Who’s Got Liquids? plus Further to the Bakken

This is another Guest Post by David Archibald

Who’s Got Liquids?

An article by Canadian consultant Mike Priaro in the 7th July, 2014 edition of Oil andGas Journal, “Grosmont carbonate formation increases Alberta’s bitumen reserves”, included the following tables:

David 1

Mr Priaro’s estimate of Canada’s recoverable bitumen is 818 billion barrels. Almost all of that is in Alberta. Combined with their coal resources, Alberta has the biggest fossil fuel resource on the planet. I have updated my estimate of what some of the major countries have in the way of fossil fuels in this table:

David 2

The highest value fuels are those that can be used as liquids in transport. High quality coal produces 2.2 barrels of liquids through a FT plant. In the following graphic I have used a factor of 2x to convert coal to its oil equivalent. Six thousand cubic feet of gas has the energy equivalent of one barrel of oil. Natural gas can be used directlyin some transport applications. Putting it through an FT plant to make diesel, for example, would lose at least 30% of its initial energy. Natural gas has traditionally traded at the oil price in the US and conceivably might return to close to that level in a tight market. So in the following graph, natural gas in TCF is divided by six to produce its oil equivalent in billions of barrels. This is the graph:

David 3

From there, one can divide each national resource endowment by the country’s population to produce this graph of per capital potential:

David 4

For the United States, the Green River oil shales are not included. Some parts of this formation might be economically recoverable at some point, for example the Mahogany Zone, but the unit as a whole has a total organic carbon content of 6%. Rocks with a carbon content down to 10% will burn in pure oxygen. It may be that only a few percent of the Green River Formation might be worth mining. In the absence of good data, it would be best to exclude it.

China’s coal resources are about the same size of that of the United States but they are burning through them four times faster. The average mining depth is approaching half of the possible ultimate depth. China has plans to increase coal consumption by another 10% to make synthetic natural gas. This process was pioneered by the Carter Administration with a plant based on lignite at Beulah, North Dakota. The Beulah plant burns through 18,000 tonnes per day and exports by-product carbon dioxide for EOR in Canada. Converting coal into syngas is a more efficient use of the contained energy than putting it through a power station. There is a 90% transfer of the inherent energy in gas in domestic cooking for example. Gas is also more storable than electricity. China appears to be on a path to have burnt through half of its initial coal endowment by the mid-2020s. Their cost of production is likely to rise thereafter.

In theory, the Chinese are building power plants that will run out of coal before the power plants wear out. They have one thing up their sleeve that has a good chance of saving the day for them. That is their thorium molten salt reactor project. The team running that project was told recently to get it commercialised in ten years instead of the original twenty years. Molten salt reactors could be added to existing power plants to replace the coal-fired boiler. That technology might come along in time to provide a seamless transition.

The figure for China’s unconventional gas potential is nominal. Results to date have fallen short of expectations and it may be a few more years before clarity is achieved.

Similarly, while the Bazhenov Fm of the West Siberian Basin in Russia has a number of similarities to the Bakken but is many times larger, well productivity for commerciality may be too low at any oil price given the much high drilling costs of this region. This is due to the rock having too high a clay content and not enough silicates so that it deforms plastically rather than fracturing to the required extent.

Further to the Bakken 

In this post I had looked at the contribution of the Bakken and the other three main US tight oil plays. Another look at the data suggests to me that my prediction that the peak is imminent may very well be right. There may only be six and a half years of production data but it is monthly data giving close to 80 data points. As to the evidence, this is a map by Schmidt from 2011 showing 15 month production for the Bakken:

David 6

Only the wells doing 100,000 barrels or more in their first 15 months have a chance to produce 300,000 barrels or more. This is the bottom three orange colours. Four counties provide 87% of Bakken production and the prospective area may be 60% of these counties at best. With respect to the Three Forks, the area that is possibly prospective is smaller again as show by this map by Millard and Dighans from May 2014 of water cut:

David 5

Millard and Dighans make the case that the abrupt transition from high oil saturation to low oil saturation in McKenzie County shown by the dashed black line is due to the overlying Pronhorn Shale blocking downward migration of oil from the Lower Bakken into the Three Forks.

Fractracker provides very good detail on completions to dat in the Bakken including the postion and length of the laterals. Clicking on a well will provide details of its spud date, ownership and drilled depth.

David 7

Some areas are already drilled on a tight spacing. For example, this is an area north of New Town that has been drilled on a 700 foot average spacing:

David 8

And this is an area west of New Town that has been drilled on a 620 foot average spacing:

David 9

It appears that the sweet spots of the Bakken have already been heavily drilled. There may not be that many locations left in areas that are going to provide a good return.

David Archibald, a Visiting Fellow at the Institute of World Politics in Washington, D.C., is the author of Twilight of Abundance: Why Life in the 21st Nasty, Brutish, and Short (Regnery, 2014).

This entry was posted in Uncategorized and tagged , , , , . Bookmark the permalink.

195 Responses to Who’s Got Liquids? plus Further to the Bakken

  1. Watcher says:

    This is the second article showing some density towards Mountrail.

    I’m gonna suggest it is too much coincidence that the big lake happens to be there. I think proximity for truck trips of water is deciding some of this and not underground geology.

    • Watcher says:

      Or maybe that close they can pipe the water. Regardless, the lake is the big deal.

  2. Euan Mearns says:

    Ron, I’ve not called by for a while having decided to stop posting links here that may upset more than 50% of you readers 😉 As you probably know we have a referendum here in 3 weeks to decide if Scotland remains part of the UK. Kind of like Louisiana deciding if it wants to stay part of USA. Oil and energy figures in the debate and so a couple of posts linked to propaganda that is circulating.

    North Sea Oil and Scottish Independence: where does the truth lie?
    The Clair Oilfield – distilling facts from fiction

    And for those with scientific curiosity about how Earth works, a post on Earth’s magnetic field that was prompted by a comment left by a NASA astronaut who was mission scientist on Apollo 14.

    The Laschamp Event and Earth’s Wandering Magnetic Field

  3. Old farmer mac says:

    If anybody is knowledgeable concerning the energy budget involved in manufacturing syngas I am sure a lot of us would appreciate hearing what you happen to know about it.

    Thanks in advance.

    • Farmer Mac,
      That depends on a great many variables. Technology used, scale, feedstock, transport distance, etc etc etc. It can be quite profitable though, as evidenced by the stock price of Sasol (ticker SSL).

      There are a few right ways to do it, and a whole lot of wrong ways to do it.

      “Energy budget” is only one important variable. You also need to be most mindful of scale economics and carbon lifecycle. Coal derived syngas without CCS will be a non-starter in north america.

      Done right, you get cost effective low carbon fuels at scale. Done wrong, you get non-price-competitive fuel with twice the carbon footprint, or an existential reliance on government subsidy/transfer payments (i.e. tax-dollars-to-liquids).

      • Old farmer mac says:

        Thanks Stephen,

        You have said a lot ( Thanks !) some of which I could have guessed more or less- there are always more wrong ways to do things than right ways.

        Let me rephrase my question.

        If you build a modern syngas plant- and by this I mean you get out gaseous fuel and waste products such as CO2 which may be salable but has energy content-how does the energy content of the new gas compare to the energy content of the coal used as raw material?I realize the answer can only be an estimate.

        • Allan H says:

          From what I recall, there is at least a 25% loss of energy in converting coal to syngas (CO+H2). To convert it to gasoline or diesel you get about a 50% loss in energy, but new technology may reduce that loss somewhat.
          I don’t know what the loss is to convert coal to methane.

  4. Synapsid says:

    On fracking the Bazhenov:

    High costs “due to the rock having too high a clay content and not enough silicates…”

    All clays are silicates. Maybe shales rich in some clays deform more plastically than shales rich in other clays do? Anyone know?

    • Doug Leighton says:

      Actually almost all minerals are silicates whereas clays (and micas) are classified as phyllosilicates. That is: sheet like in form. However, the key here is that clays tend to exhibit plasticity (when mixed with water). They bend (or flow) rather then brake. Clays also have extremely low permeability. So think of Playdoh or Plasticine as opposed to something crunchy.

      • Watcher says:

        Yo can we get a source link on this flexible rock presumption for the Bazhenov?

        • Doug Leighton says:

          Certainly not from me. I’ve never heard about Bazhenov’s fracking suitability or unsuitability before. However, I’d guess a high clay content, assuming it exists, would be a killer. By-the-way, weren’t you supposed to be nulled out by the new software upgrade? [yellow face]

        • sunnnv says:

          I found this pdf poster from Price Waterhouse of global shale plays.

          The data is from Rystad Energy Research.
          BUT, the note by the formation says: “… Salym field… high clay…”
          whose thickness is thinner that the Bazhenov listing in the data table.
          Not clear is Salym is part of the Bazhenov, or a higher level fed by the Bazhenov source rock (leaning toward this).
          Clay content of the whole Bazhenov itself (15-20%) is low compared to Bakken. (34-44%). But the quartz content is about the same in both.

          For the real nitty gritty, the EIA did a world shale assessment, last in 2013.
          Chapter IX is the Bazhenov

          They say “low” clay content.
          Also – few faults, but tax/regulation issues.

          I dunno about the “too much clay” thing, Shell/Gazprom did some vertical test wells, and are now starting to frac. I guess they think (from cores, etc.) that the stuff is frack-able.

          I’m thinking 5 wells in 2 years is just due to being in Bum Fracking Siberia,
          which is 1000 miles from anywhere, where there are two seasons: mud and frozen.

          Peak oil is about peak production rate – due to economics (or lack thereof, operating at the ends of the earth) and politics as well as geological factors.

          • aws. says:

            Bum Fracking Siberia… 🙂

          • Watcher says:

            Don’t care about clay or non clay or silicates or whatever.

            Care about this bendability. Care about big pressure from the surface pump just pushes bendable rock away and doesn’t fracture it.

            You can do that without clay, yes?

    • ManBearPig says:

      Another issue with clays is that they swell in the presence of water. When they swell, it inhibits the fracture from propagating properly and decreases the effectiveness of a frac.

      • Doug Leighton says:

        True, montmorillonite clay (known commercially as Bentonite) absorbs nearly five times its weight of water and at full saturation it occupies a volume up to 15 times its dry bulk weight: On drying it shrinks to original volume. The swelling is important, since the entire swollen mass, the clay and water, acts as though they were clay.

        Furthermore, there is no such thing as a driller (or gardener) who’s not familiar with Bentonite in its various formulations BUT all this is more-or-less moot because any subsurface clay can be presumed already water saturated (expanded).

        • Watcher says:

          Well now that’s a good description.

          Water certainly bends.

        • Tim E. says:

          Bentonite in its various formulations

          AKA Kitty Litter.

          Those of us in the manufacturing sector use it to absorb lubricant/coolant/cutting fluid spills.

          Then we ship it to your local landfill.

          • Old farmer mac says:

            Clay can behave in surprising ways. There is a clay soil spot on a neighbors place that gives when you drive on it and springs back just as if you were driving on a mattress or trampoline.The ground sinks a couple of inches under a heavy tractor wheel and then comes back up immediately as you watch in a matter of a second or so.

            I doubt that particular clay could be fracked. It would probably open up but then it would just close in around the sand grains.

  5. Ilambiquated says:

    >Converting coal into syngas is a more efficient use of the contained energy than putting it through a power station.

    This claim surprises me, considering how much coal capacity has been built in recent years.

    • Ilambiquated says:

      I mean to clarify that, Siemens and RWE have been bragging for years that they have the most efficient coal fired power plants in the world. And they’ve invested billions in the technology.

      Syngas is not an unknown in Germany, they’ve had wood-burning internal combustion engines since the 30s. But they didn’t use the technology for their new coal plants. I wonder why not, if it is the most efficient way to burn coal.


      • Old farmer mac says:

        I think maybe what the author had in mind is that the energy lost in converting from coal to syngas is more than made up for in the final stage of using the fuel.

        There is a similar thing that happens when you burn oil or coal to generate electricity and use the electricity to charge an electric car battery. The electric motor in an electric car is so much more energy efficient that it more than compensates for the loss in energy involved in generating electricity to charge the battery- compared to just burning it directly in a car engine.

        But I have cooked on a gas stove and I find it hard to believe an ordinary gas fired kitchen range is anywhere close to ninety percent efficient in putting the energy into a cooking pot.

        I prefer electricity in large part because it does not overheat my kitchen when cooking. I can boil water slowly with electricity with hardly any convection currents of hot air around the pot. A gas burner turned high enough to barely boil the same pot with the same contents creates a steady column of hot air easily felt over the pot.This comparison was made at a former home everything else held roughly equal such as outside temperature and humidity windows open or shut etc.

        I hardly ever ran the ac in the kitchen after switching back when I lived in that house. I ran it a lot using gas.

  6. Longtimber says:

    “High quality coal produces 2.2 barrels of liquids through a FT plant” … 2.2 Barrels per MT?
    So 2.2 * 159 = 350Ltr * .9 (SG of syn gas ? ) = 315kg or 31.5% of the mass of coal is converted to liquids. (?)
    Seems like more Syn Gas than I would have expected. Guess there a lot of H paired with that density of carbon.

  7. Doug Leighton says:

    In addition to conventional oil, Venezuela is supposed to have oil reserves similar in size to those of Canada, and about equal to the world’s reserves of conventional oil. Further, the Orinoco’s tar sands are supposed to be less viscous than Canada’s Athabasca tar sands, meaning they can be produced by more conventional means: Estimates of the recoverable reserves of the Orinoco stuff I’ve seen range from 100 billion barrels to 270 billion barrels. I realize they are buried quite deep (too deep for surface mining).

    I don’t have an opinion on the validity of claims about Venezuela’s heavy oil resources but it seems to me if a big thing is being made of the Canadian goo, our southern brethren should be mentioned as well.

    • Anon says:

      The thing with Venezuela is that the politics are so thoroughly dysfunctional that it has killed their investment. There’s no practical timeline for developing any of those resources (if anything, their production has been falling) so it’s not really worth counting.

      • Doug Leighton says:

        Of you’re right about Venezuela’s current dysfunctional state BUT things can change and it doesn’t seem right, to me, to ignore the existence of a reserve/resource simply because of current chaos. Hell, Canada’s tar (“oil”) sands could conceivably be declared an environmental/economic disaster affecting optimistic exploitation projections.

        • Old farmer mac says:

          I am a great cynic when it comes to giving serious consideration to the people of Canada or the world deciding the tar sands are to be ignored rather than exploited but I must admit stranger things have happened.

          If climate change were to get bad enough fast enough we might decide to give up automobiles or at least automobiles powered by petroleum.Some people in Pacific island societies gave up pigs when it became obvious that it was a choice between them and the pigs, long term.

