World Exports versus Consumption, The ELM

The EIA has updated their International Energy Statistics with annual production numbers through 2014 and export data through 2012. Sometimes these stats can be confusing as they include several types of production and exports. But for production I use only “Crude plus Condensate” and for exports I used “Crude Oil Exports” which I assume includes condensate as well.

Also the export data is not exact, just close, because some importers are also exporters. For instance in 2001 the US exported 59,000 barrels per day. In 2012 the US exported 629,000 barrels per day. The exporting of condensate is allowed in the US and since the Shale boom condensate exports have increased quite dramatically because Light Tight Oil is rather top heavy with condensate.

To get exports versus consumption for exporting nations I simply subtracted their exports from their production. The difference was what they consumed. Similar data can be found on the Energy Export Databrowser.

I think the data clearly endorses Jeffrey Brown’s Export Land Model.

World E v C

In 2012 76,160,000 barrels of C+C were produced per day. Of that 76 million barrels 42,845,000 barrels were exported while the other 33,315,000 barrels was consumed by the producing nations. That is this is oil that was never exported.

Middle East E v C

The Middle East is the world’s largest exporting geographical area. However in 2012 their exports dropped by 2,056,000 bpd while their consumption increased by 1,650,000 barrels per day. Obviously some Middle East countries were net importers however it is very likely that all Middle East imported oil was also produced in the Middle East so the above chart should be relatively accurate.

Saudi E v C

Saudi Arabia is the world’s largest crude oil exporter. The EIA says, in 2012, their exports dropped by 1,227,000 bpd while their consumption increased by 1,600,000 bpd.

Russia E v C

Russia is pretty well tied with Saudi Arabia for the world’s largest producer of crude oil. But in 2011 Saudi exported 2,585,000 barrels per day more than did Russia. But in 2012 that difference dropped to 1,379,000 bpd. Well that is if the EIA’s data is correct.

Europe E v C

Of course Europe’s exports, of which almost 100 percent if from the North Sea, have been declining since they peaked in 2000. This chart only reflects the European oil that was not exported. It does not reflect total European consumption. Most of European consumption is from imported oil. 

Canada E v C


Canada is on of a very few places in the world where exports are increasing.

AAR Reports Rail Traffic  Crude Oil Carload Update

The AAR also reported U.S. Class I railroads originated 113,089 carloads of crude oil in the first quarter of 2015, down 17,982 carloads or 13.7 percent from the fourth quarter of 2014.

I did the math. Using an average of 700 barrels per carload that works out to be 879,581 barrels per day in the first quarter 2015, down from 997,279 bpd by rail in the fourth quarter a drop of 117,698 barrels per day. Because the fourth quarter had 92 days as opposed to 90 days in the first quarter, that works out to be 11.8 percent instead of the 13.7 percent stated above. However an 11.8 percent decline in crude oil rail traffic is one hell of a drop in the first quarter.

And it was mostly Bakken Oil!  Moving Crude Oil by Rail

North Dakota, and the Bakken region more generally, have accounted for the vast majority of new rail crude oil originations. According to estimates from the North Dakota Pipeline Authority, around 750,000 barrels of crude oil per day were moving out of North Dakota by rail as of mid-2014, equivalent to more than 60 percent of North Dakota’s crude oil production.

Ancient Bacteria Sweat Fuel Under New Mexico’s Desert Sun

Under the desert sun of New Mexico, scientists have engineered ancient bacteria to produce carbon-neutral ethanol using just the sun, waste carbon dioxide and non-potable water. The fuel that results could one day be cheaper than oil. Bloomberg’s Ramy Inocencio reports from outside the oil town of Hobbs.

Alga, in this case cyanobacteria, the most primitive of bacteria, they say, can be turned into ethanol at the rate of 25,000 gallons per acre per year. That works out to be 595 barrels per acre per year. But looking at this operation it looks like a very expensive operation. Please watch this 3 minute 22 second video and give us your opinion in the comments section.

Texas’ oil and gas industry lost 8,300 jobs in April — the most in nearly 30 years

Although oil prices have rebounded about 36 percent in the last month to about $59, many companies are still going through with previously announced plans for layoffs and reduced capital spending this year. That’s affecting job growth in Texas — the nation’s top oil production state — and other states.

The last time Texas lost this many oil and gas jobs was in 1986, with a drop of 9,000 jobs. That was also during the last big oil crisis.

Goldman Sachs sees $45 oil by October

The downturn in activity sparked optimistic sentiment among oil traders that the markets have adjusted, and could be on their way back up.

Not so fast, says Goldman Sachs. The investment bank argues in a new report that not only is the oil rally a bit premature, but that the rally itself will be “self-defeating.” The rally could bring drillers back, but that would merely contribute to a reversal in price gains. More drilling and more production worsen the glut that has not yet been resolved, and prices could be in for a double dip (or triple dip if you count the price declines from February to March 2015).

The Goldman Sachs report says that the problem is not just from a surplus of crude, but also a surplus of capital. Access to cheap finance has allowed production companies to stay in the game and continue to drill new wells. Even companies that have seen their cash flows dry up or have run into liquidity problems have still been able to find investors willing to pony up fresh capital.

 Quote of the day. The U.S. is definitely losing its train of thought

Several surprising forces are gathering to take down the Happy Motoring matrix. Peak oil is actually not playing out in the form of too-high gasoline prices, but rather a race between a bankrupt middle class unable to pay the total costs of motoring and an oil industry that can’t make a profit drilling for hard-to-get oil. That scenario is plain to see in the rapid rise and now fall of shale oil.

While browsing on Google News I saw the above quote and thought “Damn, that says it far better than I ever could. That hits the nail squarely on the head.”


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336 Responses to World Exports versus Consumption, The ELM

    • don burman says:

      Sounds like “The Economist” in 1999

      • Glenn Stehle says:

        Sounds to me like a day out at Belmont.

        OilPrice published an article a couple of days ago that concluded just the opposite as what Marketwatch does.

        “That’s what makes a horse race,” one of the legendary old oil men used to quip.

        OPEC Struggling To Keep Up The Pace In Oil Price War:

        Some market watchers, such as Cornerstone Analytics (CA), have consistently stated that the underestimation of demand, coupled with over-estimation of supply, will mask the growing call on OPEC oil in the second half of this year. CA recently noted that global demand outstripped supply by some 4 million barrels in April . This comes in addition to the mounting evidence that the oil market, via rig count declines, slowing production growth, higher demand and huge API crude inventory declines, is starting to readjust….

        In fact, there is growing evidence that not only are we slowly rebalancing but the world may actually be running short of oil. According to Reuters, Saudi Arabia has turned down requests from China for more oil, as they are using it for their own domestic refining needs. It goes on to quote: “[a]nother source with a Chinese refinery that takes Saudi oil said Saudi heavy crude was ‘a bit tight’ in May and June.” China was forced to turn to Russia, Oman, and other non-OPEC nations for their needed supply. Why would Saudi Arabia refuse to supply China unless oil was, in fact, tight?

        This provides the strongest indication yet that the world is not facing a 2 million barrel-per-day surplus in supply, as many allege, and instead the call on OPEC crude is most likely growing. The latest EIA weekly inventory data showing a drawdown of 2.7 million barrels reaffirms that the US is no longer oversupplied either.

  1. Jeffrey J. Brown says:

    Rather than repeating some net export info for the nth time, if anyone has any questions about what I call “Net Export Math,” I would be happy to try to answer.

    • Jeffrey J. Brown says:

      The original ELM (Export Land Model).

      • Verwimp says:

        Thank you, Ron, Thank you Jeff!
        Jeff, I fully agree that the conclusions of Net Export Math are much more important than, for example, the prediction of the peak. I understand the fact that a country can produce as much oil as it wants, if there is a consumption growing faster than production, the export declines. And when production declines, things look very ugly really fast. There is often only something like a decade between peak production and zero export.

        I agree this is the most important aspect of the entire peak oil story.

        And that is why I made the statement in the previous Ronpost: hardly no one talks about this absolutely critical piece of information. That might be because these facts and conclusions are sometimes presented in a way that is not easy to interpret.

        When I give a peak-oil presentation to the public, I scare them with te aspect of finiteness, I alarm them with EROEI and I finally knock them down with Export Land Model.

        • superkaos says:

          You scare them with the aspect of finiteness? Who are they flat earthlings? 🙂

          • Fred Magyar says:

            Well, my experience is that most people are indeed pretty close to being the equivalent of flat eartherlings when it comes to basic math and science.

            A little food for thought. Disclaimer: my personal view of the world is strongly influenced by a background in the Biosciences. I think of the ELM theory as having immediate consequences for humans as biological organisms.

            Exponential population growth is usually followed by logistic population growth.
            For practical purposes and to keep things simple, lets just say that oil has been the number one resource responsible for the growth of recent human populations and and also the growth of our current industrial civilization.

            Basic physics and biology clearly tell us that continuation of the exponential growth is eventually going to be limited by the availability of resources and waste sinks.

            Here are two primers, one on exponential and the other on logistic population growth.

            Exponential Growth

            Logistic Growth

            The take home message for me is that I wouldn’t want to be living in Places like Egypt or Mexico in the near future…

            For extra credit you can watch the video on r and K selection…

    • John says:

      Hi Jeff

      Your work on net exports is vital and gives an insight into what can happen to a country such as the United Kingdom in regards to energy security and balance of trade.
      Have you done any work on an import land model?
      The United States is an importer and with it’s recent dramatic increase in production it has been able to reduce imports substantially. Those spare imports had to find a new markets and over the last year or so exporters have cut prices in order to keep market share.
      Global net exports can go down not just because exporters are using more oil but because importers are producing more. The price of oil tells us that exports are less because importers did not need it all.

    • Wake says:

      Have you ever given a forecast of countries that might lose net exports in the next 5, 10, and 20 years based on your work?

  2. HVACman says:

    Ron – re: quote of the day. Not just the PO quote, but the entire opinion piece succinctly and accurately summed up our societal predicament regarding our energy and economic present and future. We are the walking dead….we just don’t realize we are already dead.

    OT – has the forum been hacked or something? I’ve been getting a 403 Forbidden message whenever I try to log on the past 24 hours. Maybe it’s just me…maybe I’ve been banned because they realize I’m just the typing-dead:)

    • Yes that is a great article. I am going to save it for further reference and use in the future. The article is by James Howard Kunstler. I have problems with some of his stuff but not this piece.

      I am having no problems with . I don’t think you have been banned because Pops hardly ever bans anyone. Some guys post there as a last resort because they have been banned everywhere else.

      • HVACman says:

        ” I am going to save it for further reverence “. Funny typo. Be sure to set it up on an oil-barrel alter:)

      • Pops says:

        Thanks Ron (that was a compliment right?) is on a distibuted network (because of past hacks) but sometimes the DNS routers try to send traffic straight to the server, and since the server doesn’t accept calls, you get the Forbidden – It just happened to me yesterday, lol.

        Anyway, restart your browser, if that doesn’t work, reboot your machine and then your router/connection/modem.

        Sorry for the OT, Ron.

    • clueless says:

      RE: quote of the day – “a bankrupt middle class unable to pay the total costs of motoring.”
      Around here, the “bankrupt middle class” [assume a family of 4] seem to spend more money on cell phones, I-pods, internet, video games, Netflix, cable, etc. than they do on gasoline.

      • John B says:

        The middle class is not bankrupt, but actually expanding worldwide.

        Because of efficiency gains, and new technology, energy has become a minor expense.

        What has happened is basically the exact opposite of what Peak Oilers have been predicting.

        • SRSrocco says:

          John B,

          Sorry for being blunt… that has to be one of the most ignorant things I have ever read. I gather you are not well versed in the concept of the falling EROI.

          There seems to be the spreading of a collective brain damage here in the states and abroad.


          • wiseindian says:

            (I used to comment on TOD before under the same moniker…more of a lurker now)

            He said ‘worldwide’. The middle class is indeed swelling in absolute terms (India and China), it’s just shrinking in the western world.

            When I read about PO 4 years ago, my views on everything were colored by PO, now I’ve regained my senses. PO is indeed a problem but not everything is attributable to it. A lot of economic problems in the west today are just issues that are a natural outcome of high wages, over consumption and population decline.

            20-30 years ago people in my country could not afford cooking gas and cooked with firewood, now a lot of people use LPG, refrigerator was a luxury in cities, now it’s necessity. The economic growth within my lifetime has been outstanding and all this has been done by just increasing our (India’s) oil consumption from 640k barrels to a measly 3500k barrels.

            There is no magic in it, it’s just the sigmoid curve in action and there is more to come. Millions and millions of people in the so called ‘Third World’ will come out of poverty by just providing a little bit of extra energy and investment. To repeat the same in the west would take 10x the investment.

            For thousands of years Asia was the centre of the world in terms of economic activity due to it’s favourable geography and climate. I would say what we are seeing is just the reversion to mean.

            • Boomer II says:

              The economic growth within my lifetime has been outstanding and all this has been done by just increasing our (India’s) oil consumption from 640k barrels to a measly 3500k barrels.

              Would it be more productive, then, to channel that oil from wasteful activities in the US (e.g., SUVs for errands) to more basic activities in places like India?

              And for that to happen, would the price have to be too high for American consumers, but not so high that consumers in India can’t afford it?

              • wiseindian says:

                Would it be more productive, then, to channel that oil from wasteful activities in the US (e.g., SUVs for errands) to more basic activities in places like India?

                Oh yes, definitely. I filled my car today for the equivalent of 4.4$/gallon and that is not considered expensive here, this is after taking into consideration the fact that our GDP per capita is 1/10th of US in terms of PPP. What does that tell you about the value of oil here ?

                In US a gallon of oil represents the difference between an SUV and a sedan, here it represents the difference between a bicycle and a Honda 100cc scooter.

                I think when it comes to pricing, developing countries will outbid G7 for oil, simply because it’s so vital to them liter for liter.

                • old farmer mac says:

                  I have often pointed out that I can farm far more efficiently with twenty dollar per gallon diesel fuel than I can with animal power.You feed the tractor on days you use it. You feed a horse every day from the day it is born until it dies.

                  To take this point a bit further- we ( before retiring) used a truck that got about five to six miles per gallon. I could deliver over three hundred bushels of apples per trip to the nearest town in less than an hour round trip, excluding time to load and unload of course.

                  When my grandfather was a boy, doing a mans work , he left before daylight and got back after dark with a horse drawn wagon making precisely the same trip.The wagon could haul thirty bushels but hardly any more than that due to over working the horses.

                  So -When you really have a good use for it how much is diesel fuel worth?

                  FIVE gallons propelled the truck the twenty five miles round trip.

                  It would take ten or twelve working days to deliver the same truck load using the wagon. The horses would have to be rested no less than every third day, preferably every other day and grain fed every day. Grass and hay don’t get it done when you work a horse hard. It loses weight at an astonishing rate and turns into a bag of bones in less than a month.

                  People who believe that oil prices are limited by purchasing power are no doubt right so long as a large fraction of all the oil bought is still being wasted.

                  But once it gets scarce enough that little or none of it IS wasted, it is hard to see a hard upper limit on the price of oil.

                  MY personal guess is that most likely the upper limit will be determined in the near to mid term, the next two or three decades, by the price of synthetic diesel MANUFACTURED from coal.

                  Second guess, some little kid someplace will grow up and solve all the problems associated with feeding sewage into one end of a giant processing plant sitting in the desert sun and getting ethanol or some other biofuel- PLUS superb FERTILIZER- out the far end.

                  All the talk of needing only co2 and sun to make this work is bullshit. There is no escaping the need for other elements – in modest amounts of course , compared to the water and CO2.

                  Doo Doo and Pee Pee have been PRECIOUS commodities in times past. Barring population collapse they are destined to be VALUABLE commodities once again- rather than a wasted disposal problem.

                  I say desert because that is where solar energy is most abundant and reliable on a day to day basis but transportation issues will eventually result in such facilities being built near most cities.

                  Third guess Old Man Business As Usual croaks and the market for oil more or less disappears even while there is still some easy oil left in the ground.

                  Reality is that the future will be a mixture of all these scenarios plus some electric vehicles etc.

                  The price will collapse periodically when the economy turns sour and consumers in general have to cut back.But each cycle there will be fewer consumers as opposed to commercial users who can and will pay more. A LOT more.

                  • wiseindian says:

                    I have often pointed out that I can farm far more efficiently with twenty dollar per gallon diesel fuel than I can with animal power.You feed the tractor on days you use it. You feed a horse every day from the day it is born until it dies.

                    Indeed. I have a car as well as a scooter, I take out the car only when the scooter won’t suffice, otherwise it’s scooter all the time. I don’t go to the grocery store a km away in a car.

                    What is the value of oil ? It’s priceless.

                    To give an example, my mother cooked with firewood for only a very brief period during her childhood and for some months after her marriage and she hated it.
                    What would I or my mother pay to use gas for cooking ? An arm and a leg, which is definitely more than an American would pay for driving a second car. If it’s price goes up I will use less of it but won’t go back to firewood.

                    I don’t want to belabor my point but I can’t stress this enough, oil is a magical commodity down here and it’s consumption is going to go up in the next twenty years as millions of people quit firewood and switch to gas. The supply is going to come from West as the empire winds down and wastage is curtailed.

                    Just to make it clear I still expect the West to be dominant(economically) for the next 15-20 years but the momentum is clearly with Asia.

                    The marginal value of a litre of oil is huge, the only problem is that you have to be poor at some point in your life to realize it.

                  • Wiseindian, the only reasonable natural gas sources for India are Qatar and Iran. In 20 years India will have to outbid other clients. Given the built in economic inefficiencies we see in the Indian economy and the warm climate I don’t know if most Indians will afford it.

                  • Synapsid says:


                    Maybe Turkmenistan along with Qatar and Iran?

                  • wiseindian says:

                    Why can’t gas come from Russia via China or Central Asia ? A trans asian alliance if you can call it.

                  • Bob Nickson says:

                    I bet that gas cooking will give way to induction cooktops and PV with a small amount of battery storage.

                  • MarbleZeppelin says:

                    OFM said “The price will collapse periodically when the economy turns sour and consumers in general have to cut back.”

                    Darn, what am I going to do? I already cut back. Guess I will have to go off grid and off FF completely (my plan anyway) to ride through this. 🙂

                    You make a great point about the efficiency of bulk transport. Take a passenger van, 15 mpg. Not good right? Then put eight people in it for a commute, suddenly it’s 120 pmpg. Or a small car at 35 mpg and 4 people, it is 140 pmpg. The more the merrier. So that truck moved a bulk amount in a short period of time and fuel costs were negligible compared to the reduced effort and speed of operation. Reminds me of the logic behind freight trains.
                    The canals used water, one mule (and a boy) to move large loads, making them efficient and sustainable. However they were slow and could not really increase their rate by much.
                    Then came the steam locomotive, expensive, inefficient but a high rate of transport and more flexible as to where it could go compared to a canal. No hay or grain needed to feed it just wood or coal and lots of water. Short rest times too.
                    Everything got faster then. Diesel even faster and cheaper, airplanes even faster.
                    Population grew faster too. Faster, faster until we run out of …. energy.
                    Now it’s hurry hurry, damn the costs, find and make more energy, the Red Queen is chasing us or is it the Queen of Hearts?

                    Luckily I am running in the other direction and so are a number of others.

                  • Wiseindian, it costs a lot to ship Russian gas to China, one would expect the Chinese to consume the gas arriving in China from Russia. A pipeline project to cross from China to India would be enormously expensive.

                    Synapsid proposes Turkmenistan as a possible supply source, the question in my mind is whether one would try to reach India overland from Turkmenistan. In the end, India is stuck with Iran and Qatar. And that gas will be on demand.

                    Right now, if I were the Indian government I would be building out all the hydro they can, add nuclear power plants, and distribute pills and provide lots of incentives to cut the birth rate down.

                  • Synapsid says:


                    I was thinking Turkmenistan could tie into the pipeline from Iran to Pakistan if it ever gets built if it ever gets continued to India.

                    If it ever…

                  • wiseindian says:

                    Indian govt is already doing all three for last few years.

                    TFR is actually below 2 in most of the Indian States. A few states are laggards and they are expected to reach TFR of 2.1 in a few years given the massive drop in fertility rates.

                    Even Bangladesh the eternal poster boy of third world misery has a TFR of 2.2.

                  • Glenn Stehle says:

                    wiseindian said:

                    What is the value of oil ? It’s priceless.

                    Only for those who subscribe to the postclassical and neoclassical economists’ use or “price” theory of value.

                    This theory of value was rejected by all previous economic schools because of what is known as the Paradox of value;

                    The paradox of value (also known as the diamond–water paradox) is the apparent contradiction that, although water is on the whole more useful, in terms of survival, than diamonds, diamonds command a higher price in the market. The philosopher Adam Smith is often considered to be the classic presenter of this paradox.

