris paribus). On a supply and demand diagram this would be equivalent to a shift of the supply curve to the left which would increase the price of the dollar (a strengthening of the dollar relative to other currencies).
This theory, however, doesn’t even seem to pass the correlation test, much less the causation test.
If we look at Kopits’ graph, for instance, it looks to be about January 2012 when the petroleum trade deficit began its long decline. The non-petroleum trade defict takes off in about April 2013.
However, the precipitous rise of the dollar didn’t begin until July 2014.
So it seems pretty evident that the upsurge of the price of the dollar could not have caused the upsurge in non-petroleum imports, since the upsurge in non-petroleum imports was well underway before the precipitous upsurge of the dollar even began.
Dennis,
Please also note that the yuan has been stronger than the US dollar. The second graph in the article shows also exactly my point of dollar strength and how the lower oil trade deficit has increased dollar strength.
However he also says: If so, China could come back strong. Very strong. Twelve months from now, it could be the hot ticket once again. This is exactly my view.
Well it looks like Putin is a China bull too:
“I am confident that Asia-Pacific countries, despite the current problems, will surely remain the engine of the world economy, the most important market for goods and services,” Putin said. – See more at: http://www.rigzone.com/news/oil_gas/a/140457/Putin_Urges_Investment_in_Russias_Vast_Far_East#sthash.NEnk6vOz.dpuf
Michael Pettis, however, is not so sanguine:
The overwhelming consensus at the time [2011] was that China’s growth model was healthy and sustainable, and would generate GDP growth rates for the rest of the decade that were not much lower than the roughly 10% we had seen during the previous three decades….
Debt was already a problem in the Chinese growth model more than ten years ago (and is a problem in several advanced economies too, who are going to find it nearly impossible to grow out of their debt burdens without implicit or explicit debt forgiveness). Those analysts who do not understand why this is the case probably do not understand why the balance sheet will continue to be a heavy constraint on Chinese growth and will underestimate the difficulty of the challenge facing Xi Jinping and his administration….
Japanese GDP growth, after all, did indeed collapse as it was forced to rebalance its debt-laden economy, and this collapse in growth has lasted an astonishing 25 years, with, as I see it, still no end in sight. I would argue that Japan’s debt structure explains the 25 years of low growth and will ensure many more years of low growth….
It was precisely because of China’s debt dynamics that I began arguing in 2006-07, and contrary to consensus, that China’s growth model was unsustainable, that its debt was rising too quickly and could not be reined in without a significant drop in growth, and that China had urgently to rebalance. The same logic made me argue in 2008-09 that China’s adjustment was going to be brutally difficult and would entail at least a decade of GDP growth that could not exceed 3-4% on average.
http://blog.mpettis.com/2015/09/if-we-dont-understand-both-sides-of-chinas-balance-sheet-we-understand-neither/
So I wonder, if the economies of the US and Europe remain staganant, or sink into recession, and China’s economy grows at only 3 to 4%, does that mean China wins?
What does this bode for the price of oil?
Japan’s low growth rate can be explained in part by low population growth, but the economy has certainly stagnated since 1990. Real per capita GDP growth has been 0.76% from 1990 to 2014, for the US it has been about 1.4% over the same period. China growing at 3 to 4% per year would be fine and will be adequate to increase oil prices, especially once the peak is reached in 2020 to 2025.
According to the Russian Energy Ministry’s preliminary estimate, the country’s C+C production in August was 10.64 mb/d, up 20kb/d from July (revised upward), but still 40 kb/d below the local peak in June.
Russia’s oil output remained within a narrow range between 10.61 and 10.68 mb/d since December 2014.
Russian oil production (mb/d)
I wrote this just now on the last post, but with 500 comments, I figured it would be missed, so hope the repetition isn’t a problem:
I am another lurker who would really miss this site! I’ve been reading it several times /week since TOD stopped… I hope you can find a way to overlook the griping and continue your insightful and helpful posts – I don’t understand much of the really detailed bits about oil production, but I read what I can and I look for the oil-experts’ opinions of current situation.. much more informative than the mainstream press! I have had several blogs, so I know they are a lot of hard work. I hope you opt to keep going, and that the oil experts like Mike decide to keep commenting.
Is there talk of a shut down of the site? I sure hope not!!!
An aside, I read the main post and compared the graphs and started in on the comments. Right after Mr. Brown’s first comment I asked myself, “I wonder how long it will take to degrade into an “all mankind bad, the earth is doomed, toxic skies, etc” event. It didn’t take long.
While the technical details are outside my work and world experience, I do know numbers and appreciate Mike’s, Shallow, Fernando, Dennis etc. and of course Ron’s POV and inside knowledge. The fact of so much digression is, I believe, a reflection of Ron’s independence and willingness to tolerate. I also believe it is a direct result of the heavy-handed editing on TOD.
My background is varied, but includes many years of commercial and residential construction including stints as site foremen and even job steward. We would often have to work with and under engineers and architects and defered to their credentials as it is simply the law. However, we often had to fight them and do end-arounds due to the fact that they did not understand building, the economics of building, or appreciate how construction is really done. Often, a building is over-designed simply due to inexpeience or a fear of litigation. (I once put in a water supply for a fish hatchery with a different route to avoid an access road and bedrock. (This avoided drilling and blasting costs. We waited until the engineer was out of town and later made him redo his drawings “as-built” and after the fact). I would assume the same is true for the oil industry. That is why I relish this site because almost all of the commentators have real world experience and inside knowledge including the technical folks. It is all very interesting to look at the numbers, but when someone like Toolpush or Mike say it is time to start buying beans or that drilling is off due to thaw and not markets….well, it is a new understanding.
Keep the insights flowing, pun intended.
regards
CathyM,
“…I read what I can and I look for the oil-experts’ opinions of current situation…”
That is exactly my practice, too. I come here to learn about the oil patch and what goes on there and what those with field and production expertise have to say about the implications for the world–all aspects of it–of the dynamics of oil and natural gas. Not to know such, well that impedes understanding what is happening worldwide, economically and politically, and there is no comparable site or source that can offer the degree of insight and depth of knowledge and of knowledge-based opinion available here. THAT is why I think this site is so important.
That isn’t to say that the comment and information here on topics not directly oil-related aren’t important too–they are, very much so–but this is not the only site where such comment and info can be found (though enriched here by the oily comment more than they would be elsewhere.) I’d like to see such topics discussed without losing sight of the reason for the blog’s founding–what might be called the oil dynamic–and without going farther and farther away from it.
The site title is PeakOilBarrel, and most of the subsections listed on the blog’s masthead are focused on oil, and Ron’s own posts are solid data and insight and interpretation to do with oil. I think that focus should be maintained, not to the exclusion of other discussion, no, but we should all guard that focus. Ron’s moderation is widely tolerant and that is fine–he should not have to do the work of maintaining focus that we can all do with a little attention to the name of the blog and the posts of its founder. Ron’s is a clear vision, and we should respect it.
I routinely come here a couple days per week and read Mikes and Shallow Sands post. I’ve learned a ton from you guys.
Thank you. I really don’t feel I know that much compared to some others here.
I really don’t mind some off topic now and then. Broken record off topic I skim through. I have had to do a lot of reading on topics that can be pretty dry and go far afield so I guess I don’t mind it as much as some.
I do appreciate this blog. I don’t think Ron should have to do a ton of work, I’m sure he devotes a lot of time here already. Given he’s got his hands full already, I’m not going to ask a thing of him other than to just keep this going.
Compared to the USA as a whole, the collective IQ here is on the high end, which I also appreciate. Don’t see much of the, “we are being gouged, gas should just cost $1” comments that dominate Yahoo stories here.
So much oil related information and links end up here, an excellent blog. Much more good than not, and I can tune out the not.
Totally agree, there is so valuable information here to us that invest and trade oil. Since I’m just a desk guy this site and comments are very informative compared to all the BS I read and hear everywhere else. And Mike please come back. And thx Sand for being here. Had a question on PV10 that I tried to get answers throw google but with more confusing results. Not an economist and specially not in US company taxes. Could someone briefly explain the effect this will have on oil companies. As I understand it september is a crucial month for this or? Agin thx all for the post and comment regarding oil production.
Majority of U.S. shale firms pass up second quarter chance to hedge $60 crude
Reuters, Sep 3, 2015
http://www.reuters.com/article/2015/09/03/us-oil-producer-hedges-analysis-idUSKCN0R30AX20150903
With the benefit of hindsight, last quarter may have been the best chance for cash-strapped U.S. shale oil producers to ensure they would get at least $60 a barrel for the next year or two. Barely a third did so.
According to a Reuters analysis of hedging disclosures by the 30 largest such firms, more than half of them did not expand their hedges during the three months ended June or had no hedges at all, exposing them to a plunge that wiped more than $20 off the price of oil in the following months.
In total, 12 companies increased their outstanding oil options, swaps or other derivative hedging positions by 36 million barrels at the end of the second quarter compared with the end of the first quarter, according to the data.
Another 14 companies ended the quarter with hedging positions reduced by a total 37 million barrels, mainly as a result of expiring past hedges, the data show. The remaining four companies did not hedge oil production at all.
As a whole, the group remains more vulnerable to tumbling spot market prices than a year ago, with a third fewer barrels hedged, the data show.
Could this be a long expected white flag from LTO? Why hedge at $60 when it does not do any good.
Without hedges, they get $45
I know. But at this point only miracle would work for them. And miracle for them is $100. I think this is it. They are throwing hands into the air.
Somebody ought to know.
Are all or nearly all the hedges made previous to the price crash expired now? I know it is possible to buy a long term hedge but I have no idea how many companies try to hedge well ahead, farther than a year.
It occurs to me that some tight oil operators might have done some hedging during the first few weeks of declining prices which are not yet expired.
?????
If true, this is almost unbelievable. It would be like opting out of house insurance in hurricane season when you live along the coast. The only reason I can think they wouldn’t hedge is if the cost of hedging was too high. Costless collars though?
NOT OIL
Fraunhofer ISE develops highly compact UPS inverter; Silicon carbide components enable efficiency of 98.7 percent
The demonstrator, which contains innovative silicon carbide components, was developed in cooperation with an industry partner and achieved an efficiency of 98.7 percent. The research and development findings can be applied to other areas of electronic power conversion, e. g. electric mobility or portable power supply, ISE reports in a press release.
This is an example of the ongoing technological developments that are driving down the costs of alternatives to oil.
As the article says, this type of the development has the potential to improve the the efficiency, increase the power, reduce the size and reduce the cost, of motor drive units for electric transportation options and inverters for renewable energy systems. These are the kinds of developments that are necessary for the price of EVs to fall to more affordable levels.
NOT OIL
This outfit is not a backyard garage operation. They are big enough and well enough funded to get real results.
https://en.wikipedia.org/wiki/Fraunhofer_Institute_for_Solar_Energy_Systems_ISE
So how do these inverters generate electricity?
Huh?
Fernando has a point. They DON’T generate any electricity.
He ought to put a sarcasm alert on such comments.
If these new tech inverters become commercial realities, they will reduce the need for fossil fuels by reducing energy losses wherever they are used. They also make solar power a little cheaper to generate and they will increase the efficiency of use of batteries.
As some senator used to say, a billion here, a billion there, after a while it adds up to real money. He was talking about the federal budget.
A percent or two improvement here a percent or two improvement there and wind and solar and batteries can reduce the need for fossil fuels a little more year after year.
This cumulative effect can buy us a good bit of time. Fossil fuels are most definitely depleting fast.
We may never get to the point we can do without fossil fuels and crash very hard as the inescapable consequence, but we can certainly put that day off for some decades at least by building more and better renewables infrastructure and learning to use the energy we do have more efficiently…
That’s good enough for me. Better to spend our investment money on this sort of thing than ever bigger pickup trucks.
Sorry, my mistake for assuming that everybody knows what an inverter is. For those who don’t know, an inverter is basically an electronic device that takes a direct current input such as that available from a battery or fuel cell or solar PV module and puts out a alternating current producing voltage of a specified frequency such as 110V at 60 cycles per second (Hz) as required by US domestic appliances.
AC motors use the alternating current of the electricity supplied to them, to produce rotation that, is related to the frequency of the applied voltage hence, most appliances that use AC motors and are manufactured for use in the US, will experience lowered motor speed when they are used in Jamaica where the frequency is 50 Hz, a common issue faced by Jamaicans importing rotating machinery from the US.
I said most because many modern devices use motors designed to operate at varying frequencies and use the variation of frequency as a means of speed control. Many EVs fall into this category and use a specialized type of high power inverter that, can vary it’s frequency over a very wide range, to drive their motors at anything from zero to over 10,000 rpm..
So, while inverters do not generate electricity themselves, they generate an alternating voltage from the direct current voltage supplied by solar panels, fuel cells and batteries, converting that energy into a far more useful form. They are becoming more and more common, being used in modern high efficiency refrigerators and air conditioners for example.
I hope my long winded addition to OFM’s explanation shows how this particular item might have some impact on demand for oil in the future!
Farmer Mac had the better answer: inverters don’t generate electricity.
A percent or two improvement here a percent or two improvement there and wind and solar and batteries can reduce the need for fossil fuels a little more year after year.
Looks like Citigroup agrees. They predict major disruption of the oil based economy and the centralized electricity generation paradigm. Seems to me their analysts are reading the same writing on the wall that I have been reading.
http://cleantechnica.com/2015/01/31/citigroup-predicts-battery-storage-will-hasten-demise-fossil-fuels/
Citigroup Predicts Battery Storage Will Hasten Demise Of Fossil Fuels
January 31st, 2015 by Giles Parkinson
Originally published on RenewEconomy.
Investment bank says wide deployment of battery storage will hasten the demise of fossil fuels and utilities that remain focused on centralised generation. It tips rapid fall in costs and a $400bn storage market by 2030.
citi-report-300x271Investment bank Citigroup predicts that the wide deployment of battery storage technologies will hasten the demise of fossil fuels across the globe in the coming decade, including oil, coal and gas.
And it also warns that the battery phenomenom will be even more profound than the solar revolution currently sweeping the globe, and will sweep aside any traditional utilities that remain focused on centralised generation.
It’s also useful to note that improvements in batteries will also have a profound impact on an area with potential for major impacts on oil, EVs.
Did not want to go there but, just couldn’t avoid the implications of Citi’s report. If BAU does not suffer a catastrophic collapse before 2030, cars with internal combustion engines will have all but disappeared from the new car market, with major implications for oil consumption.
If fortune smiles on me I will live to see it- the battery electric car or perhaps the plug in hybrid battery electric with auxiliary ice engine displacing the ordinary traditional ice car.
IF the battery industry continues to crank out ever better batteries at ever lower prices. I will take that bet.
Yogi sez predictin’ is hard.
But predicting scarce expensive oil is not hard.
If for some reason progress in battery cost and capacity stalls we will still have plenty of cars assuming OMBAU doesn’t have a heart attack.
But they will be a hell of a lot smaller and lighter and substantially slower than todays cars.
I have been reading about the supposed limits of ice technology for thirty or forty years.
This year you can buy a new Ford pickup with an engine in it that is smaller and lighter and more compact AND MORE POWERFUL than even the most sophisticated mass produced sports car engine of similar displacement on the market at ANY price twenty years ago. A few super cars had engines more powerful on a displacement basis but that sort of engine requires as much attention as a thorough bred race horse.
Downsizing and reducing speed limits can result in our having cars and light trucks that will go at least two to three times as far on a gallon of gasoline as current cars- and two or three times as far on a given capacity battery as well so far as that goes.
Peak resources will get most of us sooner or later but peak oil in and of itself does not necessarily mean the end of bau- unless the drop off in oil production is really sudden and steep.
Local churches – using that word ”local” loosely are running buses by appointment from fifty or sixty miles away to a farm market operated by one of my relatives.
The bus typically hauls twenty or thirty people coming and an additional three or four tons of produce sold at farm gate prices or just a little more on the return trip.
The church members have a grand old good time and save quite a bit of money, as much as a hundred bucks apiece by buying bags of potatoes, bushels of apples peaches, green beans, bags of cabbage and lots of other stuff. Some they can use without any processing such as the potatoes, some they can or freeze, some they just divvy up with family and friends who didn’t make the trip.
Adaptation is possible and adaptation happens sometimes without it even being noticed.
An oldish church bus burns maybe twenty gallons of gas round trip. A newer larger one will haul a bigger load on the same twenty gallons.
Moving that much produce to market thru the usual channels would take three times as much energy and a good bit of it would rot and never be sold.
Forget battery improvement, that will happen. What will really improve the EV is motor design and basic design improvements. Also the use of hydraulic storage or flash capacitors to store braking energy will improve them to the point where they will be getting 300 miles or more to a charge.
In wheel motors is an innovation that has been around for a while now, but is not being applied even though it is about 15 to 20 percent more efficient and gives much better control over the vehicle. It eliminates any gearing and most bearing friction. No more need for a differential, speeds of wheels are independently electronically controlled
Mac, this the car of the future:
https://upload.wikimedia.org/wikipedia/commons/a/ab/Mini_car.jpg
Featuring a supercharged three cylinder gasoline engine with a five speed manual transmission which gets 90 miles per gallon and has 360 mile range.
Large scale battery storage was up nine times in one year by one analysis. It seems that virtually every large scale battery maker is saying that they are targeting the same $100/KWH price point. This will certainly be a major change that will be very visible to everyone within the next decade.
As soon as they market at such prices without receiving subsidies we will throw a party.
The E I E I A should require all oil producers to report all oil production on a daily basis, reports would be more accurate, a tool to begin to adjust inventories to equal demand, in essence, production quotas, monitoring what is happening, rationing, decisions on how oil is used, distributed etc. Issue rules to control the current maelstrom of madness. It won’t happen overnight, it just won’t happen, the careening straight into the wall will.
Week 34, BNSF weekly report.
http://www.bnsf.com/about-bnsf/financial-information/weekly-carload-reports/
Petroleum cars are down over 1800 compared to week 34 of 2014. 10,027 compared to 11,845 in 2014.
47,200 carloads of coal hauled to the nearest coal burning place to generate some electricity. About four thousand more carloads than the 2014 weekly haul.
Those railroads are busy hauling copious amounts of raw materials, resources, oil and coal to produce energy in a usable form, so we can have the best available work-saving devices ever to exist. No electricity, no internet. Riots would take place within hours if the internet would stop working. No washing machines for clothes, no clothes driers, the situation would begin to deteriorate quickly. The entire population of humans on the whole earth would be jonesin’ for electricity, it would be bad.
All that copper wire would be useless in seconds, the spaghetti power lines in India could take a much needed rest.
All hope would be lost and diesel-fueled generators at hospitals would be running 24/7.
Every single American citizen would go for a drive. Airlines would have full seats just so some could watch a movie.
The electricity is on now, so there is nothing to worry about except for collapse and everything crashing and burning, which is most certainly going to happen sometime, but there is no use in worrying about that until the time comes.
If you are planning on anything, plan for collapse, chaos, and craziness.
Riots would take place within hours if the internet would stop working. No washing machines for clothes, no clothes driers, the situation would begin to deteriorate quickly. The entire population of humans on the whole earth would be jonesin’ for electricity, it would be bad.
If you think being without electricity is bad… this morning here in Sao Paulo they shut off our water!
On the upside for the ruling class, people without water, don’t riot for very long, then again the ruling class doesn’t rule for very long either.
We do live in interesting times!
If you are planning on anything, plan for collapse, chaos, and craziness.
I’ve got front row seats!
We already have collapse, chaos and craziness.
Collapse of the ecosystem.
Chaos, billions of people and machines running around trying to satisfy their needs and desires, being fed mental fertilizer by the marketing machines.
Craziness, lots of people still trying to do the same things that got us here, trying to stop changes that might help, and expecting things to continue as they have in the past.
Not to quibble but fertilizer is generally thought of as promoting useful growth – a mental fertilizer would then be something that promotes thinking. 😉
The last thing the marketing machine wants is people thinking.
Not to quibble, but it does promote thinking. The thinking goes something like “How cool/sexy/better/prettier will I be if I buy that?” Marketing is there to make them think it’s great and they are great when they own it. At least in the good ole days the cars had lots of chrome and fins etc.
I remember getting in one guy’s car and seeing no labels anywhere, asked what it was. He looked insulted that I did not recognize he owned a BMW, self-worth hung on a product. That is marketing ” I am what I buy.”
That is the kind of thinking they want. It stinks and grows thoughts so it’s fertilizer, basically turns them into s??theads. 🙂
All glory is fleeting
The EIA shows that US C+C production was 5.0 MMBPD in 2008. Let’s assume that the current estimate of 9.6 MMBPD in US C+C production in April, 2015 is correct. And let’s assume that the gross rate of decline in existing US C+C production in 2008 was about 5%/year. So, in order to offset the decline from existing 2008 wells, US operators had to put on line 0.25 MMBPD of new production (which they clearly achieved, given the observed net increase in production).
Here’s the problem. Even with no increase in the decline rate, as production increases, the volumetric decline from existing wells increased in tandem with the production increase. A peak occurs when the production from new wells (and workovers, secondary, tertiary recovery efforts, etc.) can no longer offset the decline from existing production. Therefore, the higher the production rate, the closer that we are to a production peak, i.e., “All glory is fleeting.”