          The race is not always to the swift nor the contest to the strong but that is the way to bet.I am not betting on society giving up automobiles unless and until forced to do so.

          I may not live to see it come to pass but here is a future history scenario that is in my estimation very likely to come to pass.

          It is based on the assumption that synthetic liquid fuel supplies do not grow fast enough to compensate for falling oil output and that the world economy is about to crash for lack of sufficient liquid fuel.

          Somebody is going to export something to Venezuela at about that time. It may be the American brand of democracy or it may be Chinese commie capitalism or it may be a hybrid of these two plus soft European socialism. Socialists are not more timid about claiming a share of an essential resource than anybody else.

          But unless the engineers and entrepreneurs come up with ANOTHER way to keep the economic wheels turning post peak oil Venezuela is going to be a country with a lot of visitors making offers they are going to be unable to refuse.

          At first they will arrive with offers of loans and grants and technical assistance and if that doesn’t work they will arrive via parachute and armored calvary.

          History doesn’t precisely repeat but it rhymes and it ain’t over.

        • Dave Ranning says:

          Yep, eventually they will be developed and sold.
          The lockout by Wester Oil was a lesson that will not be repeated.
          They can wait. Maybe. A corrupt and dangerous situation, but a mature revolution.
          We will see, but they do hold the joker.

  8. robert wilson says:

    The third table is titled Potential Liquid Equivalent in Billion Barrels. It shows unconventional gas in the US to be almost three times greater than oil in Saudi Arabia. Do POB posters consider that a realistic “Potential”? What is the future of natural gas transportation in the US?

    • Robert, being a Peak Oil man I don’t really follow gas that close but that does seem like a lot. David is talking about shale gas here and it is kinda hard to get a handle on just how much is there. At present the price of gas is so low that many drillers have pulled out. If gas were the price it is in Europe right now, how much gas could we produce? A lot more for sure but like you, I would like to hear from some gas people, a club of which I am not a member of.

      But I do have opinions on Saudi oil reserves. I think 145 billion barrels is about twice as much as Saudi actually has, though as of 2012 they claimed 265.9 billion barrels. I believe they have perhaps 70 to 80 billion barrels of reserves and Russia has perhaps 60 to 70 billion barrels.

  9. With respect to the Bashenov Fm: http://www.oxfordenergy.org/wpcms/wp-content/uploads/2013/10/WPM-52.pdf
    With respect to US shale gas: http://www.npc.org/Prudent_Development-Topic_Papers/Topic_paper_1-8_update-Onshore_Gas-102013
    One thing from the 15 month production map by Schmidt of Bakken production above, there is a relatively sharp transition from acreage with currently commercial production rates to the blue areas of negative returns at any price. The significance of this is that as the oil price rises, there is not a vast area of well locations that can be brought on.

  10. aws. says:

    Big Picture Agriculture posted this video of an electric farm utility vehicle. Kind of interesting to see where this goes.


    • Watcher says:

      What crap. NOT A WORD about duration.

      • Fred Magyar says:

        First of all this is touted as a recreational vehicle. It is German engineering and the Germans have a decent track record of building some pretty good machines. If you go to their website this is what is posted:



        2x PMS electric Disc Motors
        Rated power 2x 4,4kW
        Peak power 12/14/18 kW
        Torque more than 500Nm
        Topspeed 30/35 km/h or 18.6/21.7 mph


        Lithium-Ion Battery
        96V nominal Voltage
        6,3/7,9/10,8 kWh Capacity
        Autonomic heating system for low temperature use
        Integrated function-surveillance guarantees highest safety

        Joystick with intelligent input-analysis
        Permanent, redundant securitychecks of complete system
        Selfdiagnosis and errorhandling
        Preset driving-profiles for different use scenarios


        Tubuluar steel frame with rollover protection
        4-point safety seat belt and body-conoured seat for best traction
        Deltatracks for maximum road grip and best stability on every surface
        Height: 154 cm
        Width: 122 cm
        Length: 132 cm
        Weight: ~275/295kg


        Driving pleasure for hours at the time along beautiful beaches or up and down the dunes, no problem for the Ziesel.

        • Old farmer mac says:

          The nature of farm work in the field is such that it requires substantial amounts of energy on a continuous basis.

          Aero resistance at farming speeds is negligible but it takes a substantial amount of horsepower just to move any machine across soft ground. The ground is always soft if you are farming it.

          Even a lawnmower sized tractor needs ten horsepower continuously to operate a small mower or pull a cultivator or plow at walking speed. This same ten horsepower will propel an aerooptimized lightweight subcompact car at highway speeds on a level road.

          And a tractor needs to be able to go for hours on end when you need it.Stopping to recharge batteries is not generally an option in time sensitive work such as planting and harvesting and swapping out batteries would probably be cost prohibitive since the most expensive part of the machine is the battery by far.Keeping spares on hand isn’t going to work.

          We will be driving battery electric cars on a regular basis decades before we ever farm with battery power- if we ever do.Personally I think it probably will always be easier to power farm machinery with locally or regionally produced biofuels than with electricity…

          Now it might be possible to do a little boutique farming with battery powered machinery under certain circumstances. An acre of strawberries or green peppers worked intensively mostly by hand brings in a whole lot of money- enough that using a battery powered utility vehicle might not eat all the profits.

          Electricity given the current state of the art just doesn’t have a place out in the fields where the bulk of our food comes from.Maybe in a few decades……….

          • Aws. says:

            That may be true for producing cash crops but I could see certain fruit and vegetable growers looking at that vehicle with interest.

            Driving my Prius up my icy and snow covered drive in winter has opened my eyes to the kind of torque at low speed an electric motor offers. We’ll just have to see what develops.

          • Ilambiquated says:

            You’re looking at it the wrong way. Trying to judge a technology by thinking of cases where it would fail doesn’t really tell you where it might succeed. Equipment built for high end applications are often overkill in many niches.

            For example, it is often said that electric cars can never succeed because cars need a 300 mile range. But most car trips are much shorter — 100m Americans commute 40 miles or less.

            Another example is tablet computers, which were widely dismissed because they are terrible at common business applications like word processing and spreadsheets, and can’t play high end games either. There turns out to be a huge market for people who want computers but don’t want any of that.

            Electric equipment like this already has advantages, and could fill a lot of niches. If liquid fuel prices increase significantly, the number of niches would increase, and the industry would focus on changing its practices to find ways to create more niches.

            An interesting question would be what percent of a farm’s fuel consumption goes into applications where this this technology would fail. The next question would be what changes in practices could be introduced to reduce that “irreplaceable” consumption.

            • Old farmer mac says:

              On farms where the vast bulk of food and fiber are produced- meaning large scale highly mechanized farms of the kind found in the US – nearly one hundred percent of the fuel used in field work is used in machines that simply cannot be powered with batteries at present and probably not for a long time to come if ever.This is not to say battery powered equipment has no place on farms.Just about every farmer in the US has battery powered hand tools by now.

              I have a battery operated electric fencing system .But you just can’t go out into a field and do production work with battery powered equipment.A Volt battery would power my utility tractor about as long as it would a Volt climbing a steep mountain such as Pikes Peak- maybe fifteen or twenty minutes max.Considering that ten minutes of that might be used up just in getting from the equipment shed to the field and back……….

              Even a little tractor such as the onesI use to trim the grass in my orchard needs at least twenty kilowatts on a continuous basis. I can get by with it being retired and a small operator mostly out in the field to pass the time considering it was paid for back in the early seventies. Tractors last.

              My neighbor who is still raising apples successfully commercially uses an eighty horsepower tractor with a twelve foot wide mower to trim his orchard and it runs hammer down for hours on end.When he is not mowing he uses it to tow the air blast sprayer he uses to apply pesticides which weighs about four tons loaded up with water.I guess a Tesla battery might last fifteen to thirty minutes on a charge doing this sort of work.

              The smallest fairly new tractor you are apt to find on a modern midwestern grain farm is going to be at least a hundred fifty horsepower and two hundred fifty is common. The big boys have even bigger ones.

              A farmer who raises cattle or hogs will have a couple of small tractors suitable for work in close quarters hauling feed and cleaning up manure and other chore work.

              Now farmers who operate such specialty businesses as greenhouses could use battery operated machinery for some jobs that they normally do with very small tractors and off road vehicles commonly called all terrain vehicles. They seldom stray very far from an electrical outlet and are mostly used intermittently and can be left plugged up between uses.

              • Techsan says:

                OFM, don’t diss the electric cars on Pikes Peak!

                A Nissan Leaf, stock except for the tires, was entered in the Pikes Peak hill climb race. Not only did it win its class, it beat some of the gasoline cars 🙂

                • Old farmer mac says:

                  I saw it earlier!!.

                  But it only takes a little old lady half an hour to do the route at a sedate crawl .

                  I am a big fan of the Leaf and the Volt as well but neither of them has a battery capable of powering a small tractor for more than about a half hour to an hour at the most.A working tractor doesn’t cruise like a car at part throttle. The engine works hard continuously.

                  Switch off your car engine at seventy mph on a good level smooth road and it will go another mile at least before it stops rolling. Switch off a tractor engine with a plow in the ground or a mower attached to it mowing hay and it will stop as fast as if you hit a bridge abutment head on. One second with the plow in the ground and three seconds or less with the mower engaged.

        • Watcher says:

          So I see a max battery of 10.8 KW Hrs. At 96 volts this is 112.5 ampere hours.

          Rated and peak power (always tricky, do wires melt at peak power?) let’s pick a number half way between them or 11.2 Kw. So it runs less than an hour before recharge.

          To get those 112.5 ampere hours back into the battery from house current, you’re looking at about 3 hours on a 40 amp circuit breaker, which is higher than most.

          • Watcher says:

            And yo, Fred, about the critters from last Ronpost — I pulled 200 degs out of the air. The various places say temp rises 30 degs C with each kilometer down so 200 is a bit high.

            Also, ya, protoplasm nearly boiling at 90 degs C looks dicey for critters, except water boils at a lower temp on Everest and thus a much higher temp at Bakken depth pressures?

            Did some more reading about biocides in the Bakken. There is some hand waving. They want to kill all the critters. There is concern about the oil itself for sure, but there are also critters that eat iron ore or whatever and can clog the apertures. It’s a moist, warm environment. Stuff grows.

            • Fred Magyar says:

              Yeah, but…

              The problem is a lot more complex than the actual boiling point of water under different pressure constraints.

              We need to really understand the physical and biochemical effects of extreme heat on say the essential proteins of living organisms. Should we wish to genetically modify these organisms for a specific task, we are also forced to work within the evolutionary constraints of an apparently limited gene pool of existing extreme thermophiles. The link below is to a very interesting proposed study…


              • Watcher says:

                Read it. Lotsa talk about diminished mutation rate for those hot critters.

                Be all that as it may be, Ghawar is more shallow than the Bakken. Even the Eagleford is. There would seem to be a lot of targets, and probably a good market for such genetically modified critters — that market being those folks not yet sanctioned and labeled horrible terrorist.

      • Fred Magyar says:

        I could certainly see something like this being useful on the small farms and vineyards near my sister’s home in Southern Germany. Almost everyone in her area already has large solar arrays that could probably easily power charging stations for these things.

        Anyways, here is a bit more info on real word use:

        Can you elaborate on the work/industrial or other commercial applications of the Ziesel? What is its battery life, towing capacity, range, etc. (I see the specs on the website but it would be useful to put it in terms of “two-hour battery life at 10mph” for example)?

        We have had a trailer made for the Ziesel, which is only slighter bigger than the Ziesel itself. This way, you can tow the Ziesel with your car, drive the Ziesel off of it, then turn it around and hook the trailer to the Ziesel.

        We had the Ziesel towing another vehicle with about a ton (1000kg) of weight on an even surface with no problem.

        The range and endurance depends a lot on the surface you are driving on. Wet and heavy snow eats more power than driving on a normal street. The time the Ziesel can be used is going to be between two hours and four hours. But this means continuous driving. 2 hours is the mentioned heavy snow with full speed.

        As for its potential, I think I have mentioned most areas. Those that we list are as follows:
        Fun and Action, Tourism, Agriculture, Patrol and Rescue, Hunt and Forest Control, Transport, Municipal Use.

        • Watcher says:

          The peak power number, or even a number well under it, does not support 2 hrs as above. Something is not right. Can’t be me.

          • Fred Magyar says:

            I agree and am a bit skeptical myself, having worked with battery storage systems for photovoltaic systems. However the people behind this have some pretty impressive credentials… From what I could figure out Zeisel is a product of GmbH Mattro who are affiliated with enerChange and they are the ones who developed this battery pack. I guess I could ask my brother in Germany to contact them directly and find out a bit more about this machine and its battery technology.

            As a shareholder of enerChange GmbH Mattro developed a modular battery system, which on the one hand as storage buffer for renewable energies and the other as a replacement system for mobile applications is a range-independent power source for electric vehicles. More information can be found under http://www.enerchange.net

            outsourced research society “enerChange GmbH”

            The most extensive work in the subject area of ​​renewable energy has led to the creation of an inter-company research center in the EU co-financed “K-Regio-program” the state of Tyrol in early 2011.

            To utilize the results of this collaboration of seven companies and several universities began operations in January 2011, our sister company enerChange GmbH.

            We carry out research activities in these areas as part of the K-Regio project “enerChange” (now successfully completed) together with the following companies and public bodies and with a total budget of over one million euros by:
            ATB Becker, Absam
            enerChange GmbH, Innsbruck
            inndata Data GmbH, Innsbruck
            Mattro mobility revolutions GmbH, Schwaz
            mechatronics engineering GmbH, Kufstein – Ebbs
            RED Bernard GmbH, Hall in Tirol
            Westcam Data GmbH, Mils bei Hall
            SWARCO Aktiengesellschaft, Wattens
            MCI, the entrepreneurial university, Innsbruck
            course of Mechatronics
            Program for Environmental and Process Technology
            University of Innsbruck, Faculty of computer science

            I’m at least willing to give these guys the benefit of the doubt for now!

            • wimbi says:


              I’m putting one of these electric conversion tractor kits together, and intend to use it for mowing and PR, as a part of our attempt to lower our town carbon footprint.

              Since I got my excessively big PV system, I have gone all-electric with house and car, and like all of it very much.

              The Car, a Leaf, is the first new car we have ever had, and FAR too fancy for my taste, which goes for bone-simple everything, since I am the fixit man around here.

              My wife loves the car, but I look at it as an example of one of those things which could get a huge improvement with obvious design changes, like- throw away all the fancy electronics, electric doors, all-around video camera, and so forth, and get the resulting lower cost and bigger range.

