US Oil Reserve Growth

This is a guest post by Dennis Coyne.

The views expressed in this post are those of Dennis Coyne and do not necessarily  represent those of Ron Patterson.

How much oil can be extracted from known oil resources profitably? This depends on many factors, the price of oil and technological progress in oil extraction methods are the chief factors, but improved knowledge gained through the development wells drilled and the corresponding output and geological data as known reserves are developed is important as well. Oil reserves do not grow, they deplete as the oil is produced. With increasing knowledge, oil price, and improved technology and production methods, the estimate of oil reserves changes over time and on average these estimates tend to increase, this is what we mean by reserve growth.

The United States Energy Information Administration (EIA) has detailed data on proven (1P) reserves and proven discoveries from 1977 to 2013, but Jean Laherrere has taught us that it is proved plus probable (2P) reserves that we should focus on.


In order to estimate US 2P reserves, I looked at data from the United Kingdom where the government publishes both 1P and 2P reserves for crude plus condensate plus NGL (C+C+NGL). Data is at link below:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/326985/Appendix_2_Historic_UK_Oil_and_Gas_Reserves_and_Production_2014.pdf

Data shown in graphic below.

blog150529/

An Excel file with some of the oil reserve data is at link below:
https://drive.google.com/file/d/0B4nArV09d398QXNpcW9oVENsTzQ/view?usp=sharing

blog150529/

The chart above plots 1P reserves on the horizontal axis vs 2P reserves on the vertical axis for data from 1977 to 2013. The ratio of 2P to 1P reserves is about 1.68 by this method. We can also sum all 1P reserves (29.8 Gb) and 2P reserves(50.8 Gb) from 1977 to 2013 and we get a ratio of 1.7 for the 2P/1P reserves. The ratio ranges from 1.3 to 2.6 over this 36 year period, but mostly stays between 1.4 and 2.0, with the 7 year period after the Piper Alpha disaster (1988) being an exception with a higher ratio over 2 during this period. I use the 1.7 ratio to estimate US 2P reserves and to look at US reserve growth, but also consider cases of 1.4 and 2.0 for a 2P/1P reserve ratio.

The US reserve data from the EIA can be downloaded at the link below:
http://www.eia.gov/dnav/pet/xls/PET_CRD_PRES_DCU_NUS_A.xls
The data in the excel file above was used to produce the Excel file below:
https://drive.google.com/file/d/0B4nArV09d398d2lUQ2RsQlZHQ00/view?usp=sharing
The file above has crude output, discoveries, 1P and 2P reserves, and cumulative output, discovery, and reserve growth. It also includes an estimate of 2P reserves if we assume no reserve growth from 1980 to 2009. This is done by taking 2P reserves (R1) at the end of 1979 and deducting 1980 output(O) and adding 1980 discoveries(D), so if R2 is reserves at the end of 1980 assuming no reserve growth, then
R2=R1-O+D
The blue dashed line in the chart below shows 2P reserves with no reserve growth, the yellow line shows estimated 2P reserves=1P reserves times 1.7 (from the UK estimate).
blog150529/

Due to the rise of LTO reserves after 2005 I use the 1980 to 2005 period to assess 2P reserve growth in the US. The chart above is the case where a 1.7 ratio of 2P to 1P reserves is assumed, 2Preserves grow by 32 Gb or 63% of 1980 reserves (51 Gb) from 1980 to 2005. If a lower ratio of 1.4 for 2P to 1P reserves is assumed, then reserve growth increases to 90% (38/42), and a higher 2P to 1P ratio of 2.0 reduces reserve growth to 44% (26/60).

Given the maturity of US reserves relative to the rest of the World, I would expect at least a 40% reserve growth for C+C less extra heavy 2P reserves. Jean Laherrere estimates about 850 Gb of 2P reserves at the end of 2010 with 1150 Gb of cumulative production and 200 Gb of future oil discovery (URR of 2200 Gb for C+C-XH), he assumes no reserve growth. If my guess of 40% reserve growth is correct that would add 340 Gb of 2P reserves after 2010, which would lead to a 2500 Gb URR for C+C-XH, this is consistent with a Hubbert Linearization for C+C-XH World data from 1993 to 2014. Chart below.

blog150529/

Two dispersive discovery models matched to data estimated from the charts published by Jean Laherrere are presented below. If there is no reserve growth then the 2200 Gb model will be correct, I expect there will be a minimum of 250 Gb of reserve growth with about 250 Gb of oil discovery minimum through 2100.

blog150529/

Increases in estimated oil reserves are a reality as shown by the US reserve data, those who ignore reserve growth are likely to underestimate future oil output. If the future is brighter than I imagine and the dreams of Tony Seba become a reality, then it is possible that reserve growth will never occur due to a lack of demand for oil and a crash in oil prices, I am not that optimistic, change will be quite difficult and will not happen quickly.

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343 Responses to US Oil Reserve Growth

  1. Patrick R says:

    Nice work Dennis.
    It may be that softer demand for all sorts of FF will undermine prices enough to keep a lot of possible reserves in the ground, particularly coal and gas. Even as the international gas trade does look poised to alter profoundly over the next five years, US and Australian exports, Russian-Chinese deals. Perhaps there is no contradiction there at all as lower priced renewables substitute generation where they can and free up more mobile LNG to chase higher priced markets…?
    http://marginalrevolution.com/marginalrevolution/2015/05/renewables-are-disruptive-to-coal-and-gas.html

    • Dennis Coyne says:

      Hi Patrick,

      Thanks. Your link is interesting. I hope that renewables and nuclear are able to replace some of the fossil fuel energy and that as prices of fossil fuels increase there will be better building science employed and more efficient appliances, more public transport, and generally less energy use per capita as the economy becomes more efficient. Also I am hopeful that the UN low fertility population scenario proves correct as lower population will help reduce future resource limits and environmental damage. The intermittancy problem of wind and solar may be overcome with widely dispersed generation connected with an extensive grid (which is mostly in place, but may require upgrades) and overbuilding of capacity, but there will be engineering challenges.

      The reality is likely to be far more grim than these hopeful scenarios. Not necessarily collapse, but difficult times ahead at best.

      • Patrick R says:

        Well I’m increasingly impatient with images of secular global collapse. Collapse is here now, how else do you describe Syria, Iraq, Libya, etc? That’s the full petroleum fuelled MadMax dystopia right there. The rest of the world is not there, and nor need it be. To assume that this is everywhere’s future is a failure to understand the complexity of the world. As Stuart Staniford says ‘peak oil is not synchronous’. Nor are other effects of the world finite nature.

        Additionally Nuclear is a bust; how on earth can it compete with both the cost and time to market of renewables? It has never costed its cleanup. It’s a rort already. Stay as far away as possible from that technophiliac junky nightmare. Requires scary big government security and indemnification too, and any tech that requires 100% failure proof is irresponsible.

        • Syria and Iraq have unusual conditions, they were drawn up by the British and the French after WW I. These countries include diverse peoples with serious religious and ethnic differences, which could be controlled by colonial rulers and dictators. USA interference in these countries weakened dictatorial rule, which in turn led to civil wars. These conditions apply to other nations, for example Sudan (which was carved up), Yugoslavia (carved up), and Nigeria (has had a civil war and lots of insurgencies). In developed democracies these conflicts tend to be resolved without violence (Quebec, Scotland, Puerto Rico). But violence can flare up (Spain ETA basque terrorists, USA civil war).

          • Phil Harris says:

            We had the recent 30 year Troubles in Ireland ( a great deal of murder and worse in a very small population) until the USA, Eire and UK managed to agree together to remove their own domestic politics – legacies from British Imperial days – from the issue.

            It might be a matter of co-incidence but the 1970s industrial upheaval and ‘oil shocks’ and the beginning of Britain’s serious de-industrialising and its effects on legacy lower-income populations were part of the scene.

          • John B says:

            The US Civil War was not about ethnic, or religious differences. It was about State vs. Federal authority, with regards to the legality of slave ownership.

            • It was an ethnic issue, lazy folk who were inclined to sit on their porch and sip lemonade abusing dark skinned folk.

              • Philip Backus says:

                Perhaps agricultural interests vs. industrial interests is the bottom line?

              • I don’t think they would have held blonde Scandinavians in slavery. Bottom line they felt justified to enslave dark skinned people.

                • old farmer mac says:

                  ”I don’t think they would have held blonde Scandinavians in slavery. ”

                  I have never thought much about the history of slavery in the US in these terms but you are most likely correct- but imo only because there would have been too much uproar from similarly light skinned people back in Merry Olde England.

                  I doubt if the slave owners themselves would have been bothered very much by the color of the skin of their human property. There are plenty of accounts of slaves that could pass for lily white in any company.

                  In the last analysis the war WAS about slavery of course but from a legal or technical pov a good case can be made that it WAS about states rights versus federal control. The bottom line is that without slavery there would have been no war.

                  Nor would the weak federal government of that era grown powerful – at least for a few more decades- had it not been for the war.

                  Previous to the war the people in the northern states themselves did not have any reason to want a powerful central government.

                  Nobody much back in those days wanted the federal government to control much of any thing at all except maybe the post office and the borders.So it had very little power , very little taxing authority, very few employees , etc etc.

                  The war did more than free the slaves. It changed the whole relationship between the states and the national government.

                  If it weren’t for this rise in the power of the central government the most prosperous liberal states these days would be thinking SERIOUSLY about seceding from the union in order to free themselves from the federally the forced subsidization of the poorer states.

                  Our powerful central government is arguably largely an unexpected consequence of the American Civil War. I suppose it is a good thing for more reasons than just the abolition of slavery alone- although I personally think slavery would have been outlawed in this country within another fifty years max without a war.

                  Suppose there had never been any slavery here in the USA. When WWI broke out – and WWII – we might not have been well enough organized to make much of a fight – we might even have sat out either or both wars.Germany might have won WWI.

                  Alternative history is a fascinating subject.

                • TechGuy says:

                  “It was an ethnic issue, lazy folk who were inclined to sit on their porch and sip lemonade abusing dark skinned folk.”

                  Not really:
                  http://www.emarotta.com/protective-tariffs-the-primary-cause-of-the-civil-war/&rct=j&q=&esrc=s&sa=U&ei=czRuVYmyCpS2yATMvoGIAw&ved=0CCcQFjAC&sig2=fwt4d8gnDpUf5sN-2MF8lw&usg=AFQjCNEEbwf_Htq5X16uibYkLvqt5mwhLg

                  “In Lincoln’s First Inaugural Address he promised he had no intention to change slavery in the South. He argued it would be unconstitutional for him to do so. But he promised he would invade any state that failed to collect tariffs in order to enforce them.”

                  After the war, they just shifted to a share-cropper model. Nothing changed for blacks in America after the war. The tarriffs imposed were directed at the south, since it targeted southern products, and the north was largely exempt from the tariffs, and almost all of the tarrif revenue was invested in infrastructure in the north.

                • Ilambiquated says:

                  Blonde Scandinavians can’t do field work in the subtropics. That’s why slave owners switched from Scotch and Irish to Africans in the 18th century.

        • Dennis Coyne says:

          Hi PatrickR,

          I also do not support the more gloom and doom view, but I also do think there is serious work that needs to be done to accomplish a transition away from fossil fuels. There will be many unforeseen problems which should not be underestimated.

          I also am not in favor of too much reliance on nuclear power, but think further research should be conducted on pebble bed and thorium reactors. A safe nuclear reactor should shut itself down with no further cooling requirement.

          I have not done the research necessary to know if this is feasible. The question becomes if energy requirements led to a choice between coal and nuclear (and no other options were available) which would you choose, for me it would be nuclear, but in time this requirement could be reduced to zero, especially if all costs (including insurance and decommissioning costs) are included in the analysis.

      • Fred Magyar says:

        The reality is likely to be far more grim than these hopeful scenarios. Not necessarily collapse, but difficult times ahead at best.

        I agree!

        However, I find those who constantly denigrate the value of renewables because of claims that they are intermittent or unsustainable because the renewables infrastructure can’t be produced and maintained by renewables alone to be the worst kind of doomers. They accept that Peak Oil is a reality with all of it’s consequences yet keep insisting that somehow a lower energy consumptive lifestyle is impossible.

        Well, I think that if your luxury ocean liner is sinking in the middle of the ocean, you might find, that being in a tiny and very uncomfortable life boat to be an acceptable alternative to drowning in rough seas, to each his own, I guess!

        To be clear I understand that there is no guarantee of survival in the lifeboats but the ocean liner is going down so clinging to it is no solution either… I suggest that if you want a slim chance at survival it’s time to man the lifeboats.

        • Boomer II says:

          They accept that Peak Oil is a reality with all of it’s consequences yet keep insisting that somehow a lower energy consumptive lifestyle is impossible.

          I don’t understand their thinking either. If your options are reduced, you will likely choose what will keep you alive. And if you can’t keep everyone alive, you’ll do what you can to keep some alive.

          The lifeboat option is apt. If there aren’t enough lifeboats to allow everyone to get into one, you’re not going to force everyone to drown because you can’t save all of them.

          Renewables, even with flaws, are an energy option. To discount them, especially in situations were they are already better than fossil fuels (e.g, no grid, no or very expensive fuel), makes no sense to me.

        • They accept that Peak Oil is a reality with all of it’s consequences yet keep insisting that somehow a lower energy consumptive lifestyle is impossible.

          Fred, I deeply appreciate your input and your very intelligent comments on this blog. They are generally spot on. But in this case you miss the mark by a country mile. That is you have the average Peak Oiler completely wrong in that assessment of their position. And for sure you have this Peak Oiler completely wrong.

          Renewables are great. It is absolutely possible for people to live a lower and energy consumptive lifestyle. It is possible for people to live in very primitive conditions as they have done so for tens of thousands of years. The debate Fred, is whether or not renewables can support 7+ billion people in a manner that will prevent total collapse of civilization as we know it and at the same time not destroy the renewable resources we have left.

          We are already living in an overtaxed world. I we are drawing down our natural renewable resources far faster than they can be renewed. That is water, topsoil, forests, ocean fisheries, rivers and everything else that we depend on for our survival. If seven plus billion people were to depend entirely on renewable natural resources for survival this process would completely destroy what’s left of them in short order.

          But you may say “The sun always shines and the wind always blows so these natural resources cannot be depleted.” But of course these are not the natural resources that will be depleted. It is the ones that are already going away that I am speaking of.

          There was a time when it was possible for the entire population of the world to live completely on renewable resources. That time was when the world population was less than one billion people.

          We are already seeing the beginnings of collapse. Somalia is a failed state that collapsed because of poverty and environmental conditions that would not support its population. The unrest in much of the middle east is caused by similar problems.

          When people get hungry, especially those who have lived with plenty to eat all their lives, they riot. They blame the state for their newly dispossessed predicament. But their rioting will gain them nothing. Robert Kaplan wrote about this twenty years ago. The Coming Anarchy

          • Boomer II says:

            The debate Fred, is whether or not renewables can support 7+ billion people in a manner that will prevent total collapse of civilization as we know it and at the same time not destroy the renewable resources we have left.

            I don’t think many people are saying renewables will support 7+ billion.

            I’d say that most of us here who support renewable use and research believe renewables will support some percentage of that population.

            The extreme doomers believe in collapse that will make impossible for almost everyone to live on earth. They believe life is so tied to oil that there aren’t any other options.

            • Jef says:

              Boomer – You keep saying that some percentage of the population can live on renewables.

              My contention is that there is no scenario for getting from 7+billion down to “some percentage” that doesn’t end up being so devastating that there is not enough normalicy left to support an sort of organised society and certainly not a scenario where we reasonably transition to you magical future.

              Call me a doomer if you want but I say stop all the talk about “renewable” future and deal with the hard cold reality of the NOW!

              • Boomer II says:

                My contention is that there is no scenario for getting from 7+billion down to “some percentage” that doesn’t end up being so devastating that there is not enough normalicy left to support an sort of organised society and certainly not a scenario where we reasonably transition to you magical future.

                If that is going to happen, it’s going to happen and it won’t hurt anything to play around with renewables anyway.

                I see no downside, and perhaps some possible upside, in advancing renewables. Your scenario doesn’t offer any hope anyway, so what difference is it to you if some of us want to see what we can do with more renewables?

                • Jef says:

                  You are wrong my scenario of stop Fu@king around with techno fixes, admitting that there is a serious problem, and get REAL about what needs to be done is ONLY the path that offers any inkling of hope.

                  Your pie in the sky lets just see, couldn’t hurt to try, mentality is what got us into this mess and is what guarantees the worst possible outcome.

                  • Boomer II says:

                    get REAL about what needs to be done is ONLY the path that offers any inkling of hope.

                    What do you propose? Outline this path.

          • Fred Magyar says:

            Ron,
            I agree with Boomer above. I have never in my wildest imaginings ever thought or suggested that sustaining 7 + billion people on this planet with or without renewables is even remotely possible. It wouldn’t be possible even if we had infinite supplies of abiotic oil either. The planet is already full but that is a slightly different discussion. Tom Murphy’s explanation of why growth has an expiration date due to the laws of thermodynamics should convince any rational individual of that much at least.

            BTW I was not talking about everyone who accepts Peak Oil as a fact of life. I was referring mostly to those that seem to suffer from some form of cognitive dissonance in that they obviously recognize that the continuation of BAU is no longer possible, yet they hold up the strawman argument that renewables are useless because they won’t be able to support BAU! They are right! But that also misses the point.

            The paradigm has already begun to change. My personal opinion is that a few islands of civilization will probably survive and I think that those that do will increasingly depend on some forms of renewables for their energy sources. Which to me, seems to indicate that making investment in R&D into decentralized micro grids and all forms of renewables and storage options all the more important. This is what I mean when I say it is time to man the lifeboats.

            With that view in mind suggestions such as, “renewables without adequate cost effective battery storage can’t deliver even 50 % of Jamaica’s current load”, are in my opinion completely moot. If that is indeed the case then Jamaica and other places like, it will probably eventually have to make due with 50% less energy. To me 50% less is still a whole lot better than 0%!

            Cheers!

          • Doug Leighton says:

            Ron,

            I agree, Fred’s input and (always) elegantly written comments are generally spot on. And, I agree with you, renewable resources are helpful, in a way, but not a real solution on our highly overpopulated planet which is being increasingly raped for its remaining resources: topsoil, fresh water, etc. The earth cannot continue to support its highly consumptive current population much less the couple more billion now being added. Besides, the people I’ve met in third world countries all seem to expect to live like wealthy Americans in the near future having seen their living standard substantially increase over the past decade(s). And, what percentage of people is deliberately organizing lives to make do with significantly less than they are currently used to? Few in my experience.

            • Fred, Doug and Boomer, I think you guys are completely disconnected with what people like Nick, or even Dennis and a few others are talking about. They are talking about a slow transaction to renewables while, at the same time, slowly reducing the population. Of course they are saying there will be hard times but no disaster, no collapse.

              Now which is it? Will there be a collapse due to declining non renewable resources and the destruction of renewable resources, reducing the population to a fraction of what it is now? Or will there be a slow transition to renewables while slowly reducing the population, via voluntary means, to a level that “renewbles” can support?

              Fred, Doug and Boomer, what level of population are you guys talking about? Let’s make it clear, what do you think is possible? Better yet, what do you think is probable?

              • Boomer II says:

                I think there will be severe problems in certain parts of the world. It’s already happening in many places.

                I see some places where renewables will provide enough energy to keep those with adequate food, water, etc. to give people a decent life. Not with unlimited personal transportation, commercial airlines, etc., but with a sustainable, meaningful life.

                So I see big economic changes that will affect the world unequally.

                I don’t believe in worldwide collapse that wipes out nearly everyone and sends those who are left back to the Stone Age. Nor do I see BAU continuing on. I see something in the middle, with drastic changes for some, and more modest changes for others.

                • Dennis Coyne says:

                  Hi Boomer,

                  Agree 100%. The scenarios that Old Farmer Mac paints also seem plausible. I think it likely that a Depression (call it Great Dperession 2) will start between 2030 and 2040 and last about 5 to 10 years, possibly there will be an oil war leading to World War 3 (non-nuclear hopefully), if on wants to call that hard times instead of collapse, that is fine. Eventually the World will recover from the economic and social disaster, possibly humans will learn a little from past mistakes and move to a more environmentally responsible path.

                • TechGuy says:

                  ” think there will be severe problems in certain parts of the world. It’s already happening in many places.”

                  The Fact is that we haven’t yet experience Peak Oil yet, and already the rising cost of energy and declining natural resources is increasing tensions.

                  We the West faces real shortages than the problems you see in the Middle East will happen in the West too.

                  Already the US-China-Russia are getting on each other nerves. You think that these problems will go away when shortages begin? The odds favor WW3 once the the economic problems become untenable.

                  DC Wrote:
                  ” I think it likely that a Depression (call it Great Dperession 2) will start between 2030 and 2040 and last about 5 to 10 years, possibly there will be an oil war leading to World War 3 (non-nuclear hopefully), if on wants to call that hard times instead of collapse, that is fine.”

                  LOL! Dennis, for someone that consider my comments as pure BS, this one takes the cake. Your a closet doomer! 🙂

                  To think WW3 will “NOT” use nuclear weapons is borderline delusional. As soon as a battle turns unfavorable, the Tactical Nukes come out to level the battlefield, which then escalates to to strategic nukes a few hours after. You really think if the Russians, Chinese, Americans, French, English, etc, will not use Nukes when their conventional forces are decimated?

                  In the past the Nuclear powers avoid Nuclear weapons by using proxy wars so that no domestic troops or homeland territories was involved in the conflict. However, those days are long over, and all that is left is direct confrontation.

                  • Boomer II says:

                    Already the US-China-Russia are getting on each other nerves. You think that these problems will go away when shortages begin? The odds favor WW3 once the the economic problems become untenable.

                    If you want the world’s population to decrease significantly and quickly, wars are one way to do it.

                  • Dennis Coyne says:

                    Hi Techguy,

                    For the same reason we have not seen any nuclear confrontation to date, possibly our luck will hold into the future.

                    There are no guarantees, the reasoning is simple, self- preservation. Nobody wins in an all out nuclear war, except possibly the 1 million survivors and the rest of the species on the planet besides homo sapiens.

                    I do not think your views are BS, I just do not agree, reasonable people can reach different conclusions.

                    Note that a Great Depression type of economic crisis could be considered collapse in some sense and I think such an event is likely. I do not expect this “collapse” to be permanant, but expect the World economy will recover over a 20 to 30 year period to some lower level of output with relatively stable or slowly declining GDP as population begins to decline after 2050.

                    Per capita income could be stable or slowly rising (maybe 1% per year) as population declines, eventually the economy will need to adjust (change) to a steady state with stable World population at 1 billion and zero economic growth (maybe by 2300).

                  • TechGuy says:

                    DC Wrote:
                    “For the same reason we have not seen any nuclear confrontation to date, possibly our luck will hold into the future.”

                    War is completely irrational. To think people will act “rationally” when it comes to the use of nuclear weapons raises a few eyebrows, especially when the losing side has nuclear weapons, and they runs out of other options.

                    “Note that a Great Depression type of economic crisis could be considered collapse in some sense and I think such an event is likely.”

                    Any long term economic depression will topple virtually all nations. During the last great depression, we have flood of war mad lunatics made dictators, It will happen again.

                    Unfortunately the large majority of humans are irrational and illogical. Long term economy crisis always brinks the worse to the top.