                    There was actually a movie about how it is possible to place so much value upon some precious object that the drive to posess it causes one to self-destruct.


                • Glenn Stehle says:

                  Don’t get any wild ideas that you might get your grubby hands on our oil in Iran, Iraq or Venezuela.

                  Our covert ops are working overtime right now, even as we speak, to throw that pinko comuniss fairy Nicolás Maduro out fo office, and install a good democratically elected leader in Venezuela like we got down in Mexico, Peña Nieto.

                  Did you hear that Maduro is even involved in selling dope to the innocent children of America? And he, along with his buddies the Chinese, don’t even care about global warming? And he’s a socialist! Imagine that! Now there’s a moral reprobate for you if there ever was one.

                  That great American patriot Richard Nixon showed them comuniss a thing or two back in 1973 when he ordered the CIA to “make Chile’s economy scream.”

                  And the best thing is our boys down in South America pulled it off without anybody makin’ a fuss about what really happened. In 1970, the CIA’s deputy director of plans wrote in a secret memo: “It is firm and continuing policy that Allende be overthrown by a coup. … It is imperative that these actions be implemented clandestinely and securely so that the USG [the U.S. government] and American hand be well hidden.”

                  When we finally got our man installed down in Chile, Augusto Pinochet, he rounded up them dirty comuniss pinko fairies in a stadium, who thought they could get away with taking our copper away from us, and snuffed ’em out en masse.

                  So take that you dirty comuniss fairy pinkos!

                  It’s just a matter of time before we get that half-breed traitor who isn’t even a true American out of office and put a good ole God-lovin patriot in the White House like Ted Cruz, Marco Rubio or Hillary Clinton. They’ll bomb the smithereens outa Iran and take our oil back in the Persian Gulf.

                  So don’t be getting any wild notions that you Indians might get your hands on our oil.

                • Glenn, I take it you think Venezuela’s President Maduro is a victim? The Bolivar hit 429 per dollar this morning, inflation is over 100 %, gasoline is free, the judicial system is broken, over 50% of the population is in poverty, the murder rate is the highest in South America, and you think this isn’t the government’s fault?

                  Government incompetence and corruption are so extreme they have driven the country over the cliff. Given events in recent weeks I expect oil production to drop about 50,000 to 100,000 bopd per quarter. Furthermore, their production practices are gutting the reservoirs, therefore at least 30 to 40 % of the country’s oil reserves will gave to be written off.

                  • Glenn Stehle says:

                    You tell it, Fernando. Whatever happens to those pinko fairies is their own fault.

                    We gave them comuniss the opportunity to convert to the one true faith, US-style democratic-capitalism, and they refused! Imagine that!

                    So what can one expect when one refuses to see the light and the way? Why it brings the wrath of the Lord down on one, that’s what. “Make their economy scream,” sayeth saint Nixon.

                    So don’t you get your pretty little mind in a dither. Obama has already issued
                    the executive order declaing Venezuela “a national security threat” to the United States, and ordered economic sanctions.

                    And don’t kid yourself, it isn’t the fact that Venezuela has the world’s largest orange groves that makes it a national security threat to the United States. No, by golly, it’s those vast petroleum resources in the Orinoco basin. After all, without then, what woud happen to our “American way of life”?

                    Never forget what is written in the
                    book of Bush: “The American way of life is not up for negotiations. Period.”

                  • Meanwhile, in the real world inhabited by common folk, here’s a post by Daniel with a translation of Leopoldo Lopez calling for a protest next Saturday


                    Things look really grim for Venezuela. I like to give you the exchange rate because it serves as a thermometer of the degree of poverty and desperation in the country. Right now the rate is 420 plus. That means a retiree gets about $20 per month. Professionals are making between $20 and $100 per month. The government is trying to keep skilled labour from fleeing the country by giving them cards they can use to purchase food, but the stores are empty, there are huge lines, and they use a rationing system which only allows an individual to buy by putting their finger in a fingerprint machine. The system, however, is short circuited by corruption, and the food is stolen to be sold openly on the street.

                  • Glenn Stehle says:

                    @ Fernando Leanme

                    On a more serious note, in your mind everything reduces down to a Chiliastic battle between US-style democratic-capitalism vs. communism.

                    If life were only so simple, so black and white.

                    Unfortunately, reality is a litte bit more complex than that. The stark reality is that US-style democratic capitalism has no better answers for peak oil and global warming than do those governments of South America inspired by Marxism and/or US-style Progressivism.

                    Venezuela, Bolivia, Brazil, Argentina and Ecuador all talk the talk when it comes to the extraction game. But they don’t walk the walk. They all see their economic futures tied to the extractive industries, predominately oil and gas.

                    No better example of this hypocrisy can be found than in the vast chasm which exists between the words and the actions of Ecuador’s left-wing president, Rafael Correa:

                    During his 15 August TV speech Correa emphasized how many poor Ecuadorians should benefit from ITT exploitation, but made absolutely no mention of those who might be seriously harmed by it.

                    Top of the list are the indigenous people living in ‘isolation’ (IPI) in Yasuni, who ultimately stand to lose parts of their territory and could be decimated by any form of contact with oil company workers because of their lack of immunological defences.

                    Why Ecuador’s president is misleading the world on Yasuni-ITT: Rafael Correa has moved to abolish an historic Amazon oil plan, but don’t be fooled by what he claims

                    Truth be known, both Capitalism and Marxism are ideologies with a humanist, Modernist and Enlightenment pedigree.

                    As Hannah Arendt notes, “they are twins, only wearing different hats.”

                    Both ideologies assert the independence of the human will and the capacity of man to make himself the master and possessor of nature.

                    Both ideologies are materialistic.

                    Both ideologies assume boundless human material prosperity and endless economic growth.

                    And both ideologies share the faith of the French Enlightenment that in an “economy of abundance” men would not come in conflict with one another because, presumably, there is no cause for rivalry.

                    Those, like Arundhati Roy, who do not buy into the capitalism vs. communism two-world theory are aware of the pitfalls of “blackwhite” (George Orwell, 1984) when it comes to dealing with human affairs:

                    Enter Mahendra Karma, one of the biggest landlords in the region and at the time a member of the Communist Party of India (CPI). In 1990, he rallied a group of mukhias and landlords and started a campaign called the Jan Jagran Abhiyaan (public awakening campaign). Their way of ‘awakening’ the ‘public’ was to form a hunting party of about 300 men to comb the forest, killing people, burning houses and molesting women. The then Madhya Pradesh government—Chhattisgarh had not yet been created—provided police back-up. In Maharashtra, something similar called ‘Democratic Front’ began its assault. People’s War responded to all of this in true People’s War style, by killing a few of the most notorious landlords. In a few months, the Jan Jagran Abhiyaan, the ‘white terror’—Comrade Venu’s term
                    for it—faded. In 1998, Mahendra Karma, who had by now joined the Congress party, tried to revive the Jan Jagran Abhiyaan.

                    Walking With The Comrades

                  • Fred Magyar says:

                    Ah, I had thought your comments about the ‘comuniss’ were ‘Poe’ I now see there was indeed more substance hiding behind them.

                    Poe’s law, named after its author Nathan Poe,[1] is a literary adage which stipulates that, without a clear indicator of an author’s intention, it is often impossible to tell the difference between an expression of sincere extremism and a parody of such extremism.[2] Someone will likely mistake the parody for a genuine article, or vice-versa.[3]
                    Source Wikipedia

                • SW says:

                  We are seeing something of a great equalization going on which would be noble were it not for our parasite (financial) class which is growing even richer in the process.
                  A positive aspect of this development is that recognizing the real value of fossil fuels, as well as their true costs creates a more level playing field for alternatives. This means that it becomes more likely that these precious non renewable resources will be used where they are needed most and make the most sense and with as much efficiency as possible.

              • Ilambiquated says:

                Asians will outbid Americans in the oil market because they don’t waste as badly as Americans do.

                When you hear an American complaining about the high price of gas, what he is really saying is that he can’t afford to waste it any more.

                It doesn’t really matter who is richer.

                • Dennis Coyne says:

                  It would be better if oil was freely traded and not subsidized. That might lead to efficient use worldwide.

        • Actually the middle class is shrinking, especially in the USA. That is their wealth is shrinking and many are entering the poverty class. More and more of the wealth is being concentrated in the hands of the 1%.

          The gap between the rich and poor is getting wider.

          And I have to agree with Steve.

          • Watcher says:

            We’ll never prove it. Data will be obfuscated.


            This is a study showing Q1 GDP consistently below other quarters in recent years. This leads the relevant folks to want to declare that their Q1 seasonal adjustment is too mild. So they will do more of it.

            Not clear why Qs 2, 3 and 4 are not declared overly adjusted upwards.

          • John B says:

            According to this report, the middle class is expanding worldwide.


            • Boomer II says:

              I notice that the report says this.

              While the middle class is rapidly expanding in emerging and developing countries, in rich countries it is shrinking and feels incapable of defending the standards of living that have characterised a middle-class lifestyle for centuries.

            • ezrydermike says:

              probably should read it a bit closer…

              “The bulk of this growth will come from Asia: by 2030 Asia will represent 66% of the global middle-class population and 59% of middle-class consumption, compared to 28% and 23%, respectively..

              This middle class is unlike that which became the engine of development in many OECD countries.

              While the middle class is rapidly expanding in emerging and developing countries, in rich countries it is shrinking and feels incapable of defending the standards of living that have characterised a middle-class lifestyle for centuries. England, Israel and Spain are just a few examples of countries where people take to the streets protesting a situation that for many has become unbearable. Middle and working classes have been carrying too much of the burden of the economic crisis; there has been a shift in wealth and income from them to the wealthier groups of society that is no longer acceptable. The rising expectations of the expanding middle class in developing countries contrast with the stagnating living standards of a shrinking middle class in OECD countries”

              • John B says:

                I did say WORLDWIDE.

                This expansion continues. The size of the “global middle class” will increase from 1.8 billion in 2009 to 3.2 billion by 2020 and 4.9 billion by 2030.

                Kunstler’s dribble may sound “catchy”, but a good rule of thumb is that whatever he says, the exact opposite is true.

                • Boomer II says:

                  The size of the “global middle class” will increase from 1.8 billion in 2009 to 3.2 billion by 2020 and 4.9 billion by 2030.

                  Is that mostly just a numbers game based on population growth?

                  • John B says:

                    Well I’m pretty sure I know where Kunstler pulls his numbers out of, but I’d rather not say.

                • Glenn Stehle says:


                  Listen Bud, what happes outside the borders of the good ole US of A don’t matter.

                  You sound like one of those comuniss to me.

                  Do you hate America?

                  You must’ve went to school too long. As Mr. Robichaux advised, “They got plenty communiss in them colleges.”

                  • SRSrocco says:


                    Are you for real? Commies?? Don’t you realize Commie bashing died years ago.. You’re supposed to hate Al-Qaeda now.

                    Ron… you got some real live political biggots in here…LOL. Who knew your site would provide entertainment and peak oil analysis.


                  • Fred Magyar says:

                    I think Roy wrote this song just for you, Glenn…

                    “Let’s Go After the Buddhists” by Roy Zimmerman


                  • Caelan MacIntyre says:

                    Thanks Fred, I enjoyed that. A cheery tune of things not so cheery.

                  • old farmer mac says:

                    Glenns heart is in the right place. I respect and admire his sentiments even as I describe them as being unrealistic.

                    It is ironic if he in a sarcastic comment asks if somebody hates America, given his obvious opinion of Yankee land .

                    Perhaps this little story will help illustrate how I feel about my country.

                    Two old democrats are talking over LBJ with another democrat- a younger one who is disillusioned with him and calls him a SOB.

                    The old guys do not dispute this characterization at all. They simply reply paraphrased ”Yes but he is OUR son of a bitch..”

                    Life ain’t fair.

                    Ask any momma rabbit about momma foxes feeding her rabbit babies to baby foxes.

                    We basically won the competition with other species some thousands of years ago. We have been competing with each other ever since.

                    My country – often wrong but still my country. My personal welfare and that of my kith an kin depend on it surviving and doing ok.

                  • Glenn Stehle says:

                    Not to worry, Steve.

                    After we get through taking care of the comuniss down in Latin America, we can turn our attention to the rag heads.

                    Anybody who threatens our national security, anybody who thinks they can terrorize us by taking our oil away from us, is morally reprehensible, and whatever happens to them is their own fault. Never lose sight of the fact that they’re bringing that rain of drones down on themselves by rejecting sure truth.

                  • cytochrome C says:

                    “My biggest setback was being born white, male, middle class, and a citizen of the United States.”

                    We can see that problem with the above comments.

                  • Glenn Stehle says:

                    Old farmer mac,

                    On the “He’s an SOB, but he’s our SOB”:

                    “BUT HE’S OUR SON OF A BITCH”….I’d never thought about this before, but inspired by an offhand comment here I went looking for the origin of the famous “son of a bitch” quote. Here are three contenders:

                    • It was Roosevelt who made the often-quoted remark about the dictator of Nicaragua, Anastasio Somoza: “Somoza may be a son of a bitch, but he’s our son of a bitch.”

                    • Dick Morris: FDR’s memorable characterization of Spain’s brutal dictator Francisco Franco: “Sure he’s a son of a bitch, but he’s our son of a bitch.”

                    • Michael Wood: Rafael Leónidas Trujillo, long-term dictator of the Dominican Republic….The Americans supported him because, as Cordell Hull said, in a phrase since used countless times of other unappealing figures, ‘he was a son of a bitch, but he was our son of a bitch.’

                    Bottom line: we don’t know who said it, who it was said of, or where it came from.

                    POLITICAL ANIMAL

      • old farmer mac says:

        There is no doubt in my mind that so far as the YANKEE middle class is concerned, other ” distractions” are responsible for any drop in per capita gasoline consumption- plus increased efficiency of course. In is getting to be almost impossible to buy a CARBURETOR for instance, except by ordering it shipped from a specialty supplier.

        One of my neighbors has a brand new CORVETTE that gets BETTER gas mileage than a PINTO I once owned. Just about everybody except the very hard up seems to be spending upwards of a hundred bucks or more on the contents of a little wire or strand of glass coming into their house – a strand so thin it is hard to even see it except in direct sun.

        Insurance premiums are costing a LOT of drivers more than gasoline- sometimes as much as five or ten times more if the person lives in some cities and drives only occasionally.

        The police in northern Virginia regularly ticket out of state Marylanders for registering their cars in Virginia in order to get a much lower insurance premium.

        To the best of my knowledge Maryland cops are keeping an eye peeled for cars with Virginia tags parked too many days in a row in Maryland as well and writing MORE tickets.

        Just about every kid I know has a smart phone with a forty bucks and up per month string attached to it.

        Driving is no longer the most entertaining and enabling way to spend disposable income. A flashy car is no longer as big a status symbol as it once was in the eyes of young women.

        Hardly any young people are able to work on a car anymore. They don’t have a clue as to HOW, and mostly they lack any PLACE to actually do so. The chicken and egg question which comes first electric cars or electric car charging stations applies to tools as well. Investing in tools without knowing how to use them is useless. Learning how without them is impossible. The neighbors and land lord get pissed when they see the hood of a car up.

        The car culture in terms of suburbia is alive and well but showing a bit of a pot belly and some gray hair and a sagging chin and some wrinkles.

        I don’t know where it will go from here but so long as the middle class has SOME income I am for sure certain that suburbia is not going to die quietly.

        Noboby who has sweated to get into his mcmansion with a yard is going to give it up for a smaller generally non existent desirable apartment in town and take a six figure loss as well as start paying rent as opposed to making fixed interest deductible mortgage payments.Rents go up – with inflation and faster in many cases. Mortgages are mostly locked in. Ten years of earnings inflation even without a promotion works wonders on the percentage of income devoted to the house payment.

        When gasoline gets to be expensive enough, suburbanites will get rid of their SUBURBANS and buy a VOLT or a Leaf or a TESLA – or even a motor scooter if they can manage the commute that way.A good many will bite the bullet and carpool. Some enterprising folks will start running unlicensed and un advertised scheduled buses – using vans of course. This in essence amounts to a carpool or defacto mass transit where the same person drives every day in exchange for a little cash for a ride.

        One of my neighbors back in the thirties once ran such a service – you waited on the side of the road on Saturday morning at eight o’clock and he picked you up and took you to town for a dime – five or six dimes covered his gasoline and he was going anyway. People who actually had a car rode with him quite often to save fifty cents. People adapt WHEN THEY HAVE TO.

        • Boomer II says:

          The car culture in terms of suburbia is alive and well but showing a bit of a pot belly and some gray hair and a sagging chin and some wrinkles.

          Yes, just as we began to associate some cars with old people who wanted to drive around in the equivalent of living room couches, I think we’ll be to associate today’s fuel hogs with old people or rednecks.

    • Enno says:

      I could not access from several kinds of connections from Italy a few weeks ago, with a similar message.

    • SAWDUST says:


      Your computer likely has contracted adware. It’s trying to redirect you somewhere to view an advertisement. It’s something you clicked on that likely caused it. I had same problem a couple months back, ended up having to reinstall windows in order to fix the problem.

      I’m not a computer expert but i tried to login to peakoilbarrel one day and got that exact same message. Took two weeks and help to figure it out.

    • Andy says:

      I have had a similar problem for the past few months, I’m not a techie so have no idea what has happened? If anyone knows how to fix this, that would be great.

  3. Brian Rose says:

    From what I am gathering demand is increasing more rapidly than various government and economic organizations predicted while supply on a global level is continuing to increase slowly.

    As summer hits in Europe and the U.S. demand will increase at a rapid click as years of steady job growth, a more stable political environment (no more shutdowns), and the effects of international QE and interest rate cuts take their effect. Businesses are buying equipment due to ridiculously low interest rates abroad at the same time that demand for just about everything (except oil services and their ancillary manufacturers and suppliers) is growing.

    The housing data out of the U.S. this week was feverishly robust. Psychologically we’re at a point where people are eager to buy a home before rates rise. Up until now rates were continually hitting record lows with no potential increase in sight – even though rates were low people perceived that they could hold off without consequence.

    The shake up in currency valuations over the last year, culminating in radical adjustments last quarter, would tend to initially reduce demand growth due to the delayed logistical impact of demand shifting from one region to another. With the new currency valuations firmly in place Europe, especially Germany, will begin to see large jumps in demand for its products. Due to the severity of the currency value changes these changes in demand may be significant enough to require large investments in factory and manufacturing growth, which would require a lot of oil.

    This is purely my opinion, but is rooted in data and knowledge regarding the effects of currency values on international trade.

    In a post a few days ago there was a healthy discussion about China and their “ghost” cities. Some quick digging reveals that these “ghost” cities are, in fact, being populated at a rapid pace. The cities most commonly cited as ghost towns, especially in the famous 60 minutes report, are now surprisingly busy.

    Of special interest to all here are videos from 2014 revealing the amount of traffic in these cities. China’s demand for commodities related to building materials is down, and will probably stay down permanently relative to before, but China’s demand for oil will grow rapidly. The mega-cities of China are more than saturated with vehicles, and bicycles as well as public transit are becoming ever more popular, but China’s future is about bringing people into these brand new hubs we previously called “ghost” cities. The videos I have seen of these cities from the past year make it clear that China’s growth in vehicle sales and oil demand will grow at a rate faster than their overall growth of 6-7%.

    Global supply may be robust and growing, albeit more slowly now, but demand from the likes of India, China, Japan, Europe, and the U.S. is going to grow very rapidly in this price environment. The markets are so focused on what caused the price decline (supply growth, especially in U.S. tight oil) that they are currently ignoring how quickly demand will rise to meet and exceed that supply. I think data over the coming months will make it clear that global inventories are declining even though supply remains robust.

    At some juncture the markets focus will switch from that of supply to demand. Until that time comes oil prices will stay range bound, but will break higher when market mentality shifts.

    • toolpush says:

      Offshore in down 5. Down 31 from last year.
      This will not effect this or next years production. But after that don’t look to the GOM for any miracles after that.
      Remember deep offshore wells decline quickly as well!

  4. daniel says:

    is there any sensible explabation why saudi consumption would increase that tapidly on 2012 after such a long time of stability?

    • Brian Rose says:

      As a response to the Arab Spring Saudi Arabia funded massive expansions for various social programs. That could at least partially explain the demand increase.

    • clueless says:

      I think that they started up some refinery operations as well as chemical plants, etc. to produce value added products.