US operators are, in effect, fighting a two front war–an increase in the decline rate from existing wells and an overall increase in the volumetric decline from existing wells, because of the increase in production. This is of course also largely true of total world production, and my contention is that in all likelihood, virtually all of the new actual crude oil production (45 and lower API gravity crude) that was put on line from 2006 to 2014 inclusive globally only served to approximately offset the declines from existing wells, i.e., it took trillions of dollars in upstream capex to keep us on an “Undulating plateau” in actual crude oil production for the past decade.
In any case, the estimated annualized volumetric declines (rounded off to nearest 0.5 MMBPD) in April, 2015 US C+C production at three rates of decline from existing wells:
5%/year: 0.5 MMBPD
10%/year: 1.0 MMBPD
15%/year: 1.5 MMBPD
At the 15%/year rate, which IMO is the most likely, in order to maintain 9.6 MMBPD, US operators would have had to put on line, from April, 2015 to April, 2016, production that would be approximately equivalent to all of Norway’s 2014 C+C production.
If the US had really wanted to be energy independent they could have started a few years back and be independent before 2025. I think most of what I hear (95%) is just blowing wind, chatter to keep the oil business flowing.
The facts and figures for the US are quite clear. First we do not have a huge reserve of easily obtainable oil. Secondly, even tapping into difficult expensive oil we still have to import a large percentage.
We should have been on an energy conversion path (renewables, gas, coal) away from oil a decade ago when the warnings of peak oil “peaked”. Now we are much further down the depletion curve and further into the future, while the energy conversion path is still small and growing slowly and powerful opponents are chewing away at it whenever they can.
It is mandatory for those who have limited internal fossil fuel energy to become energy independent as soon as possible. Imagine how those countries still using imported oil will feel when they realize that their continued existence is dependent upon those ships getting to their ports. Dependent upon volatile governments still maintaining control.
Vulnerable will be the word, very vulnerable. As we should feel right now.
We need to get away from oil as far as we can before we get hog tied and strangled by the lack of it.
I suspect the USA will be energy independent in several years. Domestic production will continue to decrease. Imports will be zero. Nobody in USA will be happy about ‘energy independence’.
Several years? Awfully short time frame for no imports, but let’s run with it.
There will be lots of happy people. All the solar PV and windpower makers, middlemen, installers, etc. All of the electric car manufacturers, the insulation producers, the natural gas and coal people will be very happy.
And just think of the thrill all those people who get re-educated for other jobs will have?
PV and wind farming will be zooming. Natural gas and coal mining will take taking off. The domestic oil industry will be booming, partly for national security reasons (government contracts). It will be wild times, the party is just getting started.
So who will be getting those exports in several years?
Fed must realize that imports will have to make up for decline in C+C production in the not too distant future. Strong dollar will import more oil than a weak dollar. I think we are fixin to find out that the Fed doesn’t care if the rest of the world implodes due to a massive dollar shortage.
When the Fed dropped interest rate from 5.25% to 0.25% Dollar denominated debt found it’s way into every corner of the world. China and the rest of the EM’s are experiencing massive outflows of capital due to the USD carry unwind as dollar strengthens.
Corporate China in particular has a massive shortage of dollars. China is trying to cut interest rates to support a massive Equity and housing bubble while not devaluing their currency to any great degree against the dollar as a major devaluing against the dollar would screw corporate China. This is why China is selling massive amounts of US treasuries to support their currency.
Late August US net crude oil imports (four week running average data, MMBPD):
2008: 10.1
2009: 9.1
2010: 9.6
2011: 9.2
2012: 8.6
2013: 8.1
2014: 7.3
2015: 7.1
Of course, when we look at total production less consumption, overall net imports on a total liquids basis are lower, but it certainly appears that the decline in US net crude oil imports has slowed considerably, and as you noted, it will in all likelihood be increasing in future months.
It looks like the recent low in net US crude oil imports was in early November, 2014, at 6.6 MMBPD (four week running average), which was down quite a bit from the early November, 2013 number (7.5).
In any event, it seems to me that the bottom line is that for every one bpd of new production that US operators had to put on line in 2008 to offset declines from existing wells, they will need about six bpd of new production now.
An interesting item about China:
Huge Purchases by Chinese Oil Trader Raise Prices, Confusion
Traders say Chinaoil’s dominance in the Dubai spot market is distorting prices
http://www.wsj.com/articles/huge-purchases-by-chinese-oil-trader-raise-prices-confusion-1441103201
The Chinese are NOT stupid. It’s my impression that serious scientists and engineers have more power politically in China than any other country in the world, comparatively speaking, with training in the sciences being the best route to positions of power and influence in the Chinese government.
To me the solution to the riddle of their buying so much oil is simple as dirt. They evidently believe that oil is going to go up and that they will profit more by buying and storing oil than by holding onto dollars that pay peanuts in interest.
Strategic reserves are all well and good and may enable a country to weather a temporary oil crisis without suffering too much harm.
But let us look at the bigger picture a minute. If a reader here has a ” bau” financial advisor with lots of certificates on his office wall and an expensive suit he probably advises said reader his client to keep enough liquid assets on hand , maybe cash or easily sold or redeemed debt instruments, on hand to live for six months.
How many people ever hear such advisors tell them they are in an industry or trade that is ON THE WAY to the landfill of history?
The Germans and the Chinese at least seem to have a good grasp of the fact that fossil fuels are depleting year after year at ever accelerating rates, as JB so often points out.
Nobody else seems to REALLY GET IT, collectively as a nation.
India has at least a clue, maybe the USA has a clue, but not even that much as a collective matter. Maybe ten percent of this country understands that one day Old Man Business As Usual will croak. Out of that ten percent maybe one percent realizes OMBAU is at risk of croaking during their own lifetime.
SAWDUST says:
Corporate China in particular has a massive shortage of dollars. China is trying to cut interest rates to support a massive Equity and housing bubble while not devaluing their currency to any great degree against the dollar as a major devaluing against the dollar would screw corporate China. This is why China is selling massive amounts of US treasuries to support their currency.
According to data presented by Alicia García-Herrero, China’s current account and FDI in the country are as great as ever. “The fall in reserves is not so much due to foreign investors fleeing from China but, rather, capital flight from Chinese residents,” she says.
http://bruegel.org/2015/08/why-is-china-finding-it-hard-to-fight-the-markets/
Mr. Brown and all– When is your gut-guess that we will turn the corner from 5% decline of conventional (undulating plateau) to the larger numbers of 10 – 15% declines? I have been curious what everyone’s best guess is of ‘when we turn the corner’. I know the factors affecting it are numerous (war, consumption increases, production declines, etc.)… I am just curious at everyone’s ‘guess’.
Thanks,
Karen
Hi Karen,
We will only see 5% to 15% declines in oil output if no new wells are drilled. The most likely scenario for World output is a 1% to 2% decline in crude plus condensate output as long as there is adequate demand for oil.
If there is an economic collapse for whatever reason (war, too much debt, environmental damage, or a serious financial crisis) then demand for oil may fall due to lack of economic growth and fewer wells may be drilled.
Such a scenario could lead to a temporary decline of more than 2% per year, but when this might occur is impossible to predict accurately.
This has never stopped me from making wild guesses. So my guess is that between 2030 and 2035 the decline in oil output of 0.5%/ year to 1%/year from 2020 to 2030 will lead to a financial crisis as economic growth slows down over this period world wide. There will be a worldwide depression which may lead to a temporary decline in C+C output of 3 to 4% per year for 5 to 10 years, but this will subside as the depression will eventually end.
If it does not the World would descend into anarchy and oil output may fall to zero, that scenario does not seem plausible to me.
Is it me getting disconnected, or are we seeing the rate of large oil discoveries dry up over the last year? I can’t recall anything significant over this period of time.
There was one in southern England, but I don’t remember any others. Good point.
I dont recall a large discovery in southern England. I do recall a small company hyping their stock claiming they had a discovery.
Fernando, the prediction of a sharp decline in new discoveries is a central prediction of the peak oil theory. 3D seismic imaging is dramatically better than in prior decades. People can now have much better clarity about the deep formations that are down there. Your observation very much reflects the central reality being discussed here.
Fernando,
It isn’t just the last year, I believe. The big discoveries have been fewer and fewer for a good long time now. Even the middling discoveries haven’t been much.
Rockman over at PO.com has been unable to spend his exploration and production budget (about a quarter of a billion dollars per year) for several years now. The prospects aren’t there.
For all: If you want to see the difference between Ron’s blog and the other peak-oil site, PeakOil.com, go over there now to the forum posts because the new one is the current post from Ron. Read the comments. They’re sad to see, I think.
Oil discoveries? Few. Gas discoveries? More than a few. The last big “oil discovery” if it can be considered a new discovery was the oil found at the Universitetskaya-1 well in the Kara Sea
Yep. I expect Shell will have a discovery at Burger. But that should be an oil leg under the gas zone they discovered over 25 years ago.
This off of reuters, coming from Rystad Energy, says monthly oil discoveries in 2014 were the “global all-time low in terms of conventional oil and gas discoveries”, and “this year’s volumes look even lower so far.”
http://pdf.reuters.com/pdfnews/pdfnews.asp?i=43059c3bf0e37541&u=2015_05_29_12_07_f427c4e9ed0d4d0fb4bad0c36ea80b83_PRIMARY.jpg
Forbes listed the 10 biggest of 2013, and noted that 2013 was “a lackluster year”.
http://www.forbes.com/sites/christopherhelman/2014/01/08/the-10-biggest-oil-and-gas-discoveries-of-2013/
Looks like a pretty clear pattern to me…
Somebody with more free time than me could subscribe to “UCubeFree” from Rystad,
and see how discoveries stack up pre-2010 data.
http://www.rystadenergy.com/Databases/UCubeFree
The jpg posted above is monthly and starts in 2010, but the widely used Colin Campbell 2012 chart is yearly. Too hard to eyeball this late at night…
(Colin Campbell chart of discoveries, like fig 9 in)
http://www.resilience.org/stories/2013-09-25/snake-oil-chapter-1-this-is-what-peak-oil-looks-like
Jamaica to Push Venezuela for Petrojam upgrade
Heavy fuel oil, produced by Petrojam, is the main source of electricity generation in Jamaica. Paulwell said yesterday that it was important that when the JPS switches to gas, “we are in a position to provide more gasolene and other products apart from HFO”.
Jamaica, in 2006, signed an agreement with Venezuela for a 49 per cent stake in Petrojam. As part of the agreement, production should have moved from an average of 30,000 to 50,000 barrels of petroleum products per day starting in 2007, but this output has not yet been realised. And with the South American country in an economic rut, there are fears that the upgrade will be stalled.
“We will be taking a position in relation to the refinery upgrade,” Paulwell told The Gleaner, adding, “We are having those discussions, which we hope to conclude as one of the achievements of this summit.
“We have to push now,” Paulwell said, while adding that if Venezuela was unable to finance the project. “There are private people who have expressed strong interest in it.
Wonder who these “private people who have expressed strong interest in it” cuz, I don’t see the Venezuelans being interested right now!
I left the newspaper some free advice ?
And the moderators approved. Congratulations!
interesting short piece on YieldCos wrt solar project financing. Anyone know about this type of thing?
I don’t know much about this, but perhaps a different path than the shale financing is prudent?
http://www.zacks.com/stock/news/188945/why-solar-energy-stocks-are-forming-yieldcos
I’ve also been loosely following Mosaic which is kind of a crowd funding investment vehicle.
https://joinmosaic.com/why-mosaic
http://www.slate.com/articles/business/the_juice/2015/05/mosaic_solar_investments_proof_that_solar_can_return_a_steady_profit.html
Baker Huger rig count just out.
The low oil price is stating to hit the rig count again.
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NTk0MjQxfENoaWxkSUQ9MzAzNzAxfFR5cGU9MQ==&t=1
US Land down 16
Canada down 9
US oil down 13
Texas down 11
Eagles Ford down 4
Permian down 2
Gas rigs are steady, the hit has come in the oil rigs.
I believe this is the leading edge of a continued down leg in the rig count. Maybe we will get down to the number that Shallow is expecting ie. very few rigs still drilling!
Yes, and I suspect the ensuing spike when production finally falls to a level that sends the price back up is going to be very, err, interesting!
Yes, it looks like a failed recovery
That is less than 3% rig down, assuming that 9 in Canada is all oil rigs, when very few are making any money for long time. Too little.
Ves,
Canada,
oil down 10
gas up 1
This is the drilling season in Canada. Dry roads and good temperatures.
Toolpush,
In Canada they don’t drill for oil just because the roads are dry and temperature is good. They drill to make a buck. And as I said you cannot make a buck for close to a year. So there is only one explanation with these BH reports:
1) That NA producers are playing chicken game between themselves in terms of continuing drilling in hopes of waiting that somebody else cuts so the price goes little bit up.
But with these meaningless small ups and downs of the working rigs price is pretty much floored.
Ves,
I am with you on not understanding why the NA oil producers are still drilling with oil at these prices. My point about Canada is, there are severe fluctuations in rig count numbers in the normal drilling cycle, due to seasonal matters, spring thaw and the Christmas period just to name a couple .
My point about the dry roads was, there is no current reason for the fall off in the rig count apart from oil price, but why there are still so many rigs still drilling, I have no idea!
Why would you not drill if your costs are zero? That’s what a loan you may not pay back would mean, but if the lender keeps lending why would you care?
“We could be losing our money instead of yours.”
We live our lives knowing (?) . . . believing . . . money matters. It doesn’t have to if a decision is made that it does not.
Well, that is the nature of being human: believing and deciding. Applies to everything.
One way of looking at it is that if you quit now you are broke and out of the business for good in a lot of cases. If you are in that situation and hang in , maybe the price goes up and you pull thru.
Otherwise, you just go broke next year. And there is a good chance you are collecting a salary for that year unless you are the actual owner. Sometimes owners of businesses going broke collect substantial salaries right up to the day of declaring bankruptcy and even after that.
If I can reiterate something Mike said several posts ago. In oil we have a lag of several months. Prices go up, and months later rig counts increase when the price of oil has fallen significantly. Oil drillers look stupid or foolhardy. Moving paper barrels is instantaneous. Physical world, it takes time to contract rigs, handle regulatory issues and mobilize the rig, staff, and contractors for site build, mudlogging etc. It takes MONTHS not days. NOBODY outside our industry gets that. Yes new technologies increase initial rates, reduce drill time, etc. Rigs ARE NOT increasing barrels produced. They drill holes. Picking a sweet spot through G&G and engineering increases production. Massive frac’s, enhanced recovery, yes. Rigs, no. Drilling deeper or faster because of hp that’s about it. Reading the garbage about how many barrels a rig can produce is growing real old.
Back to the lag, it needs to be considered when you discuss the intelligence, rationality, or desire for games of chicken by the drillers. You say stop drilling now because it is not supported by the price. Great idea. What about existing contracts with TERMINATION clauses stipulating fines for cancellation? What about presently drilling wells? Stop them midstream and lose sunk costs, the leases, and face legal issues? What CEO would survive that decision? What’s to keep an unscrupulous player, and they do exist, from coming in and scooping up the leases? Lots of issues there.
Another scary thought, based on that lag, if everyone stopped drilling what would happen when you needed that production again? Can you time it just right so you don’t overshoot and have to struggle through a several months long deficit of SEVERAL million barrels daily? That’s pretty dicey. The point is that this stuff ain’t easy. These experts dredged up by the media haven’t got a clue as to what is involved with PHYSICAL barrels. Yes we have a much higher supply in storage than last year, but those who think this “glut” is like the 1980’s really don’t understand this industry. In the 80’s the spare capacity was 15mmbbls out of 60mmbbls produced daily. Today your talking 2mmbbls out of 95mmbbls daily. Big difference. And that massive storage addition in this country represents about 10 additional days supply. Not a lot.
I’m not defending the shale companies irresponsible behavior. Those CEO’s should go. My point, physical barrels aren’t paper. There is a time lag. That lag brings real complexity to the problem. Solutions to this problem take time. I’m still surprised that in this world of increasing geopolitical instability we haven’t woken up one morning to a war or terrorist incident that really makes a mess of things. Just my thoughts.
Thanks for the reply. I think guys like you and Mike offer a valuable perspective.
You’re welcome Boomer.
Yes, well apparently you didn’t get the memo – just-in-time oil production is the latest thing in order to eliminate wasteful inventories in the oil production process / sarcasm
Arceus,
Just thoughts of an individual trying to understand the actions of what I think are irrational players. I’m not defending them, merely throwing out observations in an attempt at understanding. Thanks to the media most people believe the oil industry is rapid in response, massively efficient, and technologically as advanced as Star Wars. Believe me when I say we’re not.
Richard, very good comments. All we have done this summer is convert a producer to an injector. That took 3+months from beginning to end, with only 3 days of rig time.
However, what is your take on infill drilling in places like Bakken and EFS? Is this required by the leases? Rig contract issues? Other issues I haven’t thought of?
Shallow,
I think a combination of things. They probably have long term contracts on the rigs and I’m guessing those contracts outline penalties for cancellation. I think one of the biggest reasons is they’re betting on prices going back up pretty quickly: OPEC cuts first or a geopolitical incident of significance occurring to change production quickly. We never expected this, not like this, not this long. The shale guys are gambling, with other people’s money too, that it’s going to right itself. Problem is for them that their pile of chips is almost gone.
Lease issues are a part of it. In 2013 my former employer collapsed casing on three wells that were solid performers in a good field. Lease and unit rules mandated we drill new wells to replace lost production in 90 days or forfeit the leases. Forfeiture would mean a multi-million $ loss. While we were paying a few hundred for leases , shale players are paying thousands at 33% royalty. One player supposedly agreed to a 50% royalty on some BP fee acreage. Their greed and/or stupidity is staggering. Bottom line is they’re going to have a hard time walking away from those ridiculous, million dollar land positions.
I think Watcher put it best. It’s not their money. Worse, those executives know they have massive compensation locked in even if the ship runs on the rocks and sinks. It’s all about the money. I’ll bet the majority have none of their money in the game. Every one of them that has behaved so stupidly should be held accountable. They won’t be.
A final point are the schemers who live in the courthouse. They know everything happening in the field through scouts and gossip. They have also kept their powder dry. The minute they discover those open leases they’ll secure them. No, they have no intention of drilling in some cases but they can sit on those leases for up to 12 months without paying rentals. Then they can flip the leases at a profit or drill. That was the game up to the crash. It’s a gamble now, but what’s it going to look like in six months?
I think the game is over for a lot of these shale players in October, but that’s just an opinion. These days opinions are worth bupkis. I hate the jobs that will be lost, but those executives have made the bankruptcies and M&A unavoidable. Like most at this site I think their breakeven crap is total bullshit. In the conventional world we have no love lost for these unconventional fools. They have made life downright scary for the rest of us.
Few conventional guys are drilling. Gas maybe, oil definitely not. The shale guys are the ones still moving forward at speed.
Again, just my thoughts.
Richard said:
While we were paying a few hundred for leases , shale players are paying thousands at 33% royalty. One player supposedly agreed to a 50% royalty on some BP fee acreage.
That’s news to me.
Unbelievable!
Glen,
I neglected to mention our royalty 25%. Still $300+/- at 25% per acre is far below thousands at 33%.
Richard said:
A final point are the schemers who live in the courthouse. They know everything happening in the field through scouts and gossip. They have also kept their powder dry. The minute they discover those open leases they’ll secure them. No, they have no intention of drilling in some cases but they can sit on those leases for up to 12 months without paying rentals. Then they can flip the leases at a profit or drill. That was the game up to the crash. It’s a gamble now, but what’s it going to look like in six months?
Sounds like the great tulip bubble of 1637.
Oh well, so much for that mythical character conjured up by the classical and neoclassical economists, homo economicus.
Read more: http://www.rollingstone.com/politics/news/the-big-fracking-bubble-the-scam-behind-the-gas-boom-20120301#ixzz3kscaIbC9
Again, just my thoughts.
And thank you for them.
“I think one of the biggest reasons is they’re betting on prices going back up pretty quickly: OPEC cuts first or a geopolitical incident of significance occurring to change production quickly.”
Richard,
If that is true that, whoever drills right now, are betting on those two things for the price to go up than I have to say that is delusion on the grand scale.
What is actually happening, if the shale guys are the only one drilling and if that BH drill rig report is correct, than any increase in production this year has been subsidized by local conventional oil production staying flat or even most probably getting decreased. Wow, talk about unintentional consequences.
” It takes MONTHS not days. NOBODY outside our industry gets that. “
I’m sure OFM will back me up that you’re so wrong on that point. Farmers do. If the price of corn is up this year, the farmers can’t do anything about it this year so they all make preparations for next year. Then next year, when all the corn farmers have produced more, the price falls through the floor and they are stuck with corn they often produced with the help of borrowed money, that they then have to sell at a loss.
Same thing happened with pork in my neck of the woods. It was profitable until more and more people got involved and produced an oversupply. At that point you already have the hogs and you can either keep on feeding and breeding in the hope that somebody else will drop out and allow supply and demand to drive the price back up or you sell for the prevailing prices, take your losses and hope for a better tomorrow!
I think it’s the talking heads and their ilk, who often lose sight of the fact that commodity production is not like manufacturing. If an auto manufacturer finds itself with excess product, they can shut the plant for a while and furlough the workers and cut their finished product inventory pretty quickly. Similarly, when demand is high they can introduce more shifts and run the plant 24/7 to keep up with increased demand
When an apple farmer is faced with prices that are below their harvesting costs, what are they to do? Unlike other commodities, many agricultural products will rot in the fields if not harvested. .