              • Doug Leighton says:

                “Will there be a collapse due to declining non renewable resources and the destruction of renewable resources, reducing the population to a fraction of what it is now? ”

                Collapse because the planet is already totally overstressed. More people will exacerbate the collapse spatially and in time. My opinion.

              • Fred Magyar says:

                Fred, Doug and Boomer, what level of population are you guys talking about? Let’s make it clear, what do you think is possible? Better yet, what do you think is probable?

                OK! I’ll venture out on that limb…
                I think there will be collapse in some places, already happening in places like Venezuela, Egypt, Syria, Iran and probably many others. More severe collapse probably coming in parts of Asia where populations are very concentrated. Die off is already baked in and I don’t see our current global industrial civilization surviving in its present form for more than another quarter of a century or so, Black Swans notwithstanding.

                I expect a lot of strife and conflict over basic resources in the near future, more along the lines of food and water wars.

                The consequences of ecosystem degradation, species extinction, ocean acidification, climate change etc.. will certainly have a huge toll on human population.

                I expect human population to drop to around maybe 3 billion in by the end of the next century and that if we are lucky… but having said that I think there will still be some kind of industrial civilization and if that is the case then the only way that will be sustained will be with renewable energy.

                The consumptive lifestyles we have taken for granted will be but a footnote in the annals of human history.

                To be clear I consider my scenario to be on the optimistic side, there is a lot that could happen to make things a lot worse and I don’t entirely discount the possibility of The Shit really hitting the fan.

                … only slightly off topic, you can follow live, the energy management of the Solar Impulse on a six day nonstop flight over the Pacifc ocean from Nanjing to Hawaii…

                http://www.solarimpulse.com/widget-energy

                Note: life is not exactly a bowl of peaches for a pilot flying for six days and nights with almost no sleep in a tiny non pressurized cockpit, having to rely on breathing from oxygen tanks when at very high altitude… is it even possible?! They are going to find out soon!

                • Doug Leighton says:

                  “To be clear I consider my scenario to be on the optimistic side….” That’s funny Fred, I think!

                  • Fred Magyar says:

                    Well, from the club of Rome Limits to Growth scenarios…

                    Most scenarios resulted in an ongoing growth of population and of the economy until to a turning point around 2030. Only drastic measures for environmental protection proved to be suitable to change this systems behaviour, and only under these circumstances, scenarios could be calculated in which both world population and wealth could remain at a constant level.

                    However, so far the necessary political measures were not taken.

                  • Dennis Coyne says:

                    Hi Fred,

                    If World Population follows the UN’s Low fertility scenario through 2100 and the total fertility ratio falls worldwide to 1.5 by 2150, then World Population will fall rather than remaining constant. This will take 200 years to get to a sustainable population level (maybe 1 billion).

                    In the mean time there will be many difficulties from energy constraints, climate change, and environmental damage.

                    Getting lower overall human population levels through wide access to modern birth control and better education snd equal rights for women should be a major priority. High energy prices will help reduce some of the environmental damage and better tax policy towards externalities would help as well.

                • Dennis Coyne says:

                  Hi Fred,

                  If Total fertility ratios for the World fall to 1.5 or even 1.25, population falls pretty quickly.

                  • Fred Magyar says:

                    Yes, and I have a hunch that if we keep going as we have been and continue to compromise all our ecosystems by trying to maintain BAU at all costs then I believe we will probably hit those fertility ratios and population will decline drastically or simply crash.

                    But it looks like this will be a consequence of lack of foresight to make the necessary changes required for a soft landing, so to speak. It doesn’t seem that this will happen because necessary measures will be taken rationally or voluntarily.

                  • Dennis Coyne says:

                    Hi Fred,

                    It is certainly possible that total fertility ratios will fall due to crisis, generally in less affluent regions is where fertility ratios are highest. My guess is that you believe death rates will increase due to environmental degradation and/or economic crisis. At some point this may become reality, it might be the only way that any change occurs. Until we reach that point, higher fossil fuel prices, changes in tax policy to adjust for externalities, and more focus on access to education and modern birth control for women may help mitigate the coming crisis. Unfortunately there is not enough happening at present. When the peak arrives and is recognized it may be too little too late.

              • cytochrome C says:

                Last time we were living on real time energy input was 1700, with a population of 700 million.
                Of course we had oceans full of fish, and continents to be plundered.
                That is not the case now.
                I say 400 million under these impoverished conditions.
                We live on a crowded, hot, cop ridden planet.

                Of course technology will save us.

            • Boomer II says:

              And, what percentage of people is deliberately organizing lives to make do with significantly less than they are currently used to? Few in my experience.

              But it doesn’t matter. As everyone has pointing out, our current lives are unsustainable. Change is coming. So whether or not people choose to live more modestly, it is coming for most of us.

              The issue seems to be whether anyone is allowed/encouraged to play around with renewables, or whether they are supposed to be discouraged because either they won’t work, they provide false hopes, or they can’t keep 7 billion people alive.

              Unless you believe in scientific and technological censorship, people are going to try to advance renewable energy. And if your objection is that you feel tax money is going to support it, then you can see what you can do about that (although our tax money is going to many things we don’t all support).

              We haven’t been talking here about providing health care for people or cleaner water for people, but those too keep people alive. There are certainly things we can do to hasten world population reduction. Is that what we should be doing? Finding ways to kill off more people or lessen their chances of staying alive? It might be good for the planet, though I’m not sure too many people are going to advocate intentionally letting large populations of people die because they are excess population.

            • old farmer mac says:

              Hi Doug,

              No doubt your expertise in the energy field is ten fold or a hundred fold my own.

              But perhaps I have a better view of the forest, given that my pov is located a LOT farther from the trees.

              ”And, what percentage of people is deliberately organizing lives to make do with significantly less than they are currently used to? Few in my experience.”

              True enough.

              But my study of history and what people and countries do when major problems arise indicates- to me at least – that as energy becomes more expensive the typical person will without even deliberately thinking about it in so many words start adjusting his lifestyle in order to compensate – and these adjustments can be quite substantial over a few years time.

              Beyond the personal level there is the societal level of adaptation to be considered – which will be ENFORCED by law and by rationing actual or defacto.

              In a few more years the ordinary incandescent light bulb will be history. The market might have brought about this change it time but regulation is going to bring it about in a small fraction of the time.

              We WILL be seeing draconian luxury taxes on oversized cars and trucks when the shit hits the fan. We will be seeing building codes tightened up substantially. We will be seeing subsidy money spent on energy efficiency and conservation rather than on more freeways and office parks. We will see appliances that run on half or less the energy- and we will buy them because it will be against the law to manufacture them otherwise.

              And while I am not especially an Obama fan or a liberal democrat ( nor a republican !!) I see things happening as the result of liberal democratic politics that are very encouraging. ONE of these things not yet mentioned is that socialized medicine is here to stay now in my opinion -although pushing Ocare thru cost the dems control of congress and may also cost them the next presidential election as well imo.

              Birth control is going to be essentially free to the consumer pretty soon. My thinking is that the birth rate is going to fall even faster than the most optimistic projections made by official agencies. It is not just the PRICE of birth control that is going to bring about this change – it is the change in attitude about using it that will come with having it being perceived as a basic RIGHT. Along with women world wide getting to be better educated etc of course.

              The sort of societal level adaptations I have mentioned so far are coming about already and the shit is not yet really and truly in the fan.

              When a real crisis hits – when oil is temporarily in desperately short supply due to a war for instance – or when we finally have to face up to declining production of several critical non renewable natural resources – resource issues will be the biggest or one of the biggest issues in electoral politics.

              How big a response we get will depend a lot on luck and on how hard the wakeup bricks smash into our collective head. We might get the sort of responses we got during the Great Depression prior to WWII. That level of response would go a long long way in solving our resource problems.

              With bigger bricks hitting harder we might get a WWII level response. There could be severe rationing of some resources currently devoted to day to day consumption with the diverted materials and manpower put to work on building out renewables and on projects involving efficiency and conservation.

              Business as usual as it exists today is a dead man walking, a man with an incurable resource cancer growing in his gut. It might kill him within the next five or ten years or he might live a few more decades yet.

              But as I have often remarked before power and resources are not equally distributed. Wealth is not equally distributed.

              Geography immensely favors some countries such as the USA even as it spells disaster for others – such as Poland.

              Some societies are probably going to be able to successfully hog enough of whatever resources remain to survive a good long while with economies still MOSTLY based on fossil fuels.

              These societies will have a substantial opportunity to adapt as necessary to a low energy per capita renewable resource based life style.

              The energy return on the energy invested is high enough for renewables to work- if they are once scaled up adequately.

              Recycling and substitution can work well enough to solve the remaining problems involved with depleting researches – once the population crashes.

              The population problem is going to take care of itself. Barring miracles on the technology front saving the excess population most of us are simply going to DIE. The Four Horsemen are going to be riding long and riding hard.

              ( For what it is worth I do not believe that it is IMPOSSIBLE that technology could in principle save the seven billion of us alive today.I simply believe the odds of this happening are extremely low. There is simply not enough time remaining( in my opinion) to invent and deploy such new and existing energy and resource technologies on the necessary scale. )

              I do not pretend to know how many people are going to survive the baked in bottleneck. The population could dip very close to ZERO if the coming troubles include all out war chemical, biological, and nuclear.

              My personal wild ass guess is that there will be anywhere from half a billion to two billion people living on the Blue Marble a hundred years from now. Maybe a lot less, probably not a lot more.

              Dieoff is going to be sporadic in time and place barring long lasting hot war. Some societies in pretty desperate straights might conceivably manage to institute programs that will allow most or even all of the local people to die peacefully of old age rather than starving or dieing of thirst, disease, exposure and violence.

              The key to this more palatable outcome would involve convincing or forcing women to have only one child each – or none.

              If I were a billionaire I would have people working on a drug that once administered renders both men and women permanently sterile. I would make it freely available to any body hard up enough to take it in exchange for being supplied with emergency food and medicine and maybe a few material goods such as a solar powered radio or tv or power tool.

              If I were really devious and rich I would be working on a sexually transmitted disease that brings about incurable sterility without otherwise much affecting the health of anybody who gets infected.

              • Doug Leighton says:

                Hi Mac,

                “No doubt your expertise in the energy field is ten fold or a hundred fold my own.”

                Actually Mac, any expertise I had has been superseded several times over and I’m now mostly just an old man living day-to-day. I have traveled a bit more than most though so sometimes I like to think I have some multi-cultural experiences to draw upon: not sure if this is an advantage or not.

                Sometimes I wonder about your conclusion that the US is buffered from problems about to engulf most countries comprising our poor planet. For example, perhaps some largely rural places like Vietnam with tough people, fairly reliable sources of good quality food, plus other factors may be better off than much of America: To me the US seems especially violence prone. Don’t know, time will tell. I’m sort of neutral on the recycling and alternative energy stuff, unlike our kids and grandchildren.

                In any case, best of luck to you, your kin and your helpful neighbors.

                • old farmer mac says:

                  People such as the Vietnamese who retain something or most of their traditional lifestyle and skills will probably do ok barring truly runaway climate making their country unlivable.

                  They might be exterminated or enslaved by a bigger more powerful country but they have proven they can live and thrive under VERY tough circumstances.

                  A tough man in the USA wouldn’t make a pimple on a Vietnamese farmers neck when it comes to dealing with never ending hardships.

                  The ones of them who have adopted the CPA and programming lifestyles and live in cities dependent on imported energy and raw materials are going to be in a bad spot.

                  Now insofar as troubles go inside the USA- I have often remarked that we may wind up living under martial law or worse. I expect plenty of violence- several times as much as we experience these days, at a minimum.

                  But imo it is unlikely that our state and federal governments will collapse or lose control of large swathes of territory long term. Some cities or parts of them may fall under the control of various sorts of gangs for a while but this is par for the course in some places already in the USA and quite common in some other countries. I have been places cops won’t go except in force here in the USA.

                  The vast majority of people right left and center in this country really do believe in the rule of law despite all the political rhetoric. When the time comes – if it comes – I believe they will collectively do what they must to maintain control of their communities.

                  Right now most of us are afraid to just go out and DEAL with a troublemaker for fear of the consequences. Trouble makers have little or nothing to lose. A jail term to most of them means nothing more than ” three hots and a cot” .

                  To me it means embarrassment and expense if I am simply summonsed to court without even being arrested.

                  (In case anybody wonders I really am an unreconstructed southern Scots Irish hillbilly in many respects. I know LOTS of low life characters including some who are close kin and some in the pen for decades to come. )

                  A jail term would be DISASTER to me. I have a position in my community to lose. I have an old Daddy who would die in a matter of weeks of a broken heart in a nursing home.

                  BUT – when the calculus changes- and I have more to lose than I must risk to deal with a trouble maker – then I will do so.

                  So far I have never found it expedient shoot anybody but I HAVE escorted a few people off my property or family property at the business end of a shotgun.

                  Maybe one person I know out of about fifty would commit murder or rape or armed robbery if the opportunity presents. Probably two dozen would commit burglary and four dozen would ” deal” pot or moonshine or whatever if it meant feeding their kids or themselves versus going hungry.

                  Forty five out of that same fifty would shoot somebody for molesting their kids or stealing their food or livestock or the tools they use to make a living if there were no sheriff on call. The last four or five are Quakers or just plain wimps but even so they have brothers and cousins and neighbors who AREN’T .

                  There is an old joke that goes like this. A Quaker farmer after being kicked repeatedly by his ill tempered milk cow says to her ” The Lord forbids me to beat thee but kick me once more and I will sell thee to a Baptist. ”

                  IF the time ever comes when the phone doesn’t work and the police don’t come EVENTUALLY when you send for them then thievery and thuggery are going to be VERY dangerous professions in America in my opinion. Frontier justice will return with a vengeance.

                  If a war lord or gangster does manage to get control of a city or neighborhood then most of the people living there will still survive. They might even be better off in some respects. A powerful local leader no matter how unethical might be able to put his thieving hands on some things very hard to come by from coffee to antibiotics to gasoline.

                  Maybe a traditional Mafia based on the same lines as the old Sicilian mafias will take over some cities. If so life under it might not be that much worse than life under our current government if you are a poor city dweller. The cops we have aren’t very good at catching burglars and robbers but I have not heard that this is a problem in Sicily. Living hand to mouth is living hand to mouth whether the rules are enforced by gangsters or cops , judges and jailers. The rules in any case are written by the winners.

                  I am not predicting that the USA WILL pull thru the overshoot collapse whole and unharmed.

                  I do maintain that this country has a good chance to come thru more or less whole but skinnied down like a bear in the spring given its size ,wealth, workforce, resource base ,favorable geography, military power etc etc etc.

                  Times are going to be TOUGH even here in Yankeedom, barring lots of miracles. There will be a few but not nearly enough to keep us on Easy Street.

                  Incidentally I am working on a book and every comment I make is made in the hopes that one or more of the numerous highly intelligent people in this forum will point out the errors and shortcomings in my thinking and opinions.

                  So sometimes I exaggerate my thoughts and opinions to see what the response will be.

                  I don’t expect to be able to actually sell it but I will publish it, if I ever finish it, for the ego trip at least, in blog format .

                  I might get a few hard copies run off at a vanity press to give away to my cyber buddies, lol.

                  • wimbi says:

                    Quaker joke as heard locally from “weighty” Friend.

                    Farmer is once again kicked by milked cow.
                    “Cow, thee knows I am a Quaker and must not use violence. But what thee does not know, cow, is that one kick more and I will sell thee to farmer Swartz down the road who is a Lutheran and will beat the livin’ shit out of thee.”

                  • Dashui says:

                    I’ve noticed in Northern Ireland, where there are catholic and protestant badasses, I have yet to hear of muslim tomfoolery.

                  • Boltzmann Brain IV says:

                    I recently visited Vietnam. A few I spoke to are very concerned about China’s power projection in the South China sea. Asked me what best way to get to USA or Australia was.

                    Old Farmer is right. The Vietnamese are tough as nails. They are almost immune to bad news. It is a reflection of their history IMO.

                    Always being invaded based on their strategic location on the South China sea.

              • wimbi says:

                The population of China in 1800 was 260 million. They didn’t use much ff’s/person. They did use a lot of muscle.

                See King–Farmers of Forty Centuries. A tough life, sure, but a life–for 40 centuries.

                Just between you and me, Americans have devolved to a bunch of squalling babies. Happened in my lifetime.

                All this talk about extinction from lack of titty is ridiculous.

                • Boomer II says:

                  Yes, I don’t understand either.

                  People seem to think that if BAU can’t be supported, the world will collapse. It’s either life as we know it now, or nothing.

          • Brian Rose says:

            My fundamental perspective is that we can manage any stressors as a civilization so long as those fluctuations happen within a global economy that is growing at some percent rate each year.

            We can and will combine lower use solutions (use less water, eat less beef, go without A/C) and high tech solutions (PV, EV, autonomous vehicles, Big Data efficiencies, telecommute, etc). However, if a point is reached where growth in energy supplies and energy efficiency are too small to equal a constantly growing global GDP, then the entire monetary and financial system defaults.

            That is the only scenario I fear, and it is truly the eternal debate we all experience. If a point is reached where falling energy supplies force a no longer growing global economy than the gears stop working. People will still wake up in the morning and look for work, find things to do, and reform an economy, but that economy will not be one that is undergoing the complex process of R&D and industrial scale transition that is required in the coming decades.

            • Boomer II says:

              People will still wake up in the morning and look for work, find things to do, and reform an economy, but that economy will not be one that is undergoing the complex process of R&D and industrial scale transition that is required in the coming decades.

              In the previous post, I posted some articles about stock buybacks. The articles pointed out how corporate profits are now more likely going into stock buybacks rather than R&D and capital investments. So I think the process you fear is already happening.

              I see the world economy shrinking for most people. The wealthy keep getting wealthier and the rest do not.

              • Brian Rose says:

                Boomer II,

                In terms of R&D and stock buybacks I certainly agree. There is nuance to the trend. The low interest rate environment has led to large companies taking out low cost loans to buyback shares; oddly enough, companies are not really sinking their record profit into buybacks, they’re simply taking out loans and using those for buybacks. Either way it is allocation of capital, and they are putting it in stock buybacks instead of R&D.

                That being said, R&D is still reasonably funded in many industries as a percentage of revenue.

                It seems clear to me that the bigger an organization, the slower it tends to move as the number of levels between decision making at the top and reality on the bottom increases. This tends to lead to safe plays and insular moves that scrape together as much cost savings as possible from the current business. A chief example of late being McDonald’s.

                The R&D is currently, and in a sense always has been, done on the start-up level. The ability for Venture Capital to discover ideas that require investment is working properly in my mind. Perhaps it is working too well, as any app with a few million users is instantly valued at 10s of billions of dollars – like Uber’s $50 billion valuation; for comparison, FedEx is valued at $48 billion. How does that make sense?

                As a short statement I agree big companies could use those loans to invest in R&D instead of buybacks, but relative to revenue (not profits) R&D isn’t in crisis mode, especially considering the amount of innovation occurring on the ground level of start-ups with the explosion in Venture Capital seeking out new technologies and revolutionizing the services industry.

                • Boomer II says:

                  The articles I posted say they are using profits for buybacks.

                  S&P 500 Companies Spend Almost All Profits on Buybacks – Bloomberg Business

                  As Activism Rises, U.S. Firms Spend More on Buybacks Than Factories – WSJ: As Activism Rises, U.S. Firms Spend More on Buybacks Than Factories
                  New data reveals S&P 500 companies spent 36% of cash flow on shareholder payouts; Are giants like Apple and GE ‘underinvesting in innovation’?

                  • Brian Rose says:

                    Boomer II,

                    Sorry if I made it seem like I disagree as we are of the same mind here.

                    Profits are at record levels for many companies, but debt for those same companies is also at record levels. Companies are buying back shares while increasing their debt at the same time they have record profits.

                    Taking on debt in this interest rate environment is generally seen as a good idea, so they use the profits to buyback shares, and take on debt to run various programs, including R&D.

                    Without low interest rates the profits would be used to pay off loans, and buybacks would vanish.

                    Ultimately, I agree they’re using record profits to buyback shares, but they’re being induced to do that due to the low interest rate (cheap loan) environment.

                    So the action is using profits to buyback shares, but the cause is low interest rates essentially forcing companies to take on more debt instead of shoveling profits to pay off debt.

                    Me saying that companies are using debt/loans to do their share buybacks is wrong; they’re using profits. It is the ability to take out low cost loans that is making share buybacks lucrative, so I see it as the ultimate cause of that action.

                    I am sorry I was not clear on this before, and I fully concede to your point.

          • clueless says:

            Ron – “When people get hungry, especially those who have lived with plenty to eat all their lives, they riot.”
            Rioting will not produce any food. In fact, it will reduce the already limited amount of food. So, do you see getting back to one billion happening pretty quickly? I would think that after 30 days of riots without food, most participants would be gone.

            • Clueless, of course riots won’t bring food. But riots are never caused by logic or reason. Food riots happen frequently all over the world. Wanna see some pictures of them?

              Images of Food Riots

              I have no idea how fast the population will crash. One cannot predict chaos.

              • Puffalar (Your Five-Alarm Puff) says:

                “Stay back or I’ll club you with my baguette!”

          • MarbleZeppelin says:

            Solving the population/consumption problem is one of the most difficult and largest problems faced by the living planet. I am not sure at all that humans can act together to come to a well thought out and peaceful solution. To do little or nothing is to allow nature to take it’s course and chances the extinction of most species on earth larger than a mouse. Heck the mice might be in trouble too as well as the bugs.
            We are bucking not only our hindbrains but the very DNA controlled imperative that allows species to exist on this world.
            Possible but not probable.

            • Boomer II says:

              I see income inequality as part of the process. While I don’t like the fact that a small number of people are amassing most of the world’s wealth, from an ecological point of view it is probably better for the planet. If a small group assemblies what they need to survive and if they (intentionally or unintentionally) deprive most of the rest of the world what they need to survive, the population control process happens.

              • MarbleZeppelin says:

                Yes, and most of the population loss will be species other than human.

          • cytochrome C says:

            “I became an “environmentalist” because of a strong emotional reaction to wild places and the other-than-human world: to beech trees and hedgerows and pounding waterfalls, to songbirds and sunsets, to the flying fish in the Java Sea and the canopy of the rainforest at dusk when the gibbons come to the waterside to feed. From that reaction came a feeling, which became a series of thoughts: that such things are precious for their own sake, that they are food for the human soul, and that they need people to speak for them to, and defend them from, other people, because they cannot speak our language and we have forgotten how to speak theirs. And because we are killing them to feed ourselves and we know it and we care about it, sometimes, but we do it anyway because we are hungry, or we have persuaded ourselves that we are.

            But these are not, I think, very common views today. Today’s environmentalism is as much a victim of the contemporary cult of utility as every other aspect of our lives, from science to education. We are not environmentalists now because we have an emotional reaction to the wild world. Most of us wouldn’t even know where to find it. We are environmentalists now in order to promote something called “sustainability.” What does this curious, plastic word mean? It does not mean defending the nonhuman world from the ever-expanding empire of Homo sapiens sapiens, though some of its adherents like to pretend it does, even to themselves. It means sustaining human civilization at the comfort level that the world’s rich people — us — feel is their right, without destroying the “natural capital” or the “resource base” that is needed to do so.