              • Techsan says:

                Enjoy your Volt, especially since you are the fixit max. Simply put, you won’t have to fix it.

  11. canabuck says:

    Re: “Molten salt reactors could be added to existing power plants to replace the coal-fired boiler.”

    If China has about 623 coal-fired power plants, with an average size of 2.5 GW, and are adding about 50 plants per year, then the transition to molten salt reactors is possible over 10+ years.

    But, from my experience in China, there are coal-fired power plants spaced about every 2 to 5 km in a grid in a city. There must be large power plants outside of the city that provides the bulk of the power, and the local ones provide hot-water heating for factories and universities. These small ones produce a lot of pollution, and cannot be ignored.

    • The coal fired plants could not simply be”converted” to nuclear, the entire plant would have to rebuilt. They might be able to use the same turbine and generator but I doubt it. At any rate it would take a lot longer than ten years to convert everything, more like twenty to thirty.

      • Old farmer mac says:

        The turbines and generators and associated infrastructure such as roads and power transmission lines and transformers etc actually do make up the bulk of a coal fired power plant especially in terms of cost to the best of my knowledge.

        So using a reactor simply to replace the boilers would be practical in principle at least assuming the coal plant is of a size that matches an available reactor size.

        But I agree that it would take a lot longer than ten years to convert a nation’s worth of coal boilers from coal to nuke. It would probably take ten years just to ramp up the capacity to build such new reactors to a useful level.AND we shouldn’t forget that so far they exist only on drawing boards.

        We know it can be done, that the design does work, but not if it can be done economically on a large scale.

        • By far the largest expense and time consuming factor in building a nuclear plant would be the reactor . The heat exchanger is the boiler in a nuclear plant. And there would be the problem of fuel for all those plants. I am not so sure it would be available.

          • Old farmer mac says:

            You have a good point about fuel and reactor construction too. A little more thought indicates that the only way this would likely work is that reactors would be modular and dirt cheap compared to today’s cost.

            Whether such reactors can be built in factories and assembled on site is technically possible I suppose but the cost of them would most likely still be prohibitive for a small installation.

            Now if you are talking about a big coal fired plant in the thousand megawatt range then saving existing infrastructure and just scrapping coal boilers makes plenty of financial sense assuming the turbines and generators etc are in good condition. In that case even a conventional site built reactor would probably be a good investment compared to doing without electricity.

            It is my impression that the primary argument for molten salt reactors is that thorium which is cheap and plentiful will be used as fuel rather than uranium which is potentially in short supply.

            Of course a practical way may be found to extract uranium from sea water and even though the cost might be five or ten times the current cost of mined uranium it could still be an economical fuel considering that fuel for a reactor is dirt cheap compared to the power output.

            I have hope too for breeder reactors being perfected but the proliferation problem is one to keep any sensible person awake at night.

  12. Pingback: Edito | Blog de Yoananda

  13. Watcher, my spam filter catches about 99% of all spam but occasionally some get through. I have no control over how it works however.

  14. Jeffrey J. Brown says:

    Because of declining production, Mexico no longer has sufficient domestic light, sweet crude oil production to meet the domestic demand from refineries designed to process light crude, so they are going to have to start importing light crude, although they remain a net oil exporter.

    In any case, the Pemex official quoted in the following article had an interesting comment about condensate (which is basically natural gasoline that is not of much use as feedstock for producing distillates like diesel fuel).

    As I have previously noted, in my opinion it is very likely that actual global crude oil production (45 and lower API gravity crude oil) probably peaked in 2005, while global natural gas production and associated liquids–condensate and NGL’s–have so far continued to increase.

    Mexico’s Pemex aims to start importing light crude this year

    Aug 28 (Reuters) – Mexican state-owned oil company Pemex wants to launch light crude oil imports later this year, potentially reaching up to 70,000 barrels per day (bpd) and aimed at boosting refinery output, the head of its commercial arm said.

    The imports would mark an abrupt shift from a decades-old devotion to crude oil self-sufficiency in Mexico, long a major exporter to the United States. It also comes after a sweeping energy sector overhaul which seeks to reverse many years of declining output and export volumes.

    “Our objective is that (crude imports) will begin this year,” said Jose Manuel Carrera, chief executive officer of PMI Comercio Internacional, Pemex’s oil trading arm. His comments are the strongest signals to date on both the timing and potential volumes of light crude imports to Mexico. . . .

    While U.S. companies Pioneer Natural Resources and Enterprise Products Partners have secured permission to ship a type of ultralight oil known as condensate to foreign buyers, Carrera all but ruled out the possibility.

    “Condensate is not necessarily what Mexico needs. It needs crude,” he said.

    • Jeffrey J. Brown says:

      Kurt Cobb’s article on this topic:

      Did crude oil production actually peak in 2005?

      Here’s what’s being added to underlying crude oil production and labeled as oil by the oil companies and reporting agencies:

      • Biofuels – Essentially ethanol and biodiesel.

      • Natural gas plant liquids – Butane, ethane, pentanes, propane and other non-methane components of raw natural gas.

      • Lease condensate – Very light hydrocarbons gathered on leased production sites from both oil and natural gas wells, often referred to as “natural gasoline” because it can in a pinch be used to power gasoline engines though it doesn’t have the octane of gasoline produced at refineries.

      • Refinery gain – The most puzzling addition of all to crude oil supply calculations. This is merely the increase in the volume of refinery outputs such as gasoline, diesel and jet fuel versus the volume of crude oil inputs. It is due entirely to the expansion of the liquids produced, but indicates no actual gain in energy. In fact, great gobs of energy are EXPENDED in the refinery process to give us what we actually want.

      Let’s see if any of these non-oil things are acceptable as oil at major exchanges. Perhaps the most recognizable oil futures contract is the so-called Light Sweet Crude Oil contract. The exchange sponsoring that contract details in seven pages (of a much longer rulebook) what is acceptable to deliver to those who choose to take delivery on their contracts.

      A search for three of the four items (and their subitems) listed above predictably comes up empty. But, the search for lease condensate produces a hit. Here’s what the exchange says about lease condensate when discussing acceptable delivery of oil:

      “For the purpose of this contract, condensates are excluded from the definition of crude petroleum.”

    • Doug Leighton says:

      As a possible footnote:

      “KMZ produces about 865,000 barrels of oil per day — more than twice the current output of the gasping Cantarell. KMZ also produces a lot of natural gas. But it consumes more than twice as much gas as it produces. That’s partly because Pemex must inject vast quantities of gas into KMZ to help push the remaining oil up to the surface. Said Joram Carriles, a KMZ operations manager: “It’s a dying field.”

    • Watcher says:

      This subtle little tidbit is creeping out into the open more and more.

      A few days ago we had Bloomberg reveal an effort underway to “redefine WTI” because Cushing’s content, filled chock full with shale oil, no longer conforms to all of the parameters of WTI (not just API degs). So rather than note that, they just redefine WTI.

      I was just reading about Ghawar. Its API degs are 33-36. THAT is first class oil, not the thin Mountrail stuff at API 42-47.

    • Old farmer mac says:

      The NYT is often referred to as the ” paper of record” for the USA and it is the root source of most of whatever you might happen to read in the more liberal papers and and websites. Generally the NYT can be counted on to show some understanding of everyday reality which is neither liberal or conservative but rather just ” reality”.

      But when it comes to oil they publish puff pieces like this one which is nominally accurate for the most part but gives a totally erroneous impression of what the actual situation looks like.

      Countries that are exporting to the Far East these day are not being forced to sell their crude ”at a deep discount”.

      The Chinese pay the same or very close to the same as everybody else. So do the Japanese etc and the bills are settled in dollars most of the time. So far as I can see the only people who can buy crude at a discount on the world market are the people willing and able to buy a relatively small amount of otherwise embargoed crude sneaked out of countries on Uncle Sam’s shit list.

      And of course the real reason , the continuous depletion of legacy oil fields, for oil being a hundred bucks a barrel is scarcely ever mentioned at all in such articles.

      When it comes to conspiracies I am with Ron and seldom ever believe in them. But I have a cynical streak a mile wide and sometimes I have a hard time believing there is NOT a defacto conspiracy that includes nearly all the MSM which is geared to keeping the country and the world in the dark about oil supplies.

      I don’ t mean to say that all the media moguls get together at some resort like the heads of Mafia families and agree to keep the truth buried in this respect but rather that each and every msm outlet has a very powerful incentive to ignore the truth in situations like this one.

      The owners of any major paper are more than likely to also be in part the owners of many other large businesses that depend on Joe Six Pack staying on the consumer treadmill.And beyond that even the biggest newspaper has to have advertising revenue to keep the doors open. Only a fool would believe that the advertisers are unable to exert substantial influence on the content of the news and editorial columns.

      And beyond that the owners or managers of msm media have political axes of their own to grind and debts to settle with the people that have done them favors in the past.NPR for instance is one of my favorite sources of news but I cannot think of a single recent instance of hearing anything on NPR that is not subtly or blatantly presented in a fashion more favorable to the democrats than to republicans. This is as natural as the sun coming up because the people at NPR basically owe the existence of NPR to the democratic party and everybody knows it.

      The Wall Street Journal can be counted on to just as reliably slant coverage to favor republican politics of course.

      The trouble with some issues getting honest coverage in the MSM is that sometimes it is in the interest of just about all the MSM to fake it. Oil is such an issue.

      You can pretty much determine what the truth is concerning almost any issue by carefully reading both the pro and con press about it for a few months but not in the case of oil.

      The conservative press is dominated by people determined to maintain business as usual. The liberal press is not going to push the truth about oil supplies anytime it looks as if doing so is going to cost the democrats politically. Bad news on the oil front- spiking oil prices- would be bad for the democrats with elections coming up. Good oil news makes the democrats look good or at least better in terms of voters this fall and next presidential election.The party in power always gets the credit for good news no matter whether that party had anything to do with it or not.The out party is generally able to capitalize on bad news no matter whose fault it may be.As often as not bad news is not actually anybody’s fault but the average voter generally doesn’t understand this and wouldn’t care if he did.

      If you want the truth about a whole lot of issues these days the best place to look for it is on the internet at sites such as this one.

      • I have a hard time believing there is NOT a defacto conspiracy that includes nearly all the MSM which is geared to keeping the country and the world in the dark about oil supplies.

        Never attribute to malice that which is adequately explained by stupidity.

        • Old farmer mac says:

          ”Never attribute to malice that which is adequately explained by stupidity.”

          This is a bit of wisdom that we should never forget and it applies to the oil supply situation as it is covered by the MSM but only in a way one step removed from day to day considerations.

          In terms of day to day business the media are playing it smart rather than dumb. They are all keeping their mouth shut like a bunch of nice people at a party who will pretend the food is good when it is actually awful or maybe even rotten. This is of course what we should expect since the media are big businesses owned by big businesses and big businessmen and bad news is very bad for the bottom line.So everybody has an incentive to keep his corporate mouth shut.

          I have been looking for a word or a phrase for a long time that describes these situations that look like conspiracies but actually are not.

          Of course if the food really is rotten … then a whole lot of people are going to be tossing their guts up tomorrow and some may die.Peak oil – when it hits really hard – is going to be a lot worse than corporate food poisoning.It is going to kill a lot of businesses as dead as last weeks fish bait.

          So at a step removed from immediate considerations big business and big media are certainly playing it dumb.

          If I had any money it sure wouldn’t be in airline stock or hotel stocks!!

          • hole in head says:

            “I have been looking for a word or a phrase for a long time that describes these situations that look like conspiracies but actually are not.”
            OFM, here to assist .The phrase is “conspiracy of silence” . example we would have visitors to a terminal cancer patient in a hospital . No one will say ” you are dead ” . They will talk general . None of the visitors conspired to do that ,but then that is the way it is . Recall seeing the movie “Mississippi Burning ” where the whole town said they had no clue how the murder happened in spite of being that done in full view .

            • Watcher says:

              The way this stuff works is systemic. There is no conspiracy. There is merely an alignment of self interest of a huge number of people.

              This is particularly true with the distribution yield or assay of light tight oil. Everyone knows it’s not Libya quality oil. So phrasing will always be “this oil has the same API degs as WTI”. Only the refineries care and they have no reason to dwell on it.

      • Ilambiquated says:

        I thought is was interesting that the NYT now sees $100 oil as “affordable”.

        I also liked the part where the guy claimed that cheap oil helped him pay the smart phone bills. It shows how priorities are changing as dematerialization moves forward and oil prices increase.

        • Jeffrey J. Brown says:

          I’ve corresponded off and on for a few years with the NYT reporter who wrote the article, Clifford Krauss. Following is an email I sent him:


          A couple of points.

          Monthly Brent crude oil prices crossed the $100 mark for the first time in early 2008, and monthly Brent prices were above $100 for six months in 2008.

          Brent crossed the $100 mark again in February, 2011, and Brent has remained above $100 for 41 of the past 42 months (through August, 2014).

          In other words, the cumulative number of $100 Brent months that we are currently experiencing is about seven times greater than what we experienced in 2008.

          The rebound in US Crude + Condensate (C+C) production has certainly helped to stabilize oil prices, but I would argue that the cumulative impact of high oil prices is vastly greater now than in 2008, in terms of the number of months of $100 plus Brent prices.

          Regarding the rebound in US production, it seems to me that virtually no one in the media is paying attention to decline rates.

          If we combine the December, 2013 EIA numbers for Bakken + Eagle Ford, and round off slightly, they produced 2.2 mbpd of Crude + Condensate (C+C) in December, 2013.

          If we extrapolate the EIA’s estimates for month over month declines in legacy production*, the oil wells completed in these two plays in 2013 and in prior years would be down to a combined production rate of about 0.9 mbpd in December, 2014, about a 60% decline in one year.

          Or, in other words, based on EIA data, the industry would have to add 1.3 mbpd of new production from 12/13 to 12/14, just to offset declines from existing Bakken and Eagle Ford wells (completed in 2013 and prior years).

          *If we are looking an projecting multi-year declines, one would need a hyperbolic or two-step exponential decline estimate, but for just 12 months, I think it’s reasonable to extrapolate the current EIA monthly estimates.


          Jeffrey Brown

          • Watcher says:

            This is the point of the Enno stat.

            Industry **IS** adding that much. 63% of Bakken production is wells less than 18 months old. It requires frantic truck activity, and that’s what they’re getting. Frantic truck activity.

            If you want to see that all collapse, bring the Teamsters in to unionize the guys hauling salty production water to disposal wells. That will end the whole boom.