Island,
Good point. It’s hard not to over generalize when you’re frustrated. Yesterday was a frustrating day.
I’ve been pretty frustrated, re oil anyway, since Thanksgiving, 2014. Hang in there. Thanks for your posts.
Rig count down 13 for oil to 662. 864 total oil and gas US. Per Raymond James:
“RJA earlier in the year optimistically forecast the rig count would bottom out in June at 930 units, which ended up being 70 more than where the count actually settled. The firm now projects the count at year end will total 891 units, down 117 from its previous estimate; and for the year average 1,013 units, a reduction of 58 rigs from its previous estimate.
RJA does “not expect a meaningful rebound in the total US rig count until the back half of 2016,” and believes “US oil field activity will remain roughly flat through the remainder of 2015 and early 2016.” For next year, RJA’s projected average count is 956 units, 220 lower compared with its previous forecast.
The firm, however, still sees a “surge” beginning in second-half 2016 and continuing through the following 2 years, with the count expected to average 1,391 units in 2017 and 1,643 units in 2018. In other words, the “next 12 months in US oil field activity should be ugly, but look for a robust recovery in 2017,” RJA said.”
But they were off by 70 on their first estimate. “Surge” is dependent on the price of oil being over 60.
Can anyone here legitimately explain EROEI when it comes to fracking..? Ive read a bunch of stuff that says traditional oil like a Prudhoe Bay was 30 or more to one and with fracking it is only 5 or 6 to one. Any real science to these calculations?
Also, the 5 percent decline in global production rate that is discussed here. That sounds like crazy talk. We have to bring a new Iran plus a million more online in new production just to stay even?
All EREOI discussions are invalid. There is no clear place to end the search for energy input, for example, the truck driver hauling oil from the shale well in North Dakota, do we care about his calories, the joules that made his truck, too, or just the fuel his truck uses.
The proppant/sand injected into the well. The fuel that carried it to the well? What about the fuel for the big shovel that loaded it on the rail car. And the fuel for the train. And the joules that built the train.
See? No place clearly the proper extent to do the measure.
EROEI or Net energy does matter though even if you can’t get a clear measurement of what exactly it is. The economy runs on what surplus energy is left over after everything used to produce energy is accounted for even if it can’t be accurately measured. If there is no surplus energy left over there is no economy. If there is just a little surplus energy left over then you’ll get a little bit of an economy.
Shale oil was never the energy solution it was hyped to be. From a net energy standpoint Wind and solar are better options. But only if you forget about the fact that they are not liquid fuels and that the volume required to just replace what we import in C+C is somewhere around 1400 times as much Wind and solar than we currently have. 1400 times not 1400% more Wind and solar would be needed to just replace our current oil imports.
Nuclear is a no solution as well. Just to replace what we currently import in C+C we would need 500 more nuclear power plants on top of the 100 we currently have and thats all just here in the US not counting the rest of the worlds needs. Not enough Uranium available just to replace the current C+C imports and nuclear is also not a liquid fuel.
To replace FF all together we would need somewhere in the neighborhood of 3000 times as much wind and solar as we currently have. Or more than 1000 nuclear power plants that we don’t have the fuel for. Or some combination of both and again thats just here is the USA
Neither or the combination of both are going to work as a solution.
It is true that wind and solar power are still figuratively speaking wearing diapers but the potential for exponential growth is there. The potential for using energy many times as efficiently as we do today is also there.
And for one reason or another, a declining population is not just a possibility but pretty much a guaranteed future fact.
An extremely low eroei will not suffice to support a new renewables based economy. But ratios of eight to ten to one or higher are probably high enough.
Renewables are good enough to reach this level. This does not mean we will succeed in going renewable but it does indicate that in theory a renewables based economy is possible.
From everything i’ve read EROEI or the net energy of wind and solar are in 30 to 1 – 20 to 1 range. But the volumes needed to replace FF are just not practical.
I have a hard time wrapping my mind around the idea of enough wind and solar infrastructure getting built within the time frame available to save seven to ten billion of us from a major die off brought on by overpopulation and the depletion of non renewable resources and evironmental degradation.
Renewables on that scale within that time frame are just going to happen.
But maybe a few of us, maybe a hundred million to a few hundred million might manage the trick by hogging and then using the remaining endowment of non renewables and living down the energy ladder.
We sure as hell waste most of the energy we use now and could easily have a standard of living about as high or higher than now using a quarter or a tenth as much- but this new life would be far different than the one we lead now, and being unfamiliar and strange to rich modern people , it would appear to be drab and undesirable to most of us.
Just putting the price of one new car into a new house extra at the time of construction can reduce the energy load by seventy five percent or more and adding a couple of thousand bucks extra for German quality appliances will get you half way from there to a net zero energy house.Put some solar panels on the roof and for the price of two cars you can have a new house upgraded to produce more energy that it uses for the next hundred years.
Mandating cars be built twice as long would technically be a piece of cake and actually cost very little compared to the cost of two new cars. That would cover the bill for the upgrades on the house. Two new cars rather than four.
Technically easy , politically an extreme long shot.
Currently there is no political will to change anything. Just look at the inventory of new cars and trucks that have been built. But you can apply this to just about anything and anywhere you like and it holds true.
Nothing is going to change until we get a crisis and even then they will try everything possible to keep the same old same old going instead of making changes in the way we live.
When BAU comes to an end it will seemingly happen over the course of a few days or weeks. Cause it is simply being denied that there is a need for change.
Nobody likes change it’s human nature to fight it, delay it, for as long as possible.
Yep.
Muddling through — or “disjointed incrementalism” — almost invariably seems to be the preferred plan of action in human affairs.
The incrementalist fate, wrote Kenneth Boulding, is “to stumble through history, putting one drunken foot in front of the other.”
But there are very good reasons for this, one (amongst several) being the limitations of science. As Amitai Etzioni explains in The Moral Dimension:
The scientific model, suited for building up analytic knowledge through an endless process (in which the ultimate truth is elusive), is not a suitable model for decision making. It is not only because the actors are highly-affective and normative, because their indifference zone is rather small, and their capabilities and resources are limited, but also because of the inner fragmented structure of science.
Disjointed incrementalism or muddling through is one of “the various adaptive mechanisms” which humans have developed “to cope with the limitation of the decision-maker and of science,” Etzioni adds.
Muddling through — or “disjointed incrementalism” — almost invariably seems to be the preferred plan of action in human affairs.
That doesn’t apply here. It’s perfectly clear that the US needs to kick the oil habit. Every US president has said it for the last 40 years.
No, the problem is the power of the fossil fuel industry, the Koch brothers in particular. They’ve deliberately crippled the public decision making process to protect their narrow interests.
A metaphysics antithetical to that articulated by Etzioni is that which is evangelized by the New Atheists — Richard Dawkins, Sam Harris, Daniel Dennett, Christopher Hitchens, Lawrence Krauss and Sir Richard Kroto, to name some of the better known adherents of this belief system — whose faith holds that science can yield ultimate truth.
Glenn, I have read most of the authors you cite. And I fully support their secular world view lacking in magical supernatural agents. However, I don’t see that any of these authors would assert that the predictive powers of science will overcome intrinsic limits in our abilities to understand extremely complex and chaotic systems.
Don,
Oh really?
Then why would Stephen Jay Gould, in the The New York Review of Books, very publicly blast Dawkins as a “Darwinian fundamentalist” and claim “Dennett, as Dawkins’ s publicist, manages to convert an already vitiated and improbable account into an even more simplistic and uncompromising doctrine”?
http://www.nybooks.com/articles/archives/1997/jun/12/darwinian-fundamentalism/
Why would David Sloan Wilson in Skeptic Magazine say “it is hard to fathom the zeal with which evolutionists such as Williams and Dawkins rejected group selection and developed a view of evolution based entirely on self-interest,” and charge that pasages from Dawkins’ The Extended Phenotype have “all the earmarks of fundamentalist rhetoric, including recruiting the deity (Darwin) for one’s cause.”
http://www.skeptic.com/eskeptic/07-07-04/
Now granted, the New Atheists dealt with this criticism, coming from within the scientific community, as the calvary generals of 1914 dealt with the machine gun — by ignoring it. They would, for very obvious strategic and tactical reasons, prefer to keep the public’s attention diverted onto “those who believe in magical supernatural agents.” This is, after all, a much easier battle to win.
But the days of denying the existence of a debate within the scientific community, and a quite fierce one at that, are slowly coming to an end, and eventually the New Atheists will have to deal with the criticisms coming from within the scientific community, as well as those coming from within the atheist community.
Geez, Glenn, I haven’t clue about what you think you are talking about and I don’t much care. I don’t know if you want to have a clue about what science is about or not. For the record, if you want to understand the flaws of Stephen Jay Gould’s perspective please read Daniel Dennett’s book Darwin’s Dangerous Idea. The book was a finalist for the 1995 National Book Award in non-fiction and the 1996 Pulitzer Prize for General Non-Fiction. It persuasively rips Gould to shreds.
Mathematically group selection makes no sense whatsoever. It has been thoroughly dealt with on many occasions although I will neglect the effort to find a decent reference for you. The debunking of that is settled science. Wilson is in my estimation an intellectual flyweight of little significance. Apparently he has some following with the lay public. Who cares?
This does not mean that there are not real debates within the science. However, for a real scientist the debates lie elsewhere. Have a good day.
To replace all the energy the world uses, we would need to cover an area the size of California with PV panels (unless we use the best, which would reduce that in half). Since there will be wind, tidal, geothermal, efficiency and conservation, it will probably be less than the state of Colorado in total, worldwide.
Well, Marble, I’m sure I don’t need to tell you that a lot of the energy we now use is merely wasted, and we know lots of ways to cut way way down, example, take those absurd trailers off those more absurd diesel tractors and put the stuff on the trains recently unburdened of the absurd- cubed loads of coal going from montana to my neighborhood unfriendly huge power plant doing its damdest to heat up the river.
Then use short range electric tractors to get the cargo from the train to the big box store where it is wasted.
Then, of course, a lot of energy is just used to heat things at low temp. Solar is just great for that, no PV required, just a window or similar.
And so on. All pretty easy and totally obvious.
I’ve had no trouble going all solar with a pretty lavish lifestyle right in the middle of average everything for USA
You are so right wimbi. The list for potential energy savings would fill a large book. The really great part about moving to quieter, less polluting energy sources is that the side-effects of pollution go away, making things less expensive and life better.
Sawdust,
Have you actually done calculations??
There are about 230M light vehicles, using about 50% of total US oil consumption, and roughly 2/3 of total US oil imports. They get about 23MPG, and they drive roughly 35 miles per day, on average.
IIRC, wind and solar in the US contributes about 6% of our total power. That’s about 25 Gigawatts, on average. EVs use about 3 kilowatt-hours per mile, so they need about 12 kWhrs per day, or about 500 watts, on average.
That means that wind and solar could power about 50 million EVs, and would only need to expand by about 4-5 times to power all light vehicles and take care of 2/3 of total net oil imports.
Not hard to do that. EV’s aren’t likely to replace the full ICE fleet in less than 20 years – that much wind & solar in 20 years would be a piece of cake.
EVs get 3-4 miles per KWH. We consistently get 4 miles per KWH with both our Nissan Leaf and Chevy Volt. 35 miles per car per day will require about 10 KWH or about 2.5 KW of panels at 4 hours per day average insolation.
Is that from the “wall”, or the battery?
That is as reported by the car, so it’s from the battery. From the wall will be slightly worse (I’m guessing maybe 10%).
EROI is doubtlessly hard to quantify and one may model various indices with which to measure it, but to state that this means ‘all discussions’ of it are invalid is pure nonsense. What might be more appropriate is for you to say ‘I don’t want to talk about it’. Perhaps because it’s something you can’t get your head around. But let’s not let that be the standard for defining all that is invalid to discuss. For what a simple world we would all live in if that was the case.
Canadian Tar Sands Sticky Supply Curve——-500,000 B/D Coming Onstream IN Next Two Years
“We do not want short-term pricing to dictate our investment in long-life, high-return oil sands projects,” Cenovus Chief Executive Officer Brian Ferguson told analysts in July, when WTI was trading near $50.
http://davidstockmanscontracorner.com/canadian-tar-sands-sticky-supply-curve-500000-bd-coming-onstream-in-next-two-years/
Total announces start of production from Surmont 2 oil sands project, Canada
Tuesday, September 1, 2015
http://www.oilvoice.com/n/Total-announces-start-of-production-from-Surmont-2-oil-sands-project-Canada/eae1fb0505d2.aspx
Total announces the start-up of production from the Surmont 2 oil sands project, located 63 kilometers southeast of Fort McMurray in the Athabasca region of Alberta, Canada.
As a result of the technology that will be implemented, production will ramp up through 2016 and 2017, adding 118,000 barrels of oil per day gross capacity.
From way upthread where another reply is not possible.
”I really wish we could sit down and have a number of face to face discussions on this subject. I think you are grossly underestimating the knowledge and abilities of primitive cultures.”
No, I appreciate such cultures and their sophistication, including their still unsurpassed knowledge of some aspects of nature. But so far as I know none of them ever solved the problem of aggression.
In recent times we have some Quakers who manage to refuse to fight, but only because they can in effect shelter under the umbrella of Baptists who do fight if attacked and occasionally START the fight.
”And this from someone from a culture that does not even know enough not to shit in it’s own nest.”
I am smarter than that description but no offense taken. Both of us are painting very fast with a very broad brush.
In a face to face conversation we would find ourselves in agreement, after some discussion of nuances and fine points, most or maybe even almost all the time.
”Pride goes before a fall. Hubris leads to downfall.”
Agreed.
But pride and hubris are not exactly what this is all about from the point of view of realist. Pride and hubris are quite often the CAUSE of falls it is true.
I am trying make the point that understanding the true nature of the naked ape involves recognizing the fact that aggression is built in and has survival value and most likely can never be eliminated from our behavior.
Maybe we can figure out ways to control it better than we have in the past. That seems to be about as much as we can hope for, barring some sort of Brave New World wherein we are all BRED for certain behaviors.
If such a world ever comes into existence you can bet there will be bosses in it, and that they will breed some humans to use as police dogs so as to control the rest.
Incidentally I have noticed that Quakers who drive other local tradesmen out of business do not bid any higher at foreclosure sales than anybody else. They compete too.
I don’t have to work at manual labor in a factory although I HAVE done that sort of thing for short periods at various times. Cash income is scarce around here but I am not hard up at all. But plenty of my family and neighbors have to do any sort of work they can get. My more prosperous neighbors regardless of their political leanings all seem to agree their lack of success is mostly due to a lack of talent and effort on their part. The leftish leaning ones also admit the lack of opportunity, but they still COMPETE with everybody and lock onto every nickel they can, while believing this is the rightful order in human affairs. My sister the nursing professor feels FULLY ENTITLED to her rather cushy life and donates only a damned small portion of her six figure income to people less well off. In the last analysis she is about as darwinian as anyone but would deny this in a heart beat.
Sorry, I thought you were coming across as a arrogant Euro-American feeling superior to the witchdoctors, shamans, healers, witches of more “primitive” cultures. Those same primitive cultures that had devised ways of life within the danger of nature that could last for many millennia, probably forever if the “civilized” cultures had not intruded. Certainly their healers did quite a lot with very little.
As far as aggression is concerned, it is not a problem. All predators must be aggressive to survive. However, they should not turn their aggression against those in their pack or tribe. Aggression within a community must be very limited and controlled.
The major difference between us and the other apes (mostly extinct now) is a mental difference. We evolved a different kind of brain, one that can imagine things that don’t exist. Things like tomorrow or what might happen in the future, or what if we tried this or that. Combined with a developing communication ability, the human pack was quite dangerous, despite being generally weaker and slower than many of it’s peer animals.
So to see a major difference in how people think and act about their world is indicative of an evolutionary change. We may actually be looking at a divergence beginning in the species. Species always branch if they survive long enough. We may already have and not realized it because it involves different brain capabilities. If the branching gets marked enough, the females will start choosing those that are more like themselves and the divergence will broaden.
Possibly differences in politics is an offshoot of a fundamental difference between people.
I know this may be stepping into a controversial concept in this day and age of equality and political correctness, but why would one think that we are not part of the evolutionary process? Differences will emerge, some of those differences will amplify.
“However, they should not turn their aggression against those in their pack or tribe.” You should pass that on to male lions, the ones with harems.
You will have to be more specific.
Very interesting debate in the link
https://goo.gl/6RKDlo
The Great Debate: XENOPHOBIA – Why do we fear others? – (OFFICIAL) – FULL
Long Video Warning 2 hrs plus.
”As far as aggression is concerned, it is not a problem. All predators must be aggressive to survive. However, they should not turn their aggression against those in their pack or tribe. Aggression within a community must be very limited and controlled.”
Sometimes ,especially in the case of humans, the pack or tribe competes so successfully that it overwhelms the remainder of the natural order and becomes so numerous that competition DOES begin to take an enormous toll on the species, this INTRA species competition occasionally wiping out whole packs and tribes ( countries, nationalities, races, ethnicities, take any or all choices).
Aggression within a community ”must be controlled” ? This is a political values judgement. No impartial and disinterested biologist would ever say that. Aggression within a community is just one more ”way” to weed out the weak and keep the population down. If aggression results in too much damage within a given ”community” then it will fail, thus aggression in a state of nature is self limiting just like reproduction. Excess success in reproduction results in die off.
Note that humans have that straight ahead depth perceiving stereoscopic vision that is tightly correlated with the predatory lifestyle. Correlation in this case is no accident at all.
The average university trained psychologist who natters on about the brotherhood of man somehow never seems to RECOGNIZE the implications of this utterly obvious fact.
If anybody wants to truly understand the real nature of the abyss between a genuine scientific understanding of human nature and the generally prevailing ( in the social sciences ) fatally flawed MISUNDERSTANDING of the naked ape’s mind and behavior, I strongly suggest an EXCELLENT starting place is Stephen Pinker’s book ” The Blank Slate”.
The evolutionary psychologists are winning one battle after another but they will not win the war until all the old folks who have staked their reputations and careers on the blank slate are dead or at least forgotten in nursing homes- and even after that, there will be generations of social workers trained by behind the times educators who will be around for a couple of generations after the FIRST round of deaths leaves the evolutionary psychology guys in control of their field.
Ain’t gonna spend two hours watching the video but I can tell everybody why we fear others.
“OTHERS” have a way of showing up, as evidenced by history and experience, with clubs and fire , guns in more modern times, and taking your land and your women and men and children and leaving you dead.
ONLY A GODDAMNED FOOL COULD POSSIBLY FAIL TO UNDERSTAND THIS INSANELY WELL DOCUMENTED REALITY.
The fact that contact with others does not always immediately result in mayhem is no guarantee whatsoever that it might not result in such troubles NEXT time or the time after that.
My old hound dog walks tight little circles every time before he lowers himself to the ground to rest. Ninety nine percent of the time he does not find a sharp rock- or a copperhead – and have to choose a new resting place. But that one last percent is enough that he justiafiably fears to lay himself down without taking precautions.
The only people who talk such drivel in my experience are the ones safely ensconced in positions and lifestyles whereby they THINK they will never be threatened themselves.
Hence my acquaintances who are nurses and social workers do not fear an influx of illiterate and sometimes violent immigrants. These immigrants cannot afford to live among nurses and social workers and teachers and do not compete with them for jobs and benefits in hospitals and government bureaucracies.
The last local good sized furniture factory still running in a nearby town used to pay wages high enough to make it possible for the local people to live reasonably dignified if materially modest lives. It now employs about seventy five percent recent immigrants, mostly legal.They are willing to work harder for less money. Darwinian competition rules here too.
Only a goddamned fool could POSSIBLY fail to understand why the local people, the ones who have to accept the lower wages brought about by this influx of new competition, hate the immigrants guts with a passion.
Fools are the one class of humanity that is NEVER in short supply.
WHO BUT a fool would try to convince the long term locals who have to do this sort of work that immigrants are not a threat to them given the obvious and overwhelming evidence to the contrary?
Now these immigrants are not a threat to ME, except for the threat resulting from higher crime rates, because I have rental property and the extra competition for housing drives up local rental rates. I can also get my rough labor taken care of for less money. WIN WIN for me , at least in the short term. Long term I am dead anyway.
I AM at somewhat higher risk of getting robbed or burgled due to some immigrants being less than fully domesticated to put it in farmers terms, and some locals taking up the robbing and burgling lifestyle as the result of being outcompeted for existing jobs.
Old Farmer said “Aggression within a community ”must be controlled” ? This is a political values judgement. No impartial and disinterested biologist would ever say that. Aggression within a community is just one more ”way” to weed out the weak and keep the population down. If aggression results in too much damage within a given ”community” then it will fail, thus aggression in a state of nature is self limiting just like reproduction. Excess success in reproduction results in die off. ”
I do not know what world you live in, but in a community, tribe, pack, if aggression is not limited or controlled the pack can no longer produce young and becomes a fragmented warzone. Then it is no longer a pack or community.
Look at wolves, they control their aggression within their groups. Yet wolves are capable of massive aggression.
MZ
I read your comment as indicating that you mean controlled by conscious thought or planning – which applies to human aggression within the limited context of discussing human society alone, as opposed to nature.