            It is, in other words, an entirely human-centered piece of politicking, disguised as concern for “the planet.”

            -Kingsnorth

          • Boltzmann Brain IV says:

            That’s an uplifting article Ron.

            Off to go get my vasectomy!

            Lol!

          • Ed says:

            Let talk numbers. In 2013, 2.29 kWh per day per person was produced from renewables in the UK. (33.7 TWh shared by 64.1 m people). It has been estimated we each use 200 kWh per day now.

            Hence 4 doublings of renewables from 2 to 4 to 8 to 16 to 32 kWh/day.
            Plus reducing our consumption from 200 to 20 kWh/day would leave 12 kWh/day each to renew the renewables.

            Poor people round the world do live on less than 20 kWh/day each at the moment. So it can be done. That’s my cargoist side of my brain talking. The realist side tends to agree with Ron though.

          • Caelan MacIntyre says:

            “The relevance of anarchism to human society has nowhere been more obvious than it is in Africa. Given the multitude of problems that stare the peoples of Africa in the face, the debilitating socioeconomic conditions under which a great majority of them live, and the overall economically deprived status of Africa vis-a-vis the other continents, anarchism is really the only liberating concept capable of turning ‘the dark continent’ in a truly forward-looking direction.

            Things have gone haywire for too long; only a drastic cure can satisfy an increasingly angry, bitter and restive population stretching from Cape Town to Cairo. Conditions include the seemingly endemic problem of ethnic conflicts across the continent; the continued political and economic marginalization of Africa at the global level; the unspeakable misery of about 90% of Africa’s population; and, indeed, the ongoing collapse of the nation state in many parts of Africa.

            Given these problems, a return to the ‘anarchic elements’ in African communalism is virtually inevitable. The goal of a self-managed society born out of the free will of its people and devoid of authoritarian control and regimentation is as attractive as it is feasible in the long run.

            At the global level, human civilization is passing through a period of transition occasioned by the collapse of marxist ‘socialism’ and the evidently insuperable crisis of capitalism and the state system… As we noted earlier, all advances in human history to this point have been made possible by humanity’s quest for both freedom and human solidarity. Since this craving seems a natural instinct and, as such, is not going to disappear anytime soon, it follows that the continued evolution of society will be in the direction of freedom, equality, and community.

            The process of anarchist transformation in Africa might prove comparatively easy, given that Africa lacks a strong capitalist foundation, well-developed class formations and relations of production, and a stable, entrenched state system. What is required for now is a long-term program of class consciousness building, relevant education, and increased individual participation in social struggles. Meanwhile, the crises and mutations in capitalism, marxist socialism, and the state system, individually and collectively, cannot but accelerate. For Africa in particular, long-term development is possible only if there is a radical break with both capitalism and the state system — the principal instruments of our arrested development and stagnation. Anarchism is Africa’s way out.” ~ Sam Mbah & I.E. Igariwey

            • Boomer II says:

              Anarchism is Africa’s way out.

              Wouldn’t you also have to get rid of tribal traditions and religion?

              There’s a lot in Africa which would need to change beyond just eliminating capitalism, Marxism, and the state system.

              I’d welcome someone being able to pull this off, but it involves more than just writing about it.

              • Caelan MacIntyre says:

                “…it involves more than just writing about it.” ~ Boomer II

                It also involves more than just writing about how it involves more than just writing about it.

                “Wouldn’t you also have to get rid of tribal traditions and religion?” ~ Boomer II

                The answer would seem to involve a little more than just writing the question, but actually making an attempt at answering it oneself, maybe by doing a little more research and reading for it. Maybe even before the question is written. Such as if one is going to do little else, while ‘welcoming’ it for others.

                • Boomer II says:

                  Such as if one is going to do little else while expecting it for others.

                  I’m not the one telling Africa what it should be doing. Sam Mbah & I.E. Igariwey are the ones saying what Africa needs to do. I’ll watch with interest, but it’s not my place to inject myself into African culture and politics.

                  • Caelan MacIntyre says:

                    The people in Africa and elsewhere have already been, and are already being, ‘told what to do’ by the State and colonizations. That’s part of the problem. So I therefore think it is in part about un-‘telling people what to do’, so to speak. Anarchy is about that.

                    That way, we may see tribal tradition and religion return– the very opposite of what you seem to suggest by your question about getting ‘rid of tribal traditions and religion’.

                  • Dennis Coyne says:

                    Hi Caelan,

                    Aren’t tribal traditions and religion just another form of social coercion? The form is different, but it is not anarchy as I understand it, just a different form of government.

                  • Boomer II says:

                    That way, we may see tribal tradition and religion return– the very opposite of what you seem to suggest by your question about getting ‘rid of tribal traditions and religion’.

                    Tribes and religion have leaders. I’ve said before, I think people usually organize themselves in some form, and tend to organize in systems that have leaders, whether they be family, tribes, religions, kingdoms, countries, and so on. We seem to like to appoint someone to tell us what to do.

                    It’s a different concept than what you have suggested in terms of a total horizontal community with no hierarchies.

                    If you see tribes and religions as an acceptable substitution for states and countries, then yes, I can see that happening as people decide current states don’t serve them.

                    Now, one very big problem is that tribes and religions are often not favorable to women.

                  • Caelan MacIntyre says:

                    “Aren’t tribal traditions and religion just another form of social coercion?” ~ Dennis Coyne

                    Not if everyone agrees with them or they are not coercively imposed. Also, because they are more simple, palpable, local, smaller-scale human arrangements than States, any illegitimate coercion can presumably be more directly dealt with, and thus may also be less likely to happen. IOW, if you are a member of a tribe, Dennis, and you decide to ‘get coercive’, it’s more likely going to cause direct problems for you than if you were being coercive hundreds of miles away via laws and local cops.

                    Boomer II, there is a sea of difference between a ‘crony-capitalist-plutarchy-appointed’ leader we don’t actually know who is hundreds of miles away and acting in a thickly-complex bureaucratic system, etc., and one we do know, face-to-face, like a neighbor in the same town that we might have drinks with.
                    Not everyone wants or needs leaders either, but at the same time, leadership doesn’t have to be coercive.

                    “If you see tribes and religions as an acceptable substitution for states and countries,” ~ Boomer II

                    Nice try, but you set up the tribe and religion thing in the first place; I am/was merely responding about the freedom to believe and practice, as per anarchy, rather than your ‘get rid of’ comment, as per coercion…

                    “A straw man is a common form of argument and is an informal fallacy based on false representation of an opponent’s argument” ~ Wikipedia

                  • Boomer II says:

                    Also, because they are more simple, palpable, local, smaller-scale human arrangements than States, any illegitimate coercion can presumably be more directly dealt with, and thus may also be less likely to happen.

                    I’m curious how Africa and the Mideast will transition from tribal/religion factions they have now to something warm and friendly.

                    Sure, this might happen over the course of human history, but going from where they are now to something more democratic is something I can’t envision happening soon.

                    Again, I have followed intentional communities since the 1960s. Your ideas interest me, but trying to keep a group functioning over decades is something only a few communities have managed. It’s hard work and a lot of groups fall apart.

                    Now the cohesion advantage of tribes and religions is that many of them have leaders who keep people in line. Those who don’t stay in line are kicked out of the group or threatened with eternal doom. The Amish, for example, are a low-resource, agriculturally-focused group, but if you don’t fit in, you get shunned.

                    What I don’t understand is why you get feisty in this group if people don’t agree with you on certain points. How are you going to get along with a community with a diverse group of opinions?

                  • Dennis Coyne says:

                    Hi Caelan,

                    There is the problem in any form of social organization of having to cooperate and a dichotomy between freedom to do what you wish and to give in to the decision of the group when you do not agree with the majority viewpoint. This is a subtle form of coercion, but it certainly exists.

                    Now there seems to be a bit of a dichotomy in your thinking about tribes and religion versus the freedom of anarchy. Do you see the tribal model as a step towards “true” anarchy?

                    In the World that most of us are aware of coercion exists whether there is a modern nation state or not, it is an innate human behavior.

                    A small local tribe has to be able to protect itself from other tribes. If there is conflict and no modern technology, bigger tribes tend to win any conflicts between tribes.

                    There is a natural tendency for the size of the tribe to increase for its own protection from other tribes and over time with population increases and technological development there is a tendency for nation states to develop.

                    I am not an anthropologist, or political scientist, but given that the ideal non-coercive human probably does not exist (or there are few of these), I just don’t see how anarchy would work in practice with 7 billion people in the World.

                    It might be a great system if there were 1 million inhabitants of the planet.

                    Why do you think government was developed to begin with?

                  • Boomer II says:

                    Why do you think government was developed to begin with?

                    Earlier today I was thinking about the Wild West. When there were no laws, the guy with the fastest draw had an advantage. But after awhile settlements had sheriffs who were given more authority than others in town.

                    I think small groups, with town hall types of discussions, are a good thing. However, when you want everything done by consensus, you end up spending a lot of time in meetings. I think that’s one reason I’ve never joined a commune or something similar. I like the freedom of not having to discuss so many details of my life with a group of people.

                    I mean, married couples have enough trouble working out their issues. Trying to do it with 20, 50, 100, or 1000 people can get time consuming. If you are part of a system that works pretty well without needing your day-to-day involvement, that can allow you to do more things of your own choice.

                    I’ve lived in small towns. There’s safety in having everyone know what everyone else is doing. Everyone monitors everyone and trouble can be identified sooner. But you give up privacy in that situation.

                    I think people are trying to figure out the right mix of privacy and community.

                    About 20 years ago I accidentally went to a meeting about intentional communities (I thought I was going somewhere else). I wasn’t familiar with the term back then, though I was quite familiar with communes and the like.

                    We got on the topic of abortion. The host of the meeting said that he wouldn’t expect it to be left to the individual woman. The entire community would decide if abortion was acceptable in her case. He also talked about how a group of people can start thinking alike once their are part of the group. He thought that “group think” was a desirable feature. I left knowing that wasn’t right for me.

                  • Caelan MacIntyre says:

                    Hey guys, I mean, really… The bloated, festering, centralized crony-capitalist plutarchy governpimp is ‘antisocial technology’ complexity and coercion writ large, and bumping into diminishing returns, diminishing control, diminishing ecosystem health, and collapse.
                    I’d worry most about it than any classic tribe or anarchy. But that’s just me.

                  • Boomer II says:

                    Hey guys, the bloated, festering, centralized crony-capitalist plutarchy governpimp is ‘antisocial technology’ complexity and coercion writ large, and bumping into diminishing returns, diminishing control, diminishing ecosystem health, and collapse.
                    I’d worry most about it than about the classic tribe or anarchy. But that’s just me.

                    People here are worried about it. There are a lot of doom threads here.

                    We’ve been asking you how you’ll overcome some of the problems that have doomed other intentional communities in the past. Trying to get a group of people on the same page is a challenge for all cultures. Some use more force than others to herd those cats, but no matter how it is done, getting a group of people to work together has been one of the fundamental issues throughout human history.

                    I’d like to hear more about how you plan to do this, or how people in Africa plan to transform that area in a reasonable amount of time and without more damage and destruction than people already expect to happen.

                    Your view of the future is a nice one. But how do you get people from where we’re at to the one you envision?

                    Occupy Wall Street was a cause I believed in. Unfortunately it didn’t pick up more people as it went along. What are your solutions?

                  • Caelan MacIntyre says:

                    Boomer II, I question whether you’re really interested in ‘solutions’ or whatever per se, or if you’re simply more interested in just sitting around in your armchair idly whiling away your time to death on this flat-screen reality blog with stale broken-record issues/approaches. You just seem hungry for something new to devil’s advocate at length to death for its own sake. Well that’s your prerogative of course, but if that’s all there is, then it’s pretty much intellectual masturbation. Hey, go crazy, don’t mind me.

                  • Boomer II says:

                    I’m interested in issues. And I am curious how you personally are going to keep a group together when you keep making comments like you make to me.

                    When I ask you how you’ll handle transitions and community organization, your responses is always to tell me I’m not doing anything. My time is spent taking care of family members. I am very involved in my own little community. I’m doing as much to make the world a better place as you think you are doing. So knock off the snarky comments and actually address the challenges of keeping an intentional community together.

                    How do you hope to get the world to go from what it is now to your system?

                  • Boomer II says:

                    Here’s a bit about the challenges.

                    Problems in ICs – Intentional Community – tribe.net

                  • Caelan MacIntyre says:

                    It’s your shit like this that gives me pause.

                  • Boomer II says:

                    Yes, I have talked about income inequality. I supported Occupy Wall Street, which is a recognition of income inequality. I am very concerned about it. However, when you destroy the middle class, it also reduces consumption. So that is an upside of income inequality. What I have been saying is that the very very wealthy are doing their part for the environment by taking away everyone else’s ability to spend much money.

                    Now having everyone go back to the land to live is a great alternative. Now, tell me how you plan to get us there. How to you transform a world that is using up resources quickly into your alternative view? How do you get people to stop fighting, work together, and ending the waste?

                    I know you like to quote articles about the evils of big corporations and big government. So how do you get people to embrace what you are doing? Or do you see small communities popping up here and there and then everyone else will see how great they are and adopt those practices? That’s what the intentional community movement has been all along. People have an idea of what would make a better life so they start intentional communities. A few survive for decades. Most fall apart quickly.

                    In my own area, there are several co-housing groups. They are working fine, but it does involve a lot of community participation and discussion. They aren’t the right model for a lot of people who don’t want to put in that time.

              • Caelan MacIntyre says:

                What you’re doing sounds vague and I don’t recall reading much, if anything, about it, which isn’t necessarily to say you aren’t. But many of us have families to take care of. So, in a way, so what. I am committing extra responsibility and, some days, begrudgingly.

                We both damn well know that, as you snipe, ‘it takes more than just writing about it’. So you know where you can shove your sanctimony. You’re being just as hypocritically feisty yourself.

                • Boomer II says:

                  Look, what I said was “How do you transform Africa?”

                  Writing about how Africa needs to move toward anarchy is one thing. Actually getting it done is another.

                  Yes, I am pressing for details. I am just as concerned about the world as you are and as everyone else who is writing here.

                  You’ve got more idealistic ideas that many here. Too many of them expect doom. You seem to think the world can be saved. So tell me how you plan to do it. I want to know how to get all the red states to move away from the policies they support.

                  How do you convince everyone to try your ideas? Again, going back to Occupy Wall Street. They told us Wall Street is screwing us up. But we haven’t fixed those problems. The Kochs are buying the Republican Party and trying to stop environmental policies. How do we turn that around?

                  I am asking you, “HOW do we do this?”

                  • Caelan MacIntyre says:

                    Ok, Boomer II, let’s take a raincheck and we’ll go over this under another article. I am kind of swamped at the moment, and would like to get Permaea’s manifesto completed and published as well anyway. That way, it will also give us something to sink our teeth into besides these half-baked comments.

                    One other thing: It is not just Africa– Africa was simply a quote, an example– it is the whole planet. Let’s never mind about Africa. Besides, vast tracts of it are now being pillaged and plundered anyway by external entities/forces.

                  • Boomer II says:

                    I look forward to what you publish.

                    Again, I don’t need convincing that there are problems in the world. But I also don’t want to hear there is nothing to be done about them.

                    I was a huge fan of The Whole Earth Catalog, which first came out in 1968. I also liked reading Mother Earth News. I’ve been following all of this stuff for decades. But I have also been aware of communities that have come and gone. I know people who have been a part of them. And I know people are are now part of co-housing and cooperative housing. I also follow the sharable movement.

                    I want to know what you have in mind that has more staying power than what I saw coming out of the 1960s and 1970s. I also had hopes for Occupy Wall Street, but it didn’t turn into a movement big enough to transform the country yet. Maybe someday.

                    Whole Earth Catalog Stay Hungry Stay Foolish

                  • Boomer II says:

                    Here’s the best way for me to explain my questions.

                    I think most people in this forum agree with the “why.” You cite examples of the problems with the world today and I think you’ll find few arguments about that here.

                    It’s the “how” that is the challenge. You don’t need to convince me about the whys. But I am curious about the hows: how will you get more people to join you, and once you do, how will you keep everyone working together? Not even how to keep everyone working together in large groups, but how to keep everyone working together in small groups? I’ve always enjoyed reading about “utopian” communities, but most of them fall apart before they can make a larger impact.

    • If you mean possible as P3 reserves, then renewables should indeed drive some of those to be kept in the ground. But renewables won’t really impact the total market until they are coupled to a cost effective energy storage technology or solution. Every time I look at the figures I see the darned battery as a serious bottleneck.

      • Dennis Coyne says:

        Hi Fernando,

        Most of the future reserve growth will come from possible reserves, with maybe a little from contingent resources. I agree that the battery could be a problem, but there is the possibility of fuel cells, and vehicle to grid, along with hydro and a small amount of natural gas or nuclear spinning reserve. I agree that such a transition will be difficult and lots of research and engineering work needs to be done. The overbuilding of wind and solar power over a widely dispersed area with HVDC interconnects will reduce the need for backup. In some cases thermal storage might be used when there is excess wind or solar power to either heat water or make ice depending upon heating or cooling needs (winter or summer).

        • Vehicle to grid sure sounds a bit awkward.

          Get up in the morning with a full battery, drive vehicle, charge at midday using solar power surplus, drive vehicle, charge using wind power at night fall.

          So when is the vehicle battery supposed to backup renewables?

          • MarbleZeppelin says:

            The vehicles will store the surges of solar and wind power. Both sunshine and wind is somewhat predictable over the short term, so we will let the computers handle how much feeds back to the grid or house and how much the car needs for driving range. In the Dutch version the vehicle is also covered with solar panels so they can act as an additional power source for the house when the vehicle is not being used or excess can feed into the grid.

            One must take into consideration that even in the very large US, the average trip per day for a vehicle is about 34 miles. That leaves a lot of room for maneuvering storage versus demand. I use about 5 kwh per day at home and the typical car battery is over 20 kwh, meaning the car could support my house for a day and still have lots of charge left for travel. So instead of that Tesla having a 250 or 300 mile range it might start the day with 150 or 200 because it knows it’s owner only drives 40 miles that day. All software adjustable.
            The one downside I see is life reduction of the battery, so the power companies would have to pay for the privilege of using a car battery or give a really good exchange rate. That can all be worked out and run by computers. Power storage will be a big business.

            • I don’t think Pakistanis and Jamaicans can afford Teslas. I don’t see this idea of yours as a solution at all. You should learn to run these ideas in a dynamic model with some sort of probabilistic or stochastic sun light availability.

              • MarbleZeppelin says:

                Fernando, not my idea. Strange response.

              • islandboy says:

                As a rule, most Jamaicans can only afford modest transportation but like everywhere else there are one percenters and they live just as well, if not better than one percenters anywhere else in the world. There is a class of person in Jamaica that can afford to buy expensive German luxury vehicles and I have seen vehicles tooling around that cost more than a Tesla would cost based on import duties. I think you might be surprised by the opulence, if you ever visited Jamaica and hung out in the “right circles”.

                Maybe it would help if one percenters in places like these, since they consume a disproportionate amount of oil, could spend some of their considerable wealth on renewables and EVs?

              • Island boy, that’d be a meaningless gesture. And extremely wasteful. Those electric vehicles are useless when it comes to delivering reasonable cost electricity. I offered you a deal (check above). It’s the best I can do. I also suggest you read the following

                http://judithcurry.com/2015/05/31/solar-grid-parity/

                • islandboy says:

                  In a country where the minimum wage is the equivalent of about US$2,510 per annum (US$48 per week) , according to the World Bank the per capita GNI is US$5,220 and 19.9% of the population live below the national poverty line, is driving around in a vehicle that costs US$50,000 FOB or about US$100,000 when shipping, import duties and taxes are included a meaningful gesture? If so please, by any means, tell me what the meaning of that gesture is, if it is not plain showing off that I am more successful than y’all?

                  In a country with so many desperately poor people, showing off the signs of wealth appears to be as national disease that, certainly doesn’t help with the national balance of payments. I anxiously await the day when it becomes fashionable to have a PV array on a building and people start to compete with who’s array is bigger! I’m not holding my breath though.

                  By the way, while you ponder your answer, can you work out the financials of building or acquiring a 5 bedroom, 5 bathroom executive mansion on the hills overlooking Kingston, preferably with a swimming pool that will never be used. Factor in a German SUV for Dad, a nice luxury sedan or crossover for Mom and maybe a nice little runaround for one of the kids.

                  Why is it that the mansion, the Merc aqnd the Range Rover never have to be justified but, that PV array? That’s got to go through a financial analysis and that’s got to “make sense”?

                • islandboy says:

                  The slant of everything I’ve read at judithcurry.com suggest a strong right wing, anti-renewable, anti-global warming bias, not unlike how finding anything positive about renewables in Der Spiegel is just about impossible. Makes you wonder if they both receive support from Koch Industries.

                  I suggest you take a long, hard look at the following graphic, guess what it represents and/or and tell me what you get from it.

            • wimbi says:

              I agree with all that.

              Around here, I found an astonishing response to a talk I gave to a group of assorted church people, emphasizing the ethics of global climate change. In passing, I mentioned the bargains in used Leafs exactly like mine.

              They got together a bunch of people interested in doing something to cut carbon, and planned to buy up to 25 Leafs- this is a small town!

              They intended to join in a car share group, so that everyone could get a vehicle appropriate to any task at hand, without concern about being limited by the short range of the EV.

              Around here, typical of midwest, those cars averaged about $12K, even with only 10-20k miles on them.

      • Fred Magyar says:

        Every time I look at the figures I see the darned battery as a serious bottleneck.

        See my analogy to a sinking ocean liner above…

        Here’s the deal, you can sit on the deck sipping champagne and wait until the water reaches you and sucks you down or you can can take a seat in the life boat where you will have to row and maybe drown anyways…

        That suicide is painless
        It brings on many changes
        And I can take or leave it if I please.
        I try to find a way to make
        All our little joys relate
        Without that ever-present hate
        But now I know that it’s too late, and…
        [REFRAIN]
        The game of life is hard to play
        I’m gonna lose it anyway
        The losing card I’ll someday lay
        So this is all I have to say.

        The only way to win is cheat
        And lay it down before I’m beat
        And to another give my seat
        For that’s the only painless feat.

        Songwriters: MANDEL, JOHNNY / ALTMAN, MICHAEL B
        Suicide Is Painless lyrics © Warner/Chappell Music, Inc.

        • Sorry, as you know I’m more into crunching numbers and writing jokes. Do you have a link to a solid study showing how an integrated solar/wind/storage system may work for Jamaica? Island boy needs one. I’m ok with the drop in solar panel costs, although I see a slight risk because they have oversupply conditions at this time, and it’s hard to understand if the Chinese have a sustainable set of businesses. But I can’t figure out decent cost trends for storage. Without storage of some sort these renewables are not useable to deliver even 50 % of the load in Jamaica. Maybe they should use LNG to power backup turbines?

          • Fred Magyar says:

            Without storage of some sort these renewables are not useable to deliver even 50 % of the load in Jamaica. Maybe they should use LNG to power backup turbines?

            Two points:
            1) Maybe Jamaica and everyone else should work on reducing their load by more than 50%.
            2) Absolutely LNG should be used to power backup Turbines. No one has ever suggested that we should stop using all fossil fuels everywhere starting tomorrow.