            • toolpush says:


              I know you are very concerned about trucks and congestion, but as wells get closer together, and some plans are for up to 30 wells per pad, then centralized infrastructure come into play.
              First run a few poly pipe to the farmers gate and off load fresh water, on load up salt water. Extend those pipes to the county road, maybe a few holding tanks. Extend a little further to the freeway exit and supply several pads. It may get to the point of running all sorts of pipe work. Fresh water, salt water even natural gas . Sand will always have to be trucked, but it will be handled in bulk and transferred in pipes and air. Casing, chemicals for mud, people and food will still be using the roads of course. But there a lot of ways once the area is established that many trucks can be taken off the road, especially the last mile around the drilling site.

              • Watcher says:

                The reason I don’t see that happening is the 63% number is growing. More and more of the production is recent. Those pipes add time to “well completion.”

                You can redefine well completion, or reemphasize it. Spud to first oil. Just delay the spud until the pipes are in? Sure, you can do that, but it still takes more time to get the well done from time of decision to put a well there to first oil.

                You got 30 wells on a pad? Great. They’ll be doing just a few barrels a day in a couple of years or so and pipelines might be good for them, but we’ll soon be looking at 70 and 80% of production in the last 18 months. You just can’t get the pipes in that fast. If you try, you slow down drilling and the peak happens.

                • Old farmer mac says:

                  ”You just can’t get the pipes in that fast. If you try, you slow down drilling and the peak happens.”

                  I don’t know any more about drilling wells and fracking them that anybody else here but over a long career as a rolling stone it the trades I learned a good bit about pipes.

                  Unless you are restrained from doing so you can lay temporary pipe pretty damned fast.You just root out a ditch for it or maybe even just smooth up the ground a bit and lay it right on top of the ground. Pipes carrying hazardous materials like oil need to be very good quality and installed very carefully and this costs a ton of money.

                  But pipes of the sort needed to move water can be laid a mile a day with a couple of men operating the right sort of machinery and a few trucks to keep them supplied with pipe plus a half a dozen ground crew.

                  I may be way off on the price of it but I think you can buy an eight inch pipe strong enough to pump water five miles or more or two and up and down hill a couple of hundred feet for less than ten bucks a foot if you buy it by the carload. Such a pipe would carry more than enough produced water to eliminate a hell of a lot of trucking at least during warm weather.

                  At first glance it looks as if it would work in Texas but maybe never in the Dakotas.

                  If the wells are no more than a mile apart there will be power available to drive booster pumps as needed.

                  Plastic water lines don’t have to be welded in the usual sense.. They can be either glued or clamped. Glue is more properly called solvent weld.

                  It costs at least eighty to a hundred bucks an hour to keep a big truck on the road these days and probably considerably more in places such as the North Dakota oil fields.

                  You can easily load an eight thousand gallon truck with an eight inch line in fifteen minutes or less.

                  Something other than the price of pipe and the cost of manpower to lay it is stopping it being used at least to carry away produced water..

  15. PeterEV says:

    Table 1 above shows that there are technically 575 billion barrels of oil that are recoverable. This is approximately 8 to 10 Ghawars (40 to 50 MBOE/day?). Of course the bitumen has to be converted to “oil”. I understand that natural gas and water are part of the process for converting bitumen to oil and then the oil is transported by pipe and rail to refineries. This leads to a lot of questions:
    What is/will be the approximate resultant cost per barrel?
    Is the output quality of oil good enough by itself to be cracked into gasoline?
    Is this going to delay the onset of peak oil in terms of production?
    Will this be part of the “undulating plateau” that Daniel Yergin was talking about?
    Is there enough natural gas available in North America for the conversion process?
    Since the deposits are so far north, will this be a seasonal extraction effort?
    I assume the MacKensie River has enough water flow for these efforts.

  16. aws. says:

    Morgan Stanley Extends Diesel-Buying Spree Amid Supply Surge

    By Rupert Rowling, Bloomberg, Aug 29, 2014 12:37 PM ET

    Morgan Stanley extended purchases of diesel in Europe to a 43rd day amid the region’s biggest stockpiles in more than two years.

    The bank bought 77 percent of the 807,450 metric tons that traded on the diesel barge market in July and August in a pricing window operated by Platts, a unit of McGraw Hill Financial Inc. (MHFI), brokers’ data compiled by Bloomberg show. The bank purchased every day since July 1, including 18,700 tons today.

    Prices are in a pattern called contango that means later-month costs exceed immediate ones. That can create an incentive for traders to buy and store.

    “The curve is attractive to storage, so if you have the flexibility and the empty tanks then it makes sense to be stockpiling now,” Robert Campbell, head of oil products research at Energy Aspects Ltd., said by phone from New York Aug. 27. “Despite the contango there is an unwillingness on the part of end-consumers to buy much, so end-user storage is not that high but ARA levels are.”

    The banksters have placed their bets.

  17. aws. says:

    Recent paper in the American Meteorological Society Journal…

    >Assessing the risk of persistent drought using climate model simulations and paleoclimate data


    Projected changes in global rainfall patterns will likely alter water supplies and ecosystems in semiarid regions during the coming century. Instrumental and paleoclimate data indicate that natural hydroclimate fluctuations tend to be more energetic at low (multidecadal to multicentury) than at high (interannual) frequencies. State-of-the-art global climate models do not capture this characteristic of hydroclimate variability, suggesting that the models underestimate the risk of future persistent droughts. Methods are developed here for assessing the risk of such events in the coming century using climate model projections as well as observational (paleoclimate) information. Where instrumental and paleoclimate data are reliable, these methods may provide a more complete view of prolonged drought risk. In the US Southwest, for instance, state-of-the-art climate model projections suggest the risk of a decade-scale megadrought in the coming century is less than 50%; our analysis suggests that the risk is at least 80%, and may be higher than 90% in certain areas. The likelihood of longer lived events (> 35 years) is between 20% and 50%, and the risk of an unprecedented 50 year megadrought is non-negligible under the most severe warming scenario (5-10%). These findings are important to consider as adaptation and mitigation strategies are developed to cope with regional impacts of climate change, where population growth is high and multidecadal megadrought—worse than anything seen during the last 2000 years—would pose unprecedented challenges to water resources in the region.

    • Old farmer mac says:

      At the rate California is drying up we may have to find some money in Appalachia to fund an invasion of Canada so we can divert some rivers. One thing to be said about that scale of civil engineering job- it sure would put a million men to work !!

      Sarcasm light is ON!!

      Seriously speaking there is a significant possibility the drought will break with a repeat of the rare and little known phenomenon known as an atmospheric river.

      Most people have never heard of the west coast floods that happened in the 1860’s while we were fighting our civil war.

      Given that flooding on this scale has happened only once to my knowledge in modern times in North America it is impossible to estimate what the odds are of it happening again other than to say it will happen again eventually.

      But a better guess is that the state will be ok except in terms of agriculture.So long as our current government lasts in a recognizable form the end result of tens of millions of sweaty thirsty city dwellers wanting the water currently used by a few thousand mostly very rich farmers can only end one way.

      The cities will get the water and the farms will revert to scrubland until the rains return in a decade or a century.

      This will actually be very good for people like me. Veggies don’t grow here in the winter but taking California production off the market will raise prices for fruits and vegetables across the board anyway.

      California may never slide off into the ocean but there may come a day the rest of us wished she had when we have to start paying for her environmental troubles.

      So far as I am concerned I wish we could build a Berlin Wall around my part of the country to keep OUT the ”damyankees” pouring in daily. In recent years we are getting invaded from both directions as tens of thousands of the ones who moved to Florida decide to move halfway back home again to escape Florida summers which are much worse than our southern mountain winters.

      It is virtually impossible for a local kid to buy enough land to farm anymore given the megabucks these invaders have to spend after a lifetime in places where wages are higher and they sell their old house for a half a million tax free.

      If they start pouring in from the west coast too I guess I will have to move to Canada or something lol.

      • Fred Magyar says:


        Seriously speaking there is a significant possibility the drought will break with a repeat of the rare and little known phenomenon known as an atmospheric river.

        Most people have never heard of the west coast floods that happened in the 1860′s while we were fighting our civil war.

        There is no doubt those rivers are up there and they can occasionally cause sudden and catastrophic floods, Europe in 2009, comes to mind but the question is where exactly are those rivers being diverted to? The Jet Stream is a major driving factor and right now there is an almost 4 mile high, 2000 mile long high pressure ridge along the California coast that is diverting precipitation events away up towards Alaska and British Columbia. If you recall there was massive flooding in British Columbia just last year. Coincidence? Probably not. A large part of those floods were caused by precipitation that should have fallen on California. Unfortunately it looks like things are not going to get better anytime soon.

        Climatologist Who Predicted California Drought 10 Years Ago Says It May Soon Be ‘Even More Dire’


        “Back in 2004, Sloan, professor of Earth sciences at UC Santa Cruz, and her graduate student Jacob Sewall published, “Disappearing Arctic sea ice reduces available water in the American west” (subs. req’d). They used powerful computers “to simulate the effects of reduced Arctic sea ice,” and “their most striking finding was a significant reduction in rain and snowfall in the American West.”

        As far as I know Artic sea ice continues to disappear at ever increasing rates!

        Granted we do not have unequivocal ‘PROOF’ that any of this is being caused by anthropogenic induced climate change due to continued burning of fossil fuels. Of course it might be nice to apply the precautionary principal and stop burning them anyway…

        I know, I know, all those poor truck drivers in the Bakken making 100K/yr would suddenly lose their jobs and all the bankers would become deeply depressed, because they even though they care deeply about the little people, they wouldn’t be able to give them any more loans, so they could go out and grow the economy by buying things they didn’t really need. And the last thing we want is a bunch of depressed Bankers walking around /sarc


        • Ilambiquated says:

          Global warming aside, it seems a little over the top to drill a well every 200 yards across half of ND just to get a few sips of oil… would it be more rational just to use a little less?

          • FunnelFan says:

            First of all, oil is freedom.

            Secondly, using just “a little less” would mean that all the glorious benefits of modern civilization given to us by oil would become reserved for the wealthy and powerful.

            I believe you’ll find those of us who inhabit the real world are just a little bit skeptical of your cries of immediate doom.

            • I believe you’ll find those of us who inhabit the real world are just a little bit skeptical of your cries of immediate doom.

              About 99.9 percent of those of us who breathe are skeptical that anything is going to interrupt this wonderful age of exuberance. And they will go on being skeptical right up until the moment of collapse.

            • Ilambiquated says:

              Oil isn’t freedom, oil is Jesus. Of course some theologians argue that Jesus is freedom, so maybe you’re right. My old dad used to say there were two St. Patricks, so you never know.

              This reminds me that time is money and money is power. So time is power by the law of transitivity. But power is work divided by time, so work must be the square root of time.

      • Paulo says:


        You would be a welcome neighbour, Mac. Land is expensive here on Vancouver Island; at least compared to other places. Cheap enough where I live, though.

        Winters grey and wet…the odd snowfall of 6-12 inches, some winters no snow.

        Harvest update:
        Canning salmon this morning. 2nd to last batch. 10 cases so far and 100 fillets in the freezer. Veggies almost all processed although we are still eating fresh tomatos and cukes. The sockeye run was unbelieveable for all users…commercial, native food fish, and sporties. Coho still to come in. I used to order grapes in from California, but the drought nixed that and I may never do so again as I have switched back to fruit wines which I made 30 years ago. Currently 30 us gal of apple/plum, which makes a nice dry white/rose. Blackberry for red. The whole house smells like a winery. Broilers done and frozen and I obtained an elk draw this year…even these Rosevelt cows can top 600 lbs!

        Building a stainless still as we speak.

        My wife and I supply a few families with fish and vegetables as we always produce too much.

        It is a good place to live. By the way, my brother and sister-in-law just renounced their US citizenship. His wife was a US army vet from a military family so this was a big deal for them. I have never considered myself to be an American even though I was born in California in ’55. Lived here all my life. I think it was Fergusson Mo that finally tipped the scales for them but they also mentioned drones and the rigged economy/dysfunctional Govt.

        This post was very interesting for me as I have been agonizing about going solar for almost everything. However, whenever I research solar applications it is always 2-3X the cost than using our grid supplied hydro and using FF for tractor, pumps, etc. I just deepened a pond for irrigation and will stick with a honda irrigation pump due to cost. We have a small FF footprint, living simply, no commute, seldom go to town, and heat with wood. Having said that I have been concerned about how we can continue without FF in the mix? These graphs show that Canadians will be able to. Plus, I doubt that folks will choose to forgo Canadian Select if it means going without. As for water exports to US, this country would self-destruct with protest if that were even considered, much less embarked upon. Las Vegas and Phoenix would have to be abandoned with mass migrations from elsewhere emphasizing the point. We’re still pissed off at the US fucking us on the softwood tariffs, (protectionism for an inefficient industry….pure and simple). No, I believe the water will stay where it is, regardless of drought.


  18. Dennis Coyne says:

    Hi David,

    You said,

    “Only the wells doing 100,000 barrels or more in their first 15 months have a chance to produce 300,000 barrels or more.”

    Enno Peters has again shared his data collected from the NDIC. For the 5500 North Dakota Bakken/Three Forks wells that started producing between Jan 2008 and March 2013 (all wells with 15 months of data or more) the average well produced 90,600 barrels over the first 15 months and the median well produced 81,000 barrels over its first 15 months.

    If we assume a very conservative well profile with the wells declining exponentially at 10% per year after 66 months, the average well produces about 355 kb at 325 months when it reaches 5 b/d at which point it is abandoned. So your numbers are roughly correct, wells are still above breakeven at present price levels if the output is as low as 220 kb.

    • Old farmer mac says:

      What is the energy source going to be when these wells get down to five barrels a day? Locally generated electricity using locally produced gas to fuel the generators? Locally manufactured diesel?

      Grid sourced? It twenty years the grid might actually be extended to the individual wells if they are only a half mile or less apart. We extend the grid to houses in rural areas where the houses are farther than that apart.

      A relatively small line would be enough power pumps but it is obvious the power needed to drill and frack is many time past the practical capacity of a grid running out into rural area where all that power will be needed for only a few weeks at the most at any given spot.

      The net energy gotten from a well that must be more or less continuously pumped that produces only five barrels a day might be so little as to hardly be worth the bother. Natural gas is not going to stay cheap even in North Dakota unless I am badly fooled.

      Environmental regulations will make sure it is collected rather than flared and once collected it can be sold for whatever the market will bear.

      Using it to pump the last few thousand barrels out of an old exhausted well might not be as profitable as just selling it outright.

      • Dennis Coyne says:

        Hi Old Farmer Mac,

        As I said in my comment to watcher below, there are lots of old Bakken wells that are producing with output between 1 and 5 b/d, if real oil prices decrease relative to other operating costs then perhaps this will no longer be the case in the future. I expect that when peak oil hits (within the next 5 years would be my guess) that real oil prices will rise rather than fall, but in the ensuing economic crash oil prices may fall and many wells will be abandoned between 5 and 10 b/d, it depends on oil prices and this is hard to predict.