      • clueless says:

        Some info that is several years old

        Saudi Arabia has announced plans to invest about $46 billion in three of the world’s largest and most ambitious petrochemical projects. These include the $27 billion Ras Tanura integrated refinery and petrochemical project, the $9 billion Saudi Kayan at the Wayback Machine (archived March 15, 2009) petrochemical complex at Jubail Industrial City, and the $10 billion Petro Rabigh refinery upgrade project. Together, the three projects will employ more than 150,000 technicians and engineers working around the clock.[34] Upon completion in 2015–16, the Ras Tanura integrated refinery and petrochemicals project will become the world’s largest petrochemical facility of its kind with a combined production capacity of 11 million tons per year of different petrochemical and chemical products. The products will include ethylene, propylene, aromatics, polyethylene, ethylene oxide, chlorine derivatives, and glycol.[34]

        Saudi Arabia had plans to launch six “economic cities” (e.g. King Abdullah Economic City, to be completed by 2020, in an effort to diversify the economy and provide jobs.[35] They are being built at a cost of $60bn (2013)and are “expected to contribute $150bn to the economy”.[36] As of 2013 four cities were being developed.[

        • KLR says:

          Saudi Arabia rewrites its oil game with refining might | Reuters

          Years of investment was designed to fuel the transport, air conditioning and power generation for the kingdom’s economic growth. But as OPEC members fight for market share, Aramco’s refineries also give it a natural outlet for its 10 million bpd of crude production.

          While crude oil producers who lack a developed refinery sector – such as Nigeria – effectively leave this money on the table for refiners, Aramco and others in the Gulf can now cash in.

          “The crude is so cheap it’s pretty much free for them,” said Amrita Sen of Energy Aspects. “The margins are going to be massive. It makes trade flows in products very different.”

          Other Organization of the Petroleum Exporting Countries members, including fellow Gulf states Kuwait and the United Arab Emirates, have also boosted refining and added trading arms. But their refineries worldwide, hovering near 1 million bpd each, are only a fraction of what Aramco has built in just a few years.

          And also this: Saudi Arabia’s solar-for-oil swap is a ray of hope | Damian Carrington | Environment | The Guardian

          So what to make of the statement by Saudi Arabia’s oil minister that the world’s biggest oil exporter could stop using fossil fuels as soon as 2040 and become a “global power” in solar and wind energy?

          Ali Al-Naimi’s statement is striking as Saudi Arabia’s wealth and influence is entirely founded on its huge oil wealth and the nation has been one of the strongest voices against climate change action at UN summits.

          “In Saudi Arabia, we recognise that eventually, one of these days, we’re not going to need fossil fuels,” said Naimi at a business and climate conference in Paris on Thursday. “I don’t know when – 2040, 2050 or thereafter. So we have embarked on a program to develop solar energy,” he said in comments reported by the Guardian, Bloomberg and the Financial Times. “Hopefully, one of these days, instead of exporting fossil fuels, we will be exporting gigawatts of electric power.”

          No exports of fossil fuels? Crazy talk. I’m still wondering why they just haven’t fuel switched over to NG by now. They have a whole menu of options to reduce internal consumption if so desired; they just have to phase into it, without freaking out their populace.

          • toolpush says:

            They have been looking for Nat gas as hard as they can for the last 10 years, and have not found enough. A couple of large sour project came on line. Now they are talk shale. So they are starting to scrape the bottom of the barrel.

          • Longtimber says:

            “Lexan” Back and Front plates in new 1000V PV Source circuit combiner boxes we are working with are from none other than:

            • sunnnv says:

              “Lexan” – oh no sir, that trademark belongs to ….

              *^#& @)$*! – GE sold its plastic division to Sabic,. way back in 2007.


              “General Electric agreed yesterday to sell its plastics division for $11.6 billion to the largest public company in Saudi Arabia, the Saudi Basic Industries Corporation. …”

              Wow. Shocked that I don’t remember reading/hearing about this, and that it happened 8 years ago now.

              • Longtimber says:

                New NEC/Insurance/UL listing needs finger safe even in locked electrical panels with disconnects. Panel Air bags requirements soon. . Can’t vaporize those who’s brains are too small to read or understand hazards. Fuel tanks don’t have lockouts. Lower the bar for Darwin awards?

    • I don’t have a lot of confidence in those numbers when they show a strange diversion like that. I would chalk it up to an error in the EIA’s data.

    • Watcher says:

      mazama databrowser shows a smooth relentless ramp up in saudi consumption. No special blips.

      The more places they air condition, the more gasoline powered generators they need.

  5. Rational Pragmatist says:

    This article claims China’s CO2 emissions have started to decrease. Will this continue?

    • I suspect the Chinese are playing with their emissions figures to help the eu and Obama at the Paris climate talks. The Chinese will be asking for economic aid from rich nations. I understand the UN bureaucracy will be pushing for economic aid to be given to China, India, Venezuela, and other nations.

    • John B says:

      Of course. China is implementing new clean tech like wind, and solar.

      For all the talk about a doubling of CO2 levels, this is something that will never happen. It would take 200 years of current CO2 emission increases of 2 PPM/year. I doubt if we’ll see CO2 increases past 2050.

      • Doubling CO2 is just a model convention, referred to ~280 ppm. That’s 560 ppm. It should be reached sometime within this century, or early next century.

        • MarbleZeppelin says:

          Since CO2 only accounts for about 71% of the radiative forcing from anthropogenic sources the current CO2 equivalent is about 560ppm already.

          Between 1990 and 2013 the warming effect on the planet known as “radiative forcing” due to greenhouse gases such as CO2 rose by more than a third (34%).
          Radiative forcing from human caused sources is now about 2.8 watts/m2.

          In 2012 atmospheric CO2 rose by 2.9 ppm.

          Further reading about the CO2 surge from the WMO

          • But the net energy imbalance is 0.5 to 0.6 watts/m2. That’s what counts.

            • MarbleZeppelin says:

              What counts is how you understand what that means. Comprehension is key, otherwise it’s just numbers.
              Let’s do a little test, now no cheating by looking it up on the internet or having others tell you. This is elementary school stuff.

              By looking at a globe or world map how can you tell the tilt of the earth’s axis?

              And Fernando must answer first, no helping him.

            • What it means is that every year the earth’s temperature goes up by a tiny amount. The earth’s surface happens to have oceans, they capture most of this energy. This energy flux into the ocean leads to a slight temperature increase. The system transfers energy down through the water column, and thus, because the heat capacity of the water in the ocean is huge, the overall temperature increase is peanutty.

              The climate hysteria bunnies like to convert the energy flux into “Hiroshima equivalents”, which the ignopedists at Sks like to peddle as an app. Propaganda.

              As far as I can tell we will hit a crisis point with oil and gas supplies way before the climate gets to be warm enough to be that worrisome. Thus Ron should continue to hammer at the peak oil concept rather than start a “peak temperature” blog.

              • MarbleZeppelin says:

                Ooops, wrong answers. Sorry you get and F.

                Hint: you forgot the energy flux into melting ice, evaporating water, soil, rock, vegetation and atmosphere. You also forgot that the ocean measurement is only portional and does not cover the global oceans total area or volume.

              • I didn’t forget it. This isn’t a climate seminar blog. The ocean heat capacity overwhelms all other factors, since 2004 we can get a pretty decent idea of energy uptake from Argo buoys. The 0.5 to 0.6 watts per m2 figure isn’t debated by most scientists, but some feel it’s a bit lower and I haven’t seen higher estimates. For those who don’t study the subject in detail this is a key number to have in your heads. It’s the higher range of the measured imbalance. No theory, just the facts.

      • Boltzmann Brain IV says:

        Climate scientists are generally not dumb people John B. Getting a PHD in Physics, Chemistry or Math generally means you have an above average IQ.

        And getting a consensus of 97% (or whatever it is ) on anything is almost impossible unless there are really convincing arguments.

        If you find holes in their core arguments (like CO2 increasing temperature) there is a potential Nobel Prize available for you if you submit your paper for peer review.

        Climate Change is going to wreak havoc on this planet, but it won’t be nuthin compared to ELM peak oil.

        standing ovation!!!!

        • John B says:

          More bait and switch talk. The 97% (which I would include myself) never said anything about “Climate Change” wreaking havoc on this planet.

          Interestingly, when Hubbert put forth his peak oil theory, he never said anything about the end of the world. That was Kunstler, and the other nutters with the end of the world nonsense.

          • Boltzmann Brain IV says:

            Sorry John B. I thought you said you didn’t believe CO2 caused temperature increase in a previous thread.

            If I interpreted that incorrectly. I apologize.

            The wreak havoc opinion is mine, not the 97%.

            If CO2 isn’t increasing past 2050, there is going to be a lot less than 7 billion people on this planet or a miraculous energy transition occurred.

            That gives us 35 years to cease all CO2 emissions. Havoc?

            Don’t forget the arctic permafrost is melting and degassing methane and CO2 as well!!!! Will that cease by 2050?

            last time I checked that isn’t how positive feedback loops work.


            • John B says:

              I try to avoid opinions, and look for facts.

              Fact: The current global temp anomaly is exactly the same as it was in 1980.


              Fact: The hysteria claimed Arctic sea ice would have been gone by 2014. Reality is quite a different thing.


              Fact: While it may be true that CO2 absorbs more energy than O or N, it only constitutes .04 % of the atmosphere.

              • Boltzmann Brain IV says:

                Speaking of classic bait and switch!!!!

                I retract my apology (LOL!!!!!!).

                Roy Spencer (u can’t be serious)!!!! Arctic not being gone by 2014 means climate scientists are wrong!!!! LOL!!!!

                Al Gore isn’t a climate scientist! He is a politician. Climate Scientists aren’t accountable for what he says.

                The US Navy, NASA and Climate Scientists agree the arctic is melting. They are the only guys that have the equipment to measure it.

                Well, except for Vladimir Putin who is putting troops in the Arctic to protect his Oil resources and China who is trying to get in there as well because their stategists aren’t fools.

                Why don’t they listen to Roy Spencer????? Because they aren’t idiots and want to achieve RESULTS. So they listen to scientific consensus.

                I am enabling a tiresome conversation. I apologize to those who come to this board to discuss Peak Oil.

                Back to the chaos….

                Boltzmann Brain.

                • John B says:

                  Al Gore isn’t a climate scientist! They aren’t accountable for what he says.

                  Or for what you say: “the arctic permafrost is melting”.

                  So this is exactly my point. Alarmists like to quote the 97%, even though the 97% have never made the Alarmist’s claims.

                  • Boltzmann Brain IV says:

                    LOL! John B let’s go have a beer. We can talk about the birds and the bees.

                    Your a goose. Learned that in Australia.

                    You just like stirring up stuff for entertainment.


              • wharf rat says:

                “it only constitutes .04 % of the atmosphere”

                CO2 makes up 390 ppm (0.039%)* of the atmosphere, how can such a small amount be important? Saying that CO2 is “only a trace gas” is like saying that arsenic is “only” a trace water contaminant. Small amounts of very active substances can cause large effects.

                Some Examples of Important Small Amounts:
                •He wasn’t driving drunk, he just had a trace of blood alcohol; 800 ppm (0.08%) is the limit in all 50 US states, and limits are lower in most other countries).
                •Don’t worry about your iron deficiency, iron is only 4.4 ppm of your body’s atoms (Sterner and Eiser, 2002).
                •Ireland isn’t important; it’s only 660 ppm (0.066%) of the world population.
                •That ibuprofen pill can’t do you any good; it’s only 3 ppm of your body weight (200 mg in 60 kg person).
                •The Earth is insignificant, it’s only 3 ppm of the mass of the solar system.
                •Your children can drink that water, it only contains a trace of arsenic (0.01 ppm is the WHO and US EPA limit).
                •Ozone is only a trace gas: 0.1 ppm is the exposure limit established by the US National Institute for Occupational Safety and Health. The World Health Organization (WHO) recommends an ozone limit of 0.051 ppm.
                •A few parts per million of ink can turn a bucket of water blue. The color is caused by the absorption of the yellow/red colors from sunlight, leaving the blue. Twice as much ink causes a much stronger color, even though the total amount is still only a trace relative to water.

                “The current global temp anomaly is exactly the same as it was in 1980.”
                The current temp anomaly is based upon the 1951-80 baseline, so, no, it’s not the same as 1980

                Global surface temperature in 2014 was +0.68°C (~1.2°F) warmer than the 1951-1980 base period in the GISTEMP analysis, making 2014 the warmest year in the period of instrumental data, but the difference from the prior warmest year (2010), less than 0.02°C


              • Synapsid says:

                John B,

                That’s the 0.04% of the atmosphere that supports all the photosynthesis on the planet, yes?

                • John B says:

                  Good point. In that regard, more CO2 is beneficial.

                  • Cave Bio says:

                    This is one of those extraordinarily ignorant statements that seem to continuously pop up again and again in denialist circles. To keep it simple, carbon dioxide is often not the limiting factor in the growth of photosynthetic organisms.

                    This is a pretty good review of the issue:

                  • Synapsid says:

                    John B,

                    My point is that 0.04% of a huge amount of atmosphere is itself a huge amount of CO2. “only” 0.04% sounds like saying that it can’t be important.

                    Without that 0.04% CO2 the average surface temperature of the planet would be well below freezing.

              • A. Yeats says:

                There may have been some pause in atmospheric warming over the last 20 years, possibly caused by increased SO2 aerosols from Chinese coal fired power plants, but mostly the trend is an illusion due to a very high El Nino (warming) in 1998 and a couple of recent high La Ninas (cooling). However there has been a growing heat gain in the oceans, which might about to be dumped into the atmosphere with this year’s El Nino, which will end the hiatus – the twelve month periods ending in each successive month this year have been progressively the hottest ever recorded.

                What can’t be denied though is that the Arctic has continued to warm rapidly – partly because the aerosols aren’t effective in the atmosphere there (maybe Chinese clean tech wouldn’t be such a great idea). Minimum ice volume in September may have dropped by 75% since 1979. This year saw the lowest maximum ice extent (in February/March) ever recorded and looks on course to be the lowest ever extent in September – and, maybe this year, but probably by 2017 the Arctic will be ice free at some point. The California drought is directly attributable to changing circulation patterns caused by the ice loss and was predicted by modeling the phenomena in 2005.

                Positive feedback mechanisms are particularly strong in the Arctic – once the ice goes the water can warm above freezing quickly; there will be increase water vapor (the strongest green house gas) forced into the air; the permafrost starts to melt and the organic matter rots quickly releasing more CO2. The big one would be significant release of methane from hydrates (clathrates) in shallow seas in Siberia. If even a small proportion of these (less than 1%) are released then we’d get run away warming as much as >10 degrees Celsius in a few years and, to quote an eminent climatologist, “We are f*cked”; which means not that the happy motoring BAU might be in question but that the human race, and possibly all complex life on earth, is extinguished.

                • Meanwhile, here’s a plot of worldwide sea ice cover since 1979. These plots are hard to locate in USA government agency sites:


                  The data can be glimpsed in a page like this


                  But they don’t dare publish reality: total sea ice extent was 330 thousand square miles higher in April 2015 than the 1981-2010 average.

                  • A. Yeats says:

                    Are you suggesting there is a mechanism by which high ice coverage in Antarctica prevents runaway warming in the Arctic – I’d be happy to find out there was, but it seems unlikely.

                    The increased ice area in the south has been explained through increased warming; i.e. higher glacier outflow, especially from Pine Island and Thwaites Glaciers and changing circulation patterns that keep the ice south and close to land where it takes longer to melt. If these glaciers collapse, as seems increasingly likely since 2009, then there will be a step increase in sea ice but I doubt that the streams of refugees from Miami, the Maldives, Bangladesh, Osaka, New Orleans, Boston etc. will be saying thank god climate warming has been disproved.

                  • cytochrome C says:

                    Antarctica is losing mass big time.
                    GRACE has measured up to over 300 gigatons/year.


                    The PIG is disintegrating before our eyes.

                  • Cave Bio says:


                    I have already debunked this nonsense and I don’t know why I have to do so again, but I will.

                    Two points, first, virtually all of the Antarctic sea ice melts during the southern hemisphere summer.

                    Second, and this is important, fresh water freezes more easily than salt water.

                    Antarctic sea level rising faster than global rate

                    A new study of satellite data from the last 19 years reveals that fresh water from melting glaciers has caused the sea level around the coast of Antarctica to rise by 2cm more than the global average of 6cm. Researchers detected the rapid rise in sea-level by studying satellite scans of a region that spans more than a million square kilometers. The melting of the Antarctic ice sheet and the thinning of floating ice shelves has contributed an excess of around 350 gigatonnes of freshwater to the surrounding ocean.


                    The science is not difficult here folks.

                    I cannot respond to you directly Ron so I am editing my post here.

                    I did say virtually (for instance compare the maximum ice sheet growth in late winter to the size of the Ross Ice Shelf–virtually is the exact perfect word to use here!) and it should be self-evident that the point is that there is no long term addition and thickening of the Antarctic sea ice that offsets the long term decline and thinning of the Arctic sea ice.

                    The current extent of Antarctic sea ice, which is nowhere near the maximum extent, can be found here. Note that it dwarfs the Ross Ice Shelf.


                  • Two points, first, virtually all of the Antarctic sea ice melts during the southern hemisphere summer.

                    Well that is not quite true.

                    Ross Ice Shelf

                    The Ross Ice Shelf is the largest ice shelf of Antarctica (an area of roughly 487,000 square kilometres (188,000 sq mi) and about 800 kilometres (500 mi) across: about the size of France).[1] It is several hundred metres thick. The nearly vertical ice front to the open sea is more than 600 kilometres (370 mi) long, and between 15 and 50 metres (50 and 160 ft) high above the water surface. Ninety percent of the floating ice, however, is below the water surface.

                  • Years, no implications. The earth’s total albedo (the amount of incoming solar light we receive reflected back to space) isn’t changing as a result of sea ice surface coverage. The Arctic loses ice, but Antarctic is gaining an equivalent amount.

                    I like to point out the way government propaganda distorts reality, and this is a good example. They go through a lot of gyrations to emphasize the Arctic ice cover is shrinking, but they try to disguise the Antarctic ice growth.

                    The rest of the comments you make are irrelevant to the core issue, which is fairly simple: changes in total ice cover over the last 35 years are zilch. And most people aren’t aware because this fact tends to get buried.

                    For those who track oil production closely, this can serve as an interesting point. I think we know the EIA serves up poor quality data, mixes NGLs with crude and condensate when it serves its purposes, and has really goofy forecasts. The same applies at times with the climate data, they put up a front to stay on message with their political bosses, but the real data tends to get buried and sometimes one has to dig way down to find things they would rather we don’t mention.

                  • MarbleZeppelin says:

                    And then there is the gravitational effect. Large ice sheets such as Greenland and Antartica pull huge amounts of water toward them gravitationally. As these sheets lose mass that water starts to flow and spread out across the rest of the ocean, giving another factor in sea level rise for areas away from the gravitational effects.

                  • Nate says:

                    The big declines have occurred in the volumes of artic ice with most data coming from the cryosat mission. Not area, but volume. here is a link to the volume graph since 1979
                    Here is a little something on the Antarctic

                • John B says:

                  Thanks for admitting that Global Warming has stopped.

                  However, the Arctic has been gaining ice in recent years:


                  I don’t worry about Methane, because it quickly breaks down in the atmosphere, and the amounts are very small.

                  The positive feedbacks in the GCMs have not been born out by empirical measurements. Feedback values in the GCMs are highly theoretical.

                  Runaway warming of 10 degrees C in a few years is simply not possible.

              • Dennis Coyne says:

                Hi JohnB,

                I used University of Alabama Huntsville data to cerate the following chart. Link to web page with data below:


                Data is at monthly average data link below (or click on link at web page above.)


                • Cave Bio says:

                  Hi Dennis,

                  One important point is to remind everyone that the latent heat and high specific heat of water means that temperature is not the only way to measure the Earth’s heat content. In fact, temperature could remain completely constant and yet the heat content of the Earth’s biosphere could be increasing dramatically!

                  For those who don’t understand what I mean, place water into a Dixie cup and add a heat source. The temperature will rise until it hits the boiling point of water. At that point the temperature will remain constant even thought the heat content continues to climb. Now, simply change the water for ice and you start to get the idea of what is happening on Earth today.

                  As I have mentioned here multiple times, we live in a Dixie cup world.

                  I found this video a couple of months ago–it is a very interesting watch.



                  • Cave Bio says:

                    As an example of increasing heat content visualized as a phase transition:

                    Sudden onset of ice loss in Antarctica so large it affects Earth’s gravity field

                    Scientists have observed a sudden increase of ice loss in a previously stable region of Antarctica. The ice loss in the region is so large that it causes small changes in the gravity field of the Earth.