            BTW, There are lot’s of things happening, you can start here if you like.

            http://www.energystoragenews.org/

            • Maybe you should try running for elections in a country like Jamaica (or say Pakistan) with the slogan:

              “cut your energy consumption by half and be happy, vote for me”.

              • Boomer II says:

                “cut your energy consumption by half and be happy, vote for me”.

                But aren’t many people here saying, “Cut your energy consumption to zero and then die.”

                If you had to choose, which one would you choose?

              • wharf rat says:

                “cut your energy consumption by half and be happy, vote for me”.
                Jerry Brown said that in ’74, we did vote for him (4 times now), and, as a result, the per capita electricity consumption of the 7th largest economy in the world is half that of the other 49 states.
                Yes, we do have air conditioners. More importantly, unlike the US, we also have a can-do attitude.

                5 FACTS: How California Energy Efficiency Policies Save Money, Invigorate the Economy, and Clean Our Air
                http://switchboard.nrdc.org/blogs/lettenson/5_facts_how_california_energy.html

            • islandboy says:

              Maybe Jamaica and everyone else should work on reducing their load by more than 50%.

              Absolutely! I find it difficult to understand the cognitive dissonance of which you speak further up thread. Just about all of us who participate on this blog accept that Peak Oil is not a theory or a concept, it is a inevitability.

              That being the case, anything that absolutely relies on oil will face stagnation first, pretty much what we’re seeing now and then go into decline. Machines of all types that use petroleum based fuel must see declining use either as a result of poor economics, as fuel prices rise or fuel scarcity and that is not conjecture. It is going to happen sooner or later.

              In the face of that, what is a rational man to do? Accept death as his only fate and wait for one of the four horsemen to come and take him away? What about accepting that the oil party is over and that our lives are going to have to change in drastic and unforeseen ways? I firmly believe that a lot of us are going to have to revert to simpler lives and abide by that old adage “Make hay while the sun shines” instead of doing whatever the hell we want, whenever the hell we want. Snow skiing in the desert or ice skating in Texas in the middle of summer anyone?

              Most of the operators of facilities in places like Jamaica (Hawaii) will have to get used to running their operations when the energy resources are available (making hay while the sun shines) or face the prospect of not being able to operate at all. If that is the end of the world then, too bad. In that respect, I see renewables as enabling some sort of continuation, not exactly business as usual but, business of some sort.

              I like the idea of solar and wind backed up by gas turbines running off natural gas or landfill gas or bio-gas form sewage plants or livestock farms but, hey, that maybe that’s just me living in dreamland!

              • I looked at it for you. A combination coal, natural gas combined cycle, gas peaker turbine, wind and solar set up will cost you $2.5 billion USD. This can be put in by private outfits, you get them a $500 mm world bank loan and they finance $1.5 billion with project bonds. You pay 16 cents per kW to the private outfit.

                Renewables solar, wind and hydro get 15 % of the total generated energy. Coal 40 %, natural gas 45 %.

                The investors pay the state income tax. It’s doable over 12 years.

              • And by sheer coincidence, here’s an analysis of solar costs you may find interesting:

                http://judithcurry.com/2015/05/31/solar-grid-parity/

                • John B says:

                  I would agree with the article that CSP is not cost effective. Mainly because PV is so much cheaper.

                  However, the article compares PV at the utility scale level. That is not where Solar shines (pardon the pun). Where PV meets grid parity is at the retail level.

                  • wimbi says:

                    CSP. They are barking up the wrong tower. It’s easy to make very good, very small CSP units that do great work wherever there’s direct sunlight. And cheap, too.

                    See Sunpower, Inc web site on NASA space solar power, they made one with over 35% efficiency at only 100 watt size.

                    I did consulting with them and have held one of those things easily in one hand. Very simple mechanically. Has very long life.

                  • sigh. I guess you don’t understand what economies of scale mean.

                  • John B says:

                    I think you don’t understand the business model. PV can compete directly with the utility. In a sense, a homeowner can own their own utility.

                    Solar detractors like to measure PV costs against coal, and gas, as a feedstock for the utility. Whereas the greatest potential for PV is in distributed solar.

                  • Boomer II says:

                    Whereas the greatest potential for PV is in distributed solar.

                    This is the model that Internet entrepreneurs understand. You have a series of independent operators that connect to a network (or not). It isn’t centralized.

                    Again, I think those who aren’t familiar with Silicon Valley underestimate their desire to disrupt traditional energy and utility companies.

                  • John, I understand the business model very well. It’s based on being a social energy parasite. This works ok if parasitism is practiced by a small fraction of the population. But once a large fraction wants to be parasites then the whole scheme breaks down. I believe some of you must be working for Yingli Green or you really don’t get it?

                  • Boomer II says:

                    I’d say many of the solar proponents are planning for a time when most solar users will be off-grid.

                    The Economics of Grid Defection: But what happens when solar and batteries join forces? Together they can make the electric grid optional for many customers—without compromising reliability and increasingly at prices cheaper than utility retail electricity. Equipped with a solar-plus-battery system, customers can take or leave traditional utility service with what amounts to a “utility in a box.”

                  • John B says:

                    Never worked for Yingli Green, but I do have some Solar Panels from BP (British Petroleum).

            • wimbi says:

              Fred, and all you good people. I am very pleased to see this discussion on my favorite energy subjects, and feel compelled to add my 2 cents.

              I have a couple of bits of good luck in my background that not many of you share.

              First, I was born in the administration of Cal. Coolidge ( who?), and grew up during the depression in small, poor southern towns, where people had” succeeded”, you might say, in reducing their energy usage to a VERY small fraction of the current average.

              And second, I spent most of my engineering career doing energy
              R&D, meaning thinking up new energy gadgets of a very great variety, so I am at ease doing it more or less all the time.

              So, I am ok with very low personal energy usage, and do it more or less instinctively without feeling the least pain. My wife ditto.

              And, I know that energy ideas are like pollen, real cheap to make, very numerous indeed, and mostly merely tossed as a matter of course.

              And also, thanks to the GI bill and some luck, I got an excellent engineering education just at the beginning of the great arms race with those other guys, and never had the least trouble finding jobs pushing more money on me than I had any desire for.

              So, with all that, I am maybe an excessive optimist, at least for a big swath of people in the USA, where we have so huge a pile of real wealth right here and right now scattered around being ignored, in the used car lots, junkyards, deserts paved with useless obsolete aircraft, etc, etc.

              And on top of all that, we have another treasure chest of inestimable value- the scientific and tech knowledge to do everything we do VERY MUCH BETTER than we have ever done.

              I also have had another kind of education of an entirely different stripe- as CEO of a little R&D company, I did a lot of travel into totally miserable, near hopeless places, showing beyond argument that lots of misery is, and has long been, already cooked into the cake.

              Of course Ron is right. Even with no energy problems , we have to quit gobbling up the world we stand on.

              Now, on to the easy stuff. Solar/wind not available all the time.
              Right, but on the flip side, sometimes we have gobs of it, more or less free. Any plant manager worth his overalls will see immediately what to do- when it’s free, use it hard and fast for the stuff that can be done off and on. Lots of such things- any heat, cool can be stored, any water tank can be drained, and so on.

              And also things not much mentioned- water desalination is a big one. When the electricity is copious, run that plant flat out. Desal can be used lots of places people don’t think about, because until now, they could just get it out of the ground.

              Wind power, my favorite bad example. Everybody knows that wind up higher is far more cost effective, so why put that huge expensive thing on a big but still too low tower when there lots of ways to just fly it and leave the heavy stuff in the ground?

              Not done? Of course not. Big opportunity.

              Domestic solar. Where is that battery? Not needed , lots of other ways to get juice on demand. My current favorite is an air pump into a storage hole or pipe, then, when needed, take that air and heat it and run it thru an expander as a mini-instant demand thermal generator.

              Turbocharger turbines are dirt cheap in the junk yard, and good enough.

              Don’t like any of those ideas? No problem, we got fourteen dozen more, but we won’t bore you with any more right now.

              Hope! Or, if not hope, Fun!

              • I propose we investigate an air energy storage, for large scale industrial applications.

                Here’s an outline:

                1. Use four large caverns leached in a salt dome in Texas, capacity to be determined.

                2. Build compressor stations to increase working fluid pressure to 1000 psi. Compressor drivers will be electric motors.

                3. Build a power plant which uses turbo expanders to drive generators.

                4. Install gas turbines which can couple to the same generators, to provide power if the air pressure drops below a minimum level.

                The idea is to have the ability to provide energy storage AND also have a piggybacked peaking facility. This should overall cost.

                However, the economic return of such air system needs to be studied by itself. This is by far the largest scale I can imagine, so it should achieve the lowest cost per energy unit it can store and deliver.

          • John B says:

            Here’s a plan for 100% Renewable energy. I don’t see why it wouldn’t work in Jamaica.

            https://www.youtube.com/watch?v=7-sDkrZmrUA

      • Jef says:

        If we had a cost effective storage solution right now we would have twice or more of the electricity that we generate even without “renewables”. Or we could extend resources 2X or more. Storage also allows for enormous efficency gains. Hell we could reduce or maybe even do away with FF electricity.

        Oh by the way they have been working on this for over 100 years now but I am sure its just about to break out any day now. Keep hope alive.

        • Fred Magyar says:

          Hell we could reduce or maybe even do away with FF electricity.

          Given that FFs are a finite resource we have to do absolutely nothing to do away with them other than to keep using them at ever increasing rates… no renewables required!

          Just curious, and what exactly is your plan B?

      • Schinzy says:

        Technology could be on the way see for example: Isentropic Ltd..

      • old farmer mac says:

        When gasoline and diesel fuel got into the three and four buck per gallon range here in the states a very large number of people acquired a second vehicle that runs on substantially less fuel than the primary vehicle it stands in for.

        We used to use a full size Ford pickup with an enormous v8 engine for all our personal needs and most of our business. We kept a much BIGGER truck for large loads that could not be hauled on that pickup.

        Now I borrow a big truck since I seldom need one anymore and keep a Chevy four by four for the occasional heavy duty work and all the light truck work. This Chevy is ONLY driven when I MUST drive it rather than my compact car.

        I bought the compact car basically for one reason- to save gasoline. It saves enough to cover the cost of owning it plus enough more to be a worthwhile investment.

        In analogous fashion I believe that wind and solar power will – before too much more time passes – be worthwhile in dollar and cent terms for one simple reason- the ever decreasing finite supply of fossil fuels will get to be ever more expensive on average.

        A country that currently imports oil, coal ,and gas that builds out plenty of wind and solar capacity will be able to avoid spending substantial amounts of hard earned foreign exchange on imported fuel. There are other pluses too- more local jobs , more local property taxes, somewhat less need for military expenditures to secure supply lines etc .

        I am not so optimistic as Nick or some other folks but I AM convinced that the day of the electric car is HERE. NOW. Oil will inevitably spike up again – sooner rather than later imo- and there are now enough people who have owned Volts and Leafs and Teslas around that electric autos are no longer a complete novelty. I think that within five years they will be cheap enough to sell like ice water in hell when gasoline prices spike again.

        The conversation at the local country store the last time I stopped centered around the Prius owned by the man who runs the most popular local garage. HE swears BY his Prius – rather than at it.

        Ditto the one person in the neighborhood who owns a Volt. He does a LOT of bragging about how much gasoline he DOES NOT buy. He also points out that when his Volt eventually has fifty thousand miles on it the engine will have only five thousand or so , given that it he rarely discharges the battery sufficiently to cause it to run.

        Most multi vehicle households in this country could make good use of a Leaf right now just about every day. Range is not forever going to be the bugaboo people think it is.

  2. Han Neumann says:

    Interesting guest post, Mr. Coyne.

    “….dreams of Tony Seba become a reality, …”

    Seems it are dreams of another world. Agree, lack of demand for oil not anytime soon.

    • Dennis Coyne says:

      Hi Han,

      Thanks. I agree it will take very high oil prices to reduce oil demand significantly ($200/b in 2015$ at least.) I am very doubtful about Tony Seba’s predictions, the scenarios of Old Farmer Mac seem more reasonable to me.

      • MarbleZeppelin says:

        Electric cars (not including hybrid non-plug-in) sales rose by 32 times between 2010 and 2013

        Solar utility size power doubled in 2014
        Overall solar power grew 450% from 2010 to 2014

        Wind power doubling every five years

        Those are all world-wide figures, not projections. Exponential growth in all areas.

        Tony Seba’s view of autonomous cars and the conversion toward electric solar/wind power is merely an extrapolation of what is happening now. We all know that extrapolation is not inherently accurate, however many high rate growth trends have come about in the last 200 years or so, giving some substance to technological growth extrapolations.

        Crude oil growth has ground to a halt and liquids growth is small.

        If I am interpreting Dennis C’s graph correctly it looks like US reserve growth is not enough to compensate for production and 2P reserves are falling. Of course shale oil put an new twist to reserves and production, but is very sensitive to pricing making it undependable.

        World coal production up 60 percent 2000-2010 still growing.
        World natural gas production up 40 percent 2000-2013
        Looks like the world is shifting to coal and natural gas with renewables sneaking in the back door.

        • Brian Rose says:

          There was a big hoopla today about how Uber has “stolen” (paid handsomely) Carnegie Mellon’s entire robotics department to help them make an autonomous vehicle.

          Uber took 40 robotics engineers, including the programs Director.

          There is a huge race between several big players (Google, Apple, Tesla, Uber) to make a truly autonomous vehicle.

          Utah just approved autonomous commercial trucking, which is great because the first autonomous big rig truck was just released. Obviously, it is more prototype than commercially ready, but it is crystal clear that once the software and hardware are perfected each company involved is hoping to make a killing licensing out the technology.

          We already have PV and wind, we just need more of it.

          We already have electric vehicles, we just need more of them.

          We already have battery storage thanks to Tesla’s Power Wall, we just need more of them.

          More Gigafactories, more economies of scale.

          The last piece of the puzzle is autonomous vehicles. Once we have those…. well we’ll just need a hell of a lot more of them.

          Barring any financial collapse, which is entirely possible, we will have made a strong transition to an entirely different system of transport and energy use by 2025. My best guess is that by 2022-2025 we would naturally hit peak oil demand as the autonomous, on-demand electric vehicle world takes hold.

          It will be cheaper, less hassle, and rapidly scalable. The key to this model of autonomous transport is that it relies on large companies producing small fleets of autonomous vehicles that they “operate” themselves. No need for consumers to slowly, over decades, “turnover” the fleet of ICEs to EVs.

          As a millennial myself I can attest to how rapidly Uber has penetrated the marketplace. I’ve been informed about Uber from articles for 2 years now, which doesn’t mean much in the real world. Just in the last 6 months everyone I know, from peers to managers, aunts, uncles, and parents, has suddenly caught on to Uber, and they all use it at every opportunity.

          Once a true autonomous vehicle hits the roads legislative approval will be swift since it will already be proven technology. Legislative/legal hurdles are being worked out and debated NOW, years before the first true autonomous vehicle is here. It goes without question that whether it is Uber, Tesla, Google, or Apple the vehicle will be both autonomous AND EV due to the minimal maintenance, and ability to regulate charging at specific hubs.

          Uber cannot wait until they can do away with their current model of needing human drivers. With the data they will have collected by the launch date (2018-2020) they will know precisely how many vehicles to have in any given geographic area, at what times of day, week, and month. They will be lean, efficient, on-demand, and far cheaper than owning a vehicle.

          I truly believe that the affordability and convenience of this disruptive technology will cause a rapid shift in the perception of whether owning a vehicle is ideal. For this to happen autonomous EV networks must be not only cheaper, but truly more convenient than owning your own vehicle.

          It is pure speculation, albeit informed speculation, that developed economies will see this perception shift around 2025. Just as friends, family, and co-workers currently own their own vehicles, but supplement their transport with Uber (especially if drinking) people in the future will STILL own their own vehicle, but slowly and surely will use an autonomous Uber EV to get around while their cars are used less and less. Once their car breaks down they’ll question whether to even fix it or buy a new one. Afterall, they use their Uber app most of the time anyway…

          • coffeeguyzz says:

            Mr. Rose
            I am at ground zero with the Uber folks as I drive regularly in the SF bay area, especially downtown SF.
            The incredible explosion in the number of Uber vehicles is something to behold. They are everywhere and increasing in number and locale by the month/week.
            For readers who are either unfamiliar with the concepts or specifics of this Uber/Lyft/Getaround/(more coming by the week) industry, you may want to read up ‘cuz it’s coming soon to a neighborhood near you.
            And, yes, definitely sans human operators may eliminate the off-the-charts recklessness/distractions/dangerous, illegal moves constantly displayed by these Goober drivers.

            • coffeeguyzz says:

              Mr. Rose
              Quick corollary/projection regarding the Goobers that fans of mass transit may like … the number of people I know who have used the area’s mass transit (esp BART and Caltrain) in the past several months and then were promptly whisked the ‘last mile’ to their destination via Uber/Lyft/et al has increased tremendously as the efficiency re cost/time is now simply unbeatable.

            • Boomer II says:

              I think those who aren’t familiar with Silicon Valley thinking may be underestimating the extent to which some of the entrepreneurs there are eager to reinvent energy and transportation.

              What makes their attempt different than previous attempts is the amount of money they can throw at this. Once they decide to influence the politicians in DC to favor new industries over the fossil fuel industries, things can change rapidly.

              The new entrepreneurs may not be any nicer than the Kochs, but their money will support different projects.d

        • Dennis Coyne says:

          Hi Marblezepplin,

          If the estimate of 2P(proved and probable reserves) to 1P reserves of 1.7 is correct for the US then US reserves fell from 51 Gb in 1980 to 37 Gb in 2005, while 17 Gb of oil was discovered over that period and 63 Gb of oil was produced.
          So initial reserves (51 Gb) plus discoveries (17 Gb) minus output (63 Gb) is 5 Gb.
          Reserve growth from 1980 to 2005 is 2005 reserves (37 Gb) minus 5 Gb (from previous sentence) or 32 Gb.

          Note that after 2005, the LTO reserves caused an increase in US 2P reserves to 57 Gb in 2013, higher than the 1980 2P reserve level, with only 3.6 Gb of new discoveries from 2006 to 2013. Reserve growth from 1980 to 2013 was 63 Gb, 31 Gb of this reserve growth was from 2006 to 2013. Cumulative output was 78 Gb from 1980 to 2013, with 21 Gb of cumulative discovery and an increase in 2P reserves from 51 Gb to 57 Gb.

  3. Dennis, I looked over the graphs and the spreadsheet, and I got confused. Maybe it´s because the 2P reserves definitions we use are slightly different.

    The probable (2P) reserves I was taught to use meet the requirement to be producible under current technology, practices and prices, but fail to meet the SEC requirements (which tend to be conservative and are fairly outdated). However, the 2P reserves aren´t estimated for yet to find reservoirs. In some cases one can put an extension reserve (meaning a yet to drill sector of a field we feel meet the P50 requirement). In other cases we can add a waterflood or EOR, which we think are feasible but haven´t been scheduled for implementation within a reasonable amount of time (say 5 to 10 years).

    Because guidelines for Probable are somewhat flexible, I think there´s going to be a fair amount of hair in how different companies or consultancies estimate this figure. But what nobody does is estimate the reserves for future discoveries as Probable in the estimates for existing fields.

    Now we move on to the changes. I have a doubt about this topic. Some of the changes we see being booked are attributable to the new discoveries and extensions ????. Discoveries and extensions are usually going to see a higher revision rate (see the attached plot from an USGS study done in the 1990´s for US Gulf of Mexico fields).

    We know that as fields mature we improve what we know about them, so the changes tend to be fairly negligible. What impacts them more than anything is the oil price, changes in OPEX, tax law, regulations, and technology. But in existing fields these tend to be fairly slim (again, refer to the graph).

    Anyway, I decided to grab your excel and prepared a rough estimate of what I think may be going on. I´ll post it down below. I don´t vouch for the numbers, I´m just showing what I think is the overall reserves evolution process, in a very rough fashion. If these numbers were right US production would be about 730,000 BOPD in 2100, and remaining Proved plus probable reserves would be 9.5 billion barrels (that´s by the end of the 21st century).

  4. Here´s an excel graph showing how I think the reserves tend to evolve, with my own super rough estimate of where we may be headed:

    • Dennis Coyne says:

      Hi Fernando,

      In my spreadsheet for the US, 1P reserves are proven reserves, 2P reserves are assumed to be 1P reserves times 1.7.

      The EIA’s “new discoveries” are in two separate columns(new field discoveries and new discoveries in old fields) and I have combined them into a “discoveries” column in my spreadsheet. The discoveries in the EIA spreadsheet are 1P (proved) discoveries so I multiply by 1.7 to get 2P (proved plus probable) discoveries. I ignore the various reserve additions and subtractions and reserve extensions. The actual reported year end proven reserves from the “Data1″spreadsheet are used from 1979 to 2013.

      If the estimate of 2P reserves is correct when 1P reserves are multiplied by 1.7, then reserve growth is 63% from 1980 to 2005 in the United States. If this 2P/1P ratio of 1.7 is too high, we could use 1.4 instead for the 2P/1P ratio. In the case of 1.4, reserve growth increases to 90%. Spreadsheet at link below:

      https://drive.google.com/file/d/0B4nArV09d398Mkp6RnRqdVhsVzA/view?usp=sharing

      Chart for 2P/1P reserve ratio of 1.4 below:

      • I added the new discoveries up into a single column as well. But I used different ratios for changes. For the changes to proved I used a lower figure than for changes to new discoveries.

        You see, I think we just have a different approach, I know the reserve changes get smaller over time. This is shown in the chart I put up from the Gulf of Mexico. So I use a higher number for the changes to discoveries.

        To sort this out we would need the IHS data base, but that’s really expensive. I used to have access to Petroconsultants’ and IHS when they were separate outfits, but I no longer have such luxury.

        • “To sort this out we would need the IHS data base, but that’s really expensive. “

          Fearnando, You do realize that if climate scientists requested payment like that for their data you would be belly-aching to no end.

          The rules are different for those with money and power /
          Hypocrisy knows no bounds.

          Hide the decline (in fossil fuels)

        • Webby, IHS is a corporation, it has thousands of employees gathering the data, putting it in a common format, and doing the data base housekeeping. In many cases they have to pay individual data owners in other countries, translate the information, as well as quality check it.

          If the UN or other international agency wants to make a portion of what they hold a publicly accessible data base I’m sure they’ll be willing to negotiate a price. My guess is they’ll do it for $200 million per year.

          • Ferny-Nando,
            Yea sure, prove that “thousands of employees gathering the data”. Do you really take us for rubes?

            Doesn’t matter, the government has the data and we as taxpayers have the right to access it. So stop your belly-aching about climate change.

            • 5700 employees according to this

              http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mjg3NDg4fENoaWxkSUQ9LTF8VHlwZT0z&t=1

              Plus they use lots of contractors, and consultants. I have dealt with them for over 30 years. Face it, you aren’t in the industry, thus you can’t visualize the huge amount of data we use. The company I used to work for had warehouses, distributed server farms hidden in bunkers, and all sorts of employees guarding our data. But IHS consolidates everything. It’s like King Kong.

              • Nando,
                Listen closely. We demand the data just like you AGW deniers demand the research data of every climate scientist that ever lived, even if they reside in another country that you don’t pay taxes to

                How do you like them apples?