        • Dennis Coyne says:

          Hi Mac,

          Think about this a little more. The energy source will be the same as when the well produced 50 b/d, not really any reason to change things as flow rate decreases. If the costs are more than the oil can be sold for the well shuts down.

          A Texas oil man who runs a bunch of strippers suggested 5 b/d might be the limit, lots of Bakken wells are currently producing at 5 b/d, perhaps a horizontal well changes things, but I don’t really think so, as the pressure decreases you have to pump up from where the horizontal well turns up to become vertical, there may be some pumping losses along the radius, but if the horizontal section runs slightly downhill so that oil collects at the start of the radius (where the pipe turns from horizontal to vertical) the cost to pump the oil to the surface may be very similar to vertical wells.

          Maybe toolpush or someone in the oil business can correct this if it is wrong.

    • Dennis Coyne says:

      Below is a histogram of 15 month cumulative output from 5286 wells in the North Dakota Bakken/ Three forks which started producing between Jan 2008 and March 2013.

      • Watcher says:

        I’m gonna frown at 5 b/d as shutdown.

        A **LOT** of things have to be going on to keep a well open for bizness.

        You have to fill the on site tank. A truck won’t be by until about 200 barrels. You also have to fill the on site production water tank, which will happen 8ish times faster. Then a truck has to come by for that.

        You also have to bring a freshwater truck in to flush down into the well with that biocide laced water and dissolve the salt encrustation building up in the well. Frequency of that event . . . don’t know. Weekly seems right. If you don’t do it, you don’t get 5 bpd. You don’t get anything.

        $500/day –> $3500/week. Offset those costs. I suspect 5 is too low. Gonna shut down earlier (hmmmm unless plug and abandon expenditures are over budget that month). Shrug. 5 just seems too low with all that operations stuff happening.

        • Dennis Coyne says:

          Hi Watcher,

          The 5 b/d estimate was based on the observations of an oil man from Texas who has much more insight than me.

          In addition if we look at the data collected by Enno Peters for wells that started producing in July 2006 or earlier in the North Dakota Bakken/Three Forks 37.5 % of the producing wells had an average output below 5 b/d on average for the 96 months from July 2006 to June 2014.

          Of the 164 wells that started producing in July 2006 or earlier and were still producing for most of the months from July 2013 to June 2014, 32 % of the wells produced between 1 and 5 b/d over the 12 months before July 2014.
          So the 5 b/d estimate is pretty conservative.

          • Of the 164 wells that started producing in July 2006 or earlier and were still producing for most of the months from July 2013 to June 2014, 32 % of the wells produced between 1 and 5 b/d over the 12 months before July 2014.

            Really? Those 164 wells obviously bear no resemblance to the multistage fracked wells they are drilling today? Therefore they cannot used as any kind of a guide as to what we can expect from today’t wells.

            • Watcher says:

              Yeah, that would be my reply. Too early. Those are not horizontals. They may not have salt water issues.

              The production water and salt encrustation are the determining items, it is said. Texas doesn’t have this problem, it is also said.

              Regardless, one can complain about 5 bpd being too low (That’s 210 gallons/day -> 8.75 gallons/hour -> 0.145 gallons/minute and that’s a trickle (a garden hose is 2-3 gallons/minute) and no question salt will build up, fast) but I really wasn’t going to ask for more than 10. Maybe I should.

              • Watcher says:

                In this context I know I have seen some well IPs that were way under the hyped EOG numbers. The right question would be are there any wells flowing 5 bpd that were drilled post 2011? If they weren’t great wells, they may have degraded down to that level by now.

                The better question would be have a look at wells drilled post 2011 flowing 20 bpd last year. How many have gone off line?

                • Dennis Coyne says:

                  Hi Watcher,

                  All wells since 2011 with 12 months of production data with most recent 12 months of data between 5 b/d and 20 b/d (1.5% of 4100 wells) have not been abandoned. Wells that only produced for 3 months or less were ignored.

                  About 0.5 % of 4100 wells produced less than 0.5 b/d for the last 12 months, most of these wells were producing 10 b/d or less in their first 3 months and then output fell to zero for many months.

                  There is little evidence in the data that wells are shut down when output is 5 b/d or higher in the Bakken.

                  Histogram below is average output for the last 12 months in b/d for wells which started producing between Jan 2011 and July 2013.

                  • Watcher says:

                    >About 0.5 % of 4100 wells produced less than 0.5 b/d for the last 12 months, most of these wells were producing 10 b/d or less in their first 3 months and then output fell to zero for many months.

                    This is 20 wells flowing < 0.5 bpd. What does that mean?

                    Are you saying they got to 0.5 bpd because they fell to zero for many months, and are still at zero? Or did they fall to zero and suddenly start flowing again for an average of 0.5 bpd, but really are flowing presently 50 bpd because they got clogged and then unclogged?

                    Is there some suggestion here that 21 gallons per day (0.5 bpd) over the last . . . week is enough to pay all the bills? More specifically, are these flow rates averaged over some time period or the latest measure?

                    $50 per day can pay all the bills? One of which is royalty to the landowner.

                  • Watcher says:

                    I have information.

                    Plug and Abandonment. Costs vary, average looks like several 10s of thousands of dollars.

                    Texas regs say a well that produces more than 10 barrels/month for 3 consecutive months can be called “active” and regulations do not then require the P&A expenditure.

                    This is 0.3 bpd. A coincidence?

                    The point would be that the wells may be operated below cost. If the trucks and de-salt processes cost more than the oil flowing value, the company may endure that. In fact, text suggests that (again, in Texas, operators have three choices — record > 10 bpmonth, P&A, or request a P&A deadline extension. The last option is usually cheapest, but the Texas people aren’t stupid and they won’t let that go on forever.



                  • Watcher says:

                    oooh more:


                    This NoDak law (proposal) apparently says a well isn’t dead unless it’s been dead for a year (i.e., non paying). Whatever that means. But it seems overall to be an attempt to force P&A funding via a bond arrangement rather than just walking away from an empty hole.

                  • Dennis Coyne says:

                    Most of these 20 wells produced nothing for the last 12 months, in fact most produces for a couple of months, dropping to under 5 b/d by month 3 and to zero by month 6.

                    I created an average profile for 16 of the 20 wells, these were basically not good wells cumulative output from these 16 wells was less than 0.001% of total output from all wells that started producing between Jan 2011 and July 2013 (so they are not really worth concerning ourselves with). Basically very few wells have been abandoned that started producing since Jan 2011.

                  • Dennis Coyne says:

                    vertical axis is b/d and horizontal is month from first output

                  • Watcher says:

                    I’m going to have to look carefully at wording. How can a well be producing 0.5 bpd when it is producing “nothing for the last 12 months”

                    This sounds like what I was wondering, is the quote of 0.5 bpd an average or is it the last measurement.

                    But. . . they were bad wells so maybe it’s not useful to obsess over those 20. Hardly representative of anything.

                    The P&A numbers and regs remain potentially decisive and can be an engine of deception. Wells stay active if declaring it inactive will cost $80,000. You can declare 2 bpd, pay taxes/state royalties, owner royalties and just never pay for any trucks — all to avoid the $80K.

                  • Dennis Coyne says:

                    Hi Watcher,

                    I said,

                    “About 0.5 % of 4100 wells produced less than 0.5 b/d for the last 12 months…”

                    So basically they produced less than 0.5 b/d (note that 0 is less than 0.5) on average from July 2013 to June 2014.

                    On the cost to abandon a well, eventually this cost has to be paid unless the company goes bankrupt.

                    In many cases the stripper wells are sold to Mom and Pop operators who run these wells very efficiently.

                    Note that royalties and taxes are a percentage of oil produced.

                  • Watcher says:

                    I think we’ve lost sight of the forest for the trees.

                    Yes, of course royalties are a % of flow, and if there’s no flow, but one pretends there is flow, you pay a tiny amount — which justifies not declaring 0 ( which starts the P&A regulatory clock).

                    The overall question is whether or not 5 bpd for very long periods of time for large (growing) numbers of wells is a good number for analysis. The operators don’t care what barrels/well numbers get tracked. They just want to avoid the P&A cost, which they might do long enough to unload the well.

                    The result of all this . . . quoting flow that isn’t there.

            • Dennis Coyne says:

              Hi Ron,

              The point is that wells producing 5 b/d and less are still producing. there are very few wells in the Bakken which have been completed recently that have output that low.

              • Watcher says:

                Per above, they don’t have to be producing. They need just be reported as producing, to avoid P&A expense. It will cost royalty and some truck trips, and ongoing loss, but the P&A expense gets deferred.

                Who would complain?

    • FunnelFan says:

      QEP Resources (QEP) is doing 1 million barrel EUR wells in the Bakken now. Look for the other E&Ps to be doing the same these days thanks to Slickwater Fracks and other innovations like the Whiting (WLL) Cemented Liner technology. More and more of this oil is just going to continue coming out of the ground thanks to the profit motive and longevity of the American Free-Enterprise System. I’d just like to wish a Happy Labor Day to all the hard-working American roughnecks, roustabouts, geologists, truck drivers, frackers, etc. humbly bringing us to within sight of Energy Independence!

  19. Anonymous says:

    Yair . . . Sure do like the blue highlight Ron, works a treat.


  20. Bill H. says:

    Mr. Archibald,

    I hope your article is a bit more relaible than your latest effort on Wattsupwiththat, where you state of solar radiation incident at the surface of the oceans:

    “Most of the heat energy of sunlight is absorbed in the first few centimetres of the ocean’s surface.”

    Actually sunlight, which at the Earth’s surface is predominantly in the visible region, penetrates many metres into the ocean. As an experiment to check this could I suggest that you find a bottle or jug – as deep as is available and fill it with water. Now: looking down from the top can you see the bottom of the vessel?
    Yes? You have witnessed the experimental refutation of your claim.

    Your subsequent claims, such as the lack of heat transfer below the first 100 m of the ocean’s surface can be similarly discarded. Ever heard of ENSO, AMO, etc??

    • Fred Magyar says:

      Hey Bill,

      While many of the readers on this site do disagree with David’s views on climate change we have agreed at Ron’s request (in case you missed the memo) not to engage in that debate with him here. We still consider his work and views posted here in this article to be valid.


      • It speaks to his credibility. When someone subtitles his book “Why Life in the 21st will be Nasty, Brutish, and Short”, you have to think his main aim is to be controversial.

        His scholarship is also called into question when he can’t understand the current research on climate science, and actually opposes the consensus with his own wild theories.

        I know his background, so that is why I am hesitant to give him any kind of free pass when it comes to technical analysis. The earth is a system and that system involves the climate and natural resources taken together as a whole.

        btw, I think I did miss the memo, as I search for “memo” on this page and didn’t find anything.

      • Bill H. says:


        Thanks for the information. If Ron feels that he is well qualified to speak on fossil fuel resources then I am happy to trust his judgement. I’m not aware of any memo, however.

        • Watcher says:

          I can go back and make a memo if you guys like.

        • I just mentioned it in the email I send to about 140 people notifying them when I put up a new post.

          I will not judge of who is qualified and who is not qualified to speak on fossil fuel resources. In fact I have some disagreements with just about everyone on the subject. But this is a forum for all who are concerned with Peak Oil and related subjects.

          I just wanted this post to deal primarily with the subject David was posting about, not his opinions on other subjects. However is no harm in bringing up other subjects just a long as such subject is not used as a club to beat one over the head with.

    • Actually I am correct. I said most of the “heat energy” and I was referring to the infrared. I’m glad to see you are keeping up with my stuff at WUWT. Heat can’t travel vertically in the oceans as per the Trenberth requirement. Let’s leave it at that.

      • Aws. says:

        The floor seems to be open then…

        • Ilambiquated says:

          Arguments about global warming always end up either comparing conspiracy theories or using intuition and a bit of data to try to prove a point.

          The second approach looks promising at first glance, but the predictions come from very powerful computers crunching huge data volumes. That doesn’t prove they are right, but pitting your wits against them is like playing chess against Stockfish — it’s a chump’s game.

      • Dennis Coyne says:

        Hi David,

        You have not heard of convective heat transfer? Are we supposed to take you seriously?

        • Read the sentence again Dennis:

          “Most of the heat energy of sunlight is absorbed in the first few centimetres of the ocean’s surface.”

          Now I have no idea whether that sentence is correct or not. But I do know he is talking about what percentage of energy is absorbed in the first few centimeters of the surface of the ocean. Obviously convection will take it lower, waves will mix it and ocean currents will take it elsewhere. But all that happens after it is absorbed.

          Is it hotter or colder the deeper you go in oceans?

          Interesting question- ocean water temperature drops slowly, down to a depth of about 700 feet, but after this point it remains fairly constant for a depth of about another 250 feet in a ‘belt’, within which it gets neither hotter or colder. Below this depth, it continues to get colder, more rapidly than it did before.

          • Archibald said:

            Heat can’t travel vertically in the oceans as per the Trenberth requirement.

            The effective vertical eddy diffusion coefficient in ocean water is about 1 cm^2/sec. This puts it on the same magnitude as the thermal diffusion coefficient of copper.

            Why is it so high? Ron gave a hint — the wave action will quickly push the heat below the surface and then the eddy currents take over.

            Archibald needs to learn some thermal physics. His own theory is built on a set of incorrect assumptions.

          • Dennis Coyne says:

            Hi Ron,

            You are correct. The point is that it makes no difference if the energy is absorbed by the top few centimeters of the ocean because of convection.

            The physics is well understood.

  21. Will 2014 be the year crude oil production peaks?

    Give thought to peak oil idea

    Last week I tried to highlight the prediction of the CEO of a company that has more global oil production data than any other. Dave Demshur of Core Labs (CLB $150) says we are now at the maximum possible oil output of the planet, and it will not get higher — ever. The popular term is “peak oil”, and the concept is politically controversial.

    • Doug Leighton says:

      “we are now at the maximum possible oil output of the planet”

      It doesn’t get much clearer than that. And, these are guys who actually know what they’re talking about, not the arm wavers who so often dominate discussions. The only question is: What is the shape of the decline curve? I’d guess this will be mainly a function of current/future exploration-development commitments. But there’s no real precedent on this one so we’ll mostly just have to wait and see.

    • Doug Leighton says:

      I don’t know if Ebola has pandemic potential but this contagious disease business doesn’t seem to be taken seriously by the general population. At least according to my doctor, widespread international travel pretty much negates traditional quarantine procedures and contagion is an ever present threat to civilization. He, my doctor that is, claims it’s a “when” not an “if” scenario.