Aggression within and without communities in a state of nature is self limiting, just as population is self limiting thru negative feed back mechanisms.
Chimps and humans plan, to some extent at least. Planning is virtually unknown in the rest of the natural world beyond the simplest sort that seems to be controlled as much by instinct as by intellect. Squirrels for instance do not have to be taught to hide acorns by their mommas. They seem to know to do this by means of a built in hardwired program.
A wolf pack that grows too large has to split or partially die off. Aggression is self limiting in this sort of case. Wolves may plan hunts to some minor extent -I hope to learn more about this someday but the literature is thin and not readily accessible to a layman.
Wolfs, like dogs, use a hierarchy system. They determine who is stronger at the time and the rest just use communicative signals to the dominant ones that they know this. I think humans are too obsessed with verbal communication. Animals, like dogs and wolves use physical signaling and posturing to communicate many things.
As far as instinct versus thoughtful planning, well I do not think that that area is very well understood. It’s not just a pre-programmed response, since it must deal with all the variations in the current reality. Also, I have always wondered how a few simple molecules can pre-program a brain with information to deal with a complex world. There has to be an intersection of thought and instinct in animals. And just to continue that thought train, I bet that human action is much more influenced by instinct than most people think.
Did anyone ever study how current reality can pre-program new instinctive changes into DNA or does everyone assume that it is just a random haphazard system?
old farmer mac said:
Aggression within a community ”must be controlled” ? This is a political values judgement. No impartial and disinterested biologist would ever say that. Aggression within a community is just one more ”way” to weed out the weak and keep the population down.
Me thinks you’ve been reading entirely too much evolutionary “science” written by right-wing ideologues.
Your notions about evolutionary science ring entirely too much like those described here:
At the core of Nazi philosophy was the view of the nation as a living organism. Using Herder’s concept of Volk, Hitler viewed German society as an organism with its own health. “Our people is also a biological entity. . .. German people forms one great relationship, a blood society. . . . This biological unity of people will be known as the people-body (2).” Because individual human beings were regarded as functional or dysfunctional parts of this larger whole and thus affecting the health of the people-body, racial hygiene became seminal to Hitler’s thinking. As Bavarian Cabinet Minister Hans Schemm declared in 1934, “National Socialism is nothing but applied biology (3).”….
“German science and black racism—roots of the Nazi Holocaust”
Francois Haas, FASEB Journal
To “weed out the weak,” as you put it, the Social Darwinism of the Nazis first led them to attempt to eliminate from the society those inflicted with mental illness, feeblemindedness, criminality, epilepsy, hysteria, and alcoholism. As Haas explains, the Nazis extened their Social Darwinism
to a variety of “unworthy” groups, leading to the physician-administered racial Nuremberg laws, the Sterilization laws, the secret sterilization of Afro-Germans, and the German euthanasia program. This culminated in the extermination camps.
Methinks thou puts thine rose tinted glasses on in viewing what are perfectly obvious facts to me.
I hope you enjoy blissing out on feeling your ethics are superior to mine- but you are making a MAJOR mistake in confusing my UNDERSTANDING of the natural world with my personal ethics.
Facts can be used for good or evil, depending on who is doing the using.
Facts are impartial things by nature. I can use a stone to pave a road or break open a black walnut which I could never do without a tool- or I could use a stone to break an enemy’s head.
IF you want to preach you might as well recognize that all the people you quote are ignorant of biology as it is known to biologists who are not playing the pc game.
My understanding is based on accumulating quite a few actual credits in the basics in respectable universities and reading quite a few books starting with Darwin and finishing up most recently with the works of a number of professors at well known universities such as MIT, Harvard, Oxford, etc.
I have yet to see anything refuting the work of people such as Darwin right on up thru EO WILSON and Stephen Pinker.
You are advocating the basic blank slate idea, that man is basically good and bad only because he is led astray. BULLSHIT.
WE ARE ANIMALS. GET IT THRU YOUR SKULL. Animals are part of nature and nature does NOT deal in GOOD AND EVIL.
MEN however are capable of cooperating in seeking their own perceived best common interests. The perceived common interests of let us say my immediate neighbors is NOT the same as the common interest of would be immigrants hoping to settle in this area.
Personally I check in on a couple of local folks who are even older than I am, and help look after them. I contribute to the local church because it does outreach work including sending somebody to check on ME and my ancient Daddy. I stop and help people on the side of the road if they have car troubles and I have both black and Mexican hired help into the house to eat with us on days I have hired help.
My SECOND WIFE was Jewish and lost all her known relatives in Europe to the Holocaust. I KNOW about Nazis, I read that idiot Hitler’s book myself in order to gain more insight into the nature of his depravity.
I could go hunt up quotes right and left but mostly I know enough to come up with something from my mental attic even if I have to paraphrase and can’t remember who supposedly said it first. But I am going to go hunt one in particular and come back and post it in a minute.
“Kill one man, and you are a murderer. Kill millions of men, and you are a conqueror. Kill them all, and you are a god.
Jean Rostand, Thoughts of a Biologist (1939)
(1894 – 1977)
old farmer mac said:
IF you want to preach you might as well recognize that all the people you quote are ignorant of biology as it is known to biologists who are not playing the pc game.
Of course, OFM, your version of science’s “ultimate truths” are certainly self-evident and beyond dispute.
And anyone who disagrees with your version of science’s “sure truths” must, by definition, be either “ignorant” or “playing the pc game,” or both.
Nevertheless, your predictions could be proved right, and all the hopes, achievements and aspirations of humanism may, in the end, end up being as ephemeral as the blossoms on a cherry tree.
So the problem is not with your hypothesis. The problem lies in the fact that you’ve allowed your hypothesis to harden into a dogma.
old farmer mac said:
You are advocating the basic blank slate idea, that man is basically good and bad only because he is led astray. BULLSHIT.
Straw man, OFM, pure straw man.
To set the record straight, what I believe is that we come equipped with some basic hardwiring. And to complicate matters, not all of us have the same hardwiring.
On top of this we are programmed by our culture. This could be referred to as our software. And of course not all of us have the same software.
The reality is this: the human being as an extraordianry complex animal, which we know precious little about. We don’t even know where the line between our hardware and software is.
Take this, for example, from Melvin Konner:
A couple of weeks ago I posted some musings about “the self” in anticipation of being on a panel with Steven Pinker (author of The Blank Slate and The Stuff of Thought) and Noga Arikha (author of Passions and Tempers: A History of the Humours) at Tufts University. The panel, convened by Jonathan Wilson, was titled “The New Biology and the Self,” and what follows was my contribution….
….Which brings me to brain imaging.
This, I would argue, is at least as important a biological revolution as genomics, but it requires an even subtler philosophical approach. Let me give you two hot-off-the-press examples.
Steve [Pinker] is a coauthor of a beautiful new study of language and the brain, published in Science on October 16th. It uses a combination of functional magnetic resonance imaging and recording from electrodes in the brain to parse the exact ways in which Broca’s speech area sets up a meaningful utterance.
Without going into detail, I will say that this is an extremely important study that begins to take the mystery out of language generation and, in my view, supports the long-standing claim that the human brain is uniquely, and in a modular way, adapted for language. For myself, it strengthens my sense of separation from the apes, and my shared biological heritage with all humankind.
The other study, equally beautiful, published in Nature one day earlier, provides a remarkable contrast. It is called “An Anatomical Signature for Literacy,” and it proves the profound power of human agency over the brain. It begins:
“After decades spent fighting, members of the guerrilla forces have begun re-integrating into the mainstream of Colombian society, introducing a sizeable population of illiterate adults who have no formal education. Upon putting down their weapons and returning to society, some had the opportunity to learn to read for the first time in their early twenties, providing the perfect natural situation for experiments investigating structural brain differences associated with the acquisition of literacy…”
The study, done in Bogota and at the Basque Center for Science in Bilbao, showed that learning to read, even in adulthood, specifically increases the anatomical connection between the two halves of the brain, in areas linking vision and language.
The young former guerrillas decided to put down their weapons, learned to read, and changed the anatomy of their brains. It is hard to imagine a better case for the ability of the subjective self to change the objectively visible one. The study is one of many warnings to those who may too readily conclude that if something is seen in the brain, it must be causing what is seen in the mind.
Not so. It is only a correlation, another set of data to be meticulously compared with those of thought and behavior, leaving the task of discerning causality as difficult as ever, sometimes more so. Yet it is very, very important data, and it can certainly change our sense of ourselves—especially if we are among those who think of the mind as something separate from the brain.
http://www.melvinkonner.com/the-new-biology-and-the-self/
old farmer mac said:
…you are making a MAJOR mistake in confusing my UNDERSTANDING of the natural world with my personal ethics….
WE ARE ANIMALS. GET IT THRU YOUR SKULL. Animals are part of nature and nature does NOT deal in GOOD AND EVIL.
So if your personal ethics did not evolve from your understanding of the natural world, then where do you believe they came from? What is their origin?
old farmer mac said:
MEN however are capable of cooperating in seeking their own perceived best common interests….
Personally I check in on a couple of local folks who are even older than I am, and help look after them. I contribute to the local church because it does outreach work including sending somebody to check on ME and my ancient Daddy. I stop and help people on the side of the road if they have car troubles and I have both black and Mexican hired help into the house to eat with us on days I have hired help.
You do realize, I hope, that the sort of tit-for-tat morality you describe here is nothing but an iteration of the axioms of orthodox economics and biological models of human behavior, and that these models have a very shoddy empirical basis? Here’s how Herbert Gintis et al describe it:
As we have seen, economic theory has traditionally posited that the basic structure of a market economy can be derived from principles that are obvious from casual examination. An example of one of these assumptions is that individuals are self-regarding. Two implications of the standard model of self-regarding preferences are in strong conflict with both daily observed preferences and the laboratory and field experiments discussed later in this chapter.
The first is the implication that agents care only about the outcome of an economic interaction and not about the process through which this outcome is attained (e.g., bargaining, coercion, chance, voluntary transfer). The second is the implication that agents care only about what they personally gain and lose through an interaction and not what other agents gain or lose (or the nature of these other agents’ intentions). Until recently, with these assumptions in place, economic theory proceeded like mathematics rather than natural science; theorem after theorem concerning individual human behavior was proven, while empirical validation of such behavior was rarely deemed relevant and infrequently provided.
Indeed, generations of economists learned that the accuracy of its predictions, not the plausibility of its axioms, justifies the neoclassical model of Homo economicus (Friedman 1953). Friedman’s general position is doubtless defensible, since all tractable models simplify reality. However, we now know that predictions based on the model of the self-regarding actor often do not hold up under empirical scrutiny, rendering the model inapplicable in many contexts.
A similar situation has existed in human biology. Biologists have
been lulled into complacency by the simplicity and apparent explanatory power of two theories: inclusive fitness and reciprocal altruism (Hamilton 1964; Williams 1966; Trivers 1971). Hamilton showed that we do not need amorphous notions of species-level altruism to explain cooperation between related individuals…. Trivers followed Hamilton in showing that even a selfish individual will come to the aid of an unrelated other, provided there is a sufficiently high probability the aid will be repaid in the future. Trivers’ reciprocal altruism, which mirrors the economic analysis of exchange between self-interested agents in the absence of costless third-party enforcement (Axelrod and Hamilton 1981)…became the basis for biological models of human behavior (Dawkins 1976; Wilson 1975).
These theories convinced a generation of researchers that, except for sacrifice on behalf of kin, what appears to be altruism (personal sacrifice on behalf of others) is really just long-run material self-interest.
Ironically, human biology has settled in the same place as economic theory… Richard Dawkins, for instance, struck a responsive chord among economists when, in The Selfish Gene
(1989[1976], v.), he confidently asserted ‘‘We are survival machines — robot vehicles blindly programmed to preserve the selfish molecules known as genes. . . . This gene selfishness will usually give rise to selfishness in individual behavior.’’
Reflecting the intellectual mood of the times, in his The Biology of Moral Systems, R. D. Alexander asserted, ‘‘Ethics, morality, human conduct, and the human psyche are to be understood
only if societies are seen as collections of individuals seeking
their own self-interest. . . .’’ (1987, 3).
The experimental evidence supporting the ubiquity of non selfregarding motives, however, casts doubt on both the economist’s and the biologist’s model of the self-regarding human actor.
http://www.umass.edu/preferen/gintis/moral%20sentiments.pdf
Sorta stuck my foot in my mouth , but I AM painting fast with a very broad brush.
ETHICS evolve along with other behaviors. So, if you wish to say good equals good for the group and bad for the group equals evil, and restrict the discussion to species with brains enough to display highly variable behavior, then in that sense nature does deal in good and evil – in human terms. In terms of Jewish group survival Hitler was VERY bad which equals EVIL. EVIL is the word that dominates in MY OWN mind rather than ”bad”.
If the Nazis had won the war, the children of Nazi politicians would have become the princes and princesses of a new royal order, comparable to the royal families of old, or the current Saudi royal family. TEMPORARILY. Even a thousand years in terms of nature is an eye blink.
I find it impossible to make a case that a Nazi victory would not have been a ”good” thing for the Nazis THEMSELVES, for the Nazi in group.
The discussion can be just as well framed as good and bad for individual and group survival as good and evil, and more profitably, in terms of actual understanding.
In the last analysis, in terms of evolutionary theory, ethics are ”tools” useful in promoting the survival of a particular in group which can be as small as two individuals or as large as a coalition of nation states. But the very existence of ethics as a concept necessarily requires the existence of an out group.
My personal ethics are highly biased towards cooperation rather than going it alone. There is nothing about this fact that contradicts modern darwinian evolutionary theory – the theory is like most theories tweaked a little as time passes. Ants cooperate but they also fight.
Ditto humans.
Under some circumstances I will fight, to the extent an old fat guy CAN fight. Hopefully we can avoid such circumstances . I rather like the results of cooperation , electric lights and internet for example and rather detest the thought of modern day Vikings coming to my little farm and murdering me and carrying away my material goods.
But let’s not forget the Vikings cooperated among themselves, lol.
At some point the benefits of cooperation with the larger group may cease to outweigh the benefits of sticking with the smaller in group and fighting for the survival of the in group.This is very common.
The “Indians” who lost the land I live on lost it to the larger out group because they failed to fight the new out group successfully. (In truth they never had a long term prayer although if they had recognized the nature of the threat soon enough they could have kept us Euros out for a good while, maybe another century . ) Now except for a handful on so called reservations they are basically extinct, but some did of course interbreed with the Europeans who took their land.
It’s ”my land” for now but sooner or later somebody else who looks and talks and dresses differently will be calling it ”his”.
To my mind it is almost impossible to make the case that the aggression of my ancestors two to four hundred years back, in taking this land, did not work out VERY well equals GOOD for MY personal in group, my known relatives, and my larger in group, the current day USA.
Incidentally the book you mention is entirely consistent with modern nuanced darwinian theory.I read some random bits of it, it’s an excellent book, thanks for the link. I will read it all later.
The ”shoddy empirical basis ” is robust in the eyes of folks who do not think the way you do.
The biologists have won every battle since the publication of Darwin’s work. This one is ongoing but they will win it too.
Humans are indisputably animals and the theory is good enough to incorporate all possible behaviors successfully and in fact has done so already, with the possible exception of a few loose ends.
Your position is basically that of a preacher argueing some sort of absolutist ”good and evil” and it depends on the listener accepting the unspoken premise that men are something outside nature.
old farmer mac said:
In the last analysis, in terms of evolutionary theory, ethics are ”tools” useful in promoting the survival of a particular in group which can be as small as two individuals or as large as a coalition of nation states. But the very existence of ethics as a concept necessarily requires the existence of an out group.
Yes, but a more transcendental conceptualization of the word “group” is possible. The “group” can be extended to include all of humankind.
The idea of a transcental group is a cornerstone of the best (but certainly not all) of Judeo-Christian thought, the Enlightenment (with its notion of the universal Rights of Man), and of secular humanism.
And not even all naturalists reject it outright, as the evolutionary biologist David Sloan Wilson notes in Darwin’s Cathedral:
Within group selection by itself creates a world without morality in which individuals merely use each other to maximize their relative fitness. Group selection creates a moral world within groups but doesn’t touch the world of between-group interactions, which remains exactly as instrumental as within-group interactions in the absence of group selection. Moral conduct among groups can evolve in principle, but only by extending the hierarcy to include groups of groups. This possibility is not as far-fetched as it may appear. Remember that individual organisms are groups of groups of groups, if the emerging paradigm of major transitions is correct.
old farmer mac said:
The biologists have won every battle since the publication of Darwin’s work. This one is ongoing but they will win it too.
Well I, for one, certainly would not be willing to bet the farm on that one.
And I’m hardly alone.
Fabrizzio Mc Manus, for example, recently published a very insigtful article on the subject on Scientia Salon.
He argues that the “famous Science Wars of the 20th century,” which he notes have been raging for over a hundred years now, ever since Charles Darwin’s cousin Francis Galton introduced the dichotomy of nature vs. nurture, may soon become obsolete and irrelevant. This is so because of recent developments in both the biological sciences and the social sciences.
Here’s how McManus explains it:
If I am right, then the Science Wars were a particularly counterproductive period in the history of science because they led us to a partial and dichotomous view of the body….
In a sense, we could say that what I am advocating here is the admission that in justice, development meets development. One of the intended senses is close to the very idea of social development as found in the Human Development Index created by Nobel laureate Amartya Sen and further developed by Martha Nussbaum in her “Capabilities approach.” The other intended sense has more to do with recent theoretical insights in evolutionary biology, specifically in the fields of Evolutionary Developmental Biology (EvoDevo), Ecological Evolutionary Developmental Biology (EcoEvoDevo), Niche Construction and Extended Inheritance [2].
Curiously, what all of these very different programs have in common, among other things, is an emphasis on how the material scaffoldings of development are what produces a form that was not pre-formed or pre-given in any kind of blueprint. These scaffoldings are paradoxically responsible for both plasticity and robustness because they not only allow the organism/person to cope with her environment and its unexpected challenges by being resilient but also by being innovative.
In the concrete case of human development, the capabilities approach has emphasized on one hand material as well as cultural aspects such as bodily health and integrity and control over one’s material environment, and on the other hand political control over one’s social environment, access to education in order to develop practical reason and thought and, also, the necessity of affiliation with others. A fulfilled person is one who has had access to the entire spectrum of capabilities and, so, realizes her potential and is able to strive and enjoy.
This implies a rejection of biological determinism without rejecting biology. This is especially clear regarding handicapped persons. The capabilities approach acknowledges how the causal structure of our bodies might lead to disabilities, but also how our social scaffoldings might be able to compensate for these, thus allowing persons to have fulfilled and happy lives.
In the other case, Evo-Devo and allied fields, we find a variety of proposals in which genetic, epigenetic, behavioral, ecological and symbolic inheritances are scaffolding each other not only in the production of animal form but also in the production of its habitat and behavior [3]. The capacities of animals are not thus written in their genes in a sort of blueprint but are the result of a causal construction that, even though it is not rigidly deterministic, it is clearly influenced by biology. As in the previous case, the disruption of a particular inheritance channel might be detrimental and corrosive but it might as well be manageable if other channels remain functional.
https://scientiasalon.wordpress.com/2015/06/29/from-the-science-wars-to-political-emotions-philosophy-biology-and-justice/
old farmer mac said:
The perceived common interests of let us say my immediate neighbors is NOT the same as the common interest of would be immigrants hoping to settle in this area.
So I wonder, what is your criteria for who gets accepted into your in-group, and who must remain in the out-group?
I am not in a position to set any criteria. Even the CONCEPT of criteria is badly flawed in this sort of situation.
The actual future composition of the local community will be determined by somebody winning, somebody losing possession of this locale.
It seems to have been without humans up to about ten thousand or so years ago, max. A succession of “Indian” societies or tribes, controlled it up until roughly 1700 CE. At that time my fore bearers mostly Scots Irish with some Germans got control of it.
We are losing it slowly now to mostly Mexican immigrants and a heavy influx of “damned yankees” of mostly DWEM ancestry.
The ”damned yankees” are coming because they like the environment and laid back lifestyle and low crime and low tax aspects of this area. The more of them come, the worse it gets for locals. They have driven property values and taxes so high already that long time farm families have to sell their property because they can no longer afford to own it.
Every farm sold under these conditions means more damned yankees, more houses, more jail cells, more roads, more everything except what is bringing them here. The arrival of each and every one diminishes the attraction to the ones not here yet, but they will most likely keep coming until this area morphs into something like the mountains of NEW York state within driving distance of the Big Apple. The locals there have been reduced to servants.
DO NOT LIKE IT. CAN DO ESSENTIALLY NOTHING TO STOP IT.
Enough of the locals are winning in the transition to make it impossible to stop the change. One of my relatives for instance made his million paving the driveways of resort homes. Another has made twice that in commissions as a high dollar resort property real estate broker.
In a few hundred years, or maybe only fifty years, this area will be the property of new masters.
Now IF I were in a position to do so, I would close the borders of the COUNTRY and get the population started on a downward trend asap.A few people could get in, if they have something to offer- something special, such as great expertise.
My reasoning is simple. We have a shot at long term success and stability if we succeed in preserving this country. If we allow it to become overpopulated and TOO diverse, we lose our common heritage, what little there is left of it. You can never be sure where a cultural revolution will take you.
Sharia law for instance is nothing I want to see here- nor do I want to see widows burned at their husbands funerals.