                • Write ihs. Or maybe you can ask the eia to buy their data. Do you know how to read the well log suites?

                  • You don’t seem to understand sarcasm. We don’t have to ask, we are entitled to demand the data. Just like you AGW deniers demand to have all climate data.

                • I’m not an A&W denier, or whatever. And I don’t demand all the data. I do think research funded with public funds should be freely accessible.

                  The data held by ihs comes from private and public entities. They gather it and put it in a common set of data bases. You can suggest this should be done by the über state. But so far nobody seems to back you.

        • Dennis Coyne says:

          Hi Fernando,

          I do not have access to specific field discovery data, but the general proposition that newer fields with see more reserve growth than older fields is true in many cases. There are exceptions to this in cases such as LTO and deep water oil and even Arctic oil which are driven by technology, oil prices, environmental regulation, and tax policy. All of these are difficult to predict.

          I have taken the very simple approach that reserve growth has been X from 1980 to 2005 and that from 2010 to 2100 it might be X/3, where X is an annual rate of growth of 2P oil reserves.

          • Dennis Coyne says:

            Hi Fernando,

            I have realized that we are using terminology differently you call probable reserves 2P reserves, but I use 2P as proved and probable reserves.

            The thinking is that there are three “P”s proved, probable, and possible reserves.
            1P=proved (one of the “P”s)
            2P=proved plus probable (two “P”s)
            3P= proved plus probable plus possible (three “P”s)

            I thought this was standard practice, my apologies if that is incorrect.

            • DC, If that isn’t right it should be the correct way of expressing it. Probabilities in that sense are cumulative and so possible will include proved and probable.

            • Dennis, I’ve seen it done in different ways. I wrote a comment about my preference to make sure it’s clear: p10 slam dunk, p50 midpoint, p90 iffy. Or try viveversa. It depends on which company is paying the bill.

              But let me tell you, in a field I won’t name the proved reserves went from 200 mmbo plus, down to 180 mmbo after the development was two years old, and today it’s over 1000 mmbo. And there was no way the iffy would have been over 1 billion. On the other hand ask ConocoPhillips what happened to Yuzhno Khilchuyu. I hear they are struggling.

              • Dispersive probabilities, duh.

              • Dennis Coyne says:

                Hi Fernando,

                Yes sometimes the reserve estimates decrease and sometimes they increase, on average over history they have tended to increase.

                I will repeat part of my post:

                With increasing knowledge, oil price, and improved technology and production methods, the estimate of oil reserves changes over time and on average these estimates tend to increase, this is what we mean by reserve growth.

                When we see reserves increase from 0.2 Gb to 1 Gb it is usually because oil prices have increased since the initial estimate or EOR is being applied, or a new technology (multi-fracked horizontal wells) is being applied.

                There are many different terminologies used, I mostly try to be consistent with Jean Laherrere’s terminology when talking about oil and natural gas reserves. He has written in the past how there is some confusion over the use of proven, probable, and possible reserves. I should have made this more clear in my post.

  5. Longtimber says:

    “The biggest U.S. exchange-traded fund that tracks oil is heading for the largest two-month outflow in six years, raising concern that crude’s 30 percent rally may stall.”

    http://www.bloomberg.com/news/articles/2015-05-28/oil-fund-s-biggest-outflow-in-six-years-signals-rally-may-falter

  6. old farmer mac says:

    Dealing with the actual numbers is beyond me since I have no expertise in either the oil industry or in statistics. Beyond that I conclude that even guys who model this stuff day in and day out aren’t likely to be betting the rent money on the accuracy of their models to any lesser margin than say maybe twenty five percent either way.

    Add in the uncertainties introduced by politics and it seems obvious to me that modeling future production on a year to year or decade to decade basis can produce useful upper bound estimates but lower boundary estimates can hardly be any better than guesswork.

    I am not so foolish as to predict that any PARTICULAR combination of factors will come together but it seems safe enough to make some generalizations.

    One such generalization is that as the supply of oil on the market gradually dries up , exporting countries that are not in desperate financial straits will start hoarding their oil rather than selling it in the expectation of either a higher future price or needing it themselves more than they need the money.

    Another is that China or some other rising power may be able to make commercial and security treaties with countries with oil to sell such that these sellers give China rights of first refusal in exchange for EITHER hard currency or manufactured goods or services such as training doctors.

    I am not actually predicting that China will arrange such treaties with Venezuela by way of example but there is a real possibility this could happen. RockMan who hangs out at another forum these days has written more ( and earlier) about this sort of possibility.

    Personally I think the estimates of future discoveries are exaggerated. The technology of exploration has been advancing rocket fast in the last couple of decades and the Blue Marble is only so big. No doubt there is plenty of undiscovered oil but whether it can be gotten out of the ground economically is another question altogether. There is not much point in burning five barrels total energy equivalent to get six – or even ten or twelve.

    The other energy inputs actual and indirect such as coal and gas used to generate electricity consumed by the oil industry plus all the energy embedded in the materials used by the industry plus the manpower will eventually be more profitably applied directly to end uses such as transportation.

    The steel and copper and aluminum and industrial capacity needed to build drilling rigs and pipelines and refineries can be used to build electric cars that run cheaper than conventional cars burning ever scarcer and ever more expensive oil.

    Will there be an oil crunch that breaks the back of business as usual ?

    I used to believe in such an oil supply crisis being more or less baked in. I still believe it is a very real possibility. But oil supplies may decline slowly enough that peak oil in and of itself will not bring down industrial civilization.Renewables are coming along faster than I ever expected.

    Efficiency of energy use per capita is increasing at a good clip too. Beyond that the collapse of industries such as commercial air travel aren’t likely to mean the end of industrial civilization.People can live without visiting Grandma on the other side of the continent or chasing the snow or the sun off season.

    Life styles can change faster than most people think.Even in the boonies where I live I see a noticeable trend in people looking for places to live closer to town and their jobs. The guys with businesses of their own may buy three hundred horsepower pickup trucks but the guys working hourly jobs are buying four banger compact models. The local heating and air guys no longer stock replacement oil furnaces. It’s all heat pumps now.

    • MarbleZeppelin says:

      Old Farmer is hitting on most cylinders again. I live in a rural farming community and region. The preponderance of pick-up trucks has fallen dramatically in the last decade as has the large SUV. Most of the vehicles around here are small 4 banger types. I see quite a number of hybrids and plug-in electrics are no longer an unusual site around here. PV solar farms have popped up in the region.
      Glad to hear about the heat pump switchover, much better way to go.

      I am not fully sure about the exporting problem. I think the KSA and others might resort to internal reductions on the use of crude to keep up the profits from exports. Switching to natural gas electric generation, solar electric, wind power, electric vehicles and restrictions on the internal use of gasoline/diesel fuels will do the job. Let’s face it, except for Russia most of the exporting countries are small in size. How far do they need to travel and why can’t the do it more efficiently?

      • An interesting factor that seems to be raising a kink in projections is Saudi need for natural gas. Summer is approaching and they are in a potential natural gas squeeze (I hear). This may be a factor in their recent production spurt? Can anybody confirm this?

      • clueless says:

        Marble – I am not looking for personal information. But, it would be interesting to know where you live. My recent reading of the vehicle industry in the US is that sales of pickups and SUV’s are at record numbers [if I am remembering correctly].

        • MarbleZeppelin says:

          I am talking about over a decade period of time, not one annual surge due to bargains and low gas prices. I live about 25 miles out from the edge of one of the major population regions of the US in a township of about 1800 population in 20 square miles. I am including nearby villages and towns in my assessment.

          I am also sure that the refill of vehicles from the downturn is still going on. Work vehicles like pick-up trucks will be replaced eventually, farms and contractors have no current alternative.

    • The future discoveries would be in shales, deep water, Arctic, or really hard to reach locations. These are all expensive. Some, like the oil Shell is exploring for offshore Alaska, is so expensive that project is like a moon shot. The same applies to the shales and deep water unless we get cheaper/better technology.

      About 5 years ago I reviewed a deep water project (I was just looking it over to give them feedback on some of the problems they may face), and I was surprised when I saw that indeed they had a huge discovery, but the reservoir and the water depth made production extremely difficult. This project wasn’t unique, and it gave me a pretty good idea that indeed we were running out of easy targets.

      In conclusion, what we “find” will depend to some extent on prices and industry costs. I’d say it’s a very delicate balance.

      • Dennis Coyne says:

        Hi Fernando,

        How many new discoveries are actually “new”? My guess is that since 1990, there are probably very few truly “new” discoveries.

        There are quite a lot of oil resources in the contingent resource category Worldwide (though I do not have specific numbers, it is likely more than 800 Gb).

        If we do not consider these as “new discoveries”, but simply as potential “reserve growth” (along with possible reserves), then maybe Old Farmer Mac is correct that there will be little to no “new discovery”. If the World has 60% reserve growth over 90 years from 2010 to 2100 (rather than only the 25 years in the study of US reserves), and Jean Laherrere’s 2P estimate for C+C-XH oil reserves of 850 Gb is correct, then we would have a World C+C-XH URR of 2500 Gb with zero new discoveries. That low level of new oil discovery is possible but not likely.

        I agree that oil prices and technological development will play a large role in determining the URR.

        • Dennis, I think most deep water fields were discovered since 1990 (these include the large clusters offshore West Africa, Brazil, and Gulf of Mexico). I believe Kashagan can be considered to be new, although the structure was sort of outlined with 2D by the Soviets.

          The tight oil field (Bakken, Eagle Ford) can be considered discoveries, I suppose.

          I think a lot of the potential lies in tight rocks in the USA as wells as countries such as Argentina (Vaca Muerta). And of course there’s oil in the Arctic. What should we consider the fields in the Canadian Beaufort, like Amauligak? Stranded? Or do you call those reserve changes?

          I penciled in yet to find/EOR but I was thinking of cases where reserves would be developed thanks to a combination of higher prices, tax law changes plus technology (Mexico’s Chicontepec, Novvy Port and the Jurassic in Yamal). To be honest, I grabbed a piece of paper, jotted numbers as I remembered them and added them up. Do you think I was too high?

          • old farmer mac says:

            Unless I am mistaken the Bakken has been known to petroleum geologists since the fifties. Calling it new seems like a stretch to me but given the way reserves are defined this might be justifiable.

            • We didn’t know it could make the oil it’s making. The way we do it, it’s necessary to prove it can be produced under current technology and prices.

              We have other accumulations we don’t do much about. For example there are fields in the Arctic we don’t produce. In the north slope there’s a large heavy oil pool and thus far there are zilch reserves estimated for it. I think ConocoPhillips is trying to test a technology which may unlock some of that crude and get it to market. But it needs a very high price and the state of Alaska needs to drop taxes.

          • Doug Leighton says:

            Fernando, Don’t know if you know (or care) but Amauligak (Gulf Canada) was found over 30 years ago so not new I’d say, not that big either in grand scheme of things: Perhaps a Billion barrels? I know this reservoir well as I was employed by one of the Gulf Canada JV partners and supervised some of the seismic (and followed reserve calculations of one permutation of the reservoir characterization process). Have zero current knowledge.

            • Doug, I’m familiar with it (I helped with a look at the oil as well as the delta gas). That reserve isn’t booked at all. So in the stats for Canada it’s nothing, I suppose, just technical resources. When they get their development plan approved they’ll book some of it to proved and the rest to probable, I suppose. That’s a nice field, isn’t it?

          • Dennis Coyne says:

            Hi Fernando,

            I agree that more recent discoveries will grow more than older discoveries.

            I would consider any known resources, not as “new discoveries”. So EOR, contingent resources and so forth would all be termed “reserve growth” in my view when they become proved or probable reserves.

            Let’s take the US Bakken/Three Forls, in 2008 there were very few 2P reserves, at the end of 2013 there were 4.5 Gb of 1P reserves and 7.6 Gb of 2P reserves (if the 2P/1P ratio is 1.7). Nothing “new” was discovered, the reserve estimates increased due to high oil prices and the application of multi-stage fracking to horizontal wells.

            No doubt you are correct about ultra deep water discoveries since 1990, in the US Gulf of mexico about 12 Gb of oil was discovered from 1986 to 2013 and there was about 2.6 Gb of reserve growth (about 56% of 1986 2P reserves). I do not have data for the entire World, but a rough guess might be 30 to 50 Gb of ultra deep water oil discovery since 1990.

            For World reserve growth a 60% increase in reserves over 90 years (2010 to 2100) is less than 1/3 the rate of increase in the US reserves from 1980 to 2005 (1.8%/year vs 0.5%/year).

            This seems fairly conservative

            • Doug Leighton says:

              Dennis, in my very limited experience, oil which can be produced economically through EOR is included in the proved category assuming successful testing by a pilot project OR evidence using reliable technology establishes the “reasonable certainty” of the engineering analysis on which the project was based: The project has to have been approved for development to qualify.

              So, projects being developed by Statoil, for example, where EOR is built into the development plan would have EOR recoverable oil placed in a proven category. EOR applied to an “old” projects would fall into your reserve growth ideas and there is some gray stuff in-between. As Fernando has pointed out on several occasions, reserve growth is often an odd result stemming from SEC rules. I’ve seen reservoirs developed with essentially no growth because SEC regulations weren’t applicable and the engineers knew almost exactly what they had (could extract) from the get-go.

              Fernando may well disagree in which case I bow to his (vastly) superior knowledge.

              • Dennis Coyne says:

                Hi Doug,

                Often reserves are estimated without the EOR when oil prices are low (so EOR is not economic) and when oil prices increase and EOR becomes economic, the reserve estimate increases, I consider this as a part of reserve growth rather than a “new discovery”.

                Note that I know that you know this, I am trying to explain that I am aware of it as well.

            • Dennis, current practice is to leave out resources when producibility and economic recovery aren’t assured. This means the oil in the bakken couldn’t be placed in the reserve books.

              Take as an example the Monterrey shale in California. The U.S. Government estimated billions of barrels for that “well known accumulation”, but the oil wasn’t booked by the companies (I assume they weren’t foolish enough to do it). As it turned out, the Monterrey fizzled.

              Something similar could happen in other areas. For example, the North Slope heavy oil. That accumulation has billions of barrels, there have been a couple of experimental wells drilled and tested, but so far it remains a very hard nut to crack. That oil isn’t booked by the lease holders, and whether it can be produced before the pipeline is junked isn’t known.

              • Dennis Coyne says:

                Hi Fernando,

                I understand that reserves are only booked when they are economically recoverable, that is why I said at the top of my post that estimated reserves change with oil price, technology, and knowledge of the field as it is developed.

                Going back to the Bakken. Much of the Bakken and Three Forks resources were not reserves befor high oil prices and the application of horizontal fracking, now there are between 4.5 and 9 Gb of 2P reserves, almost none of this has been new discoveries, the estimates of recoverable reserves has increased, I call this reserve growth.

                If oil prices never increase and technology never improves, then perhaps there will not be any future reserve growth. I think such a proposition is highly unlikely.

      • TechGuy says:

        Fern Wrote:
        “. Some, like the oil Shell is exploring for offshore Alaska, is so expensive that project is like a moon shot.”

        That would be an understatement. 🙂

        It probably costs less than 5 to 7 Billion to get a man to moon and back using today tech. The Big offshore arctic projects can cost more than $80 billion to complete.

  7. This article may be of interest:

    http://www.wsj.com/articles/china-to-unveil-billions-of-dollars-in-pakistan-investment-1429214705

    “The largest part of the project would provide electricity to energy-starved Pakistan, based mostly on building new coal-fired power plants. The country is beset by hours of daily scheduled power cuts because of a lack of supply, shutting down industry and making life miserable in homes—a major reason for the election in 2013 of Prime Minister Nawaz Sharif, who promised to solve the electricity crisis.

    The plans envisage adding 10,400 megawatts of electricity at a cost of $15.5 billion by 2018. If those projects deliver, plugging the electricity deficit, Mr. Sharif would be able to go into the 2018 election saying he has lived up to his pledge.

    After 2018, adding a further 6,600 megawatts is outlined—at a cost of an additional $18.3 billion—that in cumulative total would double Pakistan’s current electricity output.”

  8. Longtimber says:

    http://seekingalpha.com/article/3224116-how-bright-will-the-sun-shine-in-canada
    See Graph on the Top 10 PV Makers. Bank on Asia being the new Middle East?? “Candian PV” made in China, We pay a 20% Premium for PV in US due to PV Tariffs to protect a non-existing Industry. PV more Global than Crude?? How about a 20% Tariff on Blood Stained ME Crude Instead. Gobbermints must Tax Sunshine and now water.

    • Longtimber says:

      PV Cartel

    • I’m happy to see the communist party leadership has managed a transition to ruthless capitalism in China. Low prices for Chinese products are a bounty for planet earth, thanks to 500 million Chinese slaves who lack the ability to form unions or vote to elect their leaders. Long live Chairman Xi!!

      • Political Economist says:

        At great human and environmental cost within China. Nothing to celebrate.

      • Comrade, it requires a long march to fulfill the people’s destiny. Did you read “Children of God”, or “I beg one thousand pardons to the People´s Republic of China”? They are very short essays I wrote about China.

        I’m somewhat familiar with China (I worked there for short periods of time, and my number two daughter taught at a Chinese university). Check what I wrote and critique it, I’m interested in your opinion.

      • Stan says:

        Claptrap. The PV workers aren’t any worse off than any others in China’s manufacturing industry and they are all a lot better off than they would be without those jobs.

  9. islandboy says:

    I feel compelled to share the graph of US electricity production from solar thermal and PV again. Tony Seba might be way out of left field as far as his predictions go but, peak production from PV doubled between 2012 and 2013 and again between 2013 and 2014. It remains to be seen what will happen this year but, March production is already greater than the peak for last year. It certainly looks to me like we are witnessing the beginnings of a significant disruption in the electricity sector. Will it eventually have an impact on oil production? Time will tell.

    • sunnnv says:

      Nice table, but where is it from? Have a link?

      The electricity sector is massively being disrupted by solar and wind,
      but oil is a tiny amount of electricity – even most new Internal Combustion Engine power plants are natural gas/biogas/landfill gas/…
      http://www.eia.gov/electricity/monthly/
      See fuels summaries, also tables 6.3 thru 6.5.

      The few that are diesel are typically tiny plants (like .4 MW) in Alaska, or some creamery’s backup generator. 1 25 MW diesel fueled ICE (in Alaska), vs 12 9.3 MW natgas ICE in North Dakota, 3 18.7 MW natgas ICE in Kansas, 12 18.3 MW natgas ICE at Redgate, Texas, etc. etc.

      Transportation hasn’t been materially electrified in the US, though CNG has risen a tiny bit.
      http://www.eia.gov/todayinenergy/detail.cfm?id=21272

      • islandboy says:

        See my comment from the previous Ronpost for the source which incidentally, happens to be Table 1.1.A of the the same one you just linked to. The graph above is from my comment immediately below the comment linked to which is why I said “I feel compelled to share the graph of US electricity production from solar thermal and PV again. What is even more dramatic is a graph showing PV electricity production between 2005 and 2014!

        Edit: The posted graph is actually missing the data for 2014. If anybody’s interested I can re-post the graph but, it just shows production doubling again to 15.874 GWh.

        • Dennis Coyne says:

          Hi Island boy,

          I think a graph with the most up to date data would be of interest, so if it is not too much trouble, post it. Make it blue so Fernando will trust it. 🙂

          Thanks.

  10. Ronald Walter says:

    BNSF week 20

    10,264 carloads of rock oil shipped by BNSF, 103 more than week 20 of 2014.

    An increase of approximately 500 cars from last week’s report.

    There has been approximately 630 million barrels of oil produced from the Williston Basin since January of 2012. The last nine months of production stands at 362 315 639 barrels of oil.

    The one billionth barrel of oil from the Basin was ca. 1979. A Conoco well down near Dickinson produced three percent of Conoco’s domestic production ca. 1993.

    Based on the last nine months of production totals, the next 27 months should produce over one billion barrels.

    The data from the Williston Basin suggests a growth in the reserve and a potential for a greater number of barrels of oil than expected. Growth in the reserve, depletion increases, more reserve. OOIP at 500 billion and a three percent extraction is 15 billion barrels potential to be produced.

    Another 30 years of Bakken oil production, then it’ll be much less oil produced, but it won’t ever approach zero.

    • Oh yes it will. It’s going to be like Hutton field. You visit Hutton today and you see nothing stick above the water.

      • sunnnv says:

        Are you forecasting that North Dakota will submerge under the sea??? 😉

        per the wiki:
        http://en.wikipedia.org/wiki/Hutton_oilfield

        field retired 2001
        production began 1984
        17 years – not a very long time…
        265 million bbls, original estimate was 190 million. Reserve growth 39%.

        I dunno, maintaining a tension leg platform in the middle of the Northern North Sea, and getting supplies to the crew have got to be insanely expensive, as is the crew helo flights. And a platform is an “all-or-nothing” affair, unlike the ground, where shutting in one well doesn’t have to close down the “office.”
        In North Dakota, they could ride out to the wells on a horse, and let the horse graze while you’re out there. (dog sled or cross country ski in the wintertime).

        If the wells salt up horribly bad though, it may not pay to pump them once a week, like they do some 30-60 year-old stripper wells in Texas. The difference between workover once or twice a year vs. once every 5 or 10 years would be a killer.

        Jet pumps fed fresh water don’t work great at low flow rates.
        Hollow pump rod to inject fresh water seems expensive.

        Does one of you guys with more time on your hands than me want to go through the DMR’s daily reports and see how many wells are abandoned from the Bakken (vs. conventional), and what that rate is vis-a-vis new wells?
        n.b. would have to find out if these are “temporarily abandoned” wells in the fracklog.

        • Sunnv, I have a little bit of information about horizontal well operating costs, and the artificial lift problems they have. The problem, as you probably know, involves pumping or lifting about 8 bopd plus 8 bwpd, with say 16000 cubic feet of gas per day, from a very low pressure reservoir using a well with a 9000 ft lateral.

          I assume this will involve putting the well on a timed production schedule. I haven’t run the design, but it may be more cost effective to use gas lift, but I’m not sure.

          Have you run the design for future conditions to see where is the economic limit at $150 per barrel? Maybe they can be producing 2500000 bopd from 30000 wells 30 years from now. But before I buy it I need to see model results.

          But I’m not sure it will never approach zero. I’m afraid in 100 years all those wells will be plugged. They’ll be too old.

          But if they figure out how to produce and make money at 5 to 8 bopd they can indeed get 15 billion barrels from the bakken and Tf. They may even get 20 billion. That ability to produce for really long term gets a lot of oil, it doesn’t make a lot of money, but I’ve worked in an area with lots of marginal wells and we produced 50 to 80 thousand bopd for over 50 years using wells which recovered about 200,000 barrels each.

    • Frugal says:

      The data from the Williston Basin suggests a growth in the reserve and a potential for a greater number of barrels of oil than expected.

      I doubt there’ll be much reserve growth in a basin like Williston. With all the wells drilled in the Williston, what could possibly be there that they haven’t found yet?

      • Reserves grow simply because they aren’t booked as reserves if development will take place beyond 5 years in the future. There are also other regulations which limit ability to book the reserves. I guess the word reserves has lots of meanings.

      • Dennis Coyne says:

        Hi Frugal,

        There has been quite a lot of reserve growth in the Bakken/Three Forks since 2008, about 5 Gb through 2013 of 1P reserves and 8.5 Gb of 2P reserves.