      • Jeffrey J. Brown says:

        I agree, and I don’t think sufficient weight is being given to the Canadian experiments with Ebola that showed that it could be spread via airborne transmission, from pigs to primates, but not from primates to primates (presumably because pigs emitted larger aerosol droplets).

        And the CDC director dodged the question when he was asked if Ebola could be spread by airborne means. He replied that a non-symptomatic person could not spread it, but he didn’t directly address the question of whether a symptomatic person could spread it, via airborne means.

        Imagine a scenario where a symptomatic person in the earliest stages of Ebola is walking past you in an airport and coughs, emitting an aerosol spray, and you walk through the aerosol spray. Or, for anyone who has seen the movie “Outbreak,” you may recall the movie theater scene.

        • DaShui says:

          I ordered from amazon an “Acme Flamethrower Kit”, in case I have to go over and sterilize my neighbors.

      • RalphW says:

        It appears that ebola is now on the loose in Port Harcout.


        The original case has been arrested and could be charged with murder after he jumped quarantine in Lagos, travelled to Port Harcourt and infected his doctor there, even as he recovered from the infection.

        It only take one rogue case…

  22. robert wilson says:

    Jean Laherrere was once collecting examples of situations that utilized mathematics in a manner similar to that of the idealized Hubbert Curve. I sent him an e-mail about Farr’s Law of Epidemiology. Alexander Langmuir, the most important epidemiologist in the history of the United States, shared a miscalculation about the AIDS epidemic. He and Bregman were fooled by the unique incubation period of HIV. http://www.rethinkingaids.com/portals/0/TheCD/B/breg.pdf

  23. Jeffrey J. Brown says:

    Preliminary 2013 Depletion Update for Global Net Exports of Oil

    Some definitions:

    Global Net Exports (GNE) = Combined net exports from (2005) Top 33 net oil exporters, total petroleum liquids + other liquids (EIA), which accounted for about 99% of total global net exports of oil in 2005

    CNE = Cumulative Net Exports (for a given time period)

    ECI (Export Capacity Index) Ratio = Ratio of production to consumption

    Six Country Case History

    The Six Country Case History consists of the major net oil exporters (net exports of 100,000 bpd or more) that hit or approached zero net exports from 1980 to 2010, excluding China. China, like the US, became a net importer prior to a production peak, because of a rapid rate of increase in consumption. Combined production from the Six Countries virtually stopped increasing in 1995, showing only a 2% increase from 1995 to 1999.

    The following chart shows the normalized values for production, ECI Ratio, net exports and remaining post-1995 CNE (Cumulative Net Exports) by year (1995 values = 100%).


    Note that even as production increased slightly from 1995 to 1999 (by 2%), net exports fell, because of rising consumption, as illustrated by the decline in the ECI Ratio. And note that even as production increased from 1995 to 1999, remaining post-1995 CNE fell by 54%.

    Estimated Six Country post-1995 CNE were about 9.0 Gb (billion barrels) based on the 1995 to 2002 rate of decline in their ECI ratio. Actual post-1995 CNE were 7.3 Gb.

    The key point is that a declining ECI Ratio corresponded to a rapid rate of depletion in remaining CNE, and even as Six Country production rose from 1995 to 1999, the rate of depletion in remaining post-1995 CNE accelerated, from 15%/year in 1996 to 26%/year in 1999.

    Global Net Exports of oil (GNE)

    GNE, the combined net exports from the top 33 net exporters in 2005, fell from about 46 mbpd (million barrels per day) in 2005 to about 44 mbpd in 2012 (2013 EIA consumption data not yet available, but I estimate that GNE in 2013 fell to around 43 mbpd). Combined production from the top 33 net exporters in 2005 rose slightly from 2005 to 2012, but because consumption increased faster than production, net exports fell, as evidenced by the decline in the ECI Ratio.

    The following chart shows the normalized values for production, ECI Ratio, net exports and estimated remaining post-2005 CNE (Cumulative Net Exports) by year (2005 values = 100%).


    Based on the 2005 to 2012 rate of decline in the Top 33 ECI Ratio, I estimate that remaining post-2005 Global CNE fell by about 21% by the end of 2012. As noted above, this methodology was too optimistic for the Six Country Case History, in regard to estimating post-1995 CNE.

    Preliminary 2013 update

    Based on the preliminary EIA data for 2013, estimated post-2005 Global CNE (Cumulative Net Exports) fell sharply, from 530 Gb to 440 GB, partly because of production disruptions in some exporting countries, e.g. Libya.

    However, as noted above, the preliminary CNE estimate for the Six Country Case History was too optimistic, and supply disruptions may increasingly be more common in the years ahead.

    In any case, based on the 2005 to 2013 data, remaining estimated post-2005 Global CNE fell by 28% from 2005 to 2013, as we burned through about 122 Gb of GNE in 2006 to 2013 inclusive.

    • Doug Leighton says:

      Looks as though you’ll be able to add Mexico to you’re Six Country soon.

      P.S., 122,000,000,000 barrels of oil burned up in a dozen years = insane

      • According to my count, 2006 thru 2013 inclusive = 8 years. That’s only oil that was exported, or about 15.25 billion barrels per year.

        • Jeffrey J. Brown says:

          I had a small math error. The cumulative net exports for the (2005) Top 33 net exporters came to 128 Gb for 2006 to 2013 inclusive, or about 16 Gb/year, versus 16.6 Gb in 2005. Based on the 2005 to 2013 rate of decline in the ECI Ratio, I estimate that we burned through 29% of post-2005 Global CNE in 8 years.

          Note that the estimated rate of depletion in remaining post-2005 Global CNE accelerated from 3.7%/year in 2006 to 5.0%/year in 2013. An accelerating rate of depletion in post-net export peak CNE was what we also observed in the Six Country Case History.

      • Jeffrey J. Brown says:

        By definition, we have depleted the remaining volume of post-2005 Global CNE (Cumulative Net Exports), the only question is, by how much?

        My “Cowboy Integration” approach to estimating post-export peak CNE is to take annual net exports at a net export peak times the number of estimated years to zero net exports, times 0.5 (to get area under a triangle) less net exports at peak.

        I extrapolate the rate of decline in the ECI Ratio (ratio of production to consumption) to estimate when a country or group of countries will approach zero net exports, when the ECI Ratio = 1.0.

        For the Six Country Case History, estimated post-1995 CNE were 9.0 Gb, based on the 1995 to 2002 rate of decline in their ECI Ratio (net export peak + 7 years).

        Estimated Six Country post-1995 CNE were 7.5 Gb, based on the 1995 to 2003 rate of decline in the ECI Ratio (net export peak + 8 years).

        Actual Six Country post-1995 CNE turned out to be 7.3 Gb.

    • Watcher says:

      Have seen maps of that sort before. Its age does matter.

      Things don’t look good for a miracle in Mexico.

  24. Chris says:

    Following last sanctions, Russia has decided to sell oil in Rubles or Yuan…


    • Doug Leighton says:


      Following last sanctions, Russia has decided to sell oil in Rubles or Yuan. Perhaps it would be more accurate to say: “…Russia has decided to sell SOME oil in Rubles…..”

      Owing to the relatively small scale of this transaction its not an earth shattering announcement. That said it is a very interesting bit of news. Certainly international oil transactions are gradually moving away from dollars but GRADUALLY is the key word here.

      • Chris says:

        Dear Doug,

        Your are totally right, it is only some oil. It is probably also a message for US: “we can increase the volume of oil not sold in dollar”.

        I am seeing also this decision in the frame of the gradual replacement of the dollar for direct transactions between states. The increasing number of swap agreements between BRICS and the rest of the world shows that one day the dollar will return to what it should only be: the currency of the USA.

        This could happen gradually or quickly. I am curious to know what will be the alternative of BRICS to the FMI. It should start in 2015 (if this really happen).

        All the best,

    • Ilambiquated says:

      The Russian government seems to believe it can wage a war of economic attrition against the US and the EU at the same time. I’d say they are a bit delusional.

      • Old farmer mac says:

        I would not say the Russians are delusional in terms of playing such games. They can survive without importing most of the stuff they pay for with oil revenues and what they must have they can now get from China and an odd assortment of other countries such as India.

        The EU and the US not to mention the rest of the developed world would be plunged into a depression so deep that it would be a hundred times worse than the thirties if the Russians stop selling oil.

        The odds are very high that they will continue to export both oil and gas in substantial quantities but they are going to be playing hardball and winning from here on out when it comes to prices and terms of delivery.

        We don’t think of Russia as a superpower any more but that does not change the fact that in terms of energy and military power combined Russia is still number two in the world.

        I am not able to follow Russian politics closely enough to judge the mood of the country but we should not forget that Hitler was able to get Germany behind him for the most part.

        Nationalism certainly seems to be alive and well- better than well- in Russia today. Putin and company appear to be determined to restore Russia’s status as a superpower.If the cards fall right for the leadership the country will get behind them and they actually could cut off energy exports.This would mean the new rich and new middle class in Russia would have to go back to a soviet era lifestyle more or less.


        It would also mean that the rest of us would be up sxxt creek without a paddle.Thirty percent unemployment across the board in western countries within a matter of weeks or months would be a good guess just for starters. Two hundred fifty dollar oil and the end of the stock market and the housing market and pension payouts.For starters.

        If they do cut off exports there is not a damned thing anybody can do about it except refuse to export consumer goods to Russia.Nobody is going to mess with a nuclear armed Russia. A country that can build ICBM’s and nuclear submarines can build enough oil rigs and other heavy machinery to get by without importing anything essential.

        War is usually worse than an economic lose lose proposition by far but war can also be more like chess and checkers than business. You can sacrifice every checker except your last one.So long as you have just one left when your opponent has none at all you win.

        I don’t think the Russians want a war with the West but I do think they are in the same position as Hitler in the early stages of WWII. He expected to get away with overrunning a few smaller and weaker nearby countries without having to fight anybody able to put up a truly serious defense.

        He would have won had the US not gotten involved in supplying the UK and Russia with food and war materials and later on troops on the ground.

        War can be a very profitable enterprise for winners.

        • PeterEV says:

          Many years ago we talked with a fellow from South Africa during the time of an economic blockage and asked him how the blockage was affecting his country. He said it hurt some but a lot of things were making it through. This peaked our interest. He said, the products don’t come directly to them. They go through an intermediary country. He gave us a couple of examples.

          Fast forward to Russia today. Just because Russia is banning fruit from Poland, it does not mean that they are without fruit despite the media pictures of empty fruit shelves at one grocery store. If Russians have a hankering for fruit, the Poles could sell to China and China could transship to Russia. China takes a cut.

        • Doug Leighton says:


          I agree with your analysis. We in the West tend to think we have a monopoly on brains but I’ve worked with a lot of Chinese and Russians over the years and have come to respect both in terms of technical ability (I NOT talking politics) Personally I’d be be reluctant to call anyone delusional though the adjective is apt in many instances. For example I think the West was delusional marching into Afghanistan — as were the Russians.

          • Doug Leighton says:


            Maybe I should have said: I agree with ALMOST all of your conclusions. [yellow face]

            • Old farmer mac says:

              What ever commentary I post is worth at least as much as I get paid for it.;-)

              I am not a real historian or political scientist and never even got to see the Asian jungles courtesy of Uncle Sam because I drew a high number in the draft lottery.

              But I do sit here in my old recliner and read good books while most people are watching sitcoms and cop shows and ball games.

              The big picture on the grandest possible scale is the thing that interests me the most and one thing that I learned a long long time ago is that experts are quite often wrong.

              WHOLE PROFESSIONS are often wrong.You don’t have to be much smarter than the average bear to understand that economists have mistaken a long winning streak for invincibility if you have taken a couple of courses in the basic sciences and actually learned something.

              Unfortunately business majors and politicians in general and lawyers in particular seldom know apple butter from doo doo when it comes to the hard sciences.

              History doesn’t precisely repeat but it certainly rhymes amazingly well.

              Power politics have been with us as far back as recorded history records for sure and probably as far back as the day one alpha male protohuman got his butt kicked by a couple of betas who ganged up on him. Longer than that maybe.

              There is nothing new under the sun when it comes to the behavior of naked apes with one possible exception that comes to mind immediately.

              We tend to stop having offspring when conditions for doing so are super optimized.A modern woman in a rich society with a good job can make enough to feed and shelter half a dozen kids but she ( Thank Sky Daddy!!) generally chooses to have only one or two.

              I just point out whatever seems obvious to me as a somewhat cynical, reasonably well informed observer of the world political scheme.I try to keep it as simple as I can while taking into account the known facts.

              The Russians could have simply wiped out the Afghans had they chosen to do so. They just weren’t mean enough to do shoot everybody in sight on sight and let God sort ’em out.

              Nobody can whip the Afghans other than by total war such as was once practiced by characters along the lines of Genghis Khan.

              Stalin knew the solution to such problems.

              ” You got a man you got a problem. No man , no problem.”

              We Yankees could exterminate the entire population of Afghanistan in a year or two simply by spraying weed killer with a few dozen b52 bombers in stead of dropping bombs.

              No food, no problem with Afghan warriors.

              We yankees may never win another war on the ground given our modern delicate sensibilities and television.

              I suppose the Russians lost on the ground in Afghanistan because they were not willing to play the ultimate hardball game on the world stage.

              People who cannot be whipped, people who do not know the meaning of surrender, can only be beaten by killing them all.

              ”When you are wounded and left on the plains,

              And the women are coming to cut up your remains,

              Just roll to your rifle and blow out your brains,

              And die like a man

              It Afghanistan.

              That’s Kipling from memory,close enough for guv’mint work.

              The Afghans may be the last people in the world who just can’t be whipped.

              Even the very tag end of the independent Native American population eventually surrendered in most cases rather than be totally wiped out.

              Maybe the Afghans will too if somebody eventually grinds them down to a few starving bands with nowhere to go to lick their wounds and raise another generation of young men.

        • Ilambiquated says:

          This has nothing to do with Hitler. why are Americans so in love with Hitler?

          • SRSrocco says:


            For some strange reason… which has to do with the public actually believing the propaganda put out by the Western Press, that the supposed BULLY PUTIN and those lousy Russians are the ones who are trying to start WW3.

            I have even received comments on my site from individuals who believe the GREAT RED SCARE, the CZAR PUTIN and those pesky CHINESE are now the United States biggest threat. Anyone who has fallen for that line of GARBAGE fails to realize the biggest threat are the NITWITS in the Obama Administration.