PC is pretty much complete and total BULLSHIT- and very dangerous bullshit, so far as I am concerned.
All kinds of people are ok with me so long as they share enough culture in common with my own that my own immediate culture and kin can survive and thrive.
I would also do what I could to lower birth rates and stop population growth all over the planet.
There is no such thing as nature operating on the basis of good and evil, nature is entirely oblivious to the pain of baby rabbits chewed alive by foxes.
But there IS such a thing as recognizing good and evil in terms of understanding and appreciating the enlightened best interest of the people in general.
Our culture has its good and not so good points and it falls short of some other cultures in a number of respects. But compared to most it is substantially superior and only a damned fool would maintain otherwise. There are plenty of damned fools in academia of course. I have run into a few of them personally.
As Alan Bloom points out in his extraordinarily important book, “The Closing of the American Mind” , when he asks a modern day young university student what HE (the student) would have done if he had been the British governor of an Indian province a few generations back and the locals were preparing to burn a widow at her husbands funeral, the student invariably has either NO answer or the exceedingly lame answer that the British had no business being in India in the first place.
Recognizing the true nature of men does not mean one has to voluntarily tolerate behaviors that harm the whole of us, or even a small minority of us. Cooperation on the part of the masses to promote the welfare of the masses is perfectly within the scope of darwinian behavior in the species known to be capable of this behavior. Men and chimps have this ability. In chimp society a boss chimp who gets to be too overbearing and abusive is apt to get his ass kicked by some of the lesser males ganging up on him.
Luckily men are capable of acting together in effective ways to prevent the worst abuses ( in societal terms) that would otherwise be perpetrated by the ”takers” among us at the expense of the ” cooperators”.
I have helped participate personally in having a ”taker” put in jail hopefully until he DIES there. This man, a fairly close relative, is simply incapable of considering the effects of his actions on other people. In a by gone time I would have helped hang him or drive him into exile.
Only a fool thinks such incidents as the cops beating on Rodney King is funny. Allowing that sort of thing to go unpunished sets the precedent for the cops to beat the hell out of me or you in the not so distant future.There may come a time when most or all of the cops in LA are Hispanic or black, this is actually likely within a couple more generations. If the precedent is set, then it is only reasonable to expect black or Hispanic cops in the future to routinely beat the hell out of Anglos.
The world as a whole is without doubt headed to hell in a hand basket due to overshoot. We are not immune here in the USA by any stretch of the imagination but we have a chance to delay the crash and soften the landing- if we face up to reality and get our asses in gear.
The entire damned world is in big trouble, and we are too politically divided in this country to ACT decisively. The left wing is too wrapped up in wishy washy but well intentioned and good hearted politics but at least basically correct on environmental issues.
The right is under the control of vested business interests so deeply dug in as to be almost invulnerable to political attack, and the common people are generally so ignorant it would make a mule blush to hear the average man on the street talk about the environment or energy or almost anything else that is really important.
The current BIG PICTURE does not encourage me to believe in a happy ending for the world as a whole but maybe a few small parts of it will pull thru ok.
As luck would have it, the immigration surge probably came at exactly the wrong time in history. Jobs are drying up, not just because of the economy, but because advanced robotics and AI will make most jobs redundant in the not too distant future. A highly-intelligent few will be the most productive members of society who will be surrounded by masses of low-wage or no wage workers with nothing to do. They will certainly find something to do.
old farmer mac,
Groups, for the most part, are human creations.
Much, if not all, of the natural world consists of continua. The practice of slicing continua into parts or even into poles and giving names to these artificial categories is necessary if we are to think about the world or to talk about it. But we must always remain alert to the danger of believing that our terms are real or refer to reality except by rough approximation.
What political, cultural and economic entrepreneurs do is to “invoke groups.” They “seek to evoke them, summon them, call them into being. Their categories are for doing — designed to stir, summon, justify, mobilize, kindle and energize.”
However, from the point of view of the scientist, “the tendency to partition the social world into putatively deeply constituted, quasi-natural intrinsic kinds — is part of what we want to explain, not what we want to explain things with.”
So if one wants to take off their politician’s hat and put on their scientist’s hat, there exists quite a body of literature on the subject of group-making and the propensity of human beings to create these things they call “groups.”
There’s Luis Barjau and all his work on the casta wars in Yucatán. There’s David Berreby and his book Us and Them: Understanding Your Tribal Mind. There’s the work of Henri Tajfel, a Holocaust survivor, and that of the social psychologist Muzafer Sherif and his Robbers’ Cave experiment. Contemporary books such as Among the Thugs by Bill Buford and War Is a Force That Gives Us Meaning by Chris Hedges describe violent conflict between groups as instinctively pleasurable, like a sexual experience.
The point is that a scientist should be a disinterested observer of all this, not an interested participant.
”Much, if not all, of the natural world consists of continua. The practice of slicing continua into parts or even into poles and giving names to these artificial categories is necessary if we are to think about the world or to talk about it. But we must always remain alert to the danger of believing that our terms are real or refer to reality except by rough approximation.
What political, cultural and economic entrepreneurs do is to “invoke groups.” They “seek to evoke them, summon them, call them into being. Their categories are for doing — designed to stir, summon, justify, mobilize, kindle and energize.”
However, from the point of view of the scientist, “the tendency to partition the social world into putatively deeply constituted, quasi-natural intrinsic kinds — is part of what we want to explain, not what we want to explain things with.”
xxxx
You fail to UNDERSTAND that all the things you are talking about ARE being investigated by scientists working in evolutionary theory. They are getting good results.
I have never heard a biologist deny anything in the excerpt from your comment I just quoted.
I get the impression you think evolutionary biologists are simpletons.
I suspect you have read little in the field of evolution and evolutionary psychology.
Perhaps you should. I have read an assortment of the literature of the sort you quote. It reeks of pc and snooty and snooty moralizing posing as real science.
OF COURSE it is your privilege to think WORSE of the other camp. I am used to people insinuating that i sympathize with nazis and worse – whereas I have read nazi literature in order to UNDERSTAND the nazi mind and their coming to power and thus some of the the many root causes of WWII.
This is not to say there are no valid observations being made in your camp, or that we should not try to act as little like solitary predators and as much like herd animals as possible.
Let me recommend E O Wilson’s “Consilience” to you.
There is an excellent description in it of the warlike clash of various professional experts and expert fields as they expand and encroach on each others fields of expertise and professional turf.
There are few fights as nasty as the ones between academics who know they are pretty well insulated against actual PHYICAL aggression so the losing camp seldom hesitates to play any trick it can, including accusing the opposition of eating children and making love to puppies or worse. (sarcasm alert.)
Change in the social sciences depends on the old guys dieing and the folks they trained currently in positions of authority retiring. That allows new blood to occupy the positions of authority so vacated.
In the physical and or life sciences you can upset the existing apple cart with just one repeatable experiment- even if you are an under grand and an Ivy League professor or a famous dead guy is proven wrong by your experiment.
The biological field in general aand evolutionary psy field is moving ahead twice as fast or faster than the opposing camp.
The people who are armed , so to speak, with evolutionary theory, are consistently mopping the floor with the sort of people you quote. Of course anybody who refuses to read both sides will never KNOW this for sure.
Evolutionary theory is about as apt to be overturned as the First , Second and Third Laws of physics. It will of course continue to be refined to take into account new research and any new data discovered.
Generally speaking I seldom argue from authority but Wilson ALONE has done more recognized fundamental work, work recognized by biologists of all sorts all by himself, than all the people you mention have ever done COMBINED.
Incidentally we both may have forgotten that our argument is about the best explanation available to explain the nature of naked apes and their behavior.
I am not generally opposed to the leftish liberal overall prescription when it comes to creating the most satisfactory sort of society- EXCEPT when this prescription risks disaster.
Allowing a FLOOD of basically destitute and unskilled semicivilized immigrants into a country already politically divided and struggling with an unmanageable debt load, runaway crime, a failing educational system, etc, is asking for a disaster.
The ship of state is already more of a life boat than otherwise and overloaded already, although this perfectly obvious fact is generally denied or ignored by a substantial portion of the political left.
We cannot afford to risk the lifeboat itself.A lot of Western Europe is already at high risk of a hard right wing backlash which may result in the loss of such basic human rights as the people of the countries involved possess today.
We may even be at risk of backlash resulting in the election oof the TRUMP CHUMP here in the USA, which would probably be a disaster insofar as the environment and poor people are concerned.
old farmer mac said:
Let me recommend E O Wilson’s “Consilience” to you.
OFM, you don’t even understand what the battle between evolutionary biologists is all about, or where the battle lines are drawn.
Earth to OFM: Edward O. Wilson is on the same side as David Sloan Wilson, as is evidenced by this article they co-authored in American Scientist.
“Evolution “for the Good of the Group”
by David Sloan Wilson and Edward O. Wilson
http://www.americanscientist.org/my_amsci/restricted.aspx?act=pdf&id=16386020847008
This from the abstract of the article very succinctly captures what the battle being waged between evolutionary biologists is all about:
After the 1960s, most biologists avoided explanations based on group selection and tried to describe all evolutionary events in terms of selection at the level of the individual. However, this extreme view gives misleading interpretations of many important biological phenomena. Now a more nuanced theory, generally known as multilevel selection theory, acknowledges competing selective forces within and between groups.
On the other side of the enemy line, holding down the fort are folks like Richard Dawkins. The position, and rhetorical strategy, of this camp is perfectly caputred by Don Warton in a comment higher up on this very thread. To wit:
http://peakoilbarrel.com/the-eia-changes-data-collection-methods/comment-page-1/#comment-536720
Don Wharton says:
09/07/2015 AT 1:02 AM
Geez, Glenn, I haven’t clue about what you think you are talking about and I don’t much care. I don’t know if you want to have a clue about what science is about or not. For the record, if you want to understand the flaws of Stephen Jay Gould’s perspective please read Daniel Dennett’s book Darwin’s Dangerous Idea. The book was a finalist for the 1995 National Book Award in non-fiction and the 1996 Pulitzer Prize for General Non-Fiction. It persuasively rips Gould to shreds.
Mathematically group selection makes no sense whatsoever. It has been thoroughly dealt with on many occasions although I will neglect the effort to find a decent reference for you. The debunking of that is settled science. Wilson is in my estimation an intellectual flyweight of little significance. Apparently he has some following with the lay public. Who cares?
This does not mean that there are not real debates within the science. However, for a real scientist the debates lie elsewhere. Have a good day.
old farmer mac said:
I get the impression you think evolutionary biologists are simpletons.
I suspect you have read little in the field of evolution and evolutionary psychology.
Perhaps you should. I have read an assortment of the literature of the sort you quote. It reeks of pc and snooty and snooty moralizing posing as real science….
The people who are armed , so to speak, with evolutionary theory, are consistently mopping the floor with the sort of people you quote. Of course anybody who refuses to read both sides will never KNOW this for sure.
Evolutionary theory is about as apt to be overturned as the First , Second and Third Laws of physics. It will of course continue to be refined to take into account new research and any new data discovered….
I am not generally opposed to the leftish liberal overall prescription when it comes to creating the most satisfactory sort of society- EXCEPT when this prescription risks disaster.
This is an excellent example of group-making.
The mind creates discrete groups, entirely imaginary, and then attributes traits to that group. These traits can be either positive or negative.
Then the mind sticks individuals into the discreet group it just created, and these individuals must, of course, exhibit the same traits as all those in the artificial group the mind just created.
In your case, the group-making takes on an Us vs. Them framework. Your group — the ‘Us’ group — is the arbiter and sole practitioner of “real science.” Your group has a monopoly on the sure and ultimate truths of “real science” — evolutionary science. This is to be expected since, as Robert Nelson points out in Economics as Religion, “Since the eighteenth century the authorty of God as a source of absolute truths of the world — the essence of the historic claim to authrity of Jewish and Christian religion — has been superceded in many areas of society by the rise of science.”
Those in the other group — the ‘Them’ group — are cast as being anti-science, anti-evolution, and politically motivated “leftish liberals.” Their literature “reeks of pc and snooty and snooty moralizing posing as real science….”
Here’s how Stephen Jay Gould explains the ontological and rhethorical strategy you employ:
Since the ultras are fundamentalists at heart, and since fundamentalists generally try to stigmatize their opponents by depicting them as apostates from the one true way, may I state for the record that I (along with all other Darwinian pluralists) do not deny either the existence and central importance of adaptation, or the production of adaptation by natural selection.
http://www.nybooks.com/articles/archives/1997/jun/12/darwinian-fundamentalism/
Dan Kahan at Yale University has a blog where he explores the fascinating world of groups and group-making. What he and his associates have found is quite surprising: the more intelligent a person is, the more prone and adept he or she is at creating and using these artifical groups, and the more blinded they are to their own departure from factual reality.
http://www.culturalcognition.net/blog/
OFM,
“when he asks a modern day young university student what HE (the student) would have done if he had been the British governor of an Indian province a few generations back and the locals were preparing to burn a widow at her husbands funeral, the student invariably has either NO answer or the exceedingly lame answer that the British had no business being in India in the first place”
I see that the “white man’s burden” is still alive and kicking.
I don’t understand why one must go around and fix all of the world’s evils, fix your home and be happy. Most of the world’s evils are there in the first place because of the fact that men are not content sitting at home minding their own business.
wiseindian,
Blame it on just war theory and the guys — Ambrose, Augustine, Calvin, Grotius, Vitoria and Suarez — who ditched the old Roman Law which held that the discovery, conquest and occupation of new territories constituted sufficent title to justify their domination and incorporation into the empire.
http://revistas.ucm.es/index.php/ASHF/article/view/ASHF0404110091A
Hernán Cortés’s devoted companion Bernal Díaz del Castillo put it succinctly: “We came here to serve God, and also to get rich.”
The goal, of course, was always to give moral and intellectual justification for conquest and plunder.
As the authorty of God as a source of absolute truths of the world was superceded in many areas of society by the rise of science and humanism in the eighteenth century, the definition of ”Doing god’s work” had to be modernized and re-worked. But the underlying idea and objective did not change. It stayed the same: to give a scientific and/or humanitarian — an “enlightened,” we of course being the “enlightened” ones — justification for conquest and plunder.
BBC, of all people, did an absolutely oustanding documentary on this:
https://www.youtube.com/watch?v=q5-R0rxQS7A&list=PL5e9Gq_buhCxKTKC-bX2HP0xsTav3ZB2T
“The goal, of course, was always to give moral and intellectual justification for conquest and plunder”
That sounds just about right. The British killed millions and millions of Indians, brought down our share of world trade/GDP from 25% to 1%, stripped this country down to the bone and then they have the galls to say that look we civilized you.
At least the invaders before them were blunt enough to say that we are doing this to make ourselves rich.
Please don’t take this personally but I hate to say that the white race has bigger problems on it’s hands given what’s going on in Europe in terms of demographic and political changes. Trying to fix Africa or climate change should be their last concern, survival should be first.
wiseindian,
If you don’t have time to watch the entire documentary I linked above, you might want to watch the part that deals with India. It begins with this segment:
The History of Racism – Episode 2 (part 4/6)
Kjell Aleklett has an interesting blog on peak oil.
A recent entry is about a peak oil song by the group Tower of Power.
Kjell put up the lyrics on his site:
https://aleklett.wordpress.com/2015/06/24/there-is-only-so-much-oil-in-the-ground/
Tower of Power – Only so much oil in the ground
live at Montreux Jazz Festival – 7/12/2006
https://www.youtube.com/watch?v=7LjrCV4Gnxw
That concert was 8 long years ago!
Yet even today, right here on a ‘Peak Oil’ blog we hear Fernando, a petroleum engineering, wondering out loud about the fact that we are not seeing any discoveries of major oil fields happening any more.
Then we had Mike, an oil man and a good guy by any measure, throwing in the towel and leaving this site because of what he perceived as a personal attacks by the EV gang and their interminable posting about how the world based on oil is being profoundly disrupted.
I’m certainly no oil expert and while I very much appreciate the collective expertise displayed on this site by the people who make their living in the oil and fossil fuel industries, I have to ask, how many charts and graphs do we need to look at before it becomes obvious that ‘Peak Oil’ is here now.
It really doesn’t take a genius to figure out that if we have a global economy that runs on oil and we are at peak oil then things are going to have to change.
Since I don’t see fusion reactors coming on line anytime soon my personal view is that we are going to see a future where we use much less energy in much more efficient ways. This future can not and will not be powered by oil. Oil is way to precious and useful a substance to be burned! So if there is to be a future with some kind of industrial society it will have to run on other sources of energy.
I still have some limited hope that not all is lost and that some sort of transition is possible at least for some of us. I’m still more on the doomer side of things and while some here might call me Pollyanish because I have talked about alternative energy such as solar and wind, EVs and disruptive technologies such as big data allowing businesses such as Uber to come into existence. I’m still very aware of the realities of things like our population overshoot and our ecological footprint not to mention the massive biological species extinction we are seeing right now. There are no guarantees that humans are going to survive it. Yet I like everyone else must get up each day and just take one step at at a time.
Call me crazy but I see a huge amount of denial among the people who have built their lives on fossil fuels, while the laypeople have the excuse of being blissfully ignorant, the people in the oil business do not!
Change is hard as hell but it is coming whether any of us likes it or wants it. Denying it and sticking our heads in the sand just isn’t going to work.
It wasn’t that long ago that people and freight got around by using coal and electric driven locomotives and electric trolleys. Oil is a convenient transport fuel, but in no way is it a necessary transport fuel. There are always alternative methods and sources of energy if we want them.
Within a decade, oil will not be a hot topic, water and food will be the new hot topics. There is no substitute for food and water, no alternative for biological creatures.
Without an ever increasing source of cheap almost free energy like oil there is absolutely no possibility of growth. It might be possible to build out some “renewable” energy infrastructure but no possible way of building out enough to replace existing energy plus enough extra to provide for growth.
No growth means everything gets very ugly for billions of people until no one is safe.
Jef msaid”Without an ever increasing source of cheap almost free energy like oil there is absolutely no possibility of growth.”
First, as PV and wind advance, that is an ever increasing supply of energy. The almost free never existed and fossil fuels are at least an order of magnitude or two more expensive than renewables.
Second, it depends on how you define growth. Personal growth, knowledge growth, technological growth are all unhinged from increasing energy use. In fact it is very likely that new knowledge and technologies will allow us to live with much less energy usage.
The technology and culture we have today is vastly different than the past, ergo the technology and culture we have in the future will be vastly different than now.
So how come everybody isn’t saying what you just said??
This is an energy site. People talk a lot about oil, nat gas. They say nothing in proportion about what is now and forever gonna put ff’s away for good and all.
Using our wits and our tech skills, and recognizing how much flat out waste can be avoided with almost no effort relative to digging holes in the arctic, and so on and on, we can make a quick jump toward sanity with what we have right now- no bigger budget than we have available- just reallocation.
Is there any place anyone knows of where such stuff is discussed consistently with any level of wisdom?
I was sorry to see Mike go but he did tend to take the discussion being about anything except the oil market personally.
I miss him and wish he would come back.
And so far as I can tell, he never accepted the fact that there is nobody out there in the oil industry deliberately trying to screw him personally.
(As a matter of fact the Saudis and maybe even the Russians MIGHT BE DELIBERATELY trying to screw American domestic oil producers and everybody else in the industry as well . Hard to say, maybe they see it that way, maybe they are just doing the best they can looking after their own perceived best interests. )
If Mike had gotten extremely impossibly lucky and found a way to sell oil at a good profit himself at a low enough price and a high enough volume to force the market price down then he would have seen this as justifiable competition and tough shit to the folks who could not compete with him. (Getting that big would require him to be in the super major class like Exon or Chevron and therefore impossible of course.)
Now most of my immediate neighbors and half of my family used to be in the orchard business and when the markets shifted on us we just held on if we could and went broke and got into some other line of work if we couldn’t hold on. We didn’t have blogs available back then.
Life is like that, especially in a modern economy. Things change fast and unexpectedly.
It would suit me JUST FINE if California agriculture would dry up and blow totally away. Things would be really hunky dory around here as a result unless we wound up paying to support California on welfare.
I could get a couple of tenants and make enough money to buy myself a new F150 growing a field of green beans and peppers without even ”striking a tap at a snake” it would be so easy. The tenants would do all the hard work,except driving the tractor. I like driving the tractor.It has a cushioned seat and power steering etc. Not hard at all.
But California growers with irrigated land and better weather and overwhelming economies of scales are just too tough for me, I will never be able to compete with them.
”A boil on your own neck is more important than all the starving people in China.”
I haven’t heard that one in a while but I guarantee ya that anybody who goes looking and finds a man with a boil on his neck, especially one where his collar rubs it, will instantly realize that man is infinitely more interested in his boil than all the people dieing in civil wars in Sand Country.
Fred: I believe that there is a lull going on worldwide in exploration for hydrocarbons that is not entirely due to lack of new conventional prospects. The collective resources of most of an industry turned onto a one way street after the discovery that gas and then later oil could be extracted in large quantities from the Barnett shale. The only thing anyone in the business wanted to hear or fund was an unconventional prospect. A whole generation of geologists have been nurtured on the thought of “I only have to find an area with enough acres of source rock to blast apart with a super-frac and we’re rich.” This movement has been so huge that it sucked in almost every company large and small. There were enough acres of this source rock that in the frenzy in the various source rock basins and the race for the most, the most important aspect of economics were answered not entirely truthfully. A quote from a company financial guy, “It is so crazy now with all the available money that it will be ten years before the funders figure this out”. Now everyone is looking at the crash and wondering how it happened.