        These are not new discoveries, just an increase in the estimate of what can be profitably produced. This rate of increase will slow considerably over the next few years if the 2013 USGS estimate is accurate (mean estimate is about 10 Gb for North Dakota Bakken/Three Forks for technically recoverable resources), the economically recoverable resources will be less, how much less depends on oil prices.

        • So they booked 13.5 billion p1 plus p2? I did a very rough baloney estimate and concluded 15 billion was reachable if prices zoom over the next 20 years.

          • Dennis Coyne says:

            Hi Fernando,

            No I use terminology differently from you. 1P reserves=proven reserves, 2P reserves=proven and probable reserves. When I say 2P/1P=1.7, then if 1P = 5 Gb, probable reserves are 3.5 Gb, and 2P reserves are 8.5 Gb.

            http://en.wikipedia.org/wiki/Oil_reserves

            There may be other ways of classifying reserves, but I use the 1P, 2P, and 3P definitions from that Wikipedia article.

            • I’m used to P10 (slam dunk), p50(midpoint), and p90 (iffy). I’ve seen companies use backwards terms. Does the figure include three forks?

              • Dennis Coyne says:

                Hi Fernando,

                Yes. I should have said Bakken/Three Forks and it is an estimate from the EIA for proven reserves, proven plus probable is estimated at 1.7 times proven reserves (the EIA rarely provides proven plus probable reserves).

                The USGS estimates about 10 Gb at the P50 level for technically recoverable resources for the North Dakota Bakken/Three Forks.

                Through 2013 2P reserves plus cumulative output from the North Dakota Bakken Three Forks was about 8.5 Gb. So in my view the USGS 2013 Bakken/Three Forks mean estimate may be conservative. Their F5 estimate was roughly 13 Gb, similar to your 15 Gb guess. Thirty gigabarrels sounds too high to me, but I don’t have your knowledge and experience so I tend to defer to the USGS estimates. By F5, this is the backwards way of doing the probability that the USGS uses, it means there is a 5% probability that the TRR will be more than 13 Gb. So the F95 level are the almost sure bets, and the F5 are the iffy resources.

  11. Boomer II says:
    • MarbleZeppelin says:

      I recall reading Harrison’s book, quite good. I also recall seeing the Limits to Growth. I agreed that those were possible futures, however having just studied the tactics and capabilities of hydrogen weapons, I saw a great uncertainty in the probability of needing to worry about population or resource depletion.
      The weapons are still with us and ready to launch, the population is much higher now and we have new world wrecking problems to worry about. The list of potential downfalls is growing, yet except for a portion of the population we are still going strong. Famine, diseases, resources shortage all still walk the earth hand in hand with social and economic wars. Yet the death rate is still too low to really impact population growth.
      Erlich was right though, populations would fall dramatically, extinction would occur. Just not homo sapiens, other species meeting their devastation and doom as their world was depleted, wrecked, poisoned and overrun. He picked the wrong species and should have stuck with butterflies.

      • Fred Magyar says:

        Erlich was right though, populations would fall dramatically, extinction would occur. Just not homo sapiens, other species meeting their devastation and doom as their world was depleted, wrecked, poisoned and overrun. He picked the wrong species and should have stuck with butterflies.

        Um, last time I checked, Homo sapiens, was trying to live on the same depleted, wrecked, poisoned and overrun planet as all those other species and as far as I’m aware, still needs healthy ecosystems just as much as all those other species.

        Perhaps you just forgot to add the sarc tag?

        • MarbleZeppelin says:

          I assume you are talking about some possible future, some mental prognostication of yours. We adjust the poisoning so that it only kills us slowly and at low enough rates so as not to endanger the whole. We have taken and changed the environment to our advantage, to the tune of adding ten New York Cities every year.
          Predicting and re-predicting the doom scenario is the job of religion and hucksters, not serious thinking people.

          I was talking about factual occurrences, not possible future ones based on a narrow view of trends that do not exist. Extending current trends into the future requires an understanding of the systems involved and a comprehensive view of all the factors. So far I have not seen a doom scenario that does not ignore a large portion of current reality and actual historical trends. To take the simple existence of lower life forms and try to apply that directly to humans is erroneous at best. If you open your eyes and look around you might see a few of the differences, those need to be taken into account.
          I try to go by the actual evidence, not some mental construct that only partially accounts for reality.

          • Fred Magyar says:

            I was talking about factual occurrences, not possible future ones based on a narrow view of trends that do not exist. Extending current trends into the future requires an understanding of the systems involved and a comprehensive view of all the factors. So far I have not seen a doom scenario that does not ignore a large portion of current reality and actual historical trends. To take the simple existence of lower life forms and try to apply that directly to humans is erroneous at best.

            Surely you jest, Mr. Zeppelin!
            You are correct you absolutely need to understand the systems involved.
            You should start with basic ecosystem thermodynamics. Hint it isn’t just about applying what effects simple life forms and extrapolating that. It’s about understanding the full system.

            Economic systems are subsets of the ecosystems and apparently Humans have yet to prove that collectively they are smarter than yeast!

            • MarbleZeppelin says:

              You are a riot Mr. Magyar. Yeast don’t cultivate their own food sources, invent ways to fertilize them and find stored energy sources to implement their actions. Nor do they imagine and build machines and buildings. Nor do they control their and modify their environment to extend survivability. That hackneyed phrase ” prove are smarter than yeast” is one of the biggest misstatements ever made. It depends on yeast being in a closed environment without external input. The earth is not a closed system and has a huge excess of external input.

              With the total input of energy into the earth system far exceeding human energy sources and environmental needs, energy is not a limit to growth or sustainability. This is an open system with an overabundance of energy input, not a closed jar with yeast growing in it. Very funny!

              • Fred Magyar says:

                With the total input of energy into the earth system far exceeding human energy sources and environmental needs, energy is not a limit to growth or sustainability.

                Either you don’t understand basic thermodynamics or you are being deliberately obtuse.

                Growth Has an Expiration Date, Tom Murphy
                https://goo.gl/66e6VO

                See if you can take care of a gerbil before you demand your pony!

                • MarbleZeppelin says:

                  Yes, I have seen Tom’s talk. More meaningless extrapolated prattle with lots of “ifs” thrown in to extend an impossible trendline into the future. Any decent scientist knows the dangers of extrapolation. Either you are not comprehending how the system works and what I am saying or you refuse to take a comprehensive view of the situation to maintain a static mindset.

      • TechGuy says:

        FWIW: I have no idea what the long term Monarch Population is. However, Insects do go through boom cycles. Every 20 years or so, there is a population explosions in many species, do to weather, and natural processes. Really you need long term data to support long term population trends. It might be that the 1997 was a boom year.

        that said, insect population declines appear to be linked to a new pesticide, which became popular in the late 1990’s

        http://en.wikipedia.org/wiki/Neonicotinoid

        My understanding is the sales of this pesticide is peanuts ( less than $3 Billion globally).

        Odd that the “enviromentalist” president refuses to ban it or at least temporarily ban it. Considering that that is market value is tiny, What is the point in not banning sales, when the pesticide manufactures can easily substitute sales with other products?

        http://www.theguardian.com/environment/2014/jun/20/bees-die-off-mystery-white-house-plan-save

  12. Watcher says:

    BTW there is a reasonable extinction scenario.

    A sharp reduction in oil distribution via geology and inevitable conflict fighting over what is left should shut off shipping nicely. This would take global population down to 800 million in about a year or two from start.

    That total is what it is and there is no reset. You can’t restart because the easy oil is gone. The effort to get difficult oil can’t be spared in that scenario from walking behind plows, which would become the most prestigious occupation.

    The absence of transportation precludes med shipment from anywhere still trying to make meds. So should see a decline in life expectancy to about 50.

    Pocket by pocket would get wiped out by disease or natural disaster. No shipping means no way out. Along with no mining of iron ore or aluminum to make anything that might ship.

    Give it a few hundred years — extinction is credible.

    • dolph9 says:

      Yeah I’ve been studying this from every possible angle and I think we’re toast.

      I think humans have gone haywire, I really do. We’ve lost it. I am completely at odds with the culture, and find myself a depressed curmudgeon at the ripe old age of 34. Just try to argue with someone that the price of an asset can’t rise to infinity, that printing money or bombing other countries doesn’t solve anything, or that we are all mortal and no amount of drugs or procedures will change that, and you will be outcast.

      The 1980s and 1990s seem like a golden era of modesty, restraint, and good governance compared to our present times.

      • WelshFarmer says:

        dolph9
        If you are a curmudgeon then so is my 20 year old son. He would agree with all that you say and has told me many times that he despairs of his peer group (other students in a fairly prestigous university).
        As a whole, they just don’t get it.

      • TechGuy says:

        Dolph9 wrote:

        “I think humans have gone haywire, I really do. We’ve lost it. I am completely at odds with the culture, and find myself a depressed curmudgeon at the ripe old age of 34. Just try to argue with someone that the price of an asset can’t rise to infinity, that printing money or bombing other countries doesn’t solve anything, or that we are all mortal and no amount of drugs or procedures will change that, and you will be outcast.”

        Welcome to the club! Humanity is indeed the “suicide” race. The best advice is to distance yourself, locate some place rural and safe, and adopt a self-reliant lifestyle. Have a goal helps, keeps you busy to avoid become depressed. Perhaps on the other side of collapse you can help rebuild society. Beats becoming a miserable drunk.

        Best of luck to you!

    • Strummer says:

      “Pocket by pocket would get wiped out by disease or natural disaster.”

      Not going to happen. 7 billion is an incredibly huge number to start from. Even a reduction of 99% leaves you with SEVENTY MILLION people. Humans have survived bottlenecks of a few tens of thousands (after the Toba eruption), without any technology to help them. Even if the global population plunges to ten of millions, they will have a huge amount of productive land and surplus productive capital available. And there are areas all over the world where there is almost zero risk of any natural disasters (Central Europe for example).

      • Watcher says:

        The easily accessed resources of that time enabled growth. They’re gone.

        Grow or die. Can’t grow. Die.

      • dolph9 says:

        Let’s keep in mind homo sapiens are just one particular species. It would be wrong to rule out the continued existence of other hominids, or the evolution of other self-aware intelligent beings.

        This I think clarifies the issue. It will take awhile, but industrial human is the peak of our species, end of story.

        • Strummer says:

          “industrial human is the peak of our species”

          That’s not what the post above was about. It was about *extinction* in a few hundred years, due to resource depletion, which I think is nonsense.

      • TechGuy says:

        “. Even if the global population plunges to ten of millions, they will have a huge amount of productive land and surplus productive capital available. And there are areas all over the world where there is almost zero risk of any natural disasters (Central Europe for example).”

        Much of the planet may become uninhabitable after a nuclear war. Not counting the issue with radioactively. No one will want or be able to live near any urban region after a nuclear strike. Areas destroyed will leak toxins everywhere. The oceans will become very contaminated (think of offshore wells without human intervention after a major storm). Sea/river side refineries will leak and burn, dumping large amounts of petrochemicals in to the seas and rivers. Rivers will also become polluted as the cities burn and toxic chemicals pour out of them from rainfall, which will end up in the oceans. Burning cities will also create airborne toxins that fall on cropland worldwide that lead to very high disease (cancer and other toxin related disease). Nuclear power plants will fail and meltdown, and the spent fuel pools will likely burn and contaminate very large regions.

        Its very likely that Human fertility will drop to zero, due to a combination of health and psychological issues. Few people will be willing to have children after a global nuclear war. Contaminated water and food will likely shorten lifespans and reduce the number of years women can have children. The old diseases of pre-19th century will make a strong come back, because of lack of medicine and intrastructure needed. Before the 20th century, natural selection helped make the population resistant to disease, however, with modern medicine and sanitation, people that would have died during their early child years are still alive and don’t have the immune system genes to protect them. If I recall correctly, pre-20th century, only 1 in 4 children made it adulthood. Meaning that with medical care and proper sanitation, perhaps as high as 75% of the survivors may die from pre-20th century diseases (ie Collera, typhoid, tuberculosis, staph, etc). Some diseases such as TB are already becoming drug resistant and untreatable. Its just a matter of another 20 years before TB become untreatable, unless a new class of drug treatments are found.

        Perhaps if humans were faced with a single disaster, survival would be more certain. However, after a nuclear war, they will be facing multiple challenges simulaneously: Radioactive fallout, modern man made toxins, disease, malnutrition, contamination of soil and war, lack of usable technology (no electricity/fuel/modern machinery), lack of knowlege of pre-industrial farming, lack of knowledge how to cope with air, soil and water contamination, etc.

        Toba came close to wiping the Humans out. Population declined to less than 70k (estimate based upon mitochondria DNA analysis). Back then, the oceans, rivers, and soil wasn’t contaiminated with petro-chemicals or radioactive fallout. My guess its a 50-50% chance humanity survives, but neither you or I have sufficient data to make a conclusion.

  13. Boltzmann Brain IV says:

    REQUEST:

    Can Fernando and other oil guys who have worked internationally….Post your opinion on Australia’s future OIL production/reserves?

    It doesn’t look good to me. Their coal and natural gas looks good. But I am unqualified.

    Maybe Ron could do a continent by continent analysis with the qualified oil guys giving their opinions, based on real life experience.

    I think that would be something readers would value, and you wouldn’t be able to find that analysis anywhere else.

    This might be the wrong post to do it, but it is something I would love to see.

    thanks!

    • My guess is Australia won’t ever get oil production back to what it used to be. One way one can tell is by the people they look to hire, the production and booking trends, etc. it seems to have enormous amounts of gas, and it’s close to Japan and China. But I wouldn’t be exporting much higher rates. The gas ought to be hoarded for the future. In 30 years it will be worth twice as much.

      • Boltzmann Brain IV says:

        What about shale? I occasionally read that Australia has good tight oil?

        thanks!

        • Dunno. They may have condensate. Let me give you a trick to figure out if a zone makes a good candidate: it ought to have over pressure, be deeper than say 2000 meters, the “shale” should be brittle, and the burial history shouldn’t be such that it cooked the rocks and made them generate gas.

          And I can’t recall many places which meet the criteria. Besides, Aussie costs are high. I think it’s better to think you’ll find gas and gas condensate. I’ll be surprised if they fibd a large good quality oil reservoir in their shales.

          The Bakken, the Eagle Ford, the Vaca Muerta, those seem to be fine. But even there the wells don’t make that much per well.

    • David Archibald posted me his reply to your question:

      There is currently an Australian Senate inquiry into transport fuel security.

      My submission is attached. It is also available online from the inquiry website. It is number 33:

      http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Rural_and_Regional_Affairs_and_Transport/Transport_energy_resilience/Submissions

  14. shallow sand says:

    Looked at March state by state EIA production report. Surprising how many states showed increases.

    I think we have addressed reporting for TX and ND plenty. How about the other states. I think I read that PA, OH, KS, OK, UT, NM, MT and WY were all up in 3/15. Seems odd to me.

    • shallow sand says:

      I suppose other smaller producing states are down December to March, so maybe what I point out above does not mean much. I know Texas and ND are the drivers of US oil production growth, and the other states are all minor players on the whole.

      Just looks to me that ND peaked in December, and we think they have very timely and accurate production information. Also appears to me that rig count drop has been fairly uniform across all regions. Therefore, find it surprising that production increased so dramatically in March, and that the above states all grew production.

      By my quick math, the above states ramped up oil production almost 100,000 bopd combined from 12/14 to 3/15. In the winter, during a time the rig count collapsed and during a time WTI averaged under $50. I guess there is the lag time issue. Maybe there were a lot of wells in these states drilled fall of 2014 that were not completed until February/early March?

      How many of the above states have reported March, 2015 oil production that is not subject to significant revision? The increases in KS and OK really caught me off guard. I guess the SCOOP and Mississippian plays are still hot?

      I have followed Sandridge. They produce the most oil in KS. They bet the farm on horizontal production in KS and OK, and to me they are only being kept alive by banks who do not want to take their assets. I have heard Sandridge wells in OK may be better, but in KS you will find tons of $3million Mississippian wells that have made under 10,000 barrels of oil in a year. Just go online and take a look. They averaged about 24 barrels per day per well in 2014. That number has increased to 34 the first two months of 2015, but that is because they have shut in close to 80 wells. Very easy to find the many duds they have drilled and completed. Given they are the number one producer in KS and have almost entirely quit drilling there, I am surprised KS production is hanging in there like it is.

      • shallow sand says:

        Sandridge Energy Q1 2015 10Q tibits

        87,000 BOE per day 88.5% from Mid-Continent.

        $11,821,000 of cash
        $3,370,578,000 of long term debt

        35 rigs drilling in field as of 12/31/15
        13 rigs drilling in field as of 3/31/15

        34% of BOE is oil, realized $24.79 per BOE, before hedges.

        Sandridge announced they are issuing another $1 billion of debt, just announced Friday. (not from 10Q).

        They produce the most oil in KS and are at the top in OK. I doubt we will see much production growth in those two states going forward.

        Kind of surprised at the reported production growth in those two states per EIA in March, 2015, versus December, 2014. Guess it must be the lag effect, or EIA estimates are high?

      • Watcher says:

        The initial collateral hit didn’t occur til post 3/31, and it was only partial.

        Given $55ish, June 30 will be even more.

      • coffeeguyzz says:

        Shallow

        Couple brief observations …
        SCOOP is definitely active as the returns coupled with locking in the leases has prompted Continental to – I believe – have more rigs there than ND. Their developing the Springer formation is especially productive.
        The Marcellus in PA is almost exclusively gas – wet/dry/rich depending on make-up, but the operators who are drilling there are primarily frantically trying to honor primary lease agreements. (Range is drilling 90% of 2015 wells on new pads. They just said they plan only 11 more new wells in 2015).
        The Utica in OH has oil, but the area is relatively small and – as in PA – the operators are getting retention wells in place as rapidly as possible.
        The Marcellus has about 2,000 wells that are already drilled and not producing until the takeaway pipelines are in place … expected by 2017 to be much enhanced.
        The book by Russell Gold “The Frackers” provides an excellent overview of Sandridge. (Actually, the book is a highly informative read on this entire shale development). Takeaway, Sandridge, from its very inception, may be in a tenuous situation, to put it mildly.

  15. Schinzy says:

    Dennis,

    Thanks for sharing all your work, very interesting as usual. The addition to
    your analysis that I dream of having is cost. That is, I would like to know
    how much investment is required to follow a given scenario. For example
    Steven Kopits has estimated that investment costs between 2005 and 2012 were
    130% higher than investment costs between 1998 and 2005. During the first
    seven year period, world production rose about 14%, during the
    subsequent 7 year period production rose less than 3%. I would like to know how
    investment costs accompany a given production scenario. Do costs continue to
    rise as production declines?

    The reason for this dream is that I believe that there are feedback cycles
    that lead to production growth in oil that could go into reverse. For
    example if WTI prices remain below $65/barrel for another year, many
    investors will be quite disappointed in their energy investments and will
    hesitate to jump back in before prices remain high for an extended length of
    time. Because of the production capex lag time, this could send prices even
    higher which would cause the market for oil to shrink considerably.

    A big problem I have with neoclassical economic theory it often involves
    maximizing concave functions for which there is a unique solution. I do not
    believe there is a unique solution. Multiple solutions are possible. That’s
    why companies invest in marketing. Timing can have a big effect on
    investment decisions.

    • shallow sand says:

      Schinzy. Good post.

      As I have noted in several posts, if and when the credit is shut off, US oil production will drop like a rock.

      US shale oil companies have not yet proven that production can be grown or even maintained out of cash flow. It did not happen at $90-100 WTI. The first quarter 2015 10Q show tremendous cash burn as realized BOE before hedges ranged from $25-35 per.

      Investors either do not understand the companies’ finances, think oil and natural gas will quickly rebound, or both.

      • Ves says:

        Hi SS,
        What if we entertain the idea that credit does not have to be shut off for the shale? They did not make money at $100. But oil still flowed. If we speculate that credit was shut to the marginal buyers of the oil and that caused drop in the price then every time oil gets to $100 or more additional credit could be cut for marginal buyers of oil. So in any case shale will never make money or pay off their debt. But maybe that is not the priority.

        • shallow sand says:

          Ves, you may be right. Your second to last sentence seems accurate, “So in any case shale will never make money or pay off their debt.”

          Just trying to understand why investors would keep buying the equity and debt of these companies. If the investors stop buying, particularly the debt, I think the TBTF consortium credit lines to the shale companies dry up too.

          As long as the TBTF lending consortiums are able to have their lines completely paid off by a debt and/or equity issuance, they will keep the credit lines open.

          Who actually buys the bonds that companies like Sandridge and Halcon are issuing? Maybe if someone could explain that to me, I could better understand how companies that are insolvent are able to raise $1 billion and $700 million through further public market borrowing.

          • Ves says:

            “Just trying to understand why investors would keep buying the equity and debt of these companies.”

            I will give you an answer but I am just afraid that maybe you will not be satisfied with this answer 🙂
            We are human beings and we have this things in our mind called “thoughts” and through these “thoughts” we most of the time make irrational decisions. And that is how it always has been from the beginning of time on this planet Earth. And if these investors “thoughts'” are suggesting them to keep buying the equity and debt of these companies then you just have to accept that this is what is happening right now. There is nothing else to figure out because you cannot figure out “irrational thought”.

            Why people are investing in individual stocks when that is the irrational thing to do, instead of the broad index market? Because their mind had a “thought” that they know the “winner” 🙂 But they don’t know. It is just their “thought”. Sometimes they could hit the “winner” with individual stock and their mind creates again a “thought” that they are clever 🙂 but it was their luck. And you know if you rely on luck you are not going to make money in the long term.

            • old farmer mac says:

              ” And you know if you rely on luck you are not going to make money in the long term.”

              Actually anybody who relies entirely on luck and buys a reasonably large and reasonably random assortment of stocks will make money if the overall market is rising.

              This is basically the same thing – in effect- as buying a very broad based index. Ask any mathematician.

              ANY given stock index might actually be moving down while the overall market is moving up- if the index focuses on one or a few industries.

              • Ves says:

                “ANY given stock index might actually be moving down while the overall market is moving up- if the index focuses on one or a few industries.”

                Broad index that I was referring like S&P Index is THE MARKET. So if US market is moving up then S&P Index that tracks that market is moving up as well. There cannot be other way.

                “Actually anybody who relies entirely on luck and buys a reasonably large and reasonably random assortment of stocks will make money if the overall market is rising.”

                Entirely not true. The point is not “just” to make money but to compare how you did against Index. If you made money but made LESS then Index than you are not rationally investing. Beating the Index is possible but very very few can do it in the long term.

                • old farmer mac says:

                  ASK a mathematician.

                  Ask ANY mathematician. Ask just about any business professor or economist but don’t ask a stock broker or any outfit peddling investment advice in any shape form or fashion. These folks have an incentive to bend the truth.

                  ANY BODY who is mathematically literate will tell you that any good sized random selection of stocks – selected by throwing darts for instance – will match the performance of the overall market.

                  The S and P index has enough variety to follow the overall market, true.

                  But there are other indexes which do not. Any index tied to a particular industry or group of industries can move contrary to the market.

                  Quite a few people beat the market long term but quite a few fail as well.

                  The ones who beat the market long term are mostly either smart enough or lucky enough to invest mostly in up and coming , growing industries- whereas the losers invest mostly in mature industries or ones on the way out.