                  • John B says:

                    So in other words, there doesn’t actually have to be any recorded increases in atmospheric temperature to prove Global Warming.

                    I’ve got a better one – you could be under a 1,000′ sheet of ice, and you’d still believe in Global Warming.

          • MarbleZeppelin says:

            Whatever the results, whether it be climate change or the sterilization of continent sized areas of land, it is homo sapiens all the way. Started 70,000 years ago and the chaos is still growing. The havoc is an ongoing and ever increasing process, so far.

            • John B says:

              Correction: 200,000 to 1.8 million years ago.


              • MarbleZeppelin says:

                Not for the latest version, the one that could imagine things and invent. 70,000 years ago is when we really started making an impression on other species. That is when our brains changed.

                • I really want to read up on this theory Marble. Got a link?

                  About 70 to 75 thousand years ago was the bottleneck caused by Toba, but I haven’t heard anything about our brains changing.

                  • Synapsid says:


                    Look for the paper “The Revolution that Wasn’t” by McBrearty and Brooks, 2000, in the Journal of Human Evolution. The matter is also covered very well in Stephen Oppenheimer’s book The Real Eve, in chapter 2. The whole book is excellent.

                    It’s about 70 000 years ago that we begin to see increasing evidence in the archaeological record, especially in South Africa, of various activities that were thought to be particular to our species, such as making barbed stone points and working bone. Some read this as showing that there’d been some change in the brain and that our species had finally become modern (thinking like us) though I don’t recall McB and Brooks holding that view themselves–oh, they didn’t; that’s the reason for the title of their paper. The more widely held picture is one of self-catalyzing learning: as people continued to learn more there was more to build on, and the process accelerated, one possible result being population increase which would boost the learning still more, perhaps in step with increasing complexity in society.

                    Since the paper came out there’s been a great deal of work done on the time span when we moderns were confined to Africa and the picture I just outlined looks pretty likely to be accurate. “Culture” to an archaeologist is stuff you dig up, and we can’t really read that as detailed behaviors or neurological development 50 000 years before the peak of the last ice age but people still try.

                    One thing we’ve found over the last couple of decades is that some of those “modern” behaviors back then were already underway in Eurasia, and they were Neanderthal behaviors. An example is incised pieces of hematite, used for pigment in burial and possible body or clothing color; another just published in the past couple of months is an assortment of eagle talons with perforations that sure look like they allowed stringing for a necklace. The Neanderthal developed in Eurasia long before moderns left Africa.

                  • MarbleZeppelin says:

                    Hi Ron
                    A very in depth and interesting ( but not for the highly religious or faint hearted) survey of human evolution and society can be found in “Sapiens: A Brief History of Humankind” by Yuval Noah Harari.
                    A very interesting and powerful book. My main interest was in the first half about how humans evolved and took over the planet. The rest is quite interesting and some is controversial, but it is always mentally stimulating.

                    I found it at the library but Amazon has it in softcover for about $16. Amazing read.
                    Guardian Review

                    Enjoy it. I did.

                  • Thanks Marble, after reading some of the reviews of this book on, I just had to have it so I have just ordered it.

                    Thanks for the tip.

                    By the way, most of the people who post on this list are highly intelligent and therefore, by definition, not very religious. 😉

                • Fred Magyar says:

                  Synapsid says:

                  “Culture” to an archaeologist is stuff you dig up, and we can’t really read that as detailed behaviors or neurological development 50 000 years before the peak of the last ice age but people still try.

                  There is an interesting book out by Neuroarchaeologist Lambros Malafouris


                  How Things Shape the Mind: A Theory of Material Engagement

                  by Lambros Malafouris
                  The MIT Press, Cambridge, MA, 2013
                  304 pp., 31 b/w. Trade, $40.00
                  ISBN: 978-0-262-01919-4.

                  Reviewed by Martha Blassnigg
                  University of Plymouth


                  In How Things Shape the Mind: A Theory of Material Engagement, Lambros Malafouris approaches key questions regarding the human evolution as creative homo faber from a fresh theoretical intervention originating in the coupling of current debates in philosophy and anthropology of mind with a shift toward object-oriented archaeological perspectives. The main critique, which is lucidly developed through the presented argument for Material Engagement Theory, is directed against representational and non-extended (“internalised”) models of the processes of the human mind and the failure to address the significance and meaning of human artefacts beyond mere inductive symbolism of neuro- and anthropocentric perspectives.

                  The book starts off by laying bare some of the pitfalls of current cognitivism in the so-called brain sciences and related fields and their wider reverberance that impacts on the understanding of human engagement with material culture. In doing so, approaches to the study of historical artefacts that merely focus on the study of objects in their signifying, symbolic character are revealed as inductive, teleological, but most importantly as a missed opportunity to more fully understand both the cognitive life of artefacts and the significance of material engagement in the cognitive shaping of the human mind in the course of evolution.

                  • Synapsid says:

                    Fred M,

                    Wow; that hurts my head. I wonder what it would say in English.

                    I looked up Martha Blassnigg on Wikipedia and now my head hurts even more. I am reminded why I left my original major, anthropology, back in 1962.

                    I have nothing substantive to offer.

                  • Fred Magyar says:

                    Synapsid, Martha is just one reviewer…

                    Lambros Malafouris writing style is a bit more accessible and probably clearer. I think his book is worth a read.

                  • Synapsid says:

                    Hi Fred M.

                    I went through Malafouris’ page and scanned the recent-publications list. A number of those items were published in Current Anthropology.

                    One of my professional hats is that of geoarchaeologist–that’s a geologist who works with archaeologists. I subscribed to Current Anthropology for decades and after years and years of making my way through papers that, all too often, were written in convoluted and jargon-heavy language, I observed that I had seldom learned anything from them. One possible reason for that is that I lack the capacity to understand the papers; another is that at least many of them really were as devoid of content as they seemed to be, though evidently publishable in CA.

                    I’m pretty intelligent, and knowledgeable, but there are wide areas of intellectual endeavor that are closed to me. Whatever the reasons for this, I decided long ago that it was not worth the time to try and read in fields whose writings left me feeling like I was trying to juggle Jello. That isn’t to say these fields are without value, only that I do not have access to them. Creativity, Cognition, and Material Culture is such a field, judging from the signs I’ve come to know over the decades.

                    Malafouris is a product of the Macdonald Institute at Cambridge; its head is Colin Renfrew. Some of Malafouris’ publications are with Renfrew. Renfrew invited me to Cambridge as a visiting scholar in the Department of Archaeology long years ago, and I’ve been familiar with his work over more than forty years. He is a very fine thinker on a large scale, writes clearly in both technical publications and in works for the broader public, and I doubt that he would be spending his time on something he saw no value in. That said, all I can do is repeat that I have nothing substantive to offer about topics like neuroarchaeology, however worthy of study they may or may not be.

                    If you haven’t seen it, look into the book The Singing Neanderthals: The Origins of Music, Language, Mind, and Body, by Steven Mithen. Mithen is a superb archaeologist at the University of Reading, and an excellent writer; I’ve valued every book of his I’ve read, and built a college course on one of them. If I can read it, it must be accessible.

                  • Fred Magyar says:


                    If you haven’t seen it, look into the book The Singing Neanderthals: The Origins of Music, Language, Mind, and Body, by Steven Mithen. Mithen is a superb archaeologist at the University of Reading, and an excellent writer; I’ve valued every book of his I’ve read, and built a college course on one of them. If I can read it, it must be accessible.

                    I’m sure if you find it worthwhile and accessible I probably will too. Thanks for the tip, I will check it out.

                    Hmm, I just had a crazy idea. What if instead of Hollywood movies, airlines offered access to scientific journals during trans continental and international flights… Guess I’ll just have to buy the book and take it on the plane >;-)

              • Dennis Coyne says:

                Hi John B,

                According to genetic and fossil evidence, archaic Homo sapiens evolved to anatomically modern humans solely in Africa, between 200,000 and 100,000 years ago…

                Quote above is from the Wikipedia article you linked to, so
                correction, 100,000 to 200,000 years before the present (BP) is when homo sapiens sapiens evolved.

          • ezrydermike says:

            another one of those crazy people talking crazy…

            “Ben van Beurden, the chief executive of Shell, has endorsed warnings that the world’s fossil fuel reserves cannot be burned unless some way is found to capture their carbon emissions. The oil boss has also predicted that the global energy system will become “zero carbon” by the end of the century, with his group obtaining a “very, very large segment” of its earnings from renewable power.

            And in an admission that the growing opposition to Shell’s controversial search for oil in the Arctic was putting increasing pressure on him, van Beurden admitted he had gone on a “personal journey” to justify the decision to drill.

            The Shell boss said he accepted the general premise contained in independent studies that have concluded that dangerous levels of global warming above 2C will occur unless CO2 is buried or reserves are kept in the ground. “We cannot burn all the hydrocarbon resources we have on the planet in an unmitigated way and not expect to have a CO2 loading in the atmosphere that is often being linked to the 2C scenario,” he said in an exclusive interview with the Guardian.”


            • John B says:

              New tech would have replaced fossil fuels, whether fears over Global Warming existed or not.

              another one of those crazy people talking crazy…

              You may have to watch this a couple of times before it really sinks in.


              • Boomer II says:

                New tech would have replaced fossil fuels, whether fears over Global Warming existed or not.

                Yes, which is why I am not sure this forum keeps getting into discussions about climate and warming.

                There are a variety of reasons to decrease dependence on fossil fuels without getting into the climate and warming discussions. Two of the biggest are declining resources and pollution.

              • Boltzmann Brain IV says:

                John B,

                When are u submitting your ideas for peer review?

                I would like an approximate date.

                Until that happens we can’t take u seriously.

                That’s the scientific approach.


          • Longtimber says:

            End Of World as we know it or End of BAU? Kunstler may wave the last laugh. Hope not, but hope not a strategy.

          • John B says:

            This proves my point.

            Nowhere in this paper do the 97% state that Climate Change is “wreaking havoc on this planet”. Or that the North Pole would be free of summer ice by 2014.

            Yet this type of alarmist nonsense is regularly attributed to the 97%.

            • Boltzmann Brain IV says:

              As I said previously, the “wreaking havoc” is my opinion. I just said it in the same post as the 97% comment.

              The opinion of climate scientists is well documented in the IPCC report. There is no debate here.

              I don’t remember any climate scientists saying the North Pole would be free of summer ice by 2014. If one of them did, it certainly wasn’t a consensus.

              You keep “bait and switching” by attributing statements to climate scientists that were said by non-climate scientists.

              Freudian projection..LOL!

              Is this coming from the guy that said we will have ZERO CO2 emissions by 2050?

              Of course if CO2 doesn’t cause temperature increase like you said, it would be awfully dangerous to change the energy system for FUN!!!

              I guess the next 35 years are going to very exciting to say the least!!!

              • John B says:

                There seems to be a dispute between a certain scientist and Al Gore about what was actually said. I tend to think Gore isn’t really smart enough to make those things up.

                And yes, there have been many failed ice free predictions by “scientists”.


                With regards to the energy transition, it’s not for fun, but for profit. New tech is cheaper.

                • Boltzmann Brain IV says:

                  I am not reading through all that, as the IPCC report represents the current thought of climate scientists that is peer reviewed.

                  Blog posts aren’t peer reviewed.

                  Glancing at it, there are a lot of mights, maybes and coulds in there. That would be indicative of probabilistic thinking and is what must necessarily be done in an uncertain world (at least to our feeble human minds).

                  I also saw comments from John Kerry, Al Gore and Joe Romm. None of those guys are climate scientists.

                  Undoubtedly there are climate scientists that are wrong about things. As long as they admit their mistakes and strive for truth, using the scientific method, that is the best we humans can do.

                  John B, when are you going to submit your ideas for peer review?

                  You could win a Nobel Prize if you are correct! Proving that CO2 doesn’t increase temperature would challenge the Laws of Physics as we know them.

                  Why would you pass such a prestigious award up???

                  That sound you hear is crickets chirping.

            • Steve in NC says:

              The possible 2013 ice-free arctic claim is from a study by Wieslaw Maslowski et al extrapolating to a date of 2016 +/- 3 years.

              • Boltzmann Brain IV says:

                Lol! I used to live in North Carolina. Great People with warm hearts! But science isn’t the specialty. BBQ is awesome.

                The Greenhouse effect is so simple that anyone that denies it might as well wear a dunce cap on their head.

                This was figured out a century ago. If you can disprove it, you might win a Nobel Prize.

                Why don’t you go for that?

    • Glenn Stehle says:

      Well garden seed!

      Another comuniss!

      Didn’t you get the memo from inside the Beltway?

      The patriots are up in arms because China “is extending its economic influence in Asia and elsewhere without following the higher standards for environmental protection, worker rights and business transparency that have become the norms among Western institutions.”

      The Women’s Patriot Corporation might not have succeeded in deporting Einstein, but its successors sure to heck got Wen Ho Lee.

    • JW says:

      During 2014 iron ore price fell by ½, and so also for most commodities. Someone used a lot less steel, wood, copper, rubber etc in the world that year. I have no data to prove it but I guess it was China that cut down investments. If so, some effect on the CO2 emission would be expected. At least a decrease in the increase.

  6. Han Neumann says:

    “In 2012 76,160,000 barrels of C+C were produced per day. Of that 76 million barrels 42,845,000 barrels were exported while the other 33,315,000 barrels was consumed by the exporting nations.”

    Ron, inside the graph it says correctly: “crude consumed by producing countries

    • Thanks Han, I have made the correction.

      • Han Neumann says:

        “…..while the other 33,315,000 barrels was consumed by the producing nations. That is this is oil that was never exported.”

        Yes, and as pointed out many times, the number of countries that only produce (without being able to export) have increased a lot.

  7. clueless says:

    There was a New York investment bank [Smith Barney, I think] that 30 years ago used to advertise: “We make money the old fashioned way; we earn it.” Goldman Sachs can (rightfully so) just say; “We make money.” With that in mind, maybe I am drinking too much Kool Aide (don’t answer that)?
    It is pretty much now known that a lot of shale oil is unprofitable at $80/bbl WTI. Especially in ND. Therefore, in my view, oil cannot go back down to $45 as they project. I think that the only way that GS could be right is if Jeffrey Brown is totally wrong with his export analysis, as is Ron with his production capability analysis. But, I do not think that they are wrong.
    And, with respect to the idea that these oil companies can almost instantaneously ramp up production if the price rises – well that is total BS. They did not pay millions of $’s in severance costs and associated shut down costs to just plunge back into drilling when the price rises. First, they can’t – these companies do not operate like ping pong balls – change directions in a fraction of a second. Second, it would be stupid. Third, the banks will not fund it [they will fund it, but much later after the scare is a distant memory]. I think that the current recovery in homebuilding could serve as some kind of recovery pattern analogy.

    • You are right. I’m not sure about the really small companies, but from what I’ve seen in my career it takes months to years to restart. Overseas, it’s slower. It takes longer to stop drilling, and it takes twice as long to restart. South American operations are just starting to slow down in a meaningful way. Argentina is offering some subsidies, but the others seem to be allowing market forces to prevail. Venezuela is a basket case, the currency devaluation over the last 5 days is unreal.

  8. Boltzmann Brain IV says:

    ELM + Putin = Bad news for NATO Aligned Countries (oil importers and in massive debt).

    The Chinese are building artificial islands in the South China Sea in an obvious attempt to grab the resources of the poorly named South China Sea.

    They are risking being attacked by the US Navy and/or Japan to do this.

    “I’m scratching my head like everyone else as to what’s the (Chinese) end game here. We have seen increased activity even recently on what appears to be the building of military infrastructure,” Capt. Mike Parker, commander of the fleet of P8 and P3 surveillance aircraft deployed to Asia, told CNN aboard the P8

    Scratching your head? He must not visit

    I believe ELM is the driver behind this. And I never get this kind of stuff wrong! LOL!!!!!

    • MarbleZeppelin says:

      I think you have the effect caused by export reduction backwards. The major problem will be for the exporting countries that depend upon much of their economy through the sales of petroleum. They will keep selling as long as possible and the importing countries will adjust their energy needs to mitigate the problem, possibly cutting imports much faster due to higher prices. The exporters will be left without a livelihood unless they start changing their economy now.

      • Boltzmann Brain IV says:

        I don’t know marble.

        That may be true for some countries, but I don’t see countries exporting themselves back to riding horses.

        A guy like Putin is notorious for manipulating people with energy. I suspect he is not the only one that will try that technique.

        If what you say is true, then why is China behaving this way?

        There would be no reason to “secure” resources if you can just buy them on the open markets.

        The Chinese are risking a military confrontation with the US Military to do this. Must be important!

        Remember the US has a huge financial interest in the South China Sea.

        • MarbleZeppelin says:

          Do you mean that the US has a financial interest in Taiwan or in the actual sea?

          • Boltzmann Brain IV says:

            The USA military values the “Freedom of the Seas” (and also ‘Escalation Dominance” which explains the missile shield aimed at Russia) . Me Pappy was in the Navy, so that means I am an expert…LOL!!!!

            Global trade from China to the USA? The USA manufacturing industry is in CHINA!!!!

            What are the shipping lanes from Asia to Europe and USA? The South China Sea?

            The Chinese are building artificial islands with military infrastructure on them. Are Chinese military strategists dumb? Give me a break!!!

            The Chinese obviously want the OIL and Natural Gas that is in the bottom of the Sea.

            They DO NOT want to fight the US NAVY…but they are risking that happening….Because ELM Peak OIL is a WORSE SCENARIO.

            The Chinese are also worried about being OIL EMBARGOED by the US NAVY. They are attempting to project power into the energy sea lanes.

            The US Navy could sink every oil tanker on the planet. Effortlessly.


            • MarbleZeppelin says:

              “The US Navy could sink every oil tanker on the planet. Effortlessly.”

              But what about the clean up costs and environmental damage?

              • Boltzmann Brain IV says:

                LOL!!! U cant be serious.

                If the US NAVY starts oil emsbargoing people…The last thing we need to worry about is environmental damage.

                That is the end game. That is a resource war with nuclear armed countries!!!

                • MarbleZeppelin says:

                  Oh no, not another end of the worlder.

                  • Boltzmann Brain IV says:

                    Oh no…not another buffoon.

                    Military moves cost $$$. They aren’t for fun.

                    Aren’t we on

                    ELM is a nasty situation. We should expect military expenditures.

                  • MarbleZeppelin says:

                    No Boltzmann I was not serious but you seem to be.
                    Boltzmann, what does military expenditure have to do with your asinine thinking that nuclear war is a viable option? End game indeed. How does that get more resources????
                    ELM is merely the loss of export capability of certain countries, IF they do not take measures to reduce their use of internal oil.
                    Do you really think that the Saudis would allow their incomes to become zero from oil? Maybe they will run their cars on natural gas or electric or institute conservation measures. Maybe they will generate their electricity from natural gas. ELM is just a model. Real countries have options and make adjustments.
                    Seems like the KSA is already shifting more to natural gas and looking at expanding solar energy.
                    The ELM result is dependent upon everything staying the same and the trend continuing. That never happens. So ELM will be modified and your predictions of the “end game” will only come true in your dreams.

                  • Boltzmann Brain IV says:


                    I am not sure how this can be explained more clearly.

                    The Chinese are building artificial islands with a MILITARY infrastructure.

                    We are on

                    The topic of the post is Jeff’s excellent Export Limited Model.

                    You can’t possibly be this clueless??????


                • MarbleZeppelin says:

                  Boltzy are you wacky or something? I just discussed the ELM model and how it would evolve. If you look up page you will see the original was totally off and now is much changed. It will change again as reality changes. It’s just a model not a crystal ball.

                  • Boltzmann Brain IV says:

                    Sorry marble, I had a few at the pub when I wrote that.

                    I appreciate the discussion.

  9. Boomer II says:

    I have posted comments before about how income inequality has been affecting consumption. The wealthy are putting their money into assets that appear to be increasing in value, though those assets are pretty much detached from the 99%. The money supply goes to the rich, who bid up stocks, real estate, and art, but it doesn’t go out into the wider economy, hence no inflation.

    Now it is quite likely that at some point these assets that the rich are buying will fall in value, but that will likely only happen if there aren’t other rich folks to buy them, or if there is someplace else for the rich to invest.

    Now the one positive for the rich funneling so much money into certain companies is that a few of those companies are doing some worthwhile R&D. Tesla, for example, will be a learning experience no matter what happens to the company. Musk is trying out things that other companies aren’t. That is good, even if they ultimately turn out to be unsuccessful, or are premature ideas.

    Overvalued in Silicon Valley, but Don’t Say ‘Tech Bubble’ –

  10. sunnnv says:

    re: Ancient Bacteria Sweat Fuel Under New Mexico’s Desert Sun

    I couldn’t get the yahoo link to work, but found the video at bloomberg worked.