            The United States has far more to lose if the U.S. Dollar is no longer the world’s reserve currency than Russia with continued sanctions. Germany is working with Russia to help legitimize its RULE OF LAW so that foreign countries can trust their legal-business system there. In the past, if a company started a mine for example, there was a good chance that the state or regional govt could just take it over. This will take some time, but the Russian Govt want to open up the country for LEGITIMATE BUSINESS and not the WEST supported LOOTING by Oligarchs.

            At some point in time, Germany will leave NATO and the EU and join up with Russia and the other BRICS in continued trade and businesses development. It makes the most sense as nothing the EU, the U.K. or any of the USA puppet states are doing is positive for economic relations. I am surprised at the lack of PROPER INTELLIGENCE from those who should know better about the real situation in the Ukraine.

            The future of the BRICS countries which will include Germany is very bright as they have the majority of the world’s population. Soon, the WEST including the U.K. and United States will no longer be able to LEECH AND SUCK of the TEAT of the rest of the world.

            At some point in time, the U.S. will be just like any other THIRD WORLD TWO-BIT BANANA REPUBLIC.

            Have a nice day and when you pass GO… make sure you collect your $200.


            • Doug Leighton says:

              Hello Steve,

              As I said to Mac up above: I agree with ALMOST all of your conclusions. Or maybe I’m just not reading carefully enough. [yellow face]

            • Steve, Russia, or Putin, does not want to start WWIII, Putin just want’s Russia to have its empire back. Putin would just love to get it back without ever firing a single shot. But he will be willing to fire a few shots if necessary. War costs a lot of money, money that Russia does not have.

              Putin also realizes he cannot get the empire back all at once. That would start a war and a war he does not want. So he hopes to get it back one small piece at a time. This will only lead to small skirmishes which will not be too expensive and will enable him to avoid a large and expensive war.

              No, no, no, Germany will never join up with Russia. Germany has no desire help Russia build a new Soviet Empire and would definitely not want to be part of any such empire. Part of Germany already tried that once and they did not like it.

              Soon, the WEST including the U.K. and United States will no longer be able to LEECH AND SUCK of the TEAT of the rest of the world.

              WTF? China, India, Bangladesh and a dozen other countries get far more from the US than the US gets from them. Just look at our balance of trade with China and tell me who is getting the better end of that deal. We are not sucking from any teat, it is out teat that is being sucked.

              I just do not understand your animosity toward the USA. I have a lot of problems with the US but I blame it on those goddamn Republicans and Tea Party nitwits, not the entire USA.

              • Watcher says:

                Russia drains $500B from its enemies every year.

                There doesn’t have to be empire ambition. There doesn’t have to be any personalities in play.

                They drain $500B from their enemies every year.

                And I do suspect they won’t let that money be printed. They’ll adjust the price if Draghi tries it. What other producer is going to jump up and offer to supply their customers? All producers already have customers of their own.

                When you are bleeding your enemies yearly, why take risks? Answer: they aren’t taking risks. NATO and the EU are hyping the situation . . . because maybe they know they are bleeding and want to change the dynamic.

                • There doesn’t have to be empire ambition.

                  Oh. I guess you haven’t heard about Crimea… or the Ukraine.

                  • SRSrocco says:


                    I guess you didn’t hear that 93% of those who voted in Crimea wanted to be apart if Russia. I gather they realized it was a better fit than being apart of that abortion called the EU.


                  • Well I don’t think they had that vote in the Ukraine.

                    Is every nation in the EU an abortion? Or just some of them? If so then which ones? And why?

                    What I am trying to figure out is which European nations do you hate just as much as the USA, and why?

                  • SRSrocco says:


                    You are making incorrect assumptions about my views. I can’t reply now as I am typing on this stupid GOD DAMN PHONE. I will clear things up later.


                  • Watcher says:

                    Ukraine doesn’t matter. It doesn’t affect the $500B bleeding.

                    The Administration has said repeatedly there will be no US military response to Ukraine. With that off the table, the bleeding will continue, regardless of who is running Russia.

                    Remember 12 months ago when Putin was a good guy? In 12 months he’s painted evil, and it doesn’t matter. It didn’t matter what he was 12 months ago and it doesn’t matter now.

                    Europe can’t survive without Russian gas and oil. That is not going to improve. It’s going to worsen. They will be more and more dependent, and soon enough exchanging barrels for paper won’t make any sense to Russia. They’ll want policy input, too.

                    That’s what victory means.

                  • Europe can’t survive without Russian gas and oil.

                    Russia is every bit as dependent on the revenue from gas and oil as Europe is dependent on the gas and oil.

                    and soon enough exchanging barrels for paper won’t make any sense to Russia.

                    Naw, you are way off there. It simply doesn’t matter who Russia sells their oil and gas to, they will have to receive paper money in exchange. All currencies are fiat currencies and when fiat currencies fail to have value then the economies of the world will have collapsed.

                    The economies of the world all run on fiat money and that includes Russia. When paper money fails economies will simply collapse. Then nothing else matters because chaos will reign.

                  • Dave Ranning says:

                    Kiev was the origin of the Rurik Dynasty, the origin of the Russian State, when Moscow was still a hunting camp.
                    Russia has almost always had the Ukraine as part of its territory, and always part of Russian history.

                    Some historical literacy would be plus when making assumptions.

                  • Dave Ranning says:

                    The Rurik dynasty or Rurikids (Russian: Рю́риковичи, Ukrainian: Рю́риковичі, Belarusian: Ру́рыковичи) was a dynasty founded by the Varangian[1] prince Rurik, who established himself in Novgorod around the year 862 AD.[2] The Rurikids were the ruling dynasty of Kievan Rus’ (after 862), the successor principalities of Galicia-Volhynia (after 1199), Chernigov, Vladimir-Suzdal, and the Grand Duchy of Moscow, and the founders of the Tsardom of Russia. They ruled until 1598 and the Time of Troubles, following which they were succeeded by the Romanovs. They are one of Europe’s oldest royal houses, with numerous existing cadet branches.

                  • Watcher says:

                    Money makes the world go round? Used to.

                    That was before QE pulled the curtain back.

                    It’s a whimsical entity.

                    Mario Draghi is being pressured to do QE. If he does QE, they buy Russian oil and gas for pieces of paper he created by decree.

                    Pre QE, it could work, Ron. The deterrent against whimsy was foreign exchange. If you printed big totals, your currency would fall against others and if you were an oil importer, you paid a LOT more for it.

                    But QE was global. Not just the US. So the US dollar could not fall against other currencies because all the central banks had their conference call to orchestrate it. It will be interesting to see if Draghi’s ECB does do it, not so much to see what they do, but to see what all the other CBs do.

                    If you were Russia, would you stand for that?

                  • Some historical literacy would be plus when making assumptions.

                    Dave, don’t be a smart ass. It doesn’t matter who had it first. The same argument was used to justify the crusades, “We had it first”.

                  • Inglorious says:

                    Ukraine did however fall within the Russia sphere of control within recent times. That’s the gist of things, Europe took advantage of Russia’s weakness to start encroaching on what Russia perceived as their zone of control. Russia has started to push back.

                    History is very much rooted in the present.

                  • Dave Ranning says:

                    Ukraine did however fall within the Russia sphere of control within recent times.

                    The Russian State was founded in Kiev about a thousand years ago.
                    The Rurikids were the ruling dynasty of Kievan Rus’ (after 862).
                    It has been part of Russian influence for a majority of those 100 years.

              • SRSrocco says:


                I have no animosity whosoever towards the entire USA, its citizens, any European countries or their citizens. That is a FALSE assumption. I can’t speak for any European citizens, but how could I blame Americans who are either TOO BUSY (scratching out a living), TOO IGNORANT (don’t have the details from both sides of the story) TOO STUPID (don’t have the mental capacity) or just DON’T GIVE A DAMN about knowing the (geo)political or economic policy that controls them.

                I place a great deal of the blame at the STENCH, BULL SHIT & GARBAGE coming from the bowels of Wall Street, the Federal Reserve & U.S. Govt. Of course this does not include most individuals who are just bureaucrats doing their job.

                We must remember, most of these folks fall into the category that their PAYCHECK forces them not to know the truth.

                While I agree the Russian & Chinese Govt’s are no SAINTS…. they are far less guilty in destabilizing the world than the criminals and their corporate masters running the show in the U.S. Govt.

                My contempt is at the very individuals and groups that now control what is known as the U.S. Fascist Business Model.

                So, as you can see, I put the blame at the LOUSY TWO-FACED POLITICANS who are running the show, and not at the people or the country itself.

                Lastly, I see you have no problem pointing the finger at the Republicans and so-called T-Party folks. What about THEM THAR D-E-M-O-C-R-A-T-S? Do you think they are less inept, stupid or selfish than their Republican counterparts?


                • Steve, you speak like a man filled with rage. You seem so pissed off at the world that you can hardly stand it.

                  Actually I am not all that pissed off at the Republicans or even the Tea Party. These guys are only doing what they think is right. They have just been brainwashed by people like Ayn Rand and others. It is not really their fault. No man, or woman, is truly responsible for his genes or environment. He is just a victim.

                  Yes I am often frustrated by human behavior but it never fills me with rage because I understand the true roots of such behavior.

                  Steve, the world is just the way it is. It is not anyone’s fault. Human frailty and innumerable events made the the world the way it is. Raging because you think it should be better will solve nothing.

                  Our weak and malleable minds was infected with stupid religious and political propaganda while were too young to know any better. And now we are idealist believing that the path we are taking is the one true path to salvation and happiness. And rage fills us because others cannot see what we believe we see.

                  • SRSrocco says:


                    Totally untrue. Not pissed off at the world. That’s another lousy assumption by you. However, you are free to believe it.

                    I just speak the truth as I see it and add a bit of CAPS for fun.


                  • I am not assuming anything, only telling you what your words convey. Your words reveal total rage:
                    Americans take advantage of it to ” LEACH AND SUCK” the teat of the rest of the world ….

                    I place a great deal of the blame at the STENCH, BULL SHIT & GARBAGE coming from the bowels of Wall Street, the Federal Reserve & U.S. Govt….

                    I put the blame at the LOUSY TWO-FACED POLITICANS…

                    And a lot more than just the ones I quoted. Steve, not only do your words reveal a rage but it appears that you are deliberately trying to accent your rage, to make sure that everyone clearly understands that you are boiling mad at all those who are responsible for the damn mess we find ourselves in.

                    But then that’s just a lousy assumption of mine. Now why would I assume exactly that which you seem to obviously to want to convey?

                  • SRSrocco says:


                    Again, I am not filled with rage. I have always used CAPS to highlight words in my articles. Some have responded in the past by saying I am yelling. I am not.

                    Actually, I am laughing quite a bit when I write.

                    Ron…. I see the world different than most, and I assume that would include you. As I stated before, I see a different world due to what I research and read. Your response of my views is typical coming from someone who hasn’t gone down the RABBIT HOLE as I see it.

                    I get it. I have several friends that reacted quite the same way. However, one has totally changed his views and opinions in the past 5 years… quite similar to mine.

                    And it wasn’t my doing as he did his own research. He actually can’t stand watching MSM anymore and gets a lot of his news from RT – U.S. based Russian Television.

                    The world sees the United States much differently than what Americans are dished out 24/7 from the corporate controlled media.

                    I know this is true Ron because ELMER FUDD told me so.


                  • And it wasn’t my doing as he did his own research. He actually can’t stand watching MSM anymore and gets a lot of his news from RT – U.S. based Russian Television.

                    Yes, I understand where you are coming from. I know a guy in Russia who feels the same way about Russia as you and your friend feel about the USA. He doesn’t watch all that Russian propaganda on Russian television, he gets all his information from UST, Russian based US Television. 😮

                    That little yellow face is a symbol for “rolling in the floor laughing my ass off” thinking: Yeah, sure, such a thing would be possible in Russia. Wouldn’t it?

                  • SRSrocco says:


                    There’s a difference. When the U.S. Dollar finally goes the way of the Dinosaur, along with the biggest Asset Bubble in history, the U.S. Treasury Bubble….

                    ….. you won’t be rolling on the floor laughing your ass off. 🙂


            • Ilambiquated says:

              I’m guessing SRS as in Socialist Revolutionary Party and rocco as in Россия

              Or am I just paranoid?

          • Old farmer mac says:

            We are infatuated with the biggest and best and the biggest and baddest.
            (Smiley face here if I knew how to insert one without a lot of bother.)

            Hitler was right on up there with the biggest and baddest among the villains well known to people these days.

            If I used some other bad character out of older history the odds are pretty good two thirds of the population would not know who he was, what he did, or where, or when, or to who.

            It is impossible to talk constructively about modern day Eurasia without bringing Hitler and WWII into the historical picture.

            Hitler worked very hard to win his spot and reputation as one of the most evil men in history but he DID accomplish some remarkable things nevertheless.

            That these things were evil does not in any way reduce their importance in understanding history and society.

            One thing he did was to turn a well educated and mostly law abiding society into a vicious police state in pretty short order and get the large majority of the people to back his wars.

            Another thing is that he took a country pretty much dead busted financially and on top of that short of of some critical resources and built up the most powerful war machine that had ever existed in less than a decade.

            Economists love to tell us such things are impossible, that the capital resources in terms of money and credit just don’t exist to get them done.

            That it HAS been done is critical to understanding what CAN happen and what may actually happen in the future.

            The US is in pretty sorry shape financially but when we finally wake up to peak oil in particular and peak resources in general we may still be in better shape than Germany was in the early thirties.

            I am thus encouraged to believe that this country could actually make the switch successfully to a sustainable steady state economy if we were to go at the job on a wartime footing with the support of the people and just stayed with it.

            I know our resident hard core doomers are convinced it can’t be done and I readily admit I am not sure it can be or will be .

            We will find out when the time comes.

            • robert wilson says:

              My interest in the Germany of the 1930’s and early 40’s was not so much caring about Hitler or the Nazis but wondering how a debtor country could pay for such a massive military operation. I was impressed with the quality of the ensuing discussion as well as the post above.

  25. Old farmer mac says:

    ”those lousy Russians are the ones who are trying to start WW3.”

    In my estimation not very many people of any sort barring NITWITS think the Russians are trying to start WWIII.

    Some people who understand power politics on the grand scale do think the Russians are willing to RISK starting WWIII in order to get what they want.

    I routinely risk getting killed in an auto accident in order to fetch home a few groceries.I risk getting killed falling off the ladder picking apples on a routine basis. I even still do dangerous things just for the fun of it sometimes such as riding a motorcycle.I have personal knowledge of people dieing all three ways a couple of dozen or more in car crashes, one falling out of an apple tree , and a couple in motorcycle accidents.

    ”those pesky CHINESE are now the United States biggest threat”

    History isn’t over.