                  But knowing this does not enable a person to know which new industries will succeed big time or which old ones will fade away.

                  Yogi sez predicting is hard , specially the future.

                  • Ves says:

                    “ANY BODY who is mathematically literate will tell you that any good sized random selection of stocks – selected by throwing darts for instance – will match the performance of the overall market.”

                    Mac,
                    This is irrational thought about investing that I was talking to SS about why investors would still pile the money in shale players.

                    We are not talking about some “other” index. I am clearly talking about S&P Index or TSX Index (in Canada) that follows ENTIRE market.
                    And what does it mean “good sized and random selection of stocks “? That does not make any sense at all. 5 stocks or 50 stocks? Why limit yourself to that many stocks when you can get 1000s stocks in Index? And why do you think you are good stock picker? And when do you sell? And when do you buy again? Market timing does not work in investing.
                    And I don’t think you noticed that you are ALWAYS comparing portfolio investing performance with Index. There is no other way because it is the entire market . So if you made money but less than Index then obviously you are not doing as well as Index/Market. If you made more than Index than good luck beating Index/Market every year for the next 30 years until retirement. Well I don’t think I can beat Index for the next 30 years so the rational way is to invest in the entire market. But many people get “thoughts” that they can beat market every year and usually end up disappointed.

                    Good book about all this is written by William Bernstein, “Four Pillars of Investing”

            • clueless says:

              In general, huge amounts of money have been made buying stocks, debt instruments or other assets that at one time were perceived to be virtually worthless by the vast majority of investors. So, it is kind of like putting money on a specific number on the roulette wheel. People have always done it and they always will. The success stories make news. In the 1970’s, after New York City needed to be bailed out, many large buildings changed hands for just taking on a mortgage that was substantially less than the building cost. Some investors later made the Forbes 500 [at that time] with profits from a building or two. Chrysler came out of bankruptcy. There are actually hundreds of such examples. And, in many cases the largest gains were made by investors that scooped up large amounts of corporate debt that had been in default. But, to be clear, almost none of these types of investments are suitable for the average person who invests. There is always speculative money available. Just look in Las Vegas before the first NFL game of the season. You will find that some money has been bet on every single team to win the Super Bowl. Huge payoff for somebody if the team perceived as the worst eventually wins. One can always dream. Just look at buying Apple just before Steve Jobs came back. After one generation, now the most valuable corporation by far. [That noise was me kicking myself again.]

      • Dennis Coyne says:

        Hi Shallowsands,

        Rune Likvern did a post a while back that showed the Bakken/Three Forks of North Dakota as cash flow positive(Nov 2013 to Nov 2014) when Brent was above $100/b (WTI over $90/b roughly),
        so higher oil prices may make the LTO plays work, at today’s oil prices I am in complete agreement that if the LTO focused oil companies lose access to credit, LTO output will drop quickly.

        Link to Rune Likvern’s post below(see figure 2):

        http://fractionalflow.com/2015/03/21/is-the-red-queen-outrunning-bakken-lto-extraction/

        The caption for figure 2 is below (from Mr Likvern’s blog):

        Figure 02: The chart above shows an estimate in development of cumulative net cash flows post CAPEX for manufacturing LTO wells in Bakken (ND) as of January 2009 and as of August 2014 (red area and rh scale) and estimated monthly net cash flows post CAPEX (black columns and lh scale).
        The assumptions for the chart are WTI oil price (realized price which is netted back to the wellhead), average well costs starting at $8 Million in January 2009 and growing to $10 Million as of January 2011 and $9 Million as of January 2013. All costs assumed to incur as the wells were reported starting to flow (this creates some backlog for cumulative costs as these are incurred continuously during the manufacturing of the wells) and the estimates do not include costs non- flowing and dry wells, water disposal wells, exploration wells, seismic surveys, acreage acquisitions etc.
        Economic assumptions; royalties of 16%, production tax of 5%, an extraction tax of 6.5%, OPEX at $5/Bbl, transport (from wellhead to refinery) $12/Bbl and interest of 5% on debt (before any corporate tax effects) and income from natural gas/NGPL sales (which now and on average grosses around 1Mcf/Bbl).
        Estimates do not include the effects of hedging, dividend payouts and retained earnings.
        Estimates do not include investments in processing/transport facilities and externalities like road upkeep, etc. The purpose with the estimates presented in the chart is to present an approximation of net cash flows and development in total use of primarily debt for manufacturing of LTO wells.
        The chart serves as a proxy of the aggregate cash flow for all oil companies in Bakken(ND).

        Chart for Figure 2 is below:

    • Dennis Coyne says:

      Hi Shinzy,

      Thank you. I do not have much information on global costs. I generally assume that over the long term that oil prices will rise to a level that makes production of the marginal barrel profitable.

      It is entirely possible that high oil prices may lead to substitution that reduces URR. I don’t think it is possible to accurately forecast this.

      • Schinzy says:

        There is more than just substitution. An elementary computation shows
        that the more important a quantity is in economic production, the
        lower the scarcity rent (in some sense,
        see Theorem 3.1 in this paper). Intuitively this occurs because scarcity of important items cause the economy to shrink. For example scarcity of food causes increased mortality and decreased natality causing population to shrink reducing the market for food. This has also been observed empirically with oil. For example when the Soviet Union cut off subsidized oil
        to N. Korea, a cascade of industrial failures reduced the
        market for oil. I am not sure whether total production will
        be greater or lesser if we massively invest in renewables. Investing
        in renewables may keep the system from collapsing permitting greater ultimate recovery of fossil fuels.

        • Dennis Coyne says:

          Hi Shintzy,

          If we are talking about energy in general, I would agree that constrained energy will reduce GDP, by substitution I am referring to substitution of non-fossil energy for fossil fuels. My suggestion is that oil prices might be constrained by the price of other forms of energy, the lower oil prices will, ceteris paribus, result in lower oil output than if prices were higher.

          It is also likely that oil prices that are “too high”, might cause an economic crisis which would reduce GDP and oil demand.

          A simple look at real oil prices in 2030 is that at a 3% real GDP growth 2030 GDP will be about 120 trillion (2014$) in 2030. If 5% of income can be spent on oil without causing a recession, that is about 6 trillion dollars and if oil output is 25 billion barrels in 2030, that would be $240/b in 2014$. If World real GDP only grows by 2%, and oil output is 25 Gb in 2030 and 5% of GDP spent on oil does not cause a recession then oil prices could only rise to $211/b by 2030.

          • Dennis Coyne says:

            In my example above it should be 3% annual real GDP growth (or 2% annual real GDP growth in the second example).

  16. Jeffrey J. Brown says:

    Steven Kopits was just on CNBC, making his bullish case for oil prices ($85 WTI by end of the third quarter of this year). I assume a link will be available a little later today.

    • Jeffrey J. Brown says:

      Steven’s January, 2015 outlook (Prienga):

    • Sam Taylor says:

      Is he still of the opinion that we’re likely heading into an oil shock within a year or so?

      • Jeffrey J. Brown says:

        Here’s the link to the interview:

        http://video.cnbc.com/gallery/?video=3000384466

      • Dennis Coyne says:

        Hi Sam,

        Kopits did not say anything about an oil shock in the interview, just that demand would increase and oil prices would rise to $85/b by the end of Sept. He also does not expect much to happen at OPEC’s meeting on Thursday. He also thinks that the LTO companies are overpriced in the stock market.

  17. Yetanother Mike says:

    Think the price of oil is going to skyrocket this year? Place your bets:

    http://www.businessinsider.com/r-houston-retailer-offers-furniture-buyers-a-7000-oil-price-bet-2015-1

  18. AlexS says:

    The EIA has posted monthly U.S. C+C production data for March.
    Historical numbers from January 2013 to February 2015 were revised upwards.
    The biggest revisions were made for Texas.
    GoM production for December-February was revised downwards.
    The numbers for North Dakota and Alaska were unchanged.
    2014 annual average was revised from 8.66 mb/d to 8.71mb/d
    These revisions explain the sharp “rise” (of 300 kb/d to 9.57mb/d) of crude output for the week ending on May 22 published last week by the EIA.

    U.S. Crude Oil Production (kb/d)
    Source: http://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbblpd_m.htm

  19. North Dakota spuds dropped to 94 in April. First time the number of spuds has dropped below 100 since February of 2011. The average spuds per month in 2014 was 219.
    Monthly statistical update 2015

  20. AlexS says:

    Estimates from Bentek Energy:

    Bakken, Eagle Ford production flat in April

    June 1, 2015
    http://www.ogfj.com/articles/2015/06/bakken-eagle-ford-production-flat-in-april.html

    Oil production from key shale formations in North Dakota and Texas were mostly flat in April as compared to March, according to Bentek Energy, an analytics and forecasting unit of Platts.
    Oil production from the Eagle Ford shale basin in Texas continued its flat trajectory in April, growing only 1,000 barrels per day (b/d) month on month. The marginal growth (less than 1% from the March levels), signifies the ongoing impact resulting from the suppressed oil pricing environment. Bakken shale in North Dakota remained relatively flat in April, increasing about 2,000 b/d, or less than 1%.
    In South Texas, Eagle Ford production averaged 1.6 million barrels per day in April, up 284,000 incremental barrels per day or nearly 22% higher than April 2014. Additionally, crude oil production in the North Dakota section of the Bakken shale formation of the Williston Basin averaged 1.2 million b/d last month, Bentek data showed. This was 173,000 b/d higher than year ago levels.
    “The number of active rigs in the Eagle Ford basin currently stands at 116 rigs, down 27 rigs from the previous month,”. “The efficiency gains noted in the region – such as the trimming of average drill time per well from 13 to 11 days between the fourth quarter of 2014 and the first quarter of 2015 – have helped in preventing oil production decline so far. Nonetheless, we do expect to see declines, however marginal, in Eagle Ford oil production as soon as next month.”
    … oil production in the Bakken Basin, however, is expected to continue to grow but at a slower pace. “Producers will likely continue to focus on efficiency gains and shift their rigs to the core areas, where initial production rates are more favorable”.
    Bentek analysis shows that from April 2014 to April 2015, total US crude oil production has increased by nearly 1 million b/d.
    “Prices of both Eagle Ford and Bakken shale oil have been on an upward trajectory since mid-March and reached a new year high by the end of April,”.
    The Platts Eagle Ford Marker, a daily price assessment launched in October 2012 and reflecting the value of oil out of the Eagle Ford Shale formation in South Texas, was up 21% between January and April, with an average price of $54.37/b for the year.
    The price of oil out of the Bakken formation at Williston, North Dakota, was up 22% between January and April, with an average price of $47.55/b for the year.

    • shallow sand says:

      Thanks both Ron and AlexS for the information.

      Alex S, I do not understand how the EFS and Bakken oil prices are arrived at and I did read the
      article you linked. It seems to me both are much higher than the posted prices. See Plains Marketing Posted Prices for EFS and Williston Light Sweet. (Monthly average)

      EFS Williston LS
      1/15 44.4597 31.6497
      2/15 47.3482 34.5382
      3/15 44.2419 31.4319
      4/15 50.6000 40.5067
      5/15 55.9516 48.6416

    • clueless says:

      I got into my car today just before 2 pm Central time and I had CNBC TV on XM radio. An executive from Core Labs was on and I just caught the last part. He said that there is no doubt that production is going to decrease. In the Bakken, he said that they need to complete 115 wells per month for level production. Then he said; “last month, there were only 32 completions in the Bakken.” Since this is June 1st, I assume that “last month” was referring to May. He may not be right, but Core Labs is involved with a lot of wells. And, while I was working, if you gave an executive the wrong numbers that he put out on National TV, well you better have your resume ready.

      • shallow sand says:

        Clueless. I watched the clip. It was Core Labs CEO. He said they are calling for US C + C to be at 8.9 million bopd at end of 2015. I was not clear on month he was referring to re 32 completions.

        • learner2 says:

          He said 32 completions 2 months ago so that would be for March.

          So today, we have both Kopits and Dave Demshur, CEO/Core Labs, calling for a v shaped recovery. Kopits calling for $85 based on demand spike, and lower production.

          DD sounds like a straight shooter. With comments like depletion never sleeps, he’s looking for 6% or more this year, then 11% next year (i guess thats cumulative). He said lower completions = lower output as soon as next month (I assume June).

          So both these industry stalwarts seem to be making predictions somewhat against the grain here. My sense from postings recently is that members expect increased production and so lower prices.

          I think $60 is a technically important price point. We will break higher or lower soon.

          • Dennis Coyne says:

            I expect slowly declining or flat production at current oil price levels.

            I also expect demand will increase over the summer and may cause an oil price increase by late in the third quarter (end of September) as demand growth reduces stocks and supply is flat to down slightly at the World level.

  21. Longtimber says:

    WSJ – * The Shale Boom Shifts Into Higher Gear *
    “Have the American entrepreneurs who developed horizontal drilling and hydraulic fracturing—“fracking”—done their jobs too well? The increase in domestic crude oil production of 3.6 million barrels a day in less than four years, reversing almost four decades of decline, has created a spectacular macroeconomic anomaly—a crash in oil prices without a recession to cause it.”

    “Now the question is whether U.S. frackers can adapt to the lower prices they created. ”
    http://www.wsj.com/articles/the-shale-boom-shifts-into-higher-gear-1433104129

    • Boomer II says:

      From that article:

      Now Hubbert’s Curve has been trumped by Moore’s Law. There will be no limits to growth in the global economy in a few years when, thanks to American ingenuity and entrepreneurship unleashed upon shale formations world-wide, oil—like transistors—becomes, for all practical purposes, free. And the lower oil prices go, the more money the frackers can make.

      How can anyone say this in all seriousness?

      • Fred Magyar says:

        Boomer, it’s the WSJ, fer crimminie’s sake, what else would you expect?!
        They have an agenda and it is to help promote the BAU infinite growth paradigm, because their sponsors and readership have enormous vested interests in that very paradigm. Most of these people couldn’t cite The Second Law if their lives depended on it…

        It is difficult to get a man to understand something if his livelihood depends on his not understanding it! Upton Sinclair

      • Sam Taylor says:

        Anyone who applies Moores law to any part of the energy system is a complete and utter idiot. It displays a wholesale lack of understanding of how the dynamics of energy differ from those of computers. Moores Law implies continual compounded growth of 47%. At that rate the US should be outproducing the entire world before 2030.

  22. Heinrich Leopold says:

    Dennis,

    Interesting post. Thank you. However, it would be also interesting to see reserves under different price scenarios. So reserves at USD 20, 100 and 200 per barrel. In my view this will show complete different numbers. The same could be said also for peak oil. We surely have seen peak oil for USD 20 per barrel. We have not yet seen peak oil for USD 50 per barrel, yet we soon might get it.

    • Dennis Coyne says:

      Hi Heinrich,

      Oil prices are very difficult to predict, and so is reserve growth.

      A $20/b oil price does not sound very reasonable, but I would expect negative reserve growth at that price level (2015$), at $100/b as a maximum real oil price level long term, reserve growth would be fairly low, possibly close to zero. I think something similar to the EIA’s 2015 AEO high oil price scenario is more likely, where Brent rises to $193 by 2030 and to $135/b by 2016 (both prices in 2013$). My reserve growth predictions would be more consistent with that price scenario.

      Not much oil will be produced (nor will reserve estimates increase) if oil prices remain $50/b or less.

  23. Watcher says:

    http://finance.yahoo.com/news/why-chinese-spending-oil-dried-222549167.html

    Buried inside is some text that wonders why and concludes they are just holding back like all other companies because of low prices and a glut.

    Except the other companies held back at $110.

    We will never ever hear . . . spending reduced because there’s nowhere left to buy holdings.

  24. Миша says:

    Russia in first place in oil production.

    10 708 000 bopd.

    http://lenta.ru/news/2015/06/02/output/

  25. Caelan MacIntyre says:

    Goooood morning, slaves, and welcome to another sedition of

    It’s The End Of The World As We Know It And I feel Fine‘.

    “The show that watches Big Brother back.”

  26. MarbleZeppelin says:

    The 2015 Arctic Sea Ice area trend line is the lowest on record so far.

    • I bet it will nudge back up a teensy bit and approach 2011/2007 (this year’s ice is thicker than 2012’s). They are also seeing a high total ice curve (Arctic plus Antarctic sea ice are at very high levels). I’ve loved tracking sea ice ever since I worked on an Arctic oil development project in the early 1990’s.

      • MarbleZeppelin says:

        Sea ice area is extremely variable, in fact it is declared if only partially covering the ocean, does not need to be packed. Packing and drifting can change the area covered as well as mass. Not a very good measure. Mass of Arctic ice has been falling for a long time (stop looking at minor variations and watch the trend). Mass of Antarctic ice shield is also falling.
        Antarctic sea ice area coverage is up because the glaciers are calving at much higher rates. Once the ice is in the ocean, guess what happens next. There are two major regions of Antarctica that are losing mass rapidly. Once the warmer deep water invades under the shelf, those regions will disintegrate into the ocean. Expect 4 to 6 meters ocean rise in the regions away from Antarctica just from that.

    • Matt Gutscher says:

      30,000 years ago there was an ice sheet that covered the top of this planet. It stretched from the US-Canadian border to the middle of Russia. The Ice sheet was between ONE and THREE MILES THICK and had been there for about 2 million years. Prior to that, there was no permanent ice anywhere on the planet for tens of millions of years.

      Yosemite’s El Capitan extends 3,000 feet straight up from the valley floor. Huge California pine trees at its top look like little shrubs from the valley floor. 30,000 years ago, if a person were looking straight up the edge of the Ice Sheet, they would see a solid ice cliff wall that stretched the distance of 3 “El Capitans”.

      20,000 years ago that ice started to melt and no one knows why, other than the fact that my F-350 had nothing to do with it. By 10,000 years ago, all that ice had melted.

      Now THAT kind of change is true global warming, not the normal seasonal ice variations we’ve only been able to study in depth for a few years.

      So while some educated elitists and politicians are running around like Chicken Little – “the sky is falling, the sky is falling” – true researchers know that anyone who thinks that this planet’s polar ice extant is in any way important on a time period less than 20,000 years is ignorant. Milankovitch Cycles alone tell us that. Deciphering long term trends require half a million years, at least.

      Being concerned over something supposedly seen over a 10 year period is not only foolish, but also economically dangerous.

      • MarbleZeppelin says:

        I think a piece of the sky fell on this guy’s head.

        BTW glacial fronts cannot physically be greater than 220 meters.

      • Boomer II says:

        20,000 years ago that ice started to melt and no one knows why, other than the fact that my F-350 had nothing to do with it. By 10,000 years ago, all that ice had melted.

        But my understanding is that what concerns people is the rapid rate of melting. Ice has come and gone before, but not at the rate that is happening now.

        • Jeremiah says:

          If global warming is happening, then why do the weather people on the TV make comments like, “This is the hottest it’s been in 25 years.” That means 25 years ago it was hotter! I would also want to know why there has been record snow fall, record cold in parts of the world, even in countries that never had snow, it’s definitely been snowing and colder here every winter for the last several years in the eastern US. Take all the temperatures around the entire world from every source, for the full year. Add them all up and get an average temperature. Now we might get good results if we could do this for every year from 1800 on, but it can’t be done because until the 1960s, we were not keeping such detailed data from all parts of the world, even today we have a lot of uninhabited areas at the poles with no temperature instrumentation at all. The scientists just have to guess what the temperatures are there and anytime guesswork is involved, you run into serious issues of ethics and trust.

          What’s become quite apparent to me is the weather scientists are using too small of a sample from too few areas and too few years to make these wildly inflated claims about the globe as a whole. Records prove that it has been warming for 10,000 years due to the ice age we went through, so the daily temperatures are supposed to be rising gradually every year anyway because of this. And eventually that will stop and we will usher in another Ice Age, for that is the natural cycle of this planet. Doesn’t matter if we like it or not, humans are too powerless to have any kind of control over this process.

          • MarbleZeppelin says:

            First of all global warming is based on well known physical science. Without GWG in the atmosphere the average earth atmospheric temperature would be minus 18F not plus 56F. The measured increase of GWG’s can only have one effect, pushing the earth system to a higher temperature. Natural feedbacks and the long CO2 tail will prevent the next glaciation. In combination AGW radiative forcing and natural feedbacks add up to several times the minor changes in radiation level from orbital changes and tilt of the earth that normally trigger a glaciation period.

            Yes, the eastern US has been experiencing cooler winters after experiencing several warmer winters. This is due to a shift in the jets stream. Warm air is being funneled up the west coast to the arctic where it is chilled and funnels back down to the eastern US. Since the arctic (even when warmer than usual) is much colder than the temperate zone the effect is cooling. One of the effects of global warming appears to be a truncated, shortened jet stream that stays in positions for long periods of time.
            There are huge numbers of monitoring stations around the world , thousands in the ocean. Satellites also keep track of radiation leaving the planet. To wish things were different in the 1800’s is fruitless although the science was developed in the 1800’s.

            To summarize, global warming does not depend upon monitoring temperatures, it is a well known physical phenomenon and is primarily dependent upon GHG as well as albedo changes. The measurements just help us learn how the changes occur and where. They may help in predictive models and they may give us a way to see if we can effect a reversal of the energy flow. They do not change the actual warming or in any way change the basic properties of the atmosphere, land or hydrosphere. This is not a case of prove or disprove global warming, it already existed before people started to pump extra CO2 into the atmosphere.
            The major questions today are how much control we have to slow down or reverse the effects and how soon and to what degree natural feedbacks amplify the situation.

            How Climate works
            David Archer
            https://www.youtube.com/watch?v=QMbXHgHDZR0
            He also has a nice educational series on YouTube
            Here is a simplified version:
            https://www.youtube.com/watch?v=5-QLBjLHnxg

  27. Jeffrey J. Brown says:

    NYT article on paid Russian Internet trolls:

    http://www.nytimes.com/2015/06/07/magazine/the-agency.html?hp&action=click&pgtype=Homepage&module=photo-spot-region&region=top-news&WT.nav=top-news

    From a nondescript office building in St. Petersburg, Russia, an army of well-paid “trolls” has tried to wreak havoc all around the Internet — and in real-life American communities.

    • I bet the Chinese have them. The Cuba/Venezuela outfit has them too. I can recognize them because they use the same vocabulary I was taught when I was in Cuba. They have the weirdest disconnect from a free speech democratic environment. For example, they don’t think there’s anything wrong if Maduro has a tv show on national TV which he uses to threaten people, using language like: “so and so, if I see xx I’m going to toss you in jail”. I have a few litmus test comments I use to figure out who they are. And I suppose the U.S. has their own outfits. They sure get the big shots in the U.S. Media to lie for them once in a while.

  28. Watcher says:

    DETROIT (Reuters) – The U.S. auto industry remained on track for the best sales year in almost a decade as consumers bought cars and trucks at the fastest pace since early 2006.

    Sales of pickup trucks and SUVs again led the way, which bodes well for the profit margins of the major automakers.

    hahahahhaah

    http://finance.yahoo.com/news/u-may-auto-sales-race-141717589.html

    (psssst Nissan Leaf sales May 2014 3117 units, May 2015 2104 units for a vibrant sales growth of -33% (that’s minus))

    • Doug Leighton says:

      Watcher, you’re a very naughty boy sometimes; don’t you realize there are a lot of people who don’t want to hear that kind of news.