    There’s a more explaining video on Joule’s site (the bottom video):

    The 10 minute BBC video gets interesting after a minute and a half of dramatic into.

    Joule looks interesting.
    Haven’t seen Robert Rapier comment directly on the company.

    Plain algae has several big issues, due to the process being a batch system, and algae be a more complex organism.
    The use of cyanobacteria in a fairly continuous mode that “sweats” fuel is a good idea,
    in that:
    1. cyanobacteria, being without mitochondria, don’t have a background burn rate, so more productive than algae.

    2. There’s no need to smush up a zillion algae, then try and separate the oil (triglycerides) droplets from the rest of the mash. That ends up taking a lot of energy.

    3. directly producing alkanes (i.e. major chemical component of crude oil/diesel) or ethanol, vs. having to convert triglycerides into biodiesel or ferment carbohydrates into ethanol cuts processing costs radically.

    4. the cyanobacteria is simpler to genetically engineer, and control gene expression – so one can grow a batch, put them into the photo-bio-reactor, have them reproduce until the fill it, then “tell” them “make alkanes and don’t grow”. Much, much easier than you can tweak algae that will grow, then try to tell them “make triglycerides in your vesicles but don’t grow in numbers”.

    5. I would surmise cyanobacteria, being simpler than algae, are more resistant to high CO2 levels, their paper talks of 50x-100x atmospheric CO2. That high a level will be acid enough that protein synthesis and folding will be affected. But the cyanobacteria get grown in numbers and their enzymes get formed without high CO2 levels, then they get dosed with high CO2 (and no doubt some magic switch) for 53 days (per their paper) before enough of their enzymes get trashed enough that it makes sense to replace the batch of cyanobacteria.

    The net result is that they’re (in the 2011 paper) 7.2% efficient, while open pond algae is only 1.3% efficient.
    Theoretical max is 12%, less than PV, but you get storage/energy-portability “for free”.

    There’s a good paper from 2011, open access, abstract at this link, with a download pdf button:

    I’d say these guys are the best biofuel solution I’ve seen yet.
    I do wonder about scaling/fouling in their growth tubes, they’re using non-potable water.
    I guess if they sanitize things (need for closed system anyway), maybe engineer their “bugs” not to make slime, fouling wouldn’t get a huge issue.
    Also, it looks like they really need high CO2 levels for high productivity – and if we run out of fossil fuels, what then? (how many cement plants are there?).

    The goals/specs/advantages are at:

    Ethanol at $1.28/gallon. 25,000 gals/acre/year
    Diesel (or similar alkanes?) at $50-$60/bbl ($1.20-$1.42/gallon), 15,000 gals/acre/year

    So, the US would need about 10 million acres of PV to supply all electricity it uses (plus storage of course).
    That’s 0.4% of the US.

    We use 19 million bbls/day of “oil”, or 300 billion gallons of oil per year.
    That’s 20 million acres at 15,000 gals/acre/year.
    New Mexico is 77.8 million acres, Texas is 172 million.
    There are about 4 million acres of residential roofs in the U.S.

    Hmmm – time will tell, but this one isn’t as outlandishly impossible as corn ethanol.
    The CO2 supply issue is a bear at high penetration though.

    • Watcher says:

      Read the article about grow for a while and then stop and divert 95% of CO2 to fuel. Don’t see how that works for reproduction and age of the critter diverted to strictly fuel. When do they die?

      • sunnnv says:

        The bacteria die when Joule empties one their production systems of the old batch and loads another that was started offline.

        I presume the old batch gets the “bugs” (bacteria) filtered out, the water reused and the waste bugs get composted/trashed, like tree leaves at the end of a season, except that the season is only 50 +/- days, and there are zillions of very tiny “leaves”. Haven’t found them saying anything besides “changing a batch”.

        Starting at 1:30 at the lower video at

        They say “instead of using the CO2 for growth, the microbes now use it to make ethanol”.
        So, one has to know enough about biotech and “synthetic biology” to know that they have the expression/silencing of genes in their microbes set so that once the organisms have increased in numbers enough, then either:
        1. the higher CO2 levels trigger expression of “make fuel” genes and silencing of “growth” genes, and/or
        2. they administer a “drug” that does the same thing, along with the higher levels of CO2.

        They don’t say, and I don’t have the time to look through their patents, if there is that info there.
        There is this teaser here:

    • MarbleZeppelin says:

      Probably would be more efficient and use less resources to use PV and wind generated electricity to convert CO2 to methanol and upgrade from there than to make huge amounts of cyanobacteria. What happens when these bacteria enter the environment?

      The NREL figures are way off, did not consider a number of factors as well as improvements in technology. Probably need about one half of the land area they stated.

      The DOE is promoting higher and larger wind towers/blades which will more than double the amount of area available for commercial wind power generation.

      We won’t need much oil in the future, so synthetic generation will be nowhere near the amounts we use now.

      • old farmer mac says:

        MZ is probably right about the manufacture of synthetic fuel proving to be cheaper in the end using pv and wind and straight up ordinary engineering rather than much more complicated biofuel systems.

        Think about this. When it becomes possible for machinery to be used to do something formerly only possible to living beings, the machines generally turn out to be much more efficient and capable in the end. The fastest bird cannot fly even two percent as fast as the fastest aircraft, the best eyes are pathetic compared to a good telescope or microscope, trucks move goods hundreds of times cheaper than horses, etc etc etc. Radios and telephones are so far ahead of the Pony Express it is beyond me to guess how much better for long distance communication. Fifty thousand times?

        A big old wind farm or solar farm is pretty much going to run itself. Near total automation. A thousand times simpler than a biorefinery dependent on genetically engineered micro flora.

        An industrial plant designed to turn electricity into liquid fuel will similarly be many times simpler and easier to manage. In my opinion.

        Industrial grade machinery is amazingly durable and damned near trouble free compared to living organisms.

      • sunnnv says:

        “probably …” – prove it, show me some numbers.

        “bugs in environment”
        My take is they are probably very fragile, noncompetitive organisms, and that the lack of high CO2 levels and/or “magic drug” would not trigger ethanol or diesel poisoning of the environment.

        They grow them in closed systems.

        The whole history of bio-engineering is a struggle to keep your bugs healthy and other bugs out of the nice/fertile growth medium you’ve so carefully prepared.

        Re: the NREL numbers:
        4,093 TWh/year for US in 2014 (from EIA).
        6 kWh/m^2 per day US insolation, flat plate latitude tilt (a bit high, but round number).
        MODULE efficiency 15% (yah, yah, I know Sunpower, Sanyo^H^H^H^H^HPanasonic,, but average MODULE efficiency).
        Packing density, 33% – need to avoid shade, allow access, avoid vents, etc.

        4093 TWh/year / 365.25 days/year = 11.2 TWh/day (average).
        11.2 TWh/day / ( 6 kWh/m^2/day * 0.15 ) = 12.4 billion m^2 = 3 million acres.
        3 million acres / .33 (packing density) = 9 million acres (close enough to 10).

        Converting CO2 is certainly possible, but where does one get large quantities of CO2?
        It’s not so easy/efficient to grab it out of the air – in reality.

        Methanol is very toxic to humans, and is not a drop in replacement for diesel (like their alkane bugs are). What about all the existing vehicles?
        If you’ve got to change vehicles, an EV is now an option.
        The bacteria grow themselves.

        • MarbleZeppelin says:

          You used the word probably also. Possibly another scientist like me.

          From the DOE paper:

          Based on an advanced turbine concept and assuming hub heights of 110 meters (m) (which are already in wide commercial deployment in Germany and other European countries), the technical potential for wind deployment is estimated to grow to 4.3 million square kilometers, a 54% increase compared to current technology with 80-m hub heights. By pursuing hub heights of 140 m, the technical potential for wind deployment is estimated to grow to 4.6 million square kilometers, a 67% increase compared to current technology with 80-m hub heights (Figure ES-1). The geographic distribution for this expanded wind technical resource would include new regions such as the Southeast, as well as increasing the already cost-effective areas where wind power is currently installed; and

          4. Improvements in siting practices have contributed to the deployment of 65 gigawatts (GW) in cumulative installed wind capacity (as of 2014). Pursuing more moderate resource quality sites can and should be done in coordination with the broad stakeholder community for wind to coexist with the environment and federal and state agency missions.

          The paper on Enabling Wind Power Nationwide.

          Methanol can be upgraded to larger molecules as I stated earlier.

          Current NREL data shows 2 acres/GWh/yr for 2 axis and 2.8 acres/GWh/yr for fixed, large installations.

          Packing factors are much higher in the solar farms around here, similar to 80 percent.

          15% is the bottom of the current PV efficiency range now.

          The area needed for solar is less than the area needed for fracking gas and oil and the energy just keeps coming without all that pollution.
          So what is the problemmm sunnnnv?

          • MarbleZeppelin says:

            I was talking about wind and solar combined land area.

          • sunnnv says:

            re: “Probably would be more efficient and use less resources to use PV and wind generated electricity to convert CO2 to methanol and upgrade from there than to make huge amounts of cyanobacteria.”

            This is what I want to see numbers on, the “CO2 to methanol and upgrade from there”. I know this is possible, I know people who have done the CO2 to methanol thing electrochemically, and alcohols are wonderful feedstocks. But what’s the economics?
            You haven’t even detailed the steps.

            The cyanobacteria will make themselves quite nicely, given the right nutrient bath and some light. The question is how expensive is it to feed them and keep them un-contaminated. Joule looks pretty cheap.

            My “probably fragile organisms” is based on reading enough Nature and Science and considering evolutionary pressures to know that bioengineered bugs are often stripped of unnecessary genes or otherwise altered to:
            * allay fears of release

            * focus the organism’s efforts on the synthesis they’re supposed to do, for efficiency. Side effect is they’re not/less focused on survival in wild environments.
            * avoid side products (important for pharmaceuticals and fine chemicals)
            * reduce genetic drift so you don’t have to re-do creation of the GMO.
            * get better patent protection
            And without the evolutionary pressure of “predators”, organisms tend to evolve to save the expense of creating defenses.

            re: windpower – increased hub heights and longer blades are all well and good, but that doesn’t give a good comparison of cyanobacteria vs. electrochemistry vs. electrically heated water-gas shift vs. ??? to do CO2 to methanol.

            re: “Current NREL data shows 2 acres/GWh/yr for 2 axis and 2.8 acres/GWh/yr for fixed, large installations.”

            yes, so 4,093 TWh/yr is 4,093,000 GWh per year U.S. electricity consumption.
            2 acres/GWh/yr means 8 million acres.
            How is that “way off” from 10 million acres?

            15% is certainly a conservative PV efficiency, but remember there are wiring and inverter losses, so for rough numbers I pick 15%, no need to oversell PV.

            And the whole fly-in-the-ointment for any CO2 to fuel scheme is where to get the CO2 cheaply enough.
            Joule hasn’t told us how much they pay for their neighbor’s CO2 (if anything but the cost of the pipe).
            If one is burning natural gas in a conventional methanol/ammonia/… plant, it’s easy to get some concentrated CO2.
            What do you do when there’s minimal fossil fuels in use, and the ones that are in use are burned in mobil sources?

            So that leaves air collection – and what’s the economics of that?
            Now that’s a problem.

            • MarbleZeppelin says:

              The low temperature organic catalysis of CO2 to methanol was developed about six years ago. The atmospheric conversion is still being researched and developed. I assume as in all things, the engineering and technology will develop as time progresses.
              You want a full blown technology with all the final numbers. Sorry, it doesn’t work that way. If you looked at PV in the 70’s the numbers were horrible and with your attitude would have never progressed.

    • wimbi says:

      Thanks for the very informative info.

      What’s wrong with just burning any biomass whatsoever and generating electricity for EV’s?

      No processing of any consequence, anything will do, including of course, any algae.

      Also, can pyrolyze the fuel, take the carbon resulting and plant it back into the ground.

      Carbon negative transportation.

      • sunnnv says:

        You’re welcome.

        “burning any biomass –> electricity for EVs”

        Probably will be in the mix, particularly in cloudy places with low population densities, though hard to say how much.
        Everything has it’s advantages and disadvantages.

        Algae and some other forms of biomass need to be dried – a lot.

        Then there’s drought, need for fresh water to grow most forms of biomass.

        Land area use is probably the big one.
        Plants growing are typically about 1% efficient.

        The big advantage for Joule is that they stripped out a lot of fluff (or silenced it) so their cyanobacteria only grows, then makes fuel; it doesn’t doesn’t have to fight off phages/fungus/etc., deal with scarce or hard to synthesize nutrients, etc. etc.
        So they get 7% efficiency, which is comparable to sugar cane in optimal circumstances.

        With 1% efficient biomass, vs. 15% efficient PV, you need 15x the land area.
        Oh, but wait, there’s more:
        A small biomass to electricity system might only be 35% efficient heating value to electricity (probably less).
        You’re size limited due to the economics of gathering biomass beyond 80 or 100 miles.
        So now you need 15x * 3x = 45x the land area.

        except that wait, there’s more – what about winter?
        maybe up to 4x to deal with one growing season –> 180x.

        Plenty of people living in the city/suburbs have more than enough roof area to “grow electricity” with PV to power a Nissan Leaf (24 kWh battery).
        At 6kWh/m^2/day of sunlight in a lot of the US, and 15% modules, that’s 27 m^2 (287 square feet) of PV modules. That’s roughly 10′ x 30′, not much bigger than the footprint of the garage to park the thing in. Double it and power your house too.

        287 square feet x 180x = 41,550 square feet
        recognize a common number of that magnitude?
        Yep, an acre is 43,560 square feet.

        How many working stiffs do you know with a spare acre or two?

        PV system sits on the roof and works unattended for the most part.
        Biomass has to be cut, gathered, possibly dried, transported before being burned,
        then you got to haul the ash “away”.

        PV systems don’t need fertilizer, biomass often does, or productivity diminishes.

        No real need to run a pyrolyzer and manually bury carbon, unless you want some oils for chemical use or liquid fuel. When one harvests a plant by chopping off above ground matter, the roots die back to match the loss. The dead roots become carbon in the ground.

        • wimbi says:

          Wow! What a lot of heavy work to answer simple little Q. I am flattered.

          I was thinking of nothing cosmic, just me and the not-a-few people like me. We live in the country, we heat with wood, we even have lots of PV and a Leaf.

          All is hotsy-totsy until about Dec. Clouds for weeks. No PV. What to do?

          Wood! We are already burning way more than needed to run a generator, we just aren’t doing it yet because we have forgotten all those wood-fired cars running around europe during their late hate.

          I’m just exhuming that wood-to-power tech. Real simple.

          With some added twists, of course, just for amusement.

      • Caelan MacIntyre says:

        “What’s wrong with just burning any biomass whatsoever…” ~ wimbi

        It may just flirt with being just plain stupid, that’s what.

        And as I’ve suggested elsewhere, maybe here too, it is a slippery slope towards the monoculturalization of composting.

        From what is understood, so-called ‘pyrolizers’ (What are they exactly and do they work as advertised and/or constructed?) don’t always work as fantasized, (and) often producing yet more C02 for the atmosphere.

        Another concern is with ‘burning everything’ rather than using it for compost or even animal feed. Growing things from nice living compost, instead of burning it dead, seems a much better way to get that carbon out of the atmosphere and into nature that then absorbs it some more, rather than sticking it in the ground as relatively-inert carbon.

        Yes, I realize humans discovered fire, and since then seem to want to burn everything. That’s why we have a lot of the problems we do.

        See also my exchange on TOD.

        “In the case of biochar, concerns over air pollutants created during pyrolysis, and introduction of toxic polycyclic aromatic hydrocarbons (PAHs) to soils will likely indicate mandatory testing before credits are granted, further pricing farmers out of carbon markets…

        When large scale energy crops are required, as would certainly be the case if biochar is adopted as a strategy to reduce atmospheric greenhouse gas levels, emissions from land use change become very concerning. Clearing of forests or grasslands to make way for energy crop monoculture results in large quantities of emissions, reduces future sink capacity and causes further collapse of ecosystems and the biodiversity on which we depend for climate regulation. As widespread freshwater shortages are predicted, the regulation of rainfall by healthy forests and soils becomes increasingly critical, and the allotment of water for irrigation of energy crops increasingly unsustainable…” ~ Almuth Ernsting and Rachel Smolker

        • old farmer mac says:

          With all due respect to Wimbi we are never going to run any sort of industrially based economy on biofuels – but I don’t think he is proposing doing so on the grand scale anyway. He talks about local action and localized self sufficiency and biofuels are quite worthwhile at the scale he talks about.

          But only somebody who knows little or nothing about the A B Cs of agriculture specifically and biology and ecology more generally can possibly actually BELIEVE we can run on biofuels at the grand scale we use fossil fuels. If we once get seriously committed to that path we are on a broad smooth extremely slippery DOWNHILL road to environmental hell.

          But we may be able to harvest a lot of methane or maybe even ethanol from biological wastes – since if the population doesn’t crash SOONER we are probably going to be COMPELLED to recycle most of our sewage and other biowastes in order to recapture the nutrients in this waste stream. This is going to cost an arm and both legs but it will still be preferable to starvation and we might as well go for the potential methane since we are going to be COMPELLED to this stuff anyway.

          The minerals we dig up to be used in manufacturing fertilizers are subject to depletion just like oil.

          I DO NOT believe that climate science is a conspiracy to collect grant money or that doctors lie about cancer cures to keep the money rolling in treating cancer or that sort of bullshit –

          but I KNOW that a hell of a lot of supposedly respectable academics spout out some awesomely ignorant ideas or just lie their asses off to support their pet schemes.

          NOBODY IS EVER GOING TO HARVEST BIG REPEATED CROPS OF SWITCHGRASS FROM SO CALLED MARGINAL FARMLAND- at least not without spending megabucks on machinery, fuel for the machinery,fire prevention , and FERTILIZERS. Also some pesticides. Big monocultural operations don’t generally work very long without pesticides. Insects, fungi, bacteria and all sorts of other critters are very adaptable and soon find ways to take advantage of a mono crop.

          Beyond these factors lies an even bigger one – the so called marginal lands are mostly already in use in one way or another. You can graze a few cows or sheep on rough land but you can’t run farm machinery over it without spending megabucks on grading and removing stone etc. A few cows or sheep on lots of rough acres work ok with very little water. You will not get a big crop of any grass repeatedly without lots of water and lots of fertilizer applied to replace the nutrients that are hauled away.

          The very idea itself flies in the face of everything we know about harvesting plants and removing them from the places they grow. But there are professors of agriculture who tell us this is possible. They know more than I do but I KNOW THE BASICS and the only conclusion I can reach is that they place their own agenda ahead of the truth.

          The truth as I see it is that the doomers are mostly right. We are way the hell up DO DO creek without a paddle.

          There is just about a zero hope of moving the tens of millions of people out of the big cities and getting them to take up MORE sustainable rural lifestyles. It just isn’t going to happen.

          We either feed them using industrial agriculture or they starve.

          In the last analysis people who think like Ron are far more likely to be right than the technocopians. The technology ambulance is going to run out of gas short of the technology hospital – and the cures the technology doctors have available at this time are not good enough to save all of us by any means.

          Things might have worked out differently if the population had grown more slowly and the resource base had been larger.

          But some of us are likely to pull through the bottleneck ok.

          • Lucky for Cuba the Castro dictatorship nationalized all farm land 50 years ago. Today, large tracts of previously productive land are covered with weeds, in ruins. This includes land my grandparents sold after WWII so they could move to the city to put my mom and uncle in college.

            I think we can recover most of that land, use a portion to grow food crops, and use the rest to grow sugar cane for ethanol. Sugar cane agriculture in Cuba is different from the USA (it has better weather and land), so it can yield a pretty large crop.

            I think the island can be cultivated with a variety of biofuel crops, and we can change the use of a large portion of the land used for cattle before the communists ruined the country. We will just gave to eat more pork and chickens.

            • Boomer II says:

              Today, large tracts of previously productive land are covered with weeds, in ruins.

              I’m speculating that the land probably is in better shape having let to go to weeds than if it had been farmed badly and depleted.

    • Watcher says:

      btw where does this come from

      Theoretical max is 12%, less than PV, but you get storage/energy-portability “for free”.

      How is 12% calculated.

      • sunnnv says:

        re 12%

        look in the PDF at:

        You may have to try a time or two, and I think they hand out magic token names per PDF so they can track who snarfed it.

        They start down at the bottom right of page 272 “Comparison of efficiencies …”
        Fig 2 on page 274 for those who like pictures.