The industry has been on one way streets before. When the geological surface anticline mappers of the 1920’s ran out of big structures, I’m sure there was talk of the show being over. Then came the gravity mappers who found most of the salt dome fields in a rather short period. Then came the seismograph mappers and the frenzy was on to map the world. Each time the discussion became, we’re done there is not much more left. Then along comes 3D seismic and later horizontal drilling. And yes, the last one way street the industry turned on has hydraulic fracturing of source rock. I am enough of an optimist to think that there is another idea or tool just around the corner.
I hear you loud and clear Doodlebugger and you DO have a point.
There might be another tool or idea just around the corner – or maybe even two of each.
BUT – and this BUT is as wide as the one on some of the pics of super fat people who shop at MallWart – the world is only so big and the geologists KNOW that hydrocarbons are to be found only in certain places, those being the ones where organic materials were deposited in enormous quantities over geological time and buried deep enough to cook into oil and gas.
Most of those places have certainly been known now for decades, there can be only a few left to be explored by now . The tight oil coming out of North Dakota was discovered no later than the early fifties IIRC.At a hundred bucks plus it works out economically. Oil was less than five bucks back then, maybe only three, I am not good at remembering numbers.
The REAL measure of the problem is the inevitable slow death of the supergiant and giant fields that supply most of our legacy production.
Nobody has discovered a supergiant conventional oil field for forty years at least. With all the new tech that is indication enough that no more than maybe a couple more will EVER be discovered and most likely – NOT ONE MORE SUPER GIANT . EVER.
But I am now somewhat hopeful that with very good luck renewables and unconventional oil will suffice to prevent the long predicted death of industrial civilization due to peak oil in and of itself.
Peak resources in general including peak oil, now that is another issue altogether.
I expect a major die off of our kind, over most parts of the world. Adaptation is possible but we no longer have time enough to adapt on the grand scale.The resources and environmental crisis is coming up TOO FAST for most of us to make it thru the bottleneck.
Some pockets of industrial civilization will most likely survive, for a very long time, on the dregs of the one time fossil fuel gift of nature. Some of those pockets may have men with brains and vision enough to manage a transition to a renewable industrial economy.
Mac:
” the world is only so big and the geologists KNOW that hydrocarbons are to be found only in certain places, those being the ones where organic materials were deposited in enormous quantities over geological time and buried deep enough to cook into oil and gas.”
I am not at all disputing you as to Supergiants Mac. The age of those huge conventionals has probably passed. The massaging of those older fields to get a few more percentages points of recovery will be a huge upside to be pursued.
If you find a geologist who tells you the above statement though, he is a tunnel visioned fool. Hydrocarbons form in exactly those basin places, but can migrate up and out of those areas into rock not generally thought of as reservoirs such as basement rock, igneous intrusions and a variety of stratigraphic traps and unsedimentary “abnormal” reservoirs outside of the known basins. The oil industry has largely wildcat drilled for objectives that can be seen or measured with a tool such as seismic, geological mapping, or microseepage of hydrocarbons to the surface or combinations therof. As time goes on more and more reservoirs are going to be found in reservoirs that do not fit the mold. One of the largest problems I see ahead is going to be the lack of prospect generating dreamers, (wildcatters), as those skills are not being taught and exercised today in the LTO generation.
“…but can migrate up and out of those areas into rock not generally thought of as reservoirs such as basement rock, igneous intrusions…”
Bloody nonsense. However, it you want to put up the necessary funding I’m sure you can find someone who’ll drill wildcat holes into some Precambrian basement rock or even igneous intrusions.
Geologists don’t lack imagination.
Doug: There are producing fields found in exactly those situations, ( ex. Texas Panhandle field fractured granite) I’m not putting my money into those, as I still am chasing convention reservoirs in overlooked areas. I do monitor the chances for something more exotic though.
With respect your comment re oil coming from granite in the Texas Panhandle is misleading. In fact, the Missourian series that makes up the Canyon Group is comprised of arkosic clastic (granitic source rock) and carbonate “wash” sediments that were eroded from the Amarillo Uplift during the mid to late Pennsylvanian. Admittedly, a somewhat unconventional play. Note: this is primarily a gas field.
All due respect, Doug am not talking about the shed debris, but the granitic uplift itself.
OK, I stand corrected.
But, (you can tell I want the last word here) I’d hate to have to look for an oil signature from an intrusive, in seismic data. Gidday mate!
I DO NOT doubt that more and more reservoirs that do not fit the mold will be found. But relative to the number of formerly discovered and now seriously depleted oil fields they will be few and far between.
AND they will be smaller and smaller as time passes and more and more expensive to produce.
Real peak oil is here or maybe even behind us. Peak oil redefined to include anything that comes out of hole in the ground that is liquid under normal atmospheric pressure plus biofuels may still be a year or two down the road.
Peak oil per capita is a long way behind us already.
Fred Magyar said:
Since I don’t see fusion reactors coming on line anytime soon my personal view is that we are going to see a future where we use much less energy in much more efficient ways.
That’s certainly my take.
To the adherents of world systems theory, however, it’s an open-ended question as to how energy austerity will play out on the global stage as it occurs.
Fred Magyar said:
I still have some limited hope that not all is lost and that some sort of transition is possible at least for some of us.
Me too.
Many of the overly defeatist or surrender arguments pretend to be empirical. But in reality they are quite deterministic, subjective and purpose-driven.
“Rage is by no means an automatic reaction to misery and suffering as such; no one reacts with rage to an incurable disease or to an earthquake or, for that matter, to social conditions that seem to be unchangeable,” the political philosopher Hannah Arendt famously wrote. “Only where there is reason to suspect that conditions could be changed and are not does rage arise.”
Many of the declarations that all hope and resistance is futile because it is against “the Nature of Things” are what the philosopher of science Stephen Toulmin called “cosmopolitical arguments.”
However, he notes that these sorts of polemics have lost much of their power to persuade beginning in 1776.
Fred Wrote:
“I still have some limited hope that not all is lost and that some sort of transition is possible at least for some of us.”
Glen wrote:
“Many of the overly defeatist or surrender arguments pretend to be empirical. But in reality they are quite deterministic, subjective and purpose-driven.”
Before “hope” can be established. one needs to end denial. The world is awash in populations and leaders that don’t see a crisis. Its BAU, and focusing on non-sense issues: gay rights, immigration, etc. Second, the world continues to march to global war. We see it in the Middle East, Asia and eastern Europe (Ukraine). We are also seeing a rapid destabilization in the poorest regions. Africa, Middle East, South America and to some degree in Western Europe (Greece, Riots in UK, Germany, Spain, Portugal). We have also have a ticking debt bomb. Each one of those problems is very challenging. Combining them at the same time makes it virtually impossible without a radical change, on a scale that has never happened in human civilization.
Its very unlikely collective population will be educated to understand the crisis before it too late. As I see it, it will be much more of the same. More denial, more lies to the public, more war, and much more global instability. It virtually impossible to get people on this site agree a crisis is coming. Half of the posters here think PV, Wind and EV will solve everything. If readers on this site cannot collectively agree we are headed for crisis, what makes you believe the rest of the world will accept it?
TechGuy,
Well I certainly cannot deny the possiblities of your prediction coming true.
But, as Patricia Churchland explains in this lecture, in human affairs an “is” quite often gives birth to an “ought,” and an “ought” in turn sometimes becomes an “is.”
http://thesciencenetwork.org/programs/beyond-belief-candles-in-the-dark/patricia-churchland-2
Furthermore, it seems to me like falling into a fit of passive nihilism would make your prediciton self-fulfilling.
Half of the posters here think PV, Wind and EV will solve everything.
No one here thinks that. But…many think that PV, Wind and EV have the potential to solve energy problems.
They won’t cure cancer, but helping with energy problems would certainly help reduce resource wars.
Fred Magyar said:
Call me crazy but I see a huge amount of denial among the people who have built their lives on fossil fuels, while the laypeople have the excuse of being blissfully ignorant, the people in the oil business do not!
I don’t think those “laypeople,” even when it comes to those “oil guys,” are nearly as hostile to the enterprise you champion as what you imagine. I think most of the problems come from much higher up in the feeding chain.
Try taking a look at this video, for instance, as well as some of the attached polling information:
http://edition.cnn.com/2015/08/03/opinions/sutter-climate-skeptics-woodward-oklahoma/index.html
Thanks for that link:
“… I met Rita Barney, … She looks like punk-climate-activist material. But even she doesn’t think we need to switch off of oil. “I think that, as we take the oil out of the ground,” she said, “God provided a way for that to replenish itself.” (Oil actually takes hundreds of thousands of years under pressure to form.) ”
OMG – how can people believe this in light of the thousands of defunct oil wells/fields?
EIA say Oklahoma was average 460 thousand bpd in 1984, but declined to 168 thousand bpd in 2005, now back up to 350 kbpd in 2014.
In 1995, oklahoma had 44,810 oil wells, in 2009, only 32,211.
If they keep refilling, why did they shut any down?
http://www.eia.gov/pub/oil_gas/petrosystem/ok_table.html
“It is difficult to get a man (or woman too it seems) to understand something when his salary depends on him not understanding it.” – Upton Sinclair
Hoot owl hooting right now. It’s a hoot.
In March of 2009 there were 948 wells in the Bakken Formation and the number of barrels stood at 3,447,000. In June of 2015 the number of wells is at 9912 and the barrels in the month of June stands at 34,500,000 plus.
31,000,000 more barrels per month in a six year span. Times 12 is an additional 370,000,000 barrels of oil added to the market in one year. Oil that is now there when six years ago it was nowhere to be seen.
Makes it a buyers market and Ford pickup trucks fly off of the shelves at the pickup truck supermarket.
Fear of the unknown, fear of something that might eat you, like a snow leopard that has a bead on you or a cannibal. Cannibals would be a group to avoid, a fear of them is warranted.
Xenophobia for a reason.
Strange how shale fracking added only a few percent oil to the world market and tar sands another few percent of synthetic fuel, yet the price of oil fell like a rock, all on a few percent change. It could very well spike again as oil production falls.
To base a civilization on a system that unstable is crazy.
It is strange only to people who have not had the experience of exposure to markets that are similar to the oil market. OIL and many farm products are much the same in that demand for them is said to be HIGHLY INELASTIC- meaning that only a small change in the quantity coming to market will cause a really big change in the price.
If a few “too many” eggs are coming to market the price of eggs crashes dramatically- just as the price of oil crashed for the very simple reason that a few too many barrels started arriving in the market.
When the price of eggs or oil falls far enough, the end users will buy enough more eggs or oil to use up the excess supply – at the new far lower price. The cook finds ways to use more eggs by substituting cheaper eggs for more expensive ingredients. The average owner of a car will drive it a little more often and take an occasional additional trip in it and maybe opt for a place to live farther from work and maybe trade for a larger faster car. Business men will substitute oil for other energy sources maybe even going back to burning it in power plants- if it gets cheap enough.
Now let the change in production be from ” too much” to ” too little” and the price of eggs and oil will spike just as sharply upward as it crashed , at least up to the point that end users cannot afford eggs and oil. There are many substitutes for eggs, so the price will never triple. It’s too easy to get by with fewer eggs and more meat and cheese etc.
BUT there are very few substitutes available for oil and NONE that are available in huge quantities on short notice. AND oil is for now absolutely essential, it is still the lifeblood of industrial civilization.
Take this to the bank- oil production will swing back to “too little” before too long and oil will spike to well over a hundred bucks a barrel. How much more is hard to say, or how long the spike can last is hard to say, because really expensive oil brings on the economic flu.
In the long run I fully expect oil to sell for two hundred bucks a barrel, the economy being able to support such a high price due to ever increasing efficiency in the use of oil and the substitution of other cheaper products for oil and changing lifestyles that require less oil.
The two hundred dollar price will be necessary to make it feasible to extract ever smaller and lesser quality oil fields, getting it out of the ground is going to be more expensive over time.
MAYBE coal to liquids will cap the price, or maybe wind and solar power and electrified transportation will cap the price. But I am betting on two hundred dollar oil in fifteen or twenty years in present day money. No problem for me, if I live that long I can justify a second hand electric car and charge it with my own pv system.
Ten dollar diesel fuel will not significantly increase the WHOLESALE cost of farm products so people with jobs will still be able to eat for only a little more than today unless they insist on highly processed foods.
Two hundred dollar oil would be evolutionary. It would crash demand and push up demand for alternatives. Just bought gasoline at 1.99 per gallon. Two hundred dollar oil might make that 8 dollar or more per gallon US and much higher in Europe. Demand would crash long before two hundred was reached so the price of oil will crash also, unless it is very production limited. At that point it would truly become a fossil.
With a little luck I expect to live to see two hundred dollar oil in current day constant money- and super small low narrow fore and aft oriented two seat cars that run on it by the millions- as well as plug in only cars and plug in hybrids by the millions.
People who have jobs will be able to afford ten dollar to twenty dollar fuel because their cars will be getting well over a hundred mpg and they will be doing a lot less driving- only really important driving will be the norm. Getting to work in the absence of mass transit etc. The speed limit might be and in my opinion will be lowered to say forty five to help increase fuel efficiency along with downsizing and lightening the cars.
If Old Man Business As Usual lives another twenty years .
Hey, from the recent high of a hundred or so , going to two hundred is only ONE doubling.
Glad to see you have a reasonable vision of the future. I doubt if we have to reduce the speed limits much, streamlining and better engine(s) design will do it. Somewhere a while back I came across an article concerned with car energy use. I think it was the Toyota Corolla uses 7 horsepower to travel at 60 mph on level ground.
So aerodynamics is not the problem, internal friction and weight are the problems. It takes horsepower to climb a hill. Some of that can be gotten back by regenerative braking going back down the other side, but it would be better just to make the whole thing lighter.
So in a way, you are right, a very efficient ICE built as light as possible and streamlined would be an answer. There is a company that produces a very lightweight diesel rotary ICE that is now being turned to military applications. Something like 2 hp to the pound if I recall correctly. So a 30 pound engine could power a light runabout car for 2 or 3 people. If car plus people weigh about a thousand to 1200 pounds, the 60 hp would be more than adequate. MPG would be over 100 and engine replacement would be a one person job and easy (no water cooling).
Still, I think there are other ways to restructure are transport that would overall be far more energy efficient.
MarbleZeppelin says:
To base a civilization on a system that unstable is crazy.
Try telling that to the market fundamentalists.
What you are preaching is heresy in the land where the price theory of value is sacrosanct.
Obviously the price of a product or commodity can vary widely while the actual value or useful properties have not changed at all.
A solar power for the USA study http://wattsupwiththat.com/2015/09/04/going-solar-system-requirements-for-100-u-s-solar-generated-utility-baseload-electricity/
WUWT is the well known home of the cornucopian element that generally understands NOTHING AT ALL about the basic sciences except possibly conventional engineering and electronics applications. I just read a long string of the comments and not a single reader bothered to mention the inevitable depletion of fossil fuels although quite a few are avid nuclear advocates.
Most of the comments display an appalling level of ignorance when it comes to the physical parameters of the real world. They seem to have swallowed the land area calculation whole as if it were a real issue.
I posted this comment which might or might not get past the moderators.
“AS USUAL, articles such as this one utterly fail to mention the flip side- which is that fossil fuel supplies are depleting at an accelerating rate and will not last forever.
Furthermore a piece of land a two hundred kilometers on a side sounds like a hell of a lot- but drawn to scale a square that size on a map of the USA is a FLYSPECK rather than a problem.
The cost of renewable energy is coming down fast and will continue to come down for a long time yet. Storage REALLY IS a tough nut but we will necessarily learn to live with a lot less storage than the authors indicate, as a matter of necessity. There are plenty of ways to substitute day time energy for energy ordinarily consumed at night, for instance thermal storage in either direction, hot or cold, such as hot or chilled water to regulate temperatures in houses and businesses.
The lighting industry in the USA has not yet even gotten to three percent total penetration of LED lighting. The possibilities involving improving energy efficiency are as big and as bright as the problem of providing the energy is big and tough.
Note that even this article admits that a typical modern panel pays back its electricity investment in a year. Such panels are still doing eighty percent or better at the end of twenty years and will be generating FIFTY percent or so at the end of sixty or seventy years IIRC but it has been a while since I checked that figure.”
Some commenters are saying pv only lasts five years at that site. Virtually all of them appear to be as dumb as fence posts and as ignorant as mules- at least as far down as I bothered to read. The comments about the future potential of nuclear power WERE at least within the range of technically realism. But none of the nuclear advocates bothered to even mention any of the problems associated with a gargantuan new fleet of nukes.
As some comedian once said, you don’t have to eat an entire meal to know that the food is lousy. A bite or two of each entree is enough to tell the story.
I just went back and skimmed over the entire string of comments. Most of the audience is beyond clueless.
A good many of the comments are so asinine as to be utterly contemptible.
Now while I have a rather low opinion of Chinese brand name products, having found them to be manufactured by a hodge podge of small manufacturers using any materials at hand and truly being junk, who is fool enough to believe that really major manufacturers who have been in business for some years already are shipping junk that will not last even a quarter of the warranty period?
ANY FOOL knows such a company and brand name would be history almost instantly given what they have been shipping for the LAST five years.
Chinese goods with recognizable European or American brand names are of competitive or better than competitive quality considering the price. I might not be able to repair a super cheap Chinese appliance – but otoh I cannot afford to repair most American made appliances either, not anymore.
The company that sells HotPoint refrigerators wanted almost two hundred bucks for a new door gasket for an old refrigerator I own. Since I could not find an aftermarket to fit, I slapped on a thick layer of silicone and wax paper at the bad spot and shut the door on the mess.. When it cured I peeled off the paper and trimmed the excess and presto I have a rotted door gasket that still fits the door opening ok, well enough for a fridge used intermittently to store fresh veggies at the tail end of the season.
I can get a newer and better used fridge any day for a hundred to a hundred fifty.
I don’t even know anybody who has called a tv repairman or a camera man or an electric range man recently. If you can’t just stick in a new burner or heating element you are just as well off to buy a cheap new range with a warranty. Generally speaking people are also discarding low end computers as well rather than paying for having them serviced.
You can buy the cheapest ice powered push lawn mower and run it until it croaks without ever doing anything except putting gasoline and oil in it a LOT cheaper than you can maintain it unless you maintain it yourself. Just sell it at a yard sale or put it out for the trash man and get a new one, this is much the cheapest option on average.
Most of the audience is beyond clueless.
They are on a wattsupwiththat site.
It is self selective.
Clueless is about as good as it it is going to get.
Did you read the post? If I did a similar study I would arrive at very similar conclusions. Solar just doesn’t have any way to satisfy the USA needs with current technology.
Solar just doesn’t have any way to satisfy the USA needs with current technology.
That’s right. Similarly, as fossil fuels decline, they won’t be able to satisfy USA needs either.
Life is going to change, no matter what.
The post is crap.
Outdated data, dubious assumptions, red herring of why solar must meet all power needs (wind and solar are complementary, saving storage costs. We can do massive efficiency gains that are less costly than renewables. Renewables are site specific, so the least cost solution for a given area is specific to that area.).
It’s sponsored by http://fuelrfuture.com – a hot fusion boosting site.
You know hot fusion?
Always a few billion dollars and a decade until break-even, and been that way for the past 50 years.
Crystalline silicon has more room for cost reductions.
http://www.nrel.gov/analysis/pdfs/article_solmat_2013-01-030.pdf
(just happened to be my “light reading” (joke) this afternoon at the office).
I’ve never seen a peer reviewed journal article that showed that crystalline silicon is limited by materials, though that cannot be said for CdTe or CIGS.
Similarly, some wind generator designs are limited by rare earth availability, but those are not required for decent wind turbines.
The real issues are:
(1) are people willing to make the political commitment to go renewable before they/the economy is clobbered by peak oil/coal/gas &/or climate change, and
(2) are they willing to pay for it (and stop their addiction to fossil fuel subsidies) while money is still widely available.
Think of renewables as a sort of an inverse Hubbert idea.
Hubbert says: each well starts, flows, declines and then stops.
Thus each field starts, peaks, declines then dies.
Thus the world starts, peaks (“one or more maxima”), declines then dies.
(and the pain starts at the decline from the peak!)
If homes, cities, islands, small nations are getting/getting-closer to 100% electricity/100% all-energy from renewables, then eventually (given politics and money), everybody can in principle be 100% renewable.
https://en.wikipedia.org/wiki/100%25_renewable_energy#Places_with_around_100.25_renewable_electricity
And as more renewables are deployed, they keep going down the learning curve, getting cheaper.
But if history is any guide (c.f. Tainter, Diamond, Greer, etc.) , a lot of people will cling to their SUV or their dream of emulating those who cling to their SUV, all the while ignoring onrushing peak everything and the economy/civilizations will collapse to some degree.
I can see PV DC applications- no inverters.
Panels last quite a while, and few parts in a DC system.
But we are talking about a small fraction of the electricity used now, and a very different lifestyle.
Wind– maybe in some situations.
Fernando IF you ever do a study you will WITHOUT A DOUBT whatsoever prove conclusively that oil, gas, and coal will last forever without any problems associated with using them in ever increasing quantities.