    China is a rising power and if she doesn’t collapse first she may well dominate the world within another fifty years or less.

    Whether one considers a China more powerful than the US a THREAT to the US depends on one’s personal understanding of power politics and human nature.

    Evidently you believe that the Chinese are NICE PEOPLE who will never take advantage of that potential future power the way we low life Americans take advantage of it to ” LEACH AND SUCK” the teat of the rest of the world .

    I submit that the Chinese are not any nicer than any other band of naked apes and will do pretty much what they can easily get away with just as other powerful countries have always done and continue to do today to a substantial extent.

    It may be a bit naive of ME to say so but I will nevertheless go so far as to say that the Uncle Sam is a LOT nicer than he HAS TO BE.

    Now as to the nitwits in Washington in general and the Obama administration in particular I find it hard to defend the status quo and will leave it at that.I will go so far as to say that a Romney administration in my opinion would not likely be doing noticeably better had that particular nitwit won the election.

    ”The United States has far more to lose if the U.S. Dollar is no longer the world’s reserve currency than Russia with continued sanctions”

    For once I agree with you without reservation!!!!!

    ” Germany is working with Russia to help legitimize its RULE OF LAW”.

    I am sure that the Germans have better intentions THIS time than the last time they seriously involved themselves in Russian affairs but I am not so sure the Russian government wants to open the country up for so called legitimate business or that Putin and company are very interested in the rule of law.

    I AM sure that the Russians have not forgotten the Siege of Stalingrad.

    ”The future of the BRICS countries which will include Germany is very bright as they have the majority of the world’s population”

    All I can say in this respect and to the entire paragraph in which it appears is that I wouldn’t even know how to get started making the opposition case without writing a book.

    Something involving resource depletion and overpopulation problems must have rubbed off on you since you are a regular here.

    ”At some point in time, the U.S. will be just like any other THIRD WORLD TWO-BIT BANANA REPUBLIC.”

    One thing about history is that it does rhyme and there is no reason to think the US is going to last forever.

    But the odds are pretty damned good that unless we all die soon in a really bad ecologically based crash or in an energy and resource driven WWIII that old Uncle Sam is going to be a guy to be reckoned with for a good while yet.

    I personally can’t see any reason ( other than overshoot!) why there may not be a Pax Americas a century from now with coal burning or wind and sun powered electric locomotives hauling bananas and mangoes from Brazil to Alaska hammer down.They can double stack or mix the cars and people can travel on trains again. A hundred mph refrigerated express with an equal number of passenger coaches could make it from the Amazon to Fairbanks with plenty of time to spare hauling produce and vacationers with four weeks off instead of two.Half the fun of a European vacation used to be the crossing on a nice ship.

    • Doug Leighton says:

      Hi Mac,

      Respecting China I have some views having worked there for about seven years. First I’ll say that I don’t speak Chinese (I read at about the grade 9 or 10 level which helps a bit). Furthermore, I’m not sure you can really understand a country without being bi-cultural and fluent in their language. Having said that here are a few comments that are more-or-less valid in my opinion based on my experiences there.

      1) The Chinese have always considered themselves the core people in the world (at least for about the last 18 centuries). They still do.

      2) Because China is an ascending world power there is a huge amount of optimism: Its almost contagious. This is a feeling I grew up with in North America and Europe had it too for awhile. This emotion affects their current behavior a lot (and this is disappearing in our culture).

      3) Individually most Chinese are pushy and aggressive, not so much collectively. China’s behavior in Asia is pretty disgusting but, in my opinion, that’s as far as it goes — Asia.

      4) Chinese plan a long long way ahead. This is mostly foreign thinking to us (the next paycheck generation. A lot of China can be understood based on their view about what their needs will be several generations hence. I have witnessed this on numerous occasions even in corporate Think Tank meetings. Amazing!

      I could go on and on but a hot dinner is sitting on the table and my manhood still has some value.


      • Doug Leighton says:

        I’ll just add one point and call it a night.

        5) The biggest problem facing China, in the short-medium term, in my opinion, is corruption. It’s everywhere, 24 hrs/day, wherever you go. In my time there I never experienced a situation where little brown envelopes weren’t being surreptitiously handed out or received. And I never really figured out how the system works because its not discussed — just understood. If you’re wondering, when asked I always said: “I’m just an engineer, I don’t deal with money, talk to my boss”. Which REALLY pissed off my boss of course.

    • SRSrocco says:


      I don’t have the wonderful GIFT of GAB as you do in your LONG, ELOQUENT responses. I like to keep it SHORT & SWEET.

      Yeah… I get it. I realize the mess Peak Oil, Resource Scarcity, Population and Climate Change will do to this wonderful world of ours. I actually believe that we will witness a RAPID NON-LINEAR GLOBAL WARMING EVENT that will make life as we know it impossible to sustain in say 30-50 years.

      That being said, when I state, “The BRICS have a bright future.” I mean it in their view… not mine. Of course, these political and economic alliances will continue for the interim, but MOTHER NATURE and UNCLE CLIMATE CHANGE will make a mess of the best laid plans of mice and men.

      The trends and items I mentioned in my comment are as I see it from the data I read and research. You are of course free to disagree. I am just human and could be wrong about all items stated. So, let’s just wait around a little while and see who GOTS it more WRONGS and or who was MOES right?

      Sound okay with you?


    • Fred Magyar says:

      Now as to the nitwits in Washington in general and the Obama administration in particular I find it hard to defend the status quo and will leave it at that.I will go so far as to say that a Romney administration in my opinion would not likely be doing noticeably better had that particular nitwit won the election.

      Am I the only one who can’t tell the difference between Depublicans and Remocrats?
      It would be nice to see a half dozen or so real political parties someday… I can dream, can’t I?

      In the meantime I’m in the process of starting a business with an online B2B portal between Brazil and the US. Be glad to send a few bushels of mangoes your way in exchange for some of your fine apples. I can even add a few bottles of high proof Cachaça slowly aged in oak barrels. If need be we can always calculate a fair exchange rate in Bitcoins, Reals, Rubles, Yuan or even Dollars! Though at the end of the day, if you get your mangoes and I get my apples do we really care if the bankers don’t get squat? >;-)

  26. Old farmer mac says:

    Hi Doug,

    I have never been ANYWHERE but your impressions mesh very well with what I have read over the years about Chinese culture.

    The facts that their leadership is mostly scientifically literate and that they are long term thinkers taken together are sufficient evidence in my opinion to conclude that China has the potential to rule the world.

    I hope you are right about their being satisfied with dominating their part of the world.

  27. Old farmer mac says:
  28. Watcher says:


    Interesting stuff. The source of Russia’s distrust and anger. Recently declassified docs indicate they were given assurances of no NATO expansion eastward. Next thing they knew, Czechs, Poland etc became NATO members.

    The West position is agreements are not supposed to be forever and nothing was signed. The article lays it out. They have a point.

    • Dave Ranning says:

      The Ukraine will not be joining NATO, as Russia has called the bluff.
      Merkel must be more than a little annoyed at the actions of the US.
      We shall see—

      Orlov has this analysis:

      • SRSrocco says:


        Agreed. The reason past President Viktor Yanukovych of Ukraine was taken out was that he didn’t agree with the IMF’s plan to bail them out as well as joining the EU. The IMF was going to give $17 billion to help bail out Ukraine of the ill gotten problems, but the payback of the loan was basically to loot the resources of the country by the WEST.

        This is the typical plan of the IMF and Western supported countries. The IMF doesn’t even have the $17 billion. They would have just printed the money.

        Without Yanukovych’s approval of this IMF assistance, it was just a matter of time before he was overthrown.

        Just another Western backed IMF Coup… in a line of dozens of coups in the past.


      • Old farmer mac says:

        This conflict is the hardest one I can remember in terms of deciding what is happening and who is telling the truth.

        But I am fairly sure everybody is lying to some extent and suppressing or minimizing the truth in other respects.

        I am not a Russian fan but some of the Russian claims have the sound to truth to them for reasons that may not be clear to westerners. One of these truths is that there are a LOT of ethnic Russians living it the disputed territory .

        Another one is that a lot of those Russians may have been settled there purposely by the old Soviet government which was notorious for doing that sort of thing in order to more easily control the old soviet empire.

        I do not doubt that most of the Russian people want to be a part of a peaceful and prosperous world ruled by law but I have my doubts as to whether the current Russian leadership shares this goal.

        It may be a bit cynical of me but the view from this old easy chair is that Putin and company are more interested in powerful prosperous Russia under their personal control.

  29. Old farmer mac says:

    I am much more of an optimist concerning pure electric and plug in hybrid electric vehicles than most people in forums such as this one but the logic behind my argument seems pretty much iron clad to me.

    Nearly all of us here are taking peak oil as a granted if not right now at least within the easily foreseeable future.

    And while some of us believe that higher prices will crush demand and cripple the world economy to such an extent that oil prices in constant money cannot go up much beyond today’s hundred bucks a barrel give or take ten or so I think that the economy can and will adjust to higher prices so long as the price increases are gradual, meaning no more than a few percent a year.

    I don’ t have any problem envisioning oil at a hundred fifty bucks a barrel in ten years.This price will mean real hardship for a lot of people in a lot of places of course but I don’t think it will in and of itself bring on an economic crash.

    In the meantime the cost of high capacity batteries is rising even as the price of them is falling.

    IF OLD MAN BUSINESS AS USUAL manages to hobble along without having a stroke or heart attack for another decade or two I think we really will have a huge huge photovoltaic industry in this country and in any country with a good solar resource.

    I don’t have a very high opinion of this Kurzwiel guy ( and have probably spelled his name wrong to boot) but Elon Musk is a visionary with a simply astounding record of turning visions into realities and when it comes to Musk I am reminded of what Yogi had to say about Mickey Mantle waving his bat at the outfield fences. ” It ain’t bragging if you can do it.”

    In this link the author says that Musk is on record as saying we will be getting fifty percent of our electricity from solar in a couple of decades.


    This to me is a breathtaking claim coming even from Elon Musk but I am willing to go with what must be his reasoning.

    Batteries are going to be much cheaper pretty soon. Oil is going to be much more expensive pretty soon. Solar power is going to be cheaper than coal and gas generated power within a decade or so.

    Personally I hope the cornucopians are right about there being plenty of cheap gas for a long time yet but I strongly suspect they are wrong. We will be needing all the gas we can get for other purposes anyway such as heating and manufacturing nitrate fertilizers and other essential chemicals.

    Now as to solar generation growing this fast I hardly think such growth is likely but maybe it is not impossible.

    I do believe the greatest domestic growth market for electricity will be to charge up cars and light trucks (but not tractors! ) and that when gasoline gets to be REALLY expensive people will gladly buy battery electric vehicles and plug in hybrid vehicles in substantial numbers as they become more familiar with them.

    We can learn to live with short range cars that need hours to recharge a lot easier than we can give up our sunk investment in suburbia.

    Those of us who can afford more than one car can still have a conventional car or a plug in hybrid as well as a pure electric.

    The rest of us will simply adapt to a new reality. The car will go only so far before you park it to be recharged. Reality.

    I could never have imagined living in an apartment with a designated parking spot for just one car when I was kid living on the farm with tons of room to play softball or pursue any other imaginable outdoor activity.A couple of decades later I was living on the south west corner of Monument Avenue and ”The Boulevard” in Richmond and could hit Stonewall Jackson’s statue from the balcony with a paper airplane if the breeze was right..

    I adapted and hardly even noticed it at the time.

    • Jeffrey J. Brown says:

      Based on the linked article, it appears that we are headed toward record global auto sales in 2014:


      Of course, the critical question is the percentage of global new vehicle sales in developing countries (with presumably low scrappage rates) versus developed countries (with high scrappage rates).

      There have definitely been some signs of flat oil demand in China, but one variable that is hard to quantify is an increase or slowdown in the rate that they are putting oil into their strategic reserve. Note that the article indicates that China’s new vehicle sales are up about 15% in 2014, over 2013.

      In any case, the preliminary 2013 EIA data (which has some revisions to prior years) indicates that what I define as Available Net Exports, or Global Net Exports of oil (GNE) less Chindia’s Net Imports (CNI), fell from 41 mbpd in 2005 to 34 mbpd in 2013. In other words, the volume of GNE available to about 155 net importing countries fell by 7 mbpd from 2005 to 2013.

      Incidentally, a recent article indicated that 0.5% of new global vehicle sales in 2014 would be electric or plug-in hybrid.

    • thrig says:

      So, a collapse back to the electric car of the 1920s as we scoot back down the the energy density parabola, given that oil is busy pricing itself out of the market? Probably some sweet lucre to be made there, if that’s your thing, but rebooting a former marketplace failure points more to a lack of cheap oil than anything new under the sun. No, no, it’s new! technology! say the proponents, wheels, check, battery, check, pale shadow compared to oil, check, unanswered questions about the necessary basic road, water, electrical maintenance out to the no-density sprawl built when the road, water, electrical construction costs were perhaps a little lower, check.

      • Old farmer mac says:

        I think most of the cars sold in China will be driven relatively little due to congestion in the relatively few places they have good roads so far. And most of them will be small cars.

        But demand for gasoline and diesel fuel will probably continue to grow pretty fast due to use in farming and commerce even if the developing world doesn’t buy all that many cars or drive them all that much.

        Some long distance trucks in this country use as much as two hundred gallons a day when operated by team drivers. This is pretty much day in day out.

        Just one good sized truck kept on the road more or less all day every day can easily use twenty five to a hundred gallons per day depending on the time spent loading and unloading etc and the size of the truck.Ten gallons would be a likely minimum for even a small pickup truck running local deliveries unless the day is spent mostly loading and unloading.

      • Old farmer mac says:

        Maintenance is expensive but it is dirt cheap compared to actual building costs.

        Barring pretty bad luck we will have enough oil to take care of maintenance needs for good long time – if the personal electric vehicle comes to dominate the car and light truck market.

        I personally believe the switch to electrics is a foregone conclusion barring Old Man Business As Usual having a stroke or heart attack before it can happen.

        Gasoline and diesel fuel are going up and batteries are coming down. Long term of course.

        We are not going to give up our sunk investment in suburbia without a fight to the death.

        People who own mcmansions in the burbs will spend thirty or forty thousand on an electric vehicle rather than take a three hundred thousand lick on the mcmansion.

        They will car pool and drive mini cars.

        They will even drive micro mini cars if necessary.

        Let’s not forget that vacant, affordable, and desirable housing in the heart of downtown simply does not exist in most places.

  30. Old farmer mac says:
  31. Pingback: Archive Edito Septembre 2104 | Blog de Yoananda

  32. Pingback: Archive Edito Septembre 2014 | Blog de Yoananda

Comments are closed.