        They take energy as solar photons at earth’s surface,
        toss the non-PAR (Photosynthetically Active Radiation) energy,
        toss culture growth energy costs (in real-world case),
        toss the reflections from the reactor walls and culture in the reactor,
        toss photon utilization loss (in real-world case)
        toss photosynthetic loss (mostly thermodynamic inefficiency),
        toss respiration/cellular maintenance,
        and that’s how you end up with 12% in theory, and 7.2% in practice.

        They detail what they mean by those categories, and give references to data used or tell what assumption were made.

        • Watcher says:

          Will go back and read this. The vids did not look passionless and the investment numbers did not look like anyone was convinced. 357 barrels/year/acre is probably not exciting anyone.

          20 million acres at a nominal $15,000/acre is $300 billion just for the land. This bothers me not very much because if it was necessary (and if it truly worked) it could be printed or the owners mowed down with automatic weapons to take the land.

          But I somewhat suspect 20 million acres put into production would be a 20+ year process and the eventual shock event will be much more sudden. This doesn’t look like a probable path.

          • old farmer mac says:

            The harvest costs and drying and transportation costs of any biomass based system intended to run on reasonably large centralized electricity generation plant or manufacturing plant are going to be killers.

            My impression is that so far as electricity is concerned , wind and solar are going to win out on account of these costs, with biomass being relegated mostly to back up status.

            Given that the sun shines hot and bright and very steadily ( meaning no cloud cover problems to any real extent) in Sand Country I believe the Saudis will soon start building out some BIG TIME solar farms so as to conserve their crude to use it as feedstock for their refining and manufacturing industries or simply to sell it directly.

            With highly predictable weather and an existing oil fired grid ramping up and down the load should be a piece of cake for them. It is obvious they must have a big afternoon peak already with a big drop off at night with clear desert skies.

            Solar would appear to work there if it is workable anywhere on the grand scale in terms of dollars and cents.

            But they are probably penciling out the details the same way I am personally. So far the pencil has said I should delay purchasing pv infrastructure for my own use due to the price of it dropping year over year.

            Beyond that I can spend ten grand on conservation and efficiency measures more efficiently for the time being. I have not yet for instance installed a heat pump instead continuing to use oil for backup heat.

            Feeding a wood stove twenty four hours around is a pain in the butt if you don’t have to.

            The heat pump will be the next big thing thus cutting out three or four hundred bucks worth of oil and reducing the ac costs all summer as well.

    • This has interesting implications for Cuba. Once the communist dictatorship falls we can recover Camagüey province (today it’s mostly abandoned and covered with weeds and brush), set aside areas to grow sugar cane to make ethanol, run the cane bagasse into boilers, use the boiler off gas (which will have a high CO2 concentration) into Cyanobacteria growth ranks. The only problem I see is that cane bagasse is burned during the harvest. So to get supplemental CO2 we need an offseason source. This can be several coal plants used to generate base load electricity.

      I think the long term bottleneck is the enriched co2 issue. If these critters need 20 % co2 we would have to burn some sort of grass like miscanthus during the non harvest season. And that may conflict with the available water supply.

    • Nick G says:

      In the very long term it will make sense to produce *some* liquids – maybe 15% of what we produce now, for aviation, long distance water freight, seasonal agriculture, a little personal transportation.

      On the other hand, these people claim 70% efficiency, which is much higher than I expected. Might make it a little more widely useful than I would have thought.

      70% efficient.
      “Hydrogen using electricity rate at 5 cents per kWh and 53 kWh per kg would have an energy cost of $2.65. Adding $0.50 facility cost would raise the cost per kg to be $3.12 per kg.”

      “1 Euro per liter”
      “The Audi e?gas plant in Werlte, Lower Saxony, already produces Audi e?gas (synthetic methane) in a comparable manner; drivers of the Audi A3 Sportback g?tron can fill up on it using a special fuel card.”

  11. canabuck says:

    rockman on Fri, 22nd May 2015 8:02 pm on

    I didn’t bother spot checking the rest of this article after reading the following BS
    “Texas’ oil and gas industry lost 8,300 jobs in April — the most in nearly 30 years….The last time Texas lost this many oil and gas jobs was in 1986, with a drop of 9,000 jobs. That was also during the last big oil crisis.”
    Who the f*ck cares how many oil patch jobs were lost in April? Just one service company alone laid 11,000 off The best guess so far is a total of 120,000. And I recall the body count back in the 80’s wasn’t 9,000 but on the order of 300,000 to 450,000.
    None of which is very important to folks outside the oil patch but perhaps indicates some effort to spin the down turn as not such a big deal. But regardless of the cause of the error it implies some serious credibility problems IMHO.

    • Mike says:

      Every job lost in the oilfield effects a family and the well being of children in that family. Unemployment, in any profession, effects the overall health of our economy and that of local communities. All Americans should be very concerned about the loss of jobs in the oilfield; those young men and women may not come back when and if things get better someday. Oil does not grow on trees, it requires a lot of hard working men and women to get it out of the ground.

      I don’t know what the intent of the article was that “The” Rockman is commenting on, whether it was an intentional effort at diminishing the severity of the employment situation, or implies serious “credibility” problems with those that still believe in the LTO miracle. The shale industry, and those that support it, have never had any credibility, IMO. That is hardly news. He is right, it was much worse in the 80’s; that was then, this is now. Having a job one week and then being told there is no more work, go home, is not a good thing to have happen in anyone’s life.

      Saying who gives a “f#ck how many oil patch jobs were lost in April?” is a stupid, arrogant thing to say. You can tell the Rockman I said so. I care, and so you should everyone.


      • shallow sand says:

        There was a lot of talk about how the large drop in oil and natural gas prices would help the US economy.

        However, the drop was so severe that it actually contributed to contraction of the US economy. Remains to be seen what the long term effects will be.

        I wasn’t paying much attention in 1986, still in school. However, outside of 1998-early 1999, a short time in 2001 and a few months in late 2008 early 2009, this has been the worst in 18 years.

        Unfortunately the jobs lost were in many instances ones that actually paid a decent wage.

        EOG, PXD, CLR and the like throw around a bunch of BS about how happy things are. Yes, $59 is better than in the $40s, but at that price long term they are screwed and the mom and pops are largely making peanuts.

        I really cannot see KSA and their brethren being satisfied with low oil prices long term either. I understand their strategy, but have to laugh at the quotes that come out of their neighbor, Oman, which is not an OPEC member. Something like, “Why sell 10 million barrels for $50 instead of 9 million barrels for $90? Doesn’t one make much more money doing the later?”.

        I still think KSA overestimates US shale. Stuff has been really messed up by these crazy low interest rates. I’m a long way from being able to retire, but I don’t see how anyone can right now. A million bucks in the bank is rare thing, but are lucky if earn $10,000 on that.

        Farmland is still way over priced, likely due to low interest rates. Farmers will not make much this year, yet read about land in Corn Belt still topping $10,000 per acre.

        Last ten years WTI average in low 80s. I’d say even that won’t save much US shale if interest rates go up 3%.

        • Watcher says:

          However, the drop was so severe that it actually contributed to contraction of the US economy. Remains to be seen what the long term effects will be.

          That violates the narrative. So they are going to ramp up seasonal adjustments on all winters. Rather than ramp them down on other seasons.

          Shale will not be allowed to be a GDP hit — by changing the GDP number.

        • Ves says:

          Hi Shallow,

          “I’m a long way from being able to retire, but I don’t see how anyone can right now. A million bucks in the bank is rare thing, but are lucky if earn $10,000 on that.”

          If you have 1 mil at 65 in today’s nominal value then you can put half in indexed funds and with other half buy annuity and with 4% annual withdrawal rate you should be fine if you don’t have big expectations. And anyway at 65 what else do you need beside coffee and muffin? 🙂

          The big problem is saving 1 mil.

          “Farmland is still way over priced, likely due to low interest rates. Farmers will not make much this year, yet read about land in Corn Belt still topping $10,000 per acre”

          That is exactly what is problem with debt based monetary system. Price is too low for producer and too high for consumer. That is exactly what is happening with price of oil. We have to create additional purchasing power for consumers in order for producers to stay in the business. But the trick is that we have to do it without using the DEBT as we have been doing particularly since 2008.

          • Watcher says:

            The 4% Trinity university study is decades old now and should be read and understood thoroughly before you reject it, as you should.

            It’s based on what happened over a period of 100 years. Since 2008, nothing looks like what it looked like over that time period. Yes, the Fed has created an equity boom, but those 100+ years had infinite oil, which is all that matters.

            History means nothing now. Oil scarcity creates its irrelevance.

            • Ves says:

              If you can’t beat them then you join them 🙂 (through diversified index funds)

              I disagree how market works changed significantly from 100 or 200 or 300 years ago. What changed is that we are paying little bit more attention how market in fiat and closed financial system can always be re-calibrated to absorb oil scarcity, until it cannot anymore. But I don’t know when that is going to happend. I could be dead by that time. CB has been printing long before 2008. The fact is that market is at all time high and the price of gasoline is never been cheaper in the last 8-9 years. So if you have a job and steady income and savings where else you would invest beside stock market? Assuming that you don’t have so much cash where Van Gog paintings would be more appealing.

              • Boomer II says:

                I believe in putting money into an S&P 500 index fund — as long as you have the time to wait out the dips.

                If you are of retirement age, you may not want to risk losing 1/3 to 1/2 your investment. It can take 10 years to get whole again.

                I’m sort of sorry I have missed out of the latest run up in the market, but I also can’t bear a heart-attack-causing drop in the market at my age.

                • Ves says:

                  ” I believe in putting money into an S&P 500 index fund — as long as you have the time to wait out the dips.’

                  Not just in S&P 500 but according to world market cap. So you in US would do S&P 500 and one of the International Index funds. You don’t have to wait out the dips because you don’t know when the dips are going to happen. What you do is rebalancing every year between bonds and equity portions of your portfolio. Sell winners and buy losers between these two equity index funds so to speak every year to balance your ration according to your risk tolerance. As you are coming closer to retirement you are also increasing bonds portion and reducing equities portion. So at the retirement age maybe you will end up with 80% bonds and 20% equities in your portfolio. So even if the dips happen closer to the retirement your portfolio has “shocks” to absorb volatility so the drive would not be like in Wartburg 🙂

                  Even if you are retired and maybe have some SS cheques coming where else would you put your nest egg? Only rational sense is stock market but of course with higher bond index fund portion then equities depending on your risk tolerance. Otherwise if it is sitting anywhere else is sure “looser”. Inflation, same as oil depletion, never sleeps 🙂

                  • Boomer II says:

                    I used to buy treasury bills. But the return now is too low to bother with.

                    I wouldn’t touch bond funds.

                  • dolph9 says:

                    Speak for yourself.

                    I believe, and will believe until the day I die, that gold is the only real money.

                    The rest is just fictitious currency that could collapse at any time.

                  • Boomer II says:

                    Aside from its industrial and jewelry uses, I don’t see an inherent worth to gold any more than I see a worth in beanie babies. It’s worth what someone will pay for it.

                    There are assets which might have inherent value, like land, storable food, stored fuel, water, and so on, but those aren’t liquid. It’s hard to pay for things with those, although gold isn’t all that much better.

                    For the most part, anything we use for currency or to hold wealth is based on a system of trust. They are worth what the community decides they are worth. It works as long as the system holds up. And when it doesn’t, even gold may not hold up. Gold will only be worth what others will pay for and there are situations where it won’t be worth much.

                  • Ves says:

                    Nobody is arguing what constitutes the money and what is not. The argument is what is the rational way to invest in the current financial system in order to reach certain goals (pension, college fund etc).

                    Problem with gold as with any other individual stock or even investing just in pork hogs are the same – no diversification. That is the reason you invest in Index funds that track whole markets. Don’t confuse what CB’s are doing and what small investors should do.

                  • Boomer II says:

                    I’ve had savings and investments in one form or another for about 40 years. Stocks, mutual funds, treasuries, savings bonds, CDs, oil, cattle, real estate, commodities. I’ve followed all of them pretty closely at one point or another.

                    The S&P 500 index fund is what I recommend to people who are younger than me.

                    For me, I think the best policy, at my age, is to pare my living expenses down to a minimum rather than to take on any financial risk. Nothing has appealed to me since the dotcom crash.

                  • old farmer mac says:

                    A working farm , with no liens on it , used to as security to secure a first mortgage for only twenty five percent of the assessed value, should impress just about anybody who is rational as a safe place to park some money, say a few tens of thousands of dollars.

                    There are plenty of farmer out there who would be glad to pay five or six or even seven percent for five years or longer..

                    But the people with the money in hand are so ignorant they insist on loaning it to somebody in a suit in an office.

                    You can’t even get one of them to talk over the risk versus reward with his attorney.

                    If the economy collapses to the point that a farm sells for less than twenty five percent of the tax assessment , bonds and stocks are going to be just about totally worthless.

                    IF a person with some cash looks for a safe return he can find one.

                    I know of real estate in my neighbor hood that would sell at auction for three or four times what folks are trying to borrow against it with a first mortgage and offering to pay six percent or more.

                    The problem with gold in the last analysis is that you can only make OR lose on it as the price goes up and down. Anytime people are not scared of the economy going bad and money becoming worthless the price of gold generally falls off from a previous high brought on by FEAR.

                    The one thing I would absolutely advise any gold investor to do is to have physical possession of his gold- PERSONAL physical possession , as in a safe deposit box or well and truly hidden.

                    Given the shenanigans banks pull, I wouldn’t trust a gold company with over a few hundred bucks max.

                  • Boomer II says:

                    A working farm , with no liens on it , used to as security to secure a first mortgage for only twenty five percent of the assessed value, should impress just about anybody who is rational as a safe place to park some money, say a few tens of thousands of dollars.

                    That makes sense to me. It has intrinsic value so that even if you can’t get your money back out, you’ve got something that can potentially keep you alive.

      • Synapsid says:


        He’s saying that to point at 8300 jobs lost is to trivialize the situation–that the real number is way over 100 000 jobs lost. His view is the same as yours.

      • Boltzmann Brain IV says:


        Love reading your posts. Couch potatoes like me, love hearing what the true blue oil guys think.

        I’ve been following Rockman’s posts for years (sounds creepy)…But he is one smart cookie. His calls have been spot on.

        I wish he would post here.

        As we all know, context and sarcasm, etc can be lost on the blog posts.

        I don’t think he meant to come across as arrogant, etc. He is a down to earth bloke.
        I suspect you two would agree on most stuff.


        • Mike says:

          I know he is iconic and much revered in the peak oil community. I have no such aspirations, but I respect that he is. Guys like he and I tend to speak from the hip; perhaps I misunderstood his quote.

          Thankfully there are still people in the world that understand the measurement of accomplishment in life is thru hard work. They roll out every morning at 5 and do what has to be done. The energy future of our country will depend greatly on those people and we, of course, should wish them no ill will.

          Its been raining in Texas like a mama cow pissing on a flat rock for 3 weeks. Rigs shut down, can’t move any oil; I think I need to fix me an attitude adjuster this evening, with soda, and call it a week.

          Thanks. And to you as well, Syn.


          • Caelan MacIntyre says:

            “Thankfully there are still people in the world that understand the measurement of accomplishment in life is thru hard work.” ~ Mike

            Depends what kind of work we are doing and it doesn’t necessarily have to be hard. (So you may wish to consider what kind of measurement device you are using.)

            The ‘hard work’ meme is a bit of a mindfuck, since, in part, if you’re working hard you may not be working smart.

            And, let’s face it, Mike, this uneconomy just reeks to high heaven of stupidity, don’t you think?

            Speaking of which, if the work is toward BAU– which involves the wanton destruction of real community and the ecosystem– then it is close to the very antithesis of accomplishment.

            …Well, I guess you could feel a sense of accomplishment with destruction, which includes the gradual erosion of our very existential foundations, but that doesn’t sound very psychologically-sound.

            Losing a ‘job’ can be crappy, even if, for some, it’s a bootlicking one with no future (and where one is working hard while Da Boss pontificates about hard work while barking orders with their hard-workin’ mouth from their thumb-sittin’ throne), but then so can getting a divorce from a relationship with no future that was abusive anyway. Change doesn’t always happen easily, but for the right kinds of change, it’s worth it.

            “The important thing to understand about collapse is that it’s brought on by overreach and overstretch, and people being zealots and trying too hard. It’s not brought on by people being laid back and doing the absolute minimum. Americans could very easily feed themselves and clothe themselves and have a place to live, working maybe 100 days a year. You know, it’s a rich country in terms of resources. There’s really no reason to work more than maybe a third of your time. And that’s sort of a standard pattern in the world. But if you want to build a huge empire and have endless economic growth, and have the largest number of billionaires on the planet, then you have to work over 40 hours a week all the time, and if you don’t, then you’re in danger of going bankrupt. So that’s the predicament that people have ended up in. Now, the cure of course is not to do the same thing even harder… what people have to get used to is the idea that most things aren’t worth doing anyway…” ~ Dmitry Orlov

            “Marx chides Adam Smith for associating work with suffering and freedom with happiness. This only applies, Marx points out, to work as capitalist imposition. It can be fulfilling if society is conceived differently.

            Piecemeal resistance may be our best bet…” ~ Elaine Glaser

      • old farmer mac says:

        Hi Mike,

        I have known Rockman via the net for a long time and I can assure you that he is a decent human being who DOES care – personally, judging by everything he has said for the last decade, or close to it.

        Sarcasm doesn’t come across on the screen.

        I would bet my last can of beans that he was expressing bitter sarcasm towards the people who wrote the article.

        This sort of thing sure as hell does matter. I have my self been fortunate enough to not be much affected – given that I have various professional licenses , some working capital, lots of skills etc.

        But I have watched almost helplessly while a LOT of people important to me have lost their livelihoods over the last couple of decades. I wish I could help them – and I have helped a very few a very great deal by helping them get thru some late schooling. But my resources other than time are very limited and I can’t do more than hire somebody by the day occasionally to help them out.

        Just today I had a local guy just about beg me to hire him at ANY rate for a few days. The best I will be able to do for him is pay him minimum wage for a day or two. And at that I could better spend the money on something else. I see more people in this situation from one year to the next.

        But when you get right down to brass tacks this guys troubles are not basically due to the economy but rather to the fact that he is an alky.I paid him ten bucks to help me unload a truck today – took about twenty minutes plus the another twenty round trip ride to the job site- and took him to the store afterward. He spent the ten bucks on beer and a deli sandwich.

        I know he gets food stamps.

        I know a lot of other people who have simply been laid off – permanently – after putting in ten or twenty years or more as model employees.

        Big biz shipped their jobs overseas. But what goes around comes around – slowly. The end result is that we are moving towards socialism. Socialized medicine is now basically a reality.I wonder what will be next but barring collapse I am sure socialized medicine is here to stay and that the state will be taking over other major portions of our lives.

        This is not GOOD in my opinion but it is BETTER than a non existent( supposedly )free enterprise health care system that leaves half of us unable to pay for care while people in the industry make megabucks.

        • Mike says:

          Thank you, Mac. I was just sticking up for my people and I am sure just misunderstood the quote.


  12. Dean says:

    Since January 2015, the PA DEP Oil & Gas has started to report monthly production data of natural gas (and oil) from unconventional wells, while before these data were available only biannually. This is very interesting since they cover almost all Marcellus shale (approx 95% of its production) and partially the Utica shale.

    However, note that …
    “Pennsylvania’s Oil and Gas Act requires unconventional well operators to submit production reports to the Department of Environmental Protection (DEP) biannually—on Aug. 15 for the period of Jan. 1 through June 30 for the same calendar year and on Feb. 15 for the period of July 1 through Dec. 31 of the previous calendar year. All other oil and gas operators are required to submit production reports on an annual basis on Feb. 15 for the previous calendar year. DEP makes every practical effort to post these reports as soon as possible after they are filed. The Oil and Gas Act reporting is a self-reporting system, meaning that data is reported from producers to DEP as required by law. All production data is posted as it was received from the unconventional well operators. DEP does not independently verify the data before it is posted”

    ===> so monthly data may represent an educated guess/interpolation.

    I report below a plot because March 2015 data show a decline for the first time since reporting has started. It may be only a seasonal event, so do not hold your breath. anyway, I will keep track of it.