Study?? STUDY? It’s a totally deliberately designed HATCHET JOB intended to keep the idiots happily lined up supporting business as usual and pouring money into FUSION power fer Sky Daddy’s sake.
You know better of course. Every once in a while you let your guard down and talk about oil prices going up to a hundred fifty in a few years.
Tell us. You have extensive experience in oil. How long do you think it will be before oil is in critically short supply in a world with still growing population?
The comments section proves obviously enough that only anti renewable idiots are reading the article. I wrote my comment HERE to reflect on the guy THERE claiming all Chinese panels are junk that will last less than five years.
The rest of the audience THERE seems to agree and think that all pv panels last only a very short while. GROSS ignorance. WHOLESALE ignorance.
Maybe one out of a hundred comments at most will be made by somebody at least marginally well informed and marginally capable of critical thinking.
Just took a brief look at the article and you know what’s funny? They appear to have low balled the required amount of PV required to replace the current FF powered fleet! They state:
“So with an average (continuous) power demand of 440 gW, the daily energy demand is 24 X 440 = 10,560 gWh. But all of this energy will have to be captured during the 12 hours of sunlight, that is, in half the time, so that the solar power generation capacity must be 880 gW.”
Wrong! Further down they state:
“For the purposes of this study, the location chosen for the solar plant is somewhere in the South West, the sunniest part of the country, since this will require the smallest solar array. For a tilted flat plate array, as specified below, the chart shows that the average solar energy intercepted throughout the year by the array is around 6 kWh/m2/day in the South West. If the plant were to be located in the colder northern states, the energy intercepted would drop by a third to around 4 kWh/m2/day so that the solar array would have to be about 50% larger to capture the same amount of energy. Other charts in this series show how the insolation decreases during winter months and increases during the summer.”
Here’s where it gets a little tricky for most people. The peak power available from sunlight is about 1 kW/m2 so a “solar resource” of 6 kWh/m2 corresponds to about 6 hours of peak power, also called “Peak Sun Hours”. It is the way solar energy professionals can estimate the output of a given array, sort of as if the sun just appear in the sky at the optimum position and stayed there for 6 hours and then disappeared. This makes BS out of their assumption that “this energy will have to be captured during the 12 hours of sunlight, that is, in half the time,”. Why do they get the data further down but use some badly concocted figure further up. The correct figure is 4x the “average (continuous) power demand”, not 2x. So that is just one area where they let us in on the fact that they are probably “out of their depth” with this study.
When it comes to the storage requirements they engage in gross oversimplification. If a particular premises has an electricity consumption profile that closely matches the available solar resource, how much battery storage is needed? Answer: almost none. On the other hand, a business that is closed during the day and operates throughout the night, would need a battery that can store all of the energy they use. They also assumed that a “battery farm” would have to exist in one location when I suspect battery banks are going to be set up adjacent to the load centers and be sized to suit a particular load, that could be a single factory or business or even a house. The concept of distributed storage to go along with distributed generation.
They also ignored the existence of thermal storage (Solana and Crescent Dunes energy projects) that can generate electricity for a number of hours in the absence of sunlight. Development of thermal storage for electricity generation has stalled because it is too costly relative to PV, even though it is competitive with PV when battery storage is considered.
So while I would grant that this study is a somewhat useful thought experiment, it is full of holes.
Neglecting clouds and occlusion by the Earth during the winter and assuming optimal angle for the day, it should be Pi x, not 2x or 4x.
The NREL data on the maps at their website is based on empirical data, taking into account cloud cover, from satellite imagery. It is used by thousands of professionals in the industry as a basis for calculating the ROI on solar projects so I’d say it’s pretty accurate. They have data for annual and monthly averages so the difference between winter and summer production can be calculated with a reasonable amount of accuracy.
I thought they were pretty soft on solar. The given assumption is that solar has to provide all the USA needs.
In such a case we would have to lay out several dozen options, load them into a dynamic systems model and run them through a weather hind cast over the last 20 years (running those models was my specialty when I was doing Arctic port conceptual designs). The model identifies the three best options and those are refined. And I bet the answer is going to show solar power can’t supply USA needs. It’s way too expensive because we lack the battery technology.
If you’re interested in how NREL made their maps, it’s all here:
http://www.nrel.gov/gis/solar_map_development.html
The State University of New York/Albany satellite radiation model was developed by Richard Perez and collaborators at the National Renewable Energy Laboratory and other universities for the U.S. Department of Energy. Specific information about this model can be found in Perez, et al. (2002). This model uses hourly radiance images from geostationary weather satellites, daily snow cover data, and monthly averages of atmospheric water vapor, trace gases, and the amount of aerosols in the atmosphere to calculate the hourly total insolation (sun and sky) falling on a horizontal surface. Atmospheric water vapor, trace gases, and aerosols are derived from a variety of sources. The procedures for converting the collector at latitude tilt are described in Marion and Wilcox (1994).
The given assumption is nonsense. According to data from the EIA’s Electric Supply Monthly, the US already gets some 6.3% of it’s electricity from conventional hydro and another 4.4% from wind as of 2014. Solar should be over 1% for 2015 having doubled every year between 2007 and 2014. Wind doubled every three years between 2004 and 2013. Why then do we need to assume that solar must contribute 100%.
Added to which the US could probably do a lot more in the way of micro-hydro, waste to energy, landfill gas and bio-gas except that, pursuing those options would probably not fit well with the current model of large centralized plants operated by large corporations. Maybe someday the politicians will break free from their crony capitalist overlords and realize that distributed generation can create a whole new class of entrepreneurship and become a source of growth for the economy (I wish!).
I accept that relying on more intermittent sources like solar and wind is going to require storage and that appropriate, affordable battery technology does not exist, yet. However, I find interesting that this matter is even being discussed. If it is an attempt to make they idea seem ridiculous, it may have the unintended consequence of making people who would otherwise not have, start to explore the idea.
All that data is (also) wrapped up in a nice neat little application, online.
http://pvwatts.nrel.gov
I can’t find the free world wide one in two quick google searches,
those in other lands will have to call forth more google-fu that I’m willing to at the moment.
It has short cuts. A more detailed study would kill solar even deader. I guess they felt there was no need to bomb until the rubble bounced.
“The correct figure is 4x the “average (continuous) power demand”, not 2x. So that is just one area where they let us in on the fact that they are probably “out of their depth” with this study.”
It needs to be move than 4x to accommodate weather (ie Overcast days, Dust, Rain, Snow, etc) requiring extra energy to be stored beyond demand to carry the load. On Average its about 5.5 Hours (convulsion) of PV output at 100% of rated value. But there will be periods when large weather system cause PV output to be very low for several days in a row. Thus requiring an oversized PV/Wind and storage systems.
There would also be storage losses, since there is no storage system that is 100% efficient. There are also conversion losses (ie Low voltage DC to High voltage AC) conversion.
Still other challenges need to be addressed such as intermittent output (ie overhead clouds passing over a PV farm) that can drop output up to 90% for a few minutes, even on sunny days. Balancing large scale intermittent power sources is extremely difficult. The only realistic, unrisky way, is to run the load off a storage system and use PV to feed the storage system. Unfortunately there still does not exist a cost effective large scale storage system (ie capable of storing GWh) that does degrade with use. Pumped water is probably the only viable option but there lacks sufficient land with a terrain profile to accommodate the large amount water storage, with a sufficient potential energy (ie hight to drop the water to run turbines) that is near a river or ocean that isn’t already occupied (developed properly) and also not in a drought/desert (lack of water/high evaporation), not endangering people (ie people living below the levy), or not displacing fertile crop land or taking water away from crops.
Watts Up With That is one of the worst of the crackpot sites. Everything there will be twisted nonsense in one way or another.
Yep—
What is my head doing up my— is a piece of work.
http://lh3.googleusercontent.com/-0_vyET1nuLo/VeoC-fZGMPI/AAAAAAAAdDM/WwpTfrOrjSc/image%25255B5%25255D.png?imgmax=800
http://russianshale.com/
Shale Media Group.
There are people out there trying to make money on shale oil without drilling a single well or lending a single unrepayable loan.
Funny. ?
I put up a new post exploring credit growth in Emerging Market Economies (EME) and their petroleum consumption for the years 2000 – 2014.
http://fractionalflow.com/2015/09/05/the-oil-price-and-emes-growth-in-credit-and-petroleum-consumption-since-2000/
Great bit of Macro [may] Rune.
In order to buy WTI futures you have to have dollars. I really don’t see why the bulk of the decline in price of oil isn’t just another dollar carry unwind that lead to leveraged positions being closed or margin calls. Dollars were borrowed cheaply 2009-2014. One would expect that the majority if not all the money that flowed into WTI futures between 2009-2014 was borrowed money, borrowed dollars to be exact. Those long oil position had no choice but to be unwound because of a strengthening dollar.
When the price of money rises, value get transferred from asset to currency. In this case oil’s lost value was transferred to the dollar. The reverse also holds true, when the price of money declines value gets transferred from currency to asset.
When dollar carry unwinds in EM’s, value get transferred from EM currencies to the dollar.
Classic case of wealth being transferred but if you live in an EM country you probably think wealth is just vanishing because you don’t realize where it’s going.
Interesting story listed top ten jobs regarding employment growth 2005-2014 in US, per occupational employment statistics from Bureau of Labor Statistics. 1,6 & 8 were oil gas industry.
1. Service Unit Operators (pumpers). 217.9% growth. $44,970 mean annual pay, 62,080 employed.
6. Petroleum Engineers. 127.1% growth. $130,050 mean annual pay. 33,740 employed.
8. Roustabouts. 118.8% growth. $35,780 mean annual pay. 73,450 employed.
I predict that personal servant will be huge growth category within twenty years, in the top ten in terms of percentage growth.
The definition of annual pay will need to be revised to include ”room and board, plus tips”.
Compensation will be substantially less than in any other major field due to the HUGE number of potential servant employees on the welfare rolls.
Should I add a sarc alert? Don’t know.
They are a little behind the times, although the human and health services industries should rise quite quickly.
If the US wanted petroleum jobs to rise, all they have to do is reduce and limit imports of petroleum. Wean us off OPEC oil. That would stimulate the drill baby drill attitude and make Canada happier too. All this talk about exporting petroleum is stupid, limit imports, start on the path to actual energy independence.
Pay in the health care industries MIGHT grow substantially but it might also stall due to the government taking over management of health care. Right now all the old bau outfits seem to be doing ok under OCARE but that MAY change as the public insists on more and more services at lower cost over time. It is not hard to foresee the government setting prices and controlling admission to the industry. For now the regulated are basically the regulators , politically speaking.
Politicians however DO have a way of throwing former allies and supporters off and under the bus when their own survival is at stake.
The health care industry brought OCARE on itself by failing to correctly deal with political realities. Serves it right if the eventual result is nationalization, pure and simple. Progress in the development of new drugs and new treatments of all sorts will slow considerably but the average citizen will be FAR better off, being able to AFFORD current treatments and drugs.
Stopping or mostly stopping the importation of oil appears to be a political impossibity for now and for the next few years but I agree this would be a good strategy for the country, if it were to be implemented gradually.
Personally I favor adding maybe fifteen or twenty cents a year annually to highway fuel taxes, with the money spent on dedicated energy efficiency programs.
This would increase gasoline prices quite a bit as time passes but also give people time and warning to get rid of gas guzzlers and buy more economical cars and trucks. This is also pretty much impossible due to politics.
BUT- IF Sky Daddy were to favor his chosen children by knocking them upside their collective head every few months with a nice sharp brick in the form of interrupted international oil deliveries, North Dakota peaking and declining sharply, the Alaska pipeline shutting down due to lack of sufficient volume, a killer hurricane every year, maybe the Russians just getting pissed and shutting off international sales altogether for a few months, except to Russian satellite clients etc etc … ………….
We might have a shot at actually BEING energy independent before declining oil supplies world wide result in hardly any oil AVAILABLE to be imported.
Pray to Sky Daddy or the god(s) of your choice for Pearl Harbor Wake Up Events.
Karl Denninger keeps hammering the point the whole Fiasco is Fraud on top of Rot, and we just Lay down and beg the bus to come run over us.
http://market-ticker.org/akcs-www?post=230633
Like I said, the supposedly regulated are themselves the regulators under the current bau model here in the USA and to a lesser extent in Canada.
But I would not be so harsh on Bernie as Kiplinger. Negotiating the price via Medicare etc would be a HELL of a good start and bring the issue to the forefront of public debate in such a way as to make people mad and get results.
Bernie knows that incremental change has a shot at bringing about wholesale change, eventually.
Wholesale change via frontal assault is just not workable here at this time.
If we survive an extremely tough economic environment for a period of years, wholesale change might be possible. The Great Depression made Social Security possible- and the Limey’s threw out the conservative government that won WWII immediately after the war, bringing on their current social welfare model. The NHS has it’s problems, but you do get treated money or none, and results are pretty good and on average better than in the USA where treatment is better-IF you can afford it.
Denninger is a financial genius IMO. Especially in Info Tech.
He analyzes the economy using 6th grade algebra so an idiot like me can understand, and it is way better than anything else.
I am stunned and shocked he thinks Peak Oil and Climate Change are liberal scams.
Science and Math have no bias!!!
I posted the below to Dennis Coyne a few minutes ago. I am re-posting it here so you folks will know what is happening.
_______________________________________________________________
Dennis, my plate is really full right now. I am in the midst of a move and I also have a lot of other stuff happening at the same time. I will not likely have a post for several days now. If you could post something it would be greatly appreciated.
Anything would do, just a paragraph saying “Open Post” or something like that. Might just copy an oil news story or two like they used to do on TOD.
I will hopefully be back to do a post in a week or so.
Thanks, Ron.
Put up Runes latest. Lotta meat there.
Hi Jef,
That of course is up to Mr.Likvern. He can contact us, if he is interested in posting it here. We can certainly discuss his post here, he has put up the link already.
There is. I have started to comment several times and just postponed it.
Somebody ask him if it can post.
You did just that.
This link from the Gaurdian, a non profit somewhat leftish leaning super high quality paper , is headlined “Donald Trump is for real”.
http://www.theguardian.com/us-news/2015/sep/06/2016-presidential-election-what-we-know?CMP=ema_565
INCIDENTALLY the Gaurdian website is free and while I have not yet gotten around to doing so, I am putting them on my short list of organizations I support with (necessarily) modest contributions.
I hope like hell the Trump Chump does not win the nomination and that if he does he will not win the election, given that even Hillary of Cattle Gate would be better imo for the country.
The thing that would put the biggest smile on my face this election cycle is that both parties run an outsider, with Bernie being close enough to to ” outside” status to qualify for the dim rats in my opinion.
The rise of the trump chump is the sort of thing I have been trying to warn my leftish leaning to super liberal acquaintances about for a LONG time now.
Can we all say “backlash” together?
Forcing change down people’s throat via the courts and control of academia is a dangerous undertaking because the legislature and the executive branches can generally ” trump” the courts and cut off funding to academia.
It is hard to know exactly what the chump would do or be ABLE to do in office, but it is not at all hard to predict a chump presidency would be very bad ( equals EVIL ) thing for the environment and the country as a whole. It would probably be good for the owners of businesses of most sorts though- at least in the short term.
There would be at least one upside . Closing the borders to all but very small numbers of immigrants would position us for topping the population hump demographically speaking right away.Our national birth rate is already low enough. The Chump might do a few things to keep industry home and bring some industry home. Might not. He is not stupid and a man who understands his own physical security might just conclude that having an industrially strong USA is the best possible protection he could wish for in terms of his personal and material fortunes.
Nobles and warlords who look after the prosperity of their working classes as a practical matter are more apt to remain nobles and warlords than ones who ignore them.
A farmer does not prosper by starving his draft animals.
the Guardian’s editorial staff can be identified by a hammer and sickle tattoo on their left shoulder. The chief editor gets a Leninheaded dragon on his back. ?
Those sob’s go out of their way to run cover for commie regimes. I used to get after them so much correcting their lies they eventually banned me. Here’s an example of the garbage they write and my response
http://21stcenturysocialcritic.blogspot.com.es/2015/01/sorry-venezuela-haters-venezuela-isnt.html
IF the tragedy of the commons applies, then I am without a doubt the worst abuser when it comes to this forum. Nevertheless I plead not guilty on the basis of a technicality- electrons are essentially free in this particular commons. LOL.
By way of explanation I am stuck in the house for now and maybe for months or years and passing the time by burning up the internet. This forum is by far the most interesting one I know of right now in terms of getting up a real conservation about serious matters.
I have an essay in the works that I planned to put on a site of my own comparing the difficulty of transitioning from fossil fuels to renewable energy to the difficulty of transitioning from industrial farming to more or less sustainable farming.
Both are at least technically possible, both appear to be damned near politically and economically IMpossible at this time except maybe for certain smallish populations of people in a few limited areas.
I can post it as a LONG comment here at the tail end of this Ron post if nothing else appears.
This link indicates that wind energy in Iowa is at least competitive with nuclear power in Iowa on a kWh hour basis although it is true that nuclear is base load and wind is not.
Wind otoh does stretch the supply of depleting fossil fuels and spread the money around in local communities and gets built fast – whereas nuclear is slow and concentrates the money and the power both electrical and POLITICAL in far away places.
The most interesting single thing about it is that the pictured wind farm is in the middle of a giant cornfield.
The arguments about wind and solar taking up too much space are complete bullshit.
This moderately long article goes into some detail about wind energy in Wyoming and nearby states.
http://trib.com/business/energy/wind-power-booming-nationally-grinds-to-a-halt-in-wyoming/article_554712f1-5a65-5b53-b667-68f5112b2353.html
According to some bankers mentioned in the article wind in Wyoming is already cheaper than coal and gas and no longer needs a subsidy.
But the industry is temporarily stalled due to a lack of transmission capacity, with the state already exporting a lot of power.
Some laws passed locally years ago are threatening the viability of the local grid by mandating renewables ( read wind ) connections to such an extent the utilities would not even need fossil fuel plants except for back up purposes. This is obviously going a good ways overboard but laws written years ago do occasionally have unforeseen consequences.
http://www.usatoday.com/story/money/2015/09/06/oil-crude-moodys-rating-cut/71746924/
This article lists seven banks that apparently have seventy five percent of their loan portfolio in energy. This does not prove they are in deep doo doo but it certainly indicates it they might be. That would depend on WHO they owe the money too and the terms of the loans. Some energy companies are doing just fine,such as refiners and pipelines and probably some wholesalers and retailers etc.
I freaked when I read 75% – Zions owns my local business bank.
But I wonder if it’s 7.5%.
Their Q2 2015 results have it at 7.2% of loan portfolio, down from 7.9% in Q1.
https://www.zionsbank.com/pdfs/2Q2015EarningsRelease.pdf
Or, percentage of common equity – I think that’s it:
https://www.argusmedia.com/pages/NewsBody.aspx?id=1074420&menu=yes
The report is $550 dollars from Moody’s in the Alacra 1-time purchase store… I’m not that curious… .
NO, read the USA Today article closely, they too say:
“On average, energy portfolios account for close to 75% of the seven banks’ capital …”
but with fractional reserve banking, this is not near their total loan portfolio.
A long nostalgia and changing times piece about the death of the car culture as the old folks pass and the new generation takes transit to work.
An enjoyable read and thought provoking.
http://www.washingtonpost.com/sf/style/2015/09/02/americas-fading-car-culture/
The U,S isn’t europe! I really wish the entitlement mentality libs who did a study abroad semseter in Europe in college and fell in love with that socialist sustainability BS from over there would stop trying to bring the same foolishness over to this continent.
Let me tell you this, I was forced to ride on public transportation to work for almost two weeks a decade ago, it really was unpleasant. These brain dead libs really need to stop trying to force an anti-car movement!!!
What are all the environmentalists going to do anyway with all the vehicles they want off the road if they ever actually got what they want? Let them rust away in everyones driveways, or junk yards, or land fills? That really isn’t too green, nor good for the environment. You need to let people try to come around on there own instead of forcing it down everyones throats!
Razler said “What are all the environmentalists going to do anyway with all the vehicles they want off the road if they ever actually got what they want? ”
All the ICE cars will be reused and recycled. They can be used to make great mobile homes for all out of business conservatives. In fact we will have them build them, set up the parks (shouldn’t call them reservations, not politically correct) with security fences and gates (made from old cars) to keep them all snug inside. Those car batteries can be connected to donated solar panels and the alternators can be made into wind generators for them. The needed plastics can come from their credit cards. They get time out for good behavior, to plant trees and clean up hazardous waste sites. Some will even be allowed to clean up and recover old mine sites. The rest can garden to produce food and some can even work outside on farms. All under supervision of course. It will be nice for them, the cars do have air conditioners and fans you know. Water pumps too and great furniture. There should be enough metal left over for rocket stoves.
How “green” is that? 🙂
sarc?
Take a deep breath.
Let me tell you this, I was forced to ride on public transportation to work for almost two weeks a decade ago, it really was unpleasant.
That’s horrible, I can only imagine your suffering!! I’m sure you must have experienced profound trauma! You really need to check yourself into a psychiatric clinic and get treatment for PTSD!
Of course they might just send you to New York City for a year or two to ride the subways during rush hour…
Air travel these days is pretty unpleasant, too. Security delays. Packed into tight seats. Of course it is cheaper than it used to be, so we do it.