      • MarbleZeppelin says:

        Reminds me of the people who think global warming has stopped because it is colder than normal in one area.

        • clueless says:

          Reminds me of people who think that there is global warming because crooks manipulate the historical temperature records.

          • Doug Leighton says:

            “Reminds me of people who think that there is global warming because crooks manipulate the historical temperature records.” Yeah, me too.

            • MarbleZeppelin says:

              Two examples of head in sand.

            • Dennis Coyne says:

              Hi Doug,

              Did you forget the smiley face? 🙂 (on the temperature manipulation, I am thinking that you do not dispute AGW)

              Note that the Nissan Leaf’s sales have decreased in part because there is now competition from other electric models from German auto makers. The proper comparison would be all EV sales.

              There is no doubt that lower petrol prices in the US has increased the sales of pickups and SUVs, in a few years people will regret those decisions when petrol is back at $4/gallon or more.

              • Doug Leighton says:

                Dennis,

                Agreed and I certainly don’t dispute AGW. Fact is, it remains a mystery to me it would be assumed otherwise from my comment; poor writing on my part I suppose.

                • Dennis Coyne says:

                  Hi Doug,

                  Perhaps poor reading comprehension on my part.

                  I interpreted clueless’s comment to mean that we should not believe in AGW because of manipulation of temperature data. You responded, Yeah me too.

                  Without a 🙂 to follow your comment the sarcasm is not evident to those who are not aware of your excellent understanding of science.

                  So one of us misunderstood what clueless meant, I think it might have been you, but who knows (except clueless.)

              • Watcher says:

                -23% Y/Y May EVs.

                hahahahaha

                The diff between 33 and 23? A lousy 100 units from a new BMW entrant.

                100 cars hahahahhahahaha.

                Ford F150 has supply problems, sales not ramping, the two F150 factories are falling way behind with the aluminum transition and constricting sales, so looking at the Chevy Silverado #2 behind F150 May sales 51602 up 10.6%. (still lower sales than F150)

                Hahahahahah 51,602 in one month.

                As for high priced gas causing problems, why would politicians who refuse to provide truck owners a subsidy be permitted to hold their seats?

                • Dennis Coyne says:

                  Hi Watcher,

                  There are lots of people who drive cars rather than SUVs and pickup trucks. We already subsidize oil use, now perhaps we could reduce fuel taxes and excise taxes to zero, but taxes would simply need to be raised elsewhere.

                  We could reduce taxes on oil companies to zero as well, but at some point if we try to control prices or subsidize oil companies, the profits of the oil companies will fall and less oil will be produced, eventually either oil prices rise or the fuel will not be available. Lots of other nations will be competing for limited oil supplies and prices will rise.

                  Of course you don’t believe in supply and demand, so oil can simply be imagined and it will be printed at the Fed. 🙂

                • Boomer II says:

                  But perhaps EVs are not behind when compared to adoption of other new technologies. According to this they have been adopted faster than hybrids.

                  Right now I am looking at how quickly small Japanese cars were adopted in the US. Detroit was slow to realize what was happening with the small car market.

                  Electric Cars’ Demand/Price Curve — Letters to the Editor – WSJ

    • Jeffrey J. Brown says:

      There are some battery issues to consider when buying a used Leaf (some dealers are resetting the batteries on used cars to make it appear that a battery with reduced storage capacity is still as good as new):

      http://evobsession.com/used-nissan-leafs-becoming-extremely-common-dealers/

      • Watcher says:

        Speaking of crooks.

      • Watcher says:

        Read more carefully.

        The laws on odometer changing will get extended as soon as some lawsuits are filed.

        Overall, this is just another reason for the average guy to spend his life worrying about tonight’s baseball game rather than timing battery failure. Pretty sure I know what he’d prefer to think about.

        • Doug Leighton says:

          As in, “…give them bread and circuses (beer and football)?” Jesus you’re a cynical bastard today Watcher. Or, more so than usual. The sad part is, I agree with you.

          • Watcher says:

            Not really criticizing them. They are entitled to prefer to enjoy baseball than obsess over and be concerned about being cheated on battery age. That’s what they SHOULD do, when they have such superior options.

  29. Ves says:

    What to make out of this?

    “Brazil’s Petrobras sold $2.5 billion in new debt. While that in of itself is not odd, the terms of the new bonds were: the bonds will mature in the 22nd century. That’s right. Petrobras issued 100-year bonds. That type of length is usually left to more estimable and credit-worthy borrowers – Petrobras’ debt is rated as “junk.”

    Shallow,
    Do you see what I am saying that is just futile to figure out irrational decisions by investors? So somebody bought a “junk” debt that matures in 100 years!!! This is Seinfeld material 🙂

    • Watcher says:

      That someone could have been the Brazillian CB.

      Just stop presuming that post 2009 there is any market for anything. That is no longer the default analysis parameter.

      • Ves says:

        I have no idea if it was Brazilian CB. But it is irrational. But also it was always like this, not just since 2009. CB’s always had exchanged paper for real estate inflation. And loans are made against that for consumption, measured as GDP productivity.

    • shallow sand says:

      Now that would be something. We could issue a few million of debt at maybe 2-3% interest for 100 years and neither us nor our kids would give a dang about paying it off, just pay the measly interest. We could really live it up!!

      I don’t think even our low decline stuff will last that long (although we operate several that pre date 1915.)Think about that, a bond maturing today issued in 1915. How much inflation has there been since 1915??

      • Watcher says:

        Well it’s a Petrobras bond. Not a Brazillian oil bond. Petrobras may buy reserves somewhere else.

    • Fabio says:

      What is really Seinfeld material is Moody’ et al criteria for these “ratings”. US triple A, what a joke.

      • Watcher says:

        If it’s backed by a central bank, with an infinite supply of money, how can it be anything other than AAA?

        • Fabio says:

          You forgot the most powerful military in the world..hence AAA for sure.

          Problem is, dollars will be worth much less than toilet paper in 100 years.

    • old farmer mac says:

      Long term bonds that are actually BOUGHT by a real entity with real cash (as opposed to being bought by a central bank with pretend cash) are NECESSARILY bought by rich individuals or entities such as insurance companies, retirement funds , etc.

      Look on the bright side of this phenomenon. The bond money is alway spent on SOMETHING – something which invariably puts ordinary mortals to work and getting paid.Bill Gates may never set foot in most of the rooms in his house but the money spent to build it was no more wasted than the money spent on jet fuel so vacationers can chase the sun and snow. Most of that house money was paid out as WAGES to trades people ranging all the way back to miners and loggers.

      SO- Bonds that will never be paid off are an EXCELLENT defacto mechanism for recycling the money being accumulated by the one percent back to the lower levels of the pyramid.

      Now for what it is worth-I believe that nearly all the folks who manage money in huge amounts – bond sized amounts- do believe the bonds they sell WILL be paid off. This to me indicates that they are simply not aware of the BIG PICTURE and the way history is going to unfold over the next couple or three generations.

      But ” nearly all” leaves a few out. The ones who DO understand REALITY are imo just keeping their mouths shut and going along to get along- and getting along VERY WELL making six and seven figure incomes.

      Remember Sinclair. A man cannot understand something if his livelihood depends on his not understanding it.

      OF COURSE most of the big time debts that have been run up in the world and that are still being run up are NEVER going to be paid.

      Default is going to be as common as man titties and pot bellies and funerals. A few smart managers will manage to actually collect a PORTION the money they are responsible for by selling the debt to another bond fund and thus actually get the money back to the owners of it in cash. This will not happen very often imo.

      I am currently reading a book titled ” THIS TIME IT’S DIFFERENT” which is basically a rather dry read – but it tells a super critical story that GODDAMNED few people know about- DEFAULT has been MANY TIMES more common in the past than almost any body would ever guess. Serial default is as common as people giving up smoking and drinking and starting again.

      Debt default is going to result in some extreme hardships for people dependent on the debts being paid – people such as retirees who will get only a fraction of their expected pension for example.The knock on effects are going to be very hard on everybody.

      But it is possible to think of debt default as simply a GIFT from the very rich who own the debt -an involuntary gift to be sure – given to the poor (the collective ninety nine percent in rough terms) who CANNOT pay.

      There ain’t no BLOOD in a turnip.

      Since we cannot know in DETAIL how the future will unfold it is impossible to know whether ANY investment is going to be safe in the future. My little farm looks pretty safe at the moment but selling it during a debt crisis other than by financing it myself would be nearly impossible .

      Beyond that there may come a day when the government simply confiscates nice little working farms and redistributes them to people it likes better than the current owners. Anybody who thinks this COULD NEVER HAPPEN even here in Yankee land knows very little about history but I am confident that so long as I can pay the taxes my farm is safe enough for the FORESEEABLE future.

  30. ezrydermike says:

    Interesting piece in today’s LA Times about ports and shipping. These guys sure don’t seem to think things are going to be slowing down anytime soon.

    http://www.latimes.com/business/la-fi-big-ships-ports-20150602-story.html#page=1

  31. Dean says:

    I found some time (despite being in bed with temperature) to update my Texas C+C corrected data with the latest EIA data: honestly, I do not have any idea why for EIA Texas production jumped in the latest months. Either they have access to new data (not yet publicly available) or they use an algorithm blindly without checking with RRC data.

    Is there anyone from Texas who can confirm this jump? Thanks

    • AlexS says:

      Dean,

      The EIA has recently significantly revised its data for Texas C+C output.
      But m-o-m changes in 1Q15 were smaller compared with 4Q14

      • Dean says:

        I know that. What I found difficult to understand is why. Also looking at drillinginfo data,

        http://diindex.drillinginfo.com/

        http://diindex.drillinginfo.com/charts/

        we have negative growth. So, where this growth is coming from?

        • shallow sand says:

          Seems strange that production has increased that much despite what appears to be decreasing completions.

          Must be major “high grading”

          I note the CEO’s of XOM, BP and COP are all talking down the price of oil this week. Seems strange too. I thought they were in the business of selling oil, not buying it.

          Finally, interesting to note Bloomberg article which claims price crash has hurt majors such as the above more than the pure shale plays. Goes into a discussion about the majors being cash flow negative. States US shale has responded very well to price crash, leads one to believe pure shale companies doing just dandy.

          Apparently Bloomberg reporters do not read 10K/10Q.

          The shale hype marches on.

  32. ezrydermike says:

    So as I was following all the reasons why renewables, esp solar can’t do this or that, I came across this. Maybe solutions aren’t going to be in the boxes that some people insist that they be in.

    “Enphase and REPOWER are in the vanguard of a new generation of solar solutions categorized as “Solar-Plus” by GTM Research. The Solar-Plus ecosystem includes solar packaged together with building automation, energy management and load control, energy storage and electric vehicle (EV) charging stations. These integrated offerings will reshape the U.S. solar market, according to the research firm. ”

    http://www.marketwatch.com/story/enphase-energy-selected-as-primary-solar-energy-solution-for-repower-by-solar-universe-2015-06-02

    • ezrydermike says:

      “Each year, Shayle Kann, SVP of Research at GTM, provides the solar industry equivalent of Mary Meeker’s internet trends slide deck — providing some context for the industry and illuminating the not-so-obvious changes. This year’s presentation is called “The Evolution of Solar” — and this is a summary.

      Kann suggests that the solar industry will evolve even faster in the next five years than it has in the previous five (Tom Werner, SunPower’s CEO, agrees). There is almost 20 gigawatts of solar operating in the U.S. today, and we could hit the 1-million-installations mark this year in a $15 billion market.

      These numbers were almost unimaginable five years ago. And similarly, the solar market of 2020 might be unrecognizable to today’s market players.

      Kann suggests that the once-static relationship between customer, utility, and project developer will be much more dynamic.”

      http://www.greentechmedia.com/articles/read/Solar-Summit-Slide-Show-The-Evolution-of-Solar

    • Boomer II says:

      And if you throw this in, you can see how tech companies are looking for ways to participate in what goes in and out of your home, including energy.

      Apple’s plan to take over your entire home will start in these two categories

  33. old farmer mac says:

    This link to Euan Mearns blog does a great job of describing a proposed pumped storage system that may be built in Holland- which is of course about as flat as it is possible for a country to be.

    http://euanmearns.com/flat-land-large-scale-electricity-storage-fles/

    Going underground might work in some other places as well.

    We hear a steady drumbeat of negativism in respect to the possibilities of pumped storage in the USA – most of it based on a supposed lack of suitable sites.

    But in actuality there are a LOT of good sites which are CURRENTLY off limits due to environmental or political considerations of one sort or another.

    It may be too late to build out pumped storage infrastructure once a fossil fuel supply crisis hits but if the material resources needed can be mustered , environmental considerations will be summarily dismissed and pumped storage will get built. Capex rather than environment will be the big question.

    Wind and solar are going to be overbuilt within a few years – meaning on really good days production will exceed the ability of the grid to absorb it all. Pumped storage is just the ticket for making optimal use of any surplus renewable electricity.

    I have been trying to locate data on the loss of fuel efficiency involved when coal fired plants are ramped up and down to follow the daily load cycle rather than run continuously at or near capacity. Anybody know where I can find it?

    • MarbleZeppelin says:

      The Mount Hope pumped hydro project was envisioned to use one of the many abandoned deep iron mines in NJ. It was initially permitted in 1994 and the permit was extended in 2007, but I do not think the project was completed. I did hear rumors of a grass roots effort to stop it, for who knows what reason. The actual stated reason for abandonment was market uncertainty. It was originally meant to produce 2 GW but was scaled to 1 GW in 2007.
      There are number of suitable underground mine sites in New Jersey, thousands of feet deep with their own inherent water supply (mines fill up with water when abandoned). Apparently the 78% efficiency was not considered a problem by the power company people, which gives one the ballpark figure of efficiency of running power plants at other than optimum power output.

      http://www.nytimes.com/1994/08/07/business/technology-harnessing-an-underground-source-of-electricity.html

      Opportunities and barriers to pumped-hydro energy storage in the United States
      http://people.duke.edu/~cy42/PHES.pdf

  34. Boomer II says:

    Since we have been asked not to reply to certain posts directly since it messes up the comments, I’ll start a new thread.

    Doesn’t matter if we like it or not, humans are too powerless to have any kind of control over this process.

    There are definitely GW people who agree with this. They feel we’ve gone too far to do much about the situation.

    I think a big fear of the skeptics is the economic consequences of cutting back on CO2. However, this is a peak oil forum. We don’t need to be talking about responding to GW since we are talking about the unfavorable economics of fossil fuels.

    The economic consequences of being so dependent on fossil fuels are already hitting us and we can talk about that without ever discussing GW.

    The GW debates allow people to dodge the peak oil situation if they want to. Some of them hope that by debunking warming data, they can steer the conversation away from the economics of fossil fuels.

    But if you believe in peak oil, you probably shouldn’t let the conversation be sidetracked that way. GW or not, the economics of fossil fuels will be problematic.

    • Jef says:

      Boomer – It is exactly that kind of thinking that has gotten us into this mess. There is only one way to look at it and that is as a complete cycle or system.

      The problem is constraints on inputs, oil being at the top of the list but by no means the only resource being constrained and threatening industrial civilization, and constraints on the waste-stream, you can’t eat without pooping.

      The biosphere is being taxed beyond what is sustainable and we are experiencing life threatening effects that are increasing exponentially to the point where there is a slight possibility of extinction, slight but none the less there. These constraints should scare the poo out of everyone and yes it should all be considered in the conversation.

      • Boomer II says:

        The problem is constraints on inputs, oil being at the top of the list but by no means the only resource being constrained and threatening industrial civilization, and constraints on the waste-stream, you can’t eat without pooping.

        You’ll have to clarify. It sounds like you think we should have no constraints (i.e., people should be free to use whatever resources they want).

        I’m guessing that isn’t what you mean, but be more specific about “constraints.”

    • ezrydermike says:

      well to be fair Boomer, you obviously are not a weather scientist and Jeremiah is a bullfrog

      • Boomer II says:

        well to be fair Boomer, you obviously are not a weather scientist and Jeremiah is a bullfrog

        I don’t feel that way. I was thinking about articles like this.

        The awful truth about climate change no one wants to admit – Vox

        • ezrydermike says:

          sorry not aimed at you but a snark comment aimed at Jeremiah (“If global warming is happening..”) probably better left out

        • Matt Gutscher says:

          Here’s the truth about that Vox article you link.

          Vox Features Yet Another Climate Science “Denier”

          Conclusion

          Although it’s the opposite of what he intended, David Roberts’ Vox article on the climate debate underscores that the published literature on climate change does not justify the typical policy recommendations being pushed on the public and government officials. Roberts openly admits that the supposedly objective scientists are deliberately altering their assumptions time and again, to keep the output of their “models” on point and saying what the politicians want to hear. It’s refreshing when someone from “the other side” of this debate is so frank about the type of process producing the fodder which is then rushed to Capitol Hill as evidence for massive tax hikes and regulations on industry.

          • Boomer II says:

            You missed my point.

            We are going to face changes anyway because of peak oil. Here is why we are going to reduce consumption of fossil fuels:

            1. Fossil fuels are becoming scarcer and will get more expensive.
            2. Fossil fuels pollute, which people don’t want.

            We’re heading down the same path whether we do it for the above reasons or to reduce CO2.

            Arguing about the science of GW doesn’t change the discussions in the peak oil forums. In other words, in terms of fuel, even if there is no concern about GW, or even if we can do nothing about it, the fossil fuel era is declining. Whatever economic changes people fear because they think they will have to make to reduce CO2 are going to happen anyway.

            Remember, this is a peak oil forum. People here believe a world economy based on oil isn’t sustainable for economic reasons.

            You’re trying to score points by talking about scientists. It doesn’t matter, because the end course is likely to be the same. The world needs to find a way to function with less oil and less coal.

            You think you have control over your future if you debunk scientists. But you don’t have control over your future if the oil becomes hard to get and if coal burning is phased out because it’s fouling the air.

  35. Caelan MacIntyre says:

    The ‘Long Peace’ Is a Statistical Illusion

    Another Pinker statistical fallacy, which can teach students how NOT to look at risks and mix random variables of different tail properties, or confuse types of estimators. This afternoon, to kill time on a long flight I decided to look for scientistojournalistic fallacies so I went to Steven Pinker’s twitter account. I immediately found one there. Heuristic: go to Pinker. He promotes there a WSJ article to the effect that ‘Terrorism kills far fewer people than falls from ladders’; the article was written by a war correspondant, Ted Koppel and is very similar to his Angels thesis.
    Now let’s try a bullshit-detecting probabilistic reasoning.
    A- Falls from ladder are thin-tailed, and the estimate based on past observations should hold for the next year with an astonishing accuracy. They are subjected to strong bounds, etc. It is “impossible” to have, say, >1% of a country’s population dying from falls from ladders the same year. The chances are less than 1 in several trillion trillion trillion years. Hence a journalistic statement about risk converges to the scientific statement.
    B- Terrorism is fat tailed. Your estimation from past data has monstrous errors. A record of the people who died last few years has very very little predictive powers of how many will die the next year, and is biased downward. One biological event can decimate the population.May be ‘reasonable’ to claim that terrorism is overhyped, that our liberty is more valuable, etc. I believe so. But the comparison here is a fallacy and sloppy thinking is dangerous…”
    “Pinker has written a rebuttal (ad hominem blather, if he had a point he would have written something 13 of my comment, not 3 x the words). He still does not understand the difference between probability and expectation (drop in observed volatility/fluctualtion ¹≠ drop in risk) or the incompatibility of his claims with his acceptance of fat tails (he does not understand asymmetries from his posts on FB and private correspondence). Yet it was Pinker who said ‘what is the actual risk for any individual? It is approaching zero’.” ~ Nassim Nicholas Taleb

    Chapter 3 confirms that Pinker’s definition of violence is: homocide rates…

    That is, the record kept by the livestock managers over certain deaths among the livestock. Get that point: The only violence that counts is that executed by the livestock among themselves and evaluated and tallied according to the biases of psychopaths in the ruling gang. In particular, violence of the livestock managers against the livestock doesn’t count.

    And then the conclusion is that the leviathan state reduces violence.

    Lovely.” ~ farmer

    Steven Pinker is wrong about violence and war

    “A metamorphosis in the nature is war is under way, which is global in reach. With the state of Iraq in ruins as a result of US-led regime change, a third of the country is controlled by Isis, which is able to inflict genocidal attacks on Yazidis and wage a campaign of terror on Christians with near-impunity. In Nigeria, the Islamist militias of Boko Haram practise a type of warfare featuring mass killing of civilians, razing of towns and villages and sexual enslavement of women and children. In Europe, targeted killing of journalists, artists and Jews in Paris and Copenhagen embodies a type of warfare that refuses to recognise any distinction between combatants and civilians. Whether they accept the fact or not, advanced societies have become terrains of violent conflict. Rather than war declining, the difference between peace and war has been fatally blurred.” ~ John Gray

    Pinker’s Dirty War On Prehistoric Peace

    But hold on. Take a closer look at this encouraging claim. The seven cultures listed on Pinker’s chart are the Jivaro, two branches of Yanomami, the Mae Enga, Dugum Dani, Murngin, Huli, and Gebusi.

    Are these societies actually representative of our hunter-gatherer ancestors?

    No.

    Are they even hunter-gatherers at all?

    Hell no.

    Only the Murngin even approach being an immediate-return hunter-gatherer society like our prehistoric ancestors, and they had been living with missionaries, guns, and aluminum powerboats for decades by 1975, when the data Pinker cites were collected.” ~ Christopher Ryan

    From what I’ve read, none of this even touches on the waves of war waged against the ecosystem, which will fold back, and is folding back, to catch humans in their undertows.

  36. islandboy says:

    Just saw this over at Yahoo Finance (bold mine):

    Why the Saudis and OPEC Want Cheaper Oil

    “U.S. oil production rose to a new high of 9.6 million barrels per day in the week of May 22, which is the highest level since weekly data started in 1983. That’s a sign shale producers, which idled unproductive rigs but kept production high during the price squeeze earlier in the year, are eagerly uncapping wells.

    Data show production out of the Bakken shale in North Dakota rose in March for the first time this year. And a recent article in the National Post highlighted a “fracklog” of drilled-but-untapped wells (totaling 4,731 in the United States) that are just waiting to come online should prices keep rising. A similar dynamic is in play in Canada as well.”

    Anybody have any idea where one can find hard data that shows any “eagerly uncapping wells” going on?

  37. ezrydermike says:

    Wimbi, Just do it! Seems like the spirit is alive and well. When is your website / blog going to start?

    “St. Louis-born singer and hip-hop artist Akon, 42, announced at the United Nations Sustainable Energy for All Forum in New York last week that he is to open a Solar Academy in Mali this summer.

    The institution will follow on from the Senegalese-American’s Akon Lighting Africa initiative, which was launched in 2014 to bring solar electricity power to 600 million Africans that currently live off the grid.

    Akon, famous for his 2004 single Locked Up, will open the academy in Mali capital of Bamako, and will enlist the assistance of European solar technicians and experts to supply training programs, equipment and guidance. Solektra International is to partner on the project.

    According to Akon Lighting Africa, the academy will teach students how to install and maintain solar-powered electricity systems and micro grids, harnessing the 320 days of sunshine that most parts of Africa receive annually. ”

    http://www.pv-magazine.com/news/details/beitrag/singer-akon-launches-solar-academy-in-mali_100019656/#axzz3c0zE8Pq6

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