    P.s. I talked with Bill Powers via Twitter (who follows these data for a long time) , and he told me that these initial monthly data were not subject to major revisions. This is good news, because it means I can relax 🙂

    • Dean says:

      I have some problem with posting the jpg file, so here it is the link to my twitter file

      while the data are reported below:

      Jan Feb Mar Apr May Jun Jul
      2012 4.924035 4.924035 4.924035 4.924035 4.924035 4.924035 6.233867
      2013 7.764482 7.764482 7.764482 7.764482 7.764482 7.764482 9.225349
      2014 10.722372 10.722372 10.722372 10.722372 10.722372 10.722372 11.471074
      2015 12.586394 12.668636 12.578956
      Aug Sep Oct Nov Dec
      2012 6.233867 6.233867 6.233867 6.233867 6.233867
      2013 9.225349 9.225349 9.225349 9.225349 9.225349
      2014 11.471074 11.471074 11.471074 11.471074 11.471074

      • coffeeguyzz says:


        It is true that Marcellus’ production was reported to the PA DEP twice a year until the recent monthly protocol was instituted.
        I found it somewhat puzzling that the EIA’s monthly reports were scrutinized so meticulously when the data presented was, at best, a close approximation. (The EIA folks told me as much in an e-mail that their numbers were based upon best available data).
        Most of the Marcellus’ operators are cutting back on their production, but -as the rig count shows – a fair amount of drilling will continue as the operators are far from fully getting retention wells on their already-leased acreage.

      • Watcher says:

        State agencies don’t usually generate verbage for legislation. That would come from lobbyists, who themselves are likely to want to minimize research cost and therefore will avoid “re-inventing the wheel”.

        Odds seem high this reporting methodology is used elsewhere and lifted from there — with minor tweaks by local lobbyists to save local industry money on taxes.

  13. Ronald Walter says:

    BNSF Week 19 Carload Report

    Petroleum at 9733, down twelve plus percentage points from week 19 of 2014 when there were 11,090 petroleum cars delivered. 1300 fewer carloads of petroleum translates to 910,000 fewer barrels of oil hauled in week 19 of 2015 compared to week 19 of 2014.

    Must be oil readily available, the buyers don’t need any more.

    Coal cars were 39,973. Week 19 of 2014 had 43,352.

    It’s Memorial Day, fill your car with gas, go for a 400 mile jaunt along the highways and byways of America and burn some gas for the fun of it. Forget about peak oil for a day or two, it’ll be there when you get back.

    • MarbleZeppelin says:

      If every driver in the US filled up their car gas tanks, would there be any left? That would be about 35 million barrels of gasoline which would need over 80 million barrels of oil. Divide by the three day weekend which gives 27 million barrels of crude per day. Yikes! Some of you are going to have to stay home or ride share. I already did my obligatory 20 mile trip.
      Just having fun, not a serious comment.

      To all on the peakoilbarrel site.
      Have a great Memorial Day weekend. Watch a war film and think about all those guys that gave up their lives so we could wander around doing pretty much what we want.

  14. Jeffrey J. Brown says:

    Excerpt from comment by “wiseindian” up the thread:

    I think when it comes to pricing, developing countries will outbid G7 for oil, simply because it’s so vital to them liter for liter.

    What has happened is clear. The $64 Trillion question is what happens over the next 15 years or so.

    Following is a chart showing normalized liquids consumption (2002 = 100%) for China, India, (2005) Top 33 Net Exporters and the US from 2002 to 2012, versus annual Brent crude oil prices. The same trends continued in 2013 (China, India & exporters’ consumption up, US consumption remained below 2002 level, but the US has recently has shown an uptick).

    • Jeffrey J. Brown says:

      The GNE/CNI Ratio from 2002 to 2012 (definitions on the chart). There have been some data revisions, but the decline in the ratio continued in 2013. At a GNE/CNI Ratio of 1.0, China & India would theoretically consume 100% of GNE.

      ANE (Available Net Exports) = GNE (Global Net Exports) less CNI (Chindia’s Net Imports). ANE fell from 41 MMBPD in 2005 to 34 MMBPD in 2013 (total petroleum liquids + other liquids, EIA).

      Here’s the problem: Given an ongoing–and inevitable–decline in GNE, unless the Chindia region cuts their net oil imports at the same rate as, or at a faster rate than, the rate of decline in GNE, it’s a mathematical certainty that the rate of decline in ANE will exceed the rate of decline in GNE and that the rate of decline in ANE will accelerate with time.

      Note that the 2005 to 2013 rate of change in GNE was -0.8%/year, versus a -2.3%/year rate of change in ANE. In other words, from 2005 to 2013, ANE fell at about three times the rate of decline in GNE.

      • old farmer mac says:

        HI Jeff,

        I am going to be going around bragging that you were my cyber buddy one of these days- when you are testifying for a congressional committee looking into the oil crisis. LOL.

        It is beyond me how anybody with even a casual acquaintance with the facts of depletion and population can think oil will stay cheap over the long term.

        But the right answer to this riddle is so simple it seems impossible. The vast majority of people don’t think at all. The ones that do are ignored by the ones that don’t.

        Some people that think for various reasons are unable or unwilling to say what they actually believe.

        My personal opinion is that most of the climate science folks are not in a position to say a great deal of what they actually believe.If they were in such a position , they would be talking about peak fossil fuels in a far more realistic fashion than they do.

        I am personally quite thoroughly satisfied that we are looking at a runaway climate scenario but Fernando is right about some stuff.

        One thing he is almost for sure right about is that the high scenarios involving oil consumption are wildly overestimated given that peak oil is here NOW or if not now within the next few years at least.

        I know a few scientists and none of them are so careless as to actually BELIEVE in such figures as are produced by technocopian agencies such as the Energy Department.

        But they are NOT going to discuss such beliefs publicly if doing so reflects badly on the data they are politically COMPELLED to use. Just about the ONLY people actually working on climate who can truly speak freely are academics with tenure – who are satisfied to remain academics. Every body else is more or less forced to go along to get along.

        Saying this is NOT denial but rather simply the recognition of reality.The science is rock solid. The only question is how fast in terms of climate.

        People who are on the right side of the facts are often in such a situation. I myself for instance often find myself labelled with various less than complimentary names for pointing out that a great deal of our social troubles in this country are the result of exporting our industrial base.

        Never the less some furniture workers who used to make fifteen dollars plus bennies go on welfare when the choice is welfare or flipping burgers twenty hours a week for half that or less.Some of them take up a new line of work frowned on by the law.

        I KNOW – some of them are close kin. Some on welfare, some in jail. Some headed there unless their luck holds. Only a VERY few have managed to find new work that pays as well as their old jobs.


      • Dennis Coyne says:

        Hi Jeff,

        There are a lot of different ways the dashed line in the GNE/CNI chart could go after 2012. The 6 country case may not apply very well to the World because the ability for countries to import oil will be different than it was for the 6 country case.

        The other factor is that GDP growth will slow in China and India and as oil supply becomes short prices will rise and there will be substitution and even slower GDP growth. The dashed line will tend to be flatter than you have drawn for these reasons.

    • Glenn Stehle says:

      Don’t worry.

      As soon as we get that traitor out of the White House who isn’t really a true American, we got a little surprise waiting for those folks who think they can outbid us for our oil.

      • Jeffrey J. Brown says:

        I assume that we have a sarcasm alert here.

        But in any case, I think that there are serious problems with using force to direct oil tankers carrying crude oil cargoes to US shores that would otherwise be bought by China and other rapidly developing countries: Submarines and sabotage.

        How many supertankers sunk off US shorelines, with accompanying disastrous crude oil spills, would it take for the US to get the message that it’s not a good idea to use force to direct oil tankers to our shores?

        • Watcher says:

          Force mechanism will be tricky.

          But . . . all countries have central banks. The presumption that price is going to decide who gets oil and who doesn’t is pretty shaky. If your country HAS to have oil, and all do, then they will print whatever money is required to pay for it. This is the profoundly powerful reality in play in Argentina — with their internally printed money paying $70+ / barrel to domestic producers in order to keep domestic producers pumping.

          Pretty sure tankers are largely owned/flagged by third party countries. Lloyds would shut off insurance for everyone when tankers start getting torpedoed. Nothing would flow.

          • old farmer mac says:

            No insurance is needed when the chips are all on the table. If it comes down to all the chips on the table tankers will sail with navy escorts.

            The rule book can be and will be thrown out the window when circumstances COMPELL such actions.

            I am sure myself that Glenn was speaking sarcastically. I sometimes do so myself but usually mention that my comment is not to be taken too seriously in that case.

            But any way you slice it , the possibility of hot war involving oil is very real. The country with the biggest military industrial complex will win the early rounds at least and if it has staying power enough it will win the late rounds as well. The odds are pretty good that if it comes to open hot war the USA will prevail in the near term- say the next ten or fifteen years. Beyond that- I would not venture a guess. We might partially disarm while China continues to build up her armed forces.

            We might or might not have allies willing and able to help us fight a blue water naval war. We – or the Chinese – might have weaponry that can take out an aircraft carrier or a destroyer at will. Nukes may fly.

            The very most conservative possible policy would be to stay pedal to the metal on the renewables and conservation fronts as well as building a new fleet of nukes. The only thing that scares me worse than the thought of a hundred new nukes is the thought of NOT having them when a really bad energy crunch hits.

            Having said all this – maybe the best possible thing that could happen would be for a few terrorists to take over and sink a supertanker just off Virginia Beach if any sail in those waters. ( To my knowledge they do not come near shore there. ) Close to Washington DC would be best but anywhere there is a big city and a nice tourist beach would be ok.

            That MIGHT be muggers brick upside our collective head sufficiently large and sharp to get our undivided attention.Or it might result in another oil war.

            AS bad as oil wars are I am not at all convinced they are as bad as a short term heart attack level crash, the COLLAPSE of the business as usual economy.

            It is a paradoxical truth that our only real hope of getting away from business as usual is the CONTINUATION of business as usual for at least a few more decades.

            We aren’t about to transition peacefully to a renewables based economy if the fossil fuel economy collapses near term. There is not a snowballs chance on a red hot stove of that happening.

            The transition – if it happens – depends on not only the short and medium term continuation of business as usual but also our making a determined , continued, long term war time type effort in that endeavor.

          • SAWDUST says:


            It’s discussed a lot that central banks can print whatever is needed. Fed might up and decide not to print anymore. Think about the reality of such a scenario. If Fed was ever to intentionally allow the debt pyramid to unwind. Emerging markets including China would absolutely implode. +7 trillion dollars or debt denominated in dollar would suddenly have the need to start leaving emerging markets.

            Dollar is the best weapon the US has against China. Eventually there will be a need for the above scenario to be used by the US.

            • Heinrich Leopold says:


              I am not so sure about a collapse of China. China can sell 1.3 trn of Treasuries before it collapses. China saved the US in the financial crisis in 2008 by buying up vast amounts of issued debt. Now it has a fantastic collateral against the US. By selling Treasuries it can increase interest rates in the US very quickly and bring down the US economy. The US and China are mutually dependent. The strong position of China can be seen in its stock market which is incredibly soaring despite a modestly strong dollar.

              • John B says:

                The Fed could create $1.3 Trillion in a millisecond.

                What China has is 1 hand-me-down Russian aircraft carrier. Please.

                I guess the foreigners’ favorite fantasy is a collapsed US economy. Keep dreaming.

                • TechGuy says:

                  “What China has is 1 hand-me-down Russian aircraft carrier. Please.”

                  Aircraft carriers are not strategically important in a nuclear war. China Miltary strategy is to sink US carriers with Subs:



                  Subs can park themselves off the coast and launch nuclear missiles that can hit their targets in just a few minutes. ICBMS can take more than 40 minutes to reach their target.

                  The US needs carriers for conventional airstrikes. Carriers don’t really have much value in a nuclear war, when you can use Subs to deliver megatons to targets in a matter of a few minutes. Carriers are extremely fragile platforms, Sub launched Nuke Missile torpedo can destroy a carrier in minutes.

                  Perhaps US treasuries are irrelevant but China’s Industrial production does matter. China could embargo exports to the US and US Asian allies and switch to military keynesianism to keep its manufacturing jobs. That would likely have a major economic impact in the US, as just about everything in use in the USA has Chinese parts or is completely manufactured in China.

                  FWIW: No one will win in a US-China war. Best hope it never happens.

  15. Hillson says:

    Last thread, Fernando posted something about seeing private intelligence that proved the U.S. Govt was flooding the U.S. population with ultranationalist propaganda to deceive them. I asked what event he believed exhibited this deception, but oddly 9/11 was not mentioned (which was the event I had in mind).

    Before you immediately dismiss the idea, answer the following questions: have you looked into the buildings collapses yourself, or just accepted the official explanation for the last 13+ years? Have you heard of wtc7?

    Some basic facts:
    Wtc7 was not hit by a plane and collapsed at 5:20pm on 9/11.
    It fell symmetrically and at free fall acceleration for over 2 seconds, meaning that 8 stories failed completely and simultaneously.
    The NIST report says office fires caused several support beams to fail, then somehow the remaining 40+ support beams over 8 floors failed by buckling simultaneously (I have no idea how this is physically possible, please explain it to me).
    The report ignores video and witness evidence of hearing explosives, and did not test for the presence of explosives.

    I could go on, but it’s now up you to decide whether this explanation is adequate after some of your own research. The “least bad” explanation I can come up with is that, upon the towers being struck and collapsing, the building owner called a local demolition crew and paid double or triple to get the job done in about 7-8 hours (still cheaper than having to worry about asbestos removal). The more bad explanations get very bad very fast, and this says nothing about how the twin towers collapsed.

    Ron, this pertains to peak oil since it was a major impetus for starting the wars in the Middle East, where the oil is.

    • Doug Leighton says:

      Basic facts? Really?

    • Ronald Walter says:

      About the most memorable part of 911 besides 911 alone and by itself was a news story on the radio concerning Zacarias Moussaoui’s testimony. I can’t forget, ever, what the newscaster said about the trial, that is, the testimony would do irreparable harm to the United States.

      Maybe a couple of years after 911 is when I heard the news report on the radio.

      911 is ancient history.

      Happened a long time ago and is like the Titanic, a memory, but the rest is history.

      A newly built ship on a maiden voyage strikes an iceberg and sinks, an unsinkable ship sinks on her maiden voyage. 20 lifeboats for other sinking ships.

      Not a good plan, but a plan, nonetheless.

      The analogy: peak oil is the iceberg and there are no lifeboats.

      One defendant’s testimony will be the iceberg that sinks the USS America?

      I don’t know who pulled off the unforgivable stunt, and I don’t care, had to be a conspiracy, it happened, but it is just a part of history and time will heal the wounds.

      Although, it all stinks to high heaven and reeks like holy hell.

    • clueless says:

      People who are delusional cannot be helped. But, I will try. Prior to the attacks on 9/11 the entire area of the twin towers was under constant guard by Federal, State and local police, and Port Authority officers 24 hours per day because of the bombing attack 10 years earlier. Have you ever seen footage showing major structures being taken down? Crews come in and spend months setting precise charges to accomplish the task. It is a lot of work. [And there are only a very few crews in the entire US that are certified to do this work. You just do not call up some local contractor.] So, can you imagine crews of people working for months prior to the attack? Gee, what are you guys doing with all those explosives and wiring, etc.? Oh nothing.
      With respect to 7 -8 hours after the attack, the entire area was cordoned off. It was hard even for the limited number of rescue workers to get in. You watched too much of Jack Bauer and “24 Hours” on Fox. In reality, you could not even fly a crew into NYC to do the work (All air flights were shut down). And, trust me, just this once trust me – there was no demolition crew stationed on Wall Street ready to go with everything that they would need. And paying double or triple? WTF? That is like saying they would all be willing to jump out of an airplane at 10,000 feet without a parachute because someone agreed to pay them triple time. And, as noted above, they could not have done months of work in 7-8 hours.
      Remember all of the people on the planes who called their loved ones? Visualize a person who is part of the plot talking to you before the crash – “You will shortly be dead, here is $100. Now call your loved ones and tell them that Arab looking guys took over the plane. I know that I am not Arab, and neither are any of them, but you get the $100 for just saying that.” And, not only you, but every other passenger that called someone is convinced to do the same thing.
      The really good news is that any possible conspiracy has to account for the fact that the Clinton Administration were the ones that let them into the US and let them take lessons on how to fly the planes, but nothing about take offs or landings. And the FBI knew that they were here, but they were “restricted” [by Clinton people] from passing that information on.

    • Hilliston, this is pure bullshit. This is not a blog that tolerates conspiracy theory bullshit, and especially 9/11 conspiracy theory bullshit. If I had caught this post before it had replies I would have deleted it. But deleting posts after they have replies creates problems.

      Please, no one else reply to this 9/11 conspiracy theory bullshit.

      Thank you,


    • I don’t want to be linked to a fake 9/11 attack. My observations are based on post mortem confirmation: Iraq WMD weren’t found, Kosovo genocide wasn’t found as charged, the Gulf of Tonking incident was faked. My sources have informed me over the years about these ongoing lies, and later I could confirm the government lied. It’s bipartisan, both sides do it.

      • Goddammit Fernando, 9/11 was not faked. Only a blooming idiot could believe it was a fake. It was a conspiracy, a conspiracy by Osama bin Laden, 19 hijackers and a few lieutenants in between. That’s it. How in the goddamn hell can anyone call that a fake?

        Iraq was Mr. Bush’s war. He and Cheney actually believed Saddam had weapons of mass destruction. They were wrong. The Gulf of Tonking was a farce. They thought they were attacked but they were not. But that was a different set of politician who were scared stupid of communism. Communism turned out to be a paper tiger, no threat at all and it is still not a threat today. It never was and never will be.

        All that being said I really don’t give a shit about your conspiracy theories or your hate America campaign. Politicians are imperfect. Yes they often lie but they all, or most of them anyway, are firmly convinced they are doing right by the American people. They are mostly ideologues, especially those on the right. They believe God approves of what they are doing. And yes, that is pure ignorance. But they are not conspirators. They do not conspire with other politicians to lie to the American people an drag us into a war.

        You, Fernando, are the perfect example of an ideologue. Your ideology is that all politicians are evil liars who conspire with each other to do evil. That is bullshit.

        This is an energy and peak oil blog, not a bullshit political blog. Let’s keep it that way.

        • Boomer II says:

          But they are not conspirators. They do not conspire with other politicians to lie to the American people an drag us into a war.

          We hear that the government is incompetent, and yet we also hear that they are able to create conspiracies that require a great deal of coordination and also require being kept from the country and the media.

          So an incompetent government is very skillful at conspiracies?

          • Hillson says:

            Politicians that the media interacts with are incompetent, venal, and petty, that does not mean all parts of the govt are as juvenile.

            The CIA would like you to believe they’re incompetent, thus they’re incapable of carrying out any successful covert ops or regime changes overseas that might make America look bad. The NSA would like you to forget they exist, so they can scoop up all the data they get their hands on and not have anybody bother them about it.

            Are you going to comply?

            • Caelan MacIntyre says:

              “Think of the press as a great keyboard on which the government can play.” ~ Joseph Goebbels

              ” ‘I am a former Los Angeles Police narcotics detective. I worked South Central Los Angeles and I can tell you, Director Deutch, emphatically and without equivocation, that the [Central Intelligence] Agency has dealt drugs in this country for a long time.’ (He then referred Deutch to three specific CIA agency operations known as Amadeus, Pegasus and Watchtower… Ruppert… [said] that in his experience as an LAPD narcotics officer, he has seen evidence of CIA complicity in drug dealing for a long time.).” ~ Michael Ruppert & documentary film, ‘Collapse’

        • Ron, i wrote that I don’t want to be linked to a fake 9/11 attack. That means I don’t want people to say I’m saying it was fake. I knew Al Qaida was active, and I advised my family to stay out of crowds in late August. However, my reasoning was a bit off. I thought the trigger was the Durban incident, but I never imagined they had 20 Saudis running loose in the USA. I thought at the most they would have say five.

          • Fernando, sorry that I misunderstood you. I though you were saying that the whole attack was a fake, or that it was planned by some folks in the White House. Such ignorance make my blood boil and in those cases I am prone to say things that I may later regret.

            So please accept my apologies for my language.

            • No problem. Another point: a few weeks later Osama released a video for internal consumption, explaining results had been much better than they expected.

              • Caelan MacIntyre says:

                Maybe I’m thinking of the wrong guy, but it seems to me that the US sort of ‘created’ Osama, like maybe how they sort of ‘created’ ISIL, or even that chocoligarch in Ukraine, now that I think about it, and so on…

                …And you know, sometimes it can be fun to take credit for something you didn’t actually do, even if only to confuse the issue.

                • John B says:

                  All this bad stuff the US does, must make you very unhappy.

                  • Caelan MacIntyre says:

                    It makes many people unhappy, worldwide. Quel surprise.
                    The ones who haven’t been murdered.

                    And it’s not precisely the US, either, but rather, the US governpimp apparatus.

                  • John B says:

                    If someone is trying to kill you, you have a legal right to kill them first. That’s not murder, it’s self defense.