According to this article NV Energy is owned by the famous and supposedly very liberal Warren Buffet and has proposed rate structures than make it very difficult to impossible for a lot of companies to install residential solar profitably in Nevada.
http://www.foxbusiness.com/investing/2015/08/28/dangers-building-residential-solar-come-to-light-in-nevada/?intcmp=ob_article_footer_text&intcmp=obnetwork
I do not quite understand the way the Solar City price escalator works but it seems to have the effect of guaranteeing Solar City revenues rather than savings for the customer as rates go up. The Solar City contract supposedly runs to well over thirty pages of fine print.
That much fine print imo generally means the contractor has buried a hundred bear traps in the deal to protect and enhance company revenues at the customers risk and expense.
Any comments by someone who understands the escalator for sure will be appreciated.
The Oxford Institute for Energy Studies is one of the best respected think tanks in the world and rated number one by some pretty serious people.
This paper from the Institute is well worth study if one is interested in real detail.
http://www.oxfordenergy.org/2015/07/global-oil-markets-current-developments-and-future-prospects/
Oil is 45 and pennies today, so it will cost less to transport refugees who are on the move today. Germany is a favorite destination. Nothing like a change of scenery to lighten the load.
All those fossil fuels being used to help some in great need, fossil fuels deserve a lot of credit for doing what they can for humanity, however, no good deed will go unpunished. A plug for fossil fuels and the positive effect they can have for humanity, public service announcements to justify their use, a campaign that needs to begin in earnest, doggone it anyhow, they can do the job when all else fails. Instead of beating on oil and coal night and day, it might help more to be more thankful of what they can do and have done. I’m sure though that the beatings will continue until the morale improves.
Toils, dangers and snares everywhere you turn, humanity needs a serious break, this stuff is taken all too seriously. More care is provided to baby panda bears than to baby humans. Humans are slaughtered daily, the cognitive dissonance sticks out like a sore thumb.
Some people have a hangnail and they call an ambulance while others suffer immeasurably and no one is there to care for them in any way, the circumstances are dire but that is just too bad, sorry, Charlie.
Humanity is in the dark, mired in the muck, lost at sea.
Great post Ronald, too bad oil is going away. Here is an essay highlighted by the BBC and written by Amory Lovins describing the end of oil by lack of demand.
https://medium.com/@amorylovins/the-troubled-oil-business-21ad430eff10
What Amory says is what I see looking out the window. Lots of people here are new to the PV installation business, and all of them are overloaded.
And there’s a big movement in this county to get the grid in local hands to allow people to sell directly to each other.
And as to that great devil intermittent– so many many ways to reduce it to a near zero problem, easily filled in by biomass/garbage gas fueled generators. That allows a quite small battery to carry over the short dips of supply.
All of this is simple, within easy reach of any community who want it.
Ronald, on a good day you are REALLY good.
Congrats on one of your very best.
So got curious about something.
“We will protect our market share and will not cut production.”
See, that doesn’t really make much sense when the US can’t export crude by law and is importing only about 1 million bpd from KSA. Shale oil wasn’t threatening market share. China would have been glad to scoop up that 1 mbpd if the US didn’t take it.
Point being, 1 mbpd doesn’t seem like enough to be driving policy. The other 90% of KSA output could not be threatened by shale because of the export ban.
In this context it’s somewhat hard to see how they could be talking about anyone else other than Russia — as in . . . it was Russia’s low pricing that they had to address as a threat to market share — in China, maybe.
Import export tidbits that are cool.
The Bahamas produce oil? http://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbblpd_m.htm
cool.
Belgium sends 100K bpd to the US? Whaaa?
China sends 2K bpd to the US. The mind boggles.
475K bpd from Russia.
“See, that doesn’t really make much sense when the US can’t export crude by law and is importing only about 1 million bpd from KSA. Shale oil wasn’t threatening market share. China would have been glad to scoop up that 1 mbpd if the US didn’t take it.”
Watcher, sometimes you say the most amazingly ignorant things for a guy who constantly lectures the rest of us about supply demand price etc being meaningless abstractions.
Oil is FUNGIBLE, F U N G I B L E , look it up.
Any oil produced inside the USA reduces the need for the USA to import and has the same effect on the WORLD market for oil as if it had been produced just about anywhere else.
Most authorities seem to think that taking about two million barrels a day off the market would be enough after a while to put the price of oil right back up around a hundred bucks again.
One way large sums of money are allowed to leave China is through commodities instead of cash. That could explain that 2K bpd coming out of China.
re: The Bahamas produce oil?
Watcher, et. al. – if you notice the menu button “Product” at the top of that link:
http://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_epc0_im0_mbblpd_m.htm
by default it says
“Total Crude Oil and Products”
If you click on it, it has many selections.
Trying “Crude Oil” and you see the Bahamas now ships nothing to the US.
(because they don’t in fact product any crude oil – though there have been some finds, but nothing commercial yet. And remember the big hype about Cuba? Nothing commercial turned up offshore either.).
But “Products” shows the same numbers as “Total Crude Oil and Products”
If you fish around, you could determine what they sent out,
looks like mostly “Finished Motor Gasoline”.
I thought there was a refinery in the Bahamas, but looks like they closed a few years back.
http://abarrelfull.wikidot.com/bahamas-oil-refining-company
So now just a storage/trading company.
Most of Russia looks like products, very little crude.
http://www.rt.com/business/314614-oil-sector-shutdown-uk/
‘The North Sea oil industry is at “serious and urgent risk” of being abandoned as major energy firms put off projects due to the oil price slump, according to the UK’s Oil and Gas Authority (OGA).’
Current Arctic Sea Ice Extent.
This season’s Arctic ice melt won’t set any records but it did melt out a lot of the multi year ice built up during the rebound years of 2013 & 2014. There were new Sept. minimum records set in 2002, 2007 & 2012, so a new record is set about every 5 years. If that continues the next one should occur in 2017. Based on how much it is reducing each new record minimum, it will be sometime late in the 2020’s or early 3030’s that the Arctic is ice free at some point during September.
There is also a worst case scenario in which the Artic could become ice free in an earlier year. If the May, June pond build up on the ice is similar to 2012, July is similar to this year, 2015, and the ice discharge out the Fram Strait into the Atlantic occurs like it did in 2007, it would become essentially ice free with a few icebergs remaining here and there.
If I jump from an overpass and fall on a truck full of cotton balls I can bounce right back up, and get a free ride and if there’s no traffic jam I’ll be just in time to give a conference about the probability that the Arctic will be ice free on September 20, 2025. ?
Make it a webinar so we can all listen, want to hear if how you accelerated to highway speeds without leaving the truck bed on that bounce. Your relative velocity vector has two components in that stunt.
Your information and MarbleZeppelin’s map is all very interesting and all that, but the real amazing thing to me personally is that according to Al Gore (king of Global Warming) the polar ice caps should have all been melted away by now. What went wrong? Scientists and democrats up to their same ol, same ol bait-and-switch tricks again?
Hi Sam, don’t be in such a rush, the trend is still there and being off by a few years happened to peak oil. Hang in there and don’t worry about the political end. Your buddy Savage will tell you the truth. I mean it’s broadcast on the radio, it must be true.
Just for equal time.
Here is what the famous scientist David Suzuki thinks of climate change deniers and contrarians.
“A little over a year ago, I wrote about a Heartland Institute conference in Las Vegas where climate change deniers engaged in a failed attempt to poke holes in the massive body of scientific evidence for human-caused climate change. I quoted Bloomberg News: “Heartland’s strategy seemed to be to throw many theories at the wall and see what stuck.”
A recent study came to a similar conclusion about contrarian “scientific” efforts to do the same. “Learning from mistakes in climate research,” published in Theoretical and Applied Climatology, examined some of the tiny percentage of scientific papers that reject anthropogenic climate change, attempting to replicate their results.
In a Guardian article, co-author Dana Nuccitelli said their study found “no cohesive, consistent alternative theory to human-caused global warming.” Instead, “Some blame global warming on the sun, others on orbital cycles of other planets, others on ocean cycles, and so on.”
Nuccitelli and fellow researchers Rasmus Benestad, Stephan Lewandowsky, Katharine Hayhoe, Hans Olav Hygen, Rob van Dorland and John Cook note that about 97 per cent of experts worldwide agree on a cohesive, science-based theory of global warming, but those who don’t “are all over the map, even contradicting each other. The one thing they seem to have in common is methodological flaws like cherry picking, curve fitting, ignoring inconvenient data, and disregarding known physics.”
It’s astounding and tragic that, with all the evidence — from volumes of scientific research to the very real effects we are experiencing everywhere — some people stubbornly refuse to believe there’s a problem worth addressing. Sadder still: Many of them are political leaders.
Part of the problem is that fossil fuel interests spend enormous amounts of money to sow doubt and confusion, often by funding or setting up organizations like the Heartland Institute in the U.S., the Global Warming Policy Foundation in the U.K., Ethical Oil and Friends of Science in Canada and the International Climate Science Coalition, based in this country but affiliated with similar organizations in Australia and New Zealand and with close ties to Heartland. A number of industry-funded websites also promote fossil fuels at the expense of human life, including Climate Depot and Watts Up With That?
These secretive organizations rarely reveal funding sources, prey on the uninformed and ignorant, and blanket the media with opinion articles, letters to editors and comments, often referring to misleading charts and graphs and bogus “studies” from organizations with names that imply they’re scientific when they’re anything but. They’re assisted by a compliant news media and politicians who also receive fossil fuel industry funding. It’s likely the people behind these organizations know they’re lying but care more about making money and preserving the lopsided benefits of a polluting sunset industry than finding ways to contribute to human health, well-being and survival.
Those who argue that seven billion people pumping massive amounts of greenhouse gases into the atmosphere aren’t having a serious negative impact are out to lunch.
Fortunately, most thinking people don’t buy the lies. People from all sectors and walks of life — religious, academic, business, political, activist, social justice and citizenry — are calling for an urgent response to the greatest threat humanity faces. From Pope Francis and the Dalai Lama to Islamic scholars and Hindu, Sikh and Jewish leaders; from Volvo, Ikea and Apple to the International Monetary Fund, World Bank and World Health Organization; from every legitimate scientific academy and institution to enlightened political leaders — all have warned about the serious nature of global warming and the urgent need to do something about it.”
Man, all those people and organizations conspiring to invent that global warming nonsense. Who’d have it possible? Why old grandpa said it was ‘way warmer when he was a kid. ‘Course grandpa was in a crazy house when he said that so maybe it weren’t really true.
My grandpa warmed up with shots of whiskey and increased his immune system with chewing tobacco.
Just looked at earnings estimates for Q3 2015 and future for several upstream oil and gas. On NASDAQ site.
Interesting that almost all gas weighted companies all have estimated losses for remainder of 2015, but also 2016 and 2017.
Will be interesting to take the non integrated public companies PDP PV10 at end of 2015 and compare it to the same companies’ long term debt. Wonder which number will be higher?
There will be an OPEC cut between now and the end of 2016, IMO. They can bluster all they want, but the low oil price hurts OPEC collectively more than anyone else, absent Russia.
Heard Schork (sp?) on Bloomberg this morning. He claims OPEC’s enemy #1 is Elon Musk and the EV revolution, not Russia, not US shale. Thought that was an interesting comment.
Sure are a lot of vehicles on the interstate this weekend. Wonder where this Labor Day weekend will compare in miles traveled compared to past?
Russia can sell at a low price regardless of production cut by others. There is no law of the universe that says they have to demand more money for oil if they prefer to demand less.
They have enemies. They are hurting them. And no Russians are starving.
NOT OIL
But definitely EIA’
I spotted an article that I thought was somewhat relevant to the discussion on providing all us electricity needs with solar power only.
Is Hillary Clinton’s ambitious solar energy goal for the US workable?
What caught my attention was a graphic showing the forecast for wind and solar generation that, had as it’s source, the EIA. It was an interactive thing and not an image so, I couldn’t copy and paste it but, I was able to download the data, reproduce it and attach it to this post.
Can anybody explain to me/us, why the EIA thinks that after 2017 growth in solar and wind generation is going to just stop abruptly? Up to that point, solar will have been doubling every two years and win every three to four years.
I would appreciate any hints as to why they think neither solar or wind will double for the next ten years after 2017?
In the meantime to get back to oil, I had a look at a post on this very web site from April 10, 2015
The EIA’s International Energy Outlook 2014
It’s amazing! They have world C+C production climbing steadily from under 78 million bpd in 2014 to just over 99 million bpd in 2040, a steady climb totaling 21.25 million bpd, essentially without a pause!
Somehow, production of a non renewable resource is going to continue for the foreseeable future but, the production of the means of harnessing renewable energy is just going to grind to a halt in the next couple of years! Yeah! Riiiight!
Honestly, I don’t know why the EIA even bothers to try extending their forecasts out more than a couple of years out. Their long term forecasts are pathetic.
On April 17, 2015, Ron Posted:
AEO 2015, The EIA’s Crude Production Expectations
The first comment was by Sam Taylor and I think he basically “hit the ball out of the park” as it relates to oil:
I’ve been reading back through some old EIA reports over the last few days, and one of the things I notice about their predictions is just how strongly the last 4 or 5 years of performance seem to influence where their predictions go. They were over optimistic early in the 2000s seemed to get more pessimistic in the mid-late 2000s, and have been vastly more optimistic in the last couple of years as US growth has taken off again. So basically this seems to cause them to miss most of the turning points, which are the most important events.
However, when it comes to solar and wind, past trends seem to have no bearing, past two to three years out as shown below!
It’s impossible to follow discussions because there is no threading of the posts. Anyway.
Coffee,
What companies do to hold acreage it is totally irrelevant. What it is relevant is how much “sweet spots” are sweet at $45. Based on their negative cash flow and penny value of their stock not much. Do you have any insider view on the value of these “sweet spots”?
Ves
Virtually no one can make money at $45 WTI, especially since ATW in ND has been closer to $30.
I cannot say why these guys are drilling at these prices, what I can say is that there has been a LOT of drilling throughout the past couple of years in areas that were suspected of not being especially productive. The biggest reason, as I mentioned above, is to be able to hold this acreage for the future, as they had spent significant time and money to simply obtain the rights to drill.
You may feel it is irrevelant to hold by production, but the companies that spent hundreds of millions of dollars in doing so may think otherwise.
As for the value of this acreage (sweet spots) in dollar amounts? We all may find out shortly as some/much (?) of this land changes hands in the coming financial crunch.
There actually will be clearly defined/declared appraisals when the weaker ones go bust.
Coffee,
I know very well why they wanted to hold acreage and it is not for the rights for the drill. It was as always greed and because they were spending some other people’s money. Motives are always the same.
I can’t wait for that October credit thing considering how much carnage they produced for worldwide oil industry.
This link is way out there in terms of being oil related- but in the end, given that oil is still the lifeblood of industry and will be for a while………
It is worth a look. There is a whole series of short pieces in this link, nearly all the ones I have looked at are thought provoking.
http://www.psmag.com/series/the-future-of-work-and-workers
Boy, I wonder if the Saudi’s feel like maybe they made a big mistake?
Oil is below $45 WTI again.
Really getting tired of this.
Wonder what the heck they are going to cut that their citizens will find unnecessary??
Paid $1.99 9/10 for gas most recently. Per CPI, that is the same purchasing power as .83 cents was in 1986. What were gasoline prices in 1986??
Hey what’s with the oil prices?
Or the formatting?
And why are people here still talking about EV’s?
Do you want to EdriVe, rather than walk, run or bike, over the cliff? Well ok then.
Such promise as a species so long ago on the plains of what is now carved up into bordered governpimp-controlled areas collectively called Africa.
Would you allow a sociopathic stranger to feed your kid? Apparently you already do.
Teen: “Hey Dad, who makes our food?”
Cae-Dad: “You mean produces it?”
Teen: “Ya!”
Cae-Dad: “Corporate farms I guess… Outfits like that.”
Teen: “But someone told me that corporations are sociopaths, or, like, their CEO’s are!”
Cae-Dad: “They are not the only psychos that control your life, kiddo.”
Teen: “Fack!”
Cae-Dad: “Frack too.”
Teen: “So why are we eating it?!”
Cae-Dad: “Go ask your mother.”
Teen: “Fack!”
A lot of things are in the wrong place, wimbi.
Goodbye dog days of summer and (in the late Bob Ross’ voice) happy forest fires.
Arthur Berman’s new article:
The Biggest Red Herring In U.S. Shale
Posted on Mon, 07 September 2015
http://oilprice.com/Energy/Crude-Oil/The-Biggest-Red-Herring-In-US-Shale.html
AlexS. Thanks for the link. Mr. Berman’s analysis is very much like what I have been advocating with regard to companywide “break even”.
My view is what does it cost to keep production flat or maintain it? Berman shows three major shale players are losing in the neighborhood of $20 per BOE to keep production flat.
I am hopeful the money gets cut off. Why invest in shale oil when there are thousands of public companies that are cash flow positive and can pay dividends without borrowing the money to pay them, like COP and MRO do?
shallow sand
Totally agree with you (and with Mr. Berman, Mr. Linkvern and others).
I came to similar conclusions after analyzing shale companies’ 1Q and 2Q results
Interestingly, more articles about (poor) shale economics now appear in mainstream media, including Bloomberg and Financial Times.
There are too many comments about renewables, EV’s, polar ice melt, climate change, and collapse of civilization. It just never stops.
Which means that peak oil comments are too few in number, therefore, any more non peak oil comments are superfluous. All other comments to follow must remain on the topic of oil, how much, when the peak will occur or if it has occurred, what might take place after the peak.
No more comments on renewables and those other uninteresting matters. That is an order.
Vie have our vays.
Yes, it is sarcasm.
Just have every gas station in America report its daily fuel sales to the EIA and make estimates from the reported totals. Interpolations to construct some extrapolations.
Oil is at or close to 90 mbpd consumption, 20 million bpd by the US and the rest of the world hogs the other 70 mi!!ion. 6.9 billion people, the rest of the world, could cut back a cup per day per person and the oil crisis would end. It would save, conserve, 5 million bpd for future use.
In the US, it would save 220,000 bpd or so, so it isn’t really wasted and an increase of 200,000 bpd in the US would still conserve 4.8 million barrels worldwide. /sarc
The view from San Jose is meh. You see the occasional Tesla and Leaf. Of course they are more common here than in New York (where I moved from recently) but still few and far between. They are the status symbol of the eco concious — let’s people show how rich they are without guilt. In Silicon Valley appearing to be eco concious is very important. It’s the perfect product! Priuses are way more common, as are Ford F150s and big SUVs. It’s a very mixed bag.
Of course, you can’t own a Tesla or Leaf without also owning an ICE car unless you want to stay inside Silicon Valley all the time. So, in that respect, it’s an environmental joke.
Where I live (a college town), Priuses have replaced Subaru Outbacks as the most popular car I see. I did see my first Tesla not long ago — charging at the station next to the skate park by the local rec center. I know there are more of them here because there was a Tesla dealership here for awhile (it moved to a different location in the state). I’m sure I have driven by more than that, but I haven’t learned to immediately identify them.
Saw my first Volt the other day.
I think the reason we don’t have even more pure EVs is that a lot of people have to park on the street or in parking lots. (My situation.) Not everyone has a garage with a plug. Which triggers an interesting thought. Plug-in cars seem to go along with the suburbs or with people going to work where there are charging stations.
If you work at home and your parking spot isn’t near an electrical plug, a plug in vehicle isn’t as desirable as a hybrid.
re: staying inside Silicon Valley.
More so with Leafs, though I have seen California Leafs in the Reno-Tahoe area, and not just those that live in Verdi over the line.
Tesla models S?
All the time in Reno: Whitney Peak, the Peppermill and the Atlantis casinos have Tesla chargers (for patrons only, see front desk/valet), the later two at 80 amps.
And Superchargers are all along I-80, and I-70 as well as I-5
This summer I saw a model S with Texas plates “EV HVN” at the Whole Foods in Frisco, Colorado, and several along I-80 in Wyoming.
The interactive US map:
http://www.teslamotors.com/findus#/bounds/49.38,-66.94,25.82,-124.39?search=supercharger&name=us
You can look for “Destination Charging” (turn on at bottom of map, and turn off Supercharges by clicking on the boxes).
There’s even a Tesla charger at the Gold Hill hotel in Gold Hill (a sprawling suburb of Virginia City, Nevada – /sarc).
That puts them in league with the Hyatt Regency in Income Village Nevada (Incline Village, excuse me), The Ritz Carlton at Northstar, Cedar House in Truckee, Resort at Squaw Creek, Heavenly,
a couple of airbnb places and some high-end real estate offices in the Lake Tahoe area.
If them places is too highfaluting fer ya’, head to Red Bluff or Downieville, or the Super 8 in Ukiah.
Somebody is using them, the http://www.plugshare.com comments for the Truckee Supercharger 18 days ago says “5 of 6 stalls full. Must be Friday afternoon….”.
http://www.plugshare.com
n.b. the plugshare map doesn’t show all the locations unless you zoom in, and having the residential stations enabled makes the view very crowded.
From other comments at non-Tesla chargers, one can tell shorter range cars (?Leafs) have stopped in along I-80 coming up the hill.
I see quite a few Leaf, Volt, and Tesla in Austin. A colleague at work has a Tesla (loves it). I have seen Volt and Tesla at neighbors’ houses half a block from mine. It is common to see Teslas on the road.
.
.