                    Of course there will always be the Neville Chamberlains that would rather just bury their heads in the sand, and hope it all goes away.

                  • Caelan MacIntyre says:

                    Yes, thank you, and ISIL might want to spill over into the US Homeland to do just that– similar to what the Homeland cops are already doing.

                  • John B says:

                    And when they do, I’m sure you will want to join them. If you haven’t already.

                • The U.S. didnt create Obama. According to Michael Scheuer (a CIA employee who headed the “bin laden unit”), U.S. Foreign policy helps provide the breeding ground for guys like Osama. Michael isn’t the kind of guy you’ll see interviewed by CNN, Fox, or the NY Times. He is very clear about the strategic failures being made. He’s anti neocon.

                  • Caelan MacIntyre says:

                    “The U.S. didnt create Obama.” ~ Fernando Leanme

                    I wrote Osama, not Obama.

                    “According to Michael Scheuer (a CIA employee who headed the ‘bin laden unit’), U.S. Foreign policy helps provide the breeding ground for guys like Osama.” ~ Fernando Leanme

                    That’s part of what I’m saying.

        • dolph9 says:

          Although I don’t personally believe in an overarching 911 conspiracy (although I do believe there were factions within CIA and Mossad which knew something was up and probably let it go and even encouraged it), I do appreciate the work of the 911 truth movement.

          I find them as a whole to be very intelligent, sensitive, curious individuals who are asking the right questions, as opposed to the mainstream organs of American opinion, and the regular average American “patriots” who would shoot themselves in the head if the government or corporations told them to.

          • I do appreciate the work of the 911 truth movement.

            I don’t. They are all a bunch of very stupid morons. The idea that an army of engineers sneaked into all three buildings and planted explosives is just down in the dirt stupid. Ignorance gone to seed. I am a democrat but the idea that Cheney was in charge of it all is beyond ignorance.

            The twin towers pancaked down, floor by floor, starting from the point of impact. Such a thing would be impossible to duplicate because the army of engineers who would have planted the explosives would have to have known exactly what floor the planes would hit. Any person who thinks such a thing could pulled off is just ignorant.

            You have the story. Nineteen hijackers organized by Osama bin Laden and a few of his henchmen carried out the whole thing.

            You have the whole goddamn story. Anyone who really thinks Cheney and an army of engineers were really responsible for 9/11 is just too damn stupid to post on this blog.

            I apologize for the blunt language but nothing pisses me off as much as willful ignorance.

  16. Paulo says:


    Nice to read your comments again.

    re statement on NA middle class decline: “a natural outcome of high wages, over consumption and population decline.” Perhaps true, if high wages are defined by comparing and trying to assimilate competition into the economy with what I call under-paid Asian wage rates. Some would say Asian wages border on slavery in many cases.

    As for ascendency of the Asian economic tiger, perhaps, if the end result is a domestic rather than export focus. TPP giveaways considered, the economic pendulum now swings to the benefit of multi-national corporations and the improving wages in your country only exist as such due to the relatively high wages of your competitors. If industry is finally knocked out and down in ‘the west’, you can bet you will be next to line up for the down escalator as the companies look at hungrier venues to work in. What, you think wages have risen in India because you deserve them or are better/smarter workers? You’ll be ground down once again, like everybody else these days. You just have to wait your turn. Think about it. Your main resource is cheap labour and an overwhelming need to survive. The industrial wolves have been feasting on desperate workers for years…pitting one group against the other over and over again while they take their profits and go home to live large.

    And in 15-20 years, the mentioned time frame of Asian economic ascendency, climate change outcomes will provide their own infernal feedback loops. Water shortages, as your snowpack further declines or as China continues to divert, may produce vast food shortages. Sea level rise may force millions of very poor Bangledeshi migrants northwards…that should be fun. And those nuclear armed Pakastani neighbours are so inclined to cooperate and negotiate?

    Ascendency of and to what? We are all headed for troubles and decline one way or another. There are no ‘winners’ in this.


    • wiseindian says:

      I don’t know the future any more than you do. Of course there will be war, pestilence and other problems. Didn’t Europe have those issues between 17th and 20th century ? Was it a smooth ride from 0-100kmph all the way ?

      I am not making some wild predictions here, all I am saying is that things are just reverting to mean (with or without oil). For most of human history Asia was the centre of all economic activity and things are just going back to normal. No one is smarter, neither Asians nor Europeans, it’s just that Asia has a tremendous advantage when it comes geography and climate and a huge demographic lead right now.

      The average western household is deep in debt, the family unit has been completely destroyed, savings rate is zero and you guys are not having kids any more, how on Earth is the west going to avoid economic contraction with all this is something I don’t understand.(The same issues will haunt Asia as well but that’s a few decades down the road)

      We all have our share of problems and it’s possible that Asia will suffer terribly from climate change while the west won’t but if you had a dollar to bet where would you put it ? The momentum and history are clearly on this side.

      On the nuclear front, The Economist has been making these predictions ever since India tested it’s first nuke in 1974, no one has blown anyone up till now. And I don’t understand one thing, how is this threat any greater than Russia and US blowing each other up or for that matter China and US ? After all India’s stockpile is less than 1/20th of all these stockpiles combined and it has been in far lesser number of conflicts than any of the countries mentioned above. I think it’s just good ole stereotyping (the natives can’t handle technology).

      • Fred Magyar says:

        No one is smarter, neither Asians nor Europeans, it’s just that Asia has a tremendous advantage when it comes geography and climate and a huge demographic lead right now.

        Jared Diamond’s book ‘Guns, Germs, and Steel: The Fates of Human Societies’ speaks specifically to the first part of your point.

        However, given that the entire planet is already facing massive problems due to resource depletion and environmental degradation, I’m not too sure if I’d really consider placing that ‘Huge Demographic Lead’ you ,mention, in the assets column…

        To put that in perspective, if I had to bet which place has a better chance of transitioning to a stable economy while still maintaining a sustainable ecological footprint, I’d say a country like Brazil with a population of about 200 million and a land area of 3,287,956 sq mi, is far better off when compared to India with a population of about 1.2 billion on a area of 1,269,346 sq mi.

        Disclaimer: As someone born in Brazil I readily admit my bias but no matter how you slice or dice, it I don’t see a very large population being an advantage to any country at this particular juncture in human history.

        I do wish you and all Indians well!

        • cytochrome C says:

          What gives you hope?

          Nothing. I think hope is an illusion best abandoned. Our task is to see the world clearly, not wax poetic about hope.

      • dolph9 says:

        America has basically developed a suicide wish. It’s obvious and it would take a fool not to recognize it. I’m not necessarily saying the rest of the world will do just fine, but if you have some people who are determined to commit suicide, it’s best to protect yourself and stay out of the way.

        But, all things change in time! All empires of the past are gone, everything we see around us will be either fall into disrepair or be used differently by people in the future.

  17. SRSrocco says:

    Happy Holiday Everyone,

    It’s been a while since I provided an update on the GOLD MARKET. So, I thought I’d would share some news events on the so-called Barbarous Relic.

    Kronen Zeitung: Austria Repatriates 110 Tonnes Of Gold From UK

    Austria is repatriating gold from the vaults at the Bank Of England (BOE) at this very moment, according to Kronen Zeitung. The OeNB (central bank of the Republic of Austria) stored 82 % of its 280 tonnes at the depository in England. It will start by bringing back 110 tonnes to Austria, to eventually have 50 % on own soil.

    Russia’s Central Bank Purchases Another 300,000 Troy Ounces of Gold in April 21

    Since yesterday was the 20th of the month, the folks over at The Central Bank of the Russian Federation updated their Internet site with April’s data. It showed that they added 300,000 troy ounces of gold to their reserves, which now stands at 40.1 million troy ounces.
    Austria repatriating 110 metric tons of gold continues the notion that Central Banks do not trust their gold held in foreign depositories anymore. Seems as if the Chinese Central Bank has been acquiring a great deal of gold on the hush-hush and there is speculation that some of this gold was hoodwinked from allocated & unallocated sources including Central Bank gold.

    Other European countries are also considering repatriating their gold. Belgium has hinted at demanding some of its gold back to its shores. Of course, when Germany asked for its gold back from the NY Fed a few years ago, the Fed told them it would take 7 years to return it. Several German officials went to the NY Fed to examine their gold, but the folks at the NY Fed did the right thing and told them NEIN!! LOL

    The Chinese will announce at some point their official gold holdings. There is rumor, let’s say good speculation, that the Chinese Central Bank holds between 15,000-30,000 metric tons of Gold. For those who do not know, the Chinese purchased JP Morgans banking complex headquartered in Manhattan…. which has an underground tunnel connecting to the NY FED.

    I would imagine things are going to start getting interesting when the Chinese begin seeding their Bonds in place of other Central Bank Bonds and debt. Gold Trade Notes are coming, and I would wager the Chinese will be using their new large hoard for this purpose in the future.

    For all you folks who think the U.S. Dollar & U.S. Treasury will continue to run international trade for the foreseeable future, the Chinese and the BRICS countries have other plans.


    • Patrick R says:

      Steve, I get that if you subscribe to a secular scarcity meme then gold (and other metals) looks like a sure bet. But my hunch is that the peculiar failure of gold to inflate wildly despite QE means that the disruptive economics of renewables are keeping a lid on this expected dynamic. I know this is heresy on this site but it seems to me that we are seeing the beginning of a new abundance of cheap renewable electricity that will not be positive for gold. Or for the expensive FF extraction industries. Which is to say they become relegated from central position in our economies and energetic future.

      So give me a wind or solar farm rather than a gold vault. The problem society faces is how to order the economic benefits of electricity abundance financially. This is not straightforward. In the same way that our current system can’t work out how to apportion the costs of efficient urban rail systems so it struggles to price energy production where so much of the costs are capex and so little is opex. This is experienced by the spot price hitting zero at optimin renewable production times in economies with even small amounts of the future generation systems.

      Our current financial system needs scarcity to work, this is clumsily medieval. Renewables will force new structures and gold will be relegated by this to the status of an ancient relic. IMHO. After all it does nothing; I can’t believe we will revert to a cargo cult faced with the opportunity to upgrade to new structures to price economic goods.

      But then y’all seem to be hooked on a Mad Max future. Maybe for those economies that back the wrong horse…. The Middle East is already doing a plausible imitation of this, with tremendous help from the U.S. of A. But remember really big changes, transformations, are by definition unrecognisably different from what they replace.

      My intuition is that a whole new world order is trying to form, and the risk for the U.S. is the usual one for all empires; burning all its treasure trying to hang on to the old structures (see Middle East). But there are many United States and much of the new order is being invented there too; the digital, electrical world of the Jobs and Musks, etc. But renewable energy is extremely disruptive (an overused word, but right here) and it will bring down not only the hegemony of the oil patch, but also the current financial system.
      I reckon.

      • SRSrocco says:

        Patrick R,

        How Ironic your comment. I just published on article comparing SILVER DEMAND: Solar PV vs Coin & Bar. In the article I included the new information by Charles Hall and Pedro Pietro on what is the FINANCIAL DISASTER of Spain’s Solar Industry. According to their work, 44,000 of the 57,000 Solar Installations are almost bankrupt. I don’t know how folks translate that to be CHEAP.

        You can check out my article here:

        Once the world wakes up to the fact that SOLAR PV is not a viable long term energy source, silver consumption in the Solar Industry will decline precipitously.

        Patrick, I don’t see the world be flooded by cheap renewables. Because, according to the true ALL IN COST EROI data, they aren’t cheap.


        • Boomer II says:

          Patrick, I don’t see the world be flooded by cheap renewables. Because, according to the true ALL IN COST EROI data, they aren’t cheap.

          But PVs are cheaper in some cases, like places without a grid.

          And further down the line they may become necessary for others, too. If you run out of other energy sources or they sky rocket in price, but you do have access to PVs, then you are likely going to use PVs.

          Though construction costs could be expensive, the fact that the sun provides free fuel gives them a different economic structure than energy generators that require a continuing supply of fuel, especially fuel that might have to be hauled in.

        • SW says:

          Future PV panels will not use Ag. They can be made with Ni/Cu electroplated contacts and work every bit as well. This work is about to transition from the lab to the manufacturing environment. A large amount of focus on PV R&D at this point in time is related to substituting inexpensive earth abundant materials for those that were not but reflexively included in original designs because they were obvious easier choices. A second focus is in reducing the energy inputs required to fabricate both the cells and the modules.

      • I know this is heresy on this site but it seems to me that we are seeing the beginning of a new abundance of cheap renewable electricity…

        You must have a lot better eyesight than I because I cannot see that new abundance anywhere. I think what you are doing is giving an opinion, not any facts that can be verified.

        • islandboy says:

          With due respect Ron, I read Patrick to be saying, “it seems to me that we are seeing the beginning of a new abundance of cheap renewable electricity…”.

          When I first became aware of Peak Oil and got interested in renewable energy, solar was contributing about one tenth of a percent of US annual electrical energy. This year it will reach 1% and in a video linked to by John B up-thread, Ray Kurzweil points out that eight more doublings would take it’s contribution to 100%. Now, again up-thread, Fred linked to some videos explaining exponential and logistic population growth leading me to think that while solar and solar PV in particular are in an exponential growth phase, they will probably start running up into some limits well before eight doublings are completed, meaning that the growth plot will no longer be exponential since each subsequent doubling will take longer.

          The fact is that the world is at a point where renewable electricity is gaining attention and in more and more places it is becoming cheap enough to be taken seriously. So much so, that it is beginning to attract the hostility from quarters that were once thought to be allies. To wit:

          Warren Buffett Is Sending Mixed Messages on Green Energy”

          ” Warren Buffett highlights how his Berkshire Hathaway Inc. utilities make massive investments in renewable energy. Meanwhile, in Nevada, the company is fighting a plan that would encourage more residents to use green power.

          Berkshire’s NV Energy, the state’s dominant utility, opposes the proposal to increase a cap on the amount of energy that can be generated with solar panels by residents who sell power back to the grid in a practice known as net metering.

          While the billionaire’s famed holding company has reaped tax credits from investing in wind farms and solar arrays, net metering is often seen by utilities as a threat. Buffett wants his managers to protect competitive advantages, said Jeff Matthews, an investor and author of books about Berkshire.”

          Need I say more?

        • old farmer mac says:

          Hi Ron,

          As you have pointed out this IS a peak oil blog- and the best one around imo.

          I believe along with you that peak oil is a reality, if not NOW then in the fairly near future.

          It’s either renewables or economic collapse when fossil fuels once get to be scarce and expensive enough.

          I am not quite so pessimistic as you -I believe some portion of our current industrial civilization will survive and manage a transition to renewables.

          I am wondering about your guess or opinion in regards to a couple of possibilities.

          Do you think there will be a significant amount of coal to liquid capacity built ? By significant I mean something on the order of say five to ten million barrels per day ?

          Personally I tend to think Fernando is probably right about the depletion feces hitting the fan sooner than we will face a climate crisis- which in his opinion is not likely anyway. I disagree on that point.

          My own guess however is that fossil fuel depletion is a far more pressing issue than climate if the time frame is limited to the next few decades, say out to 2050.

          I can’t remember you expressing an opinion on how long it will be before climate change really starts kicking our collective butts. I mean REALLY starts , as in forcing people to move in large numbers, resulting in substantial shortages of food etc..

          I know plenty of people are short of food NOW but that is not because plenty food is unavailable – it is because it is too expensive for them.

          So – your personal opinion or wild ass guess either one – how long will it be before oil depletion forces the economy to its knees? Five years ? Ten? Twenty?

          My own gut feeling is that we have no more than twenty years or so of more or less business as usual left.

        • Patrick R says:

          Ron it is absolutely an opinion. It is phrased as an opinion. Like everywhere this site is full of opinion, even where there is a lot if data there are still conclusions surmised from that data; these are opinions. The question needs to be is any given opinion good, supported, or at least interesting. Not is it an opinion.

          In your opinion, clearly, my opinion isn’t good. Well it is clear I am talking about the trend not the current quantum. And the trend looks very clear to me; the renewable buildout is gaining pace, and my point is that this is extremely disruptive not only to current dominant players but to current financial models in total. And the situation in Spain supports that rather than refutes it (though is complicated by corruption and mismanagement). Germany, and even the impact of relatively small amounts of distributed solar in Australia, in a hostile regulatory environment (Big Coal backed government there), on the profits of established generators testament to this more powerfully.

          Ron you are carefully and wonderfully documenting the peak oil dynamic, which is a great service, others here are intensly involved in the oil patch, and are understandibly concerned about their and their families and friends livelihoods. But I keep coming here because my interest is in what’s next.

          I find the binary of either BAU or Doom an unconvincing and childish oversimplification. BAU never continues, and is disappearing very fast wherever you look, but what is developing looks more complex and nuanced than just some scene from Hieronymous Bosch.

          Steve like Gail you seem to think more like a cost accountant than an economist. I hope you get pleasure from your sparkly metals as they may not bring you great security…? I am not claiming to know, but rather just suggesting a counterfactual. I think it would be wise to ask what would happen to other commodities and structures in the event of a renewable rich world. One with at least certain places with very very low marginal electricity costs and therefore a more electrified economy (transport the most interesting issue)…?

          This is certainly one plausible outcome of the wind down in FF this century. I don’t think anyone here is claiming an overnight end to all FF. This is already looking more like transition than collapse to me. Perhaps the key questions are ones of timing? Though of course, as always, some places and some whole industries will collapse, as is always happening. Oil patch is firing, solar installers are hiring; so it goes. How’s Kodak doing? Know any Photolithographers?

  18. Hickory says:

    The GNE/CNI ratio implications are massive. and I’ve believed for a long time that the important data regarding Peak Oil is that which relates to Peak Export- in other words ‘how much oil is available for sale on the world market’.

  19. Marianne says:

    What are the cultural and literary implications of peak oil???? Have any writers thought about the sun/fossil fuel debate over the past few centuries?? The answer is “yes!” (I’m an academic studying this.)

    So this, by the way, is the paper of mine that is getting a lot of views from oil producing areas. Texas, Saudi Arabia, Nigeria, Russia. (What I think happened is that it must be getting shared on some oil patch websites). It is about Dickens’ novel “Great Expectations”. (Guess why Miss Havisham dies by being burned up, why Pip has a nightmarish vision of her being burned in a furnace and why she “has never seen the sun”….!?—and why is Estella named “star”?)

    • Watcher says:

      Most academic work is all about trends and numerical flow that in their phrasing force this or that to happen. Academics usually try to configure themselves above and aloof from matters military, until they have a DoD grant, at which time their philosophical sensibilities experience a change.

      It’s the military realities and refusal of humans to accept perpetual subordination that tend to render academic approaches worthless. The one big happy family silliness is never true, and their failure to recognize this is bizarre, given the competition for tenured positions and even for dept chair after tenure.

      If you want to think about societal evolution with oil scarcity, think about how one breathes when the air is clogged with flies feasting on billions of corpses. Find the literary parallels for that. Probably Russian. The great Russian famines of 1601-03 might have generated some stories. 33% of the country dead. That would be 2.1 billion of the world today? About 100 million in the US.

      That’s an optimistic scenario.

      • Fred Magyar says:

        Academic approaches are worthless?! Really, OK! If you say so.
        I guess we should start by eliminating all History Departments at all major universities around the world. Language, Arts, Philosophy etc… All useless academic fluff!

        West Point Academic Departments

        Behavioral Sciences and Leadership
        Chemistry and Life Science
        Civil and Mechanical Engineering
        Electrical Engineering and Computer Science
        English and Philosophy
        Foreign Languages
        Geography and Environmental Engineering
        Mathematical Sciences
        Physics and Nuclear Engineering
        Social Sciences
        Systems Engineering

        • Watcher says:

          Oh I suspect West Point doesn’t do much anti military teaching.

          • Fred Magyar says:

            Yeah, but they do teach things there that are in the domain of academics, some of which have nothing specific to do with the military, right?

            • Boomer II says:

              Yeah, but they do teach things there that are in the domain of academics, some of whom have nothing to do with the military, right?

              They take a broader view of the world than many people realize.

              About 35 years ago I was talking to an officer who taught at the Air Force Academy. He mentioned that the Academy was having a symposium on Joseph Heller’s anti-war novel, Catch 22.

              I said I was surprised to hear that. He said, “The military probably understands Catch 22 better than anyone else.”

              The military academies do teach quite a bit about history and diplomacy because they want to learn from the past.

  20. Thorne says:

    Interesting article from the Washington Post regarding predicted future population demographics:

    I can scarcely imagine the impact of an Ebola or other even more virulent pathogen outbreak in the Africa of 2050+.

    As far as the African charismatic mega fauna, kiss them goodbye.

    I think fish stocks will be circling the drain as well.

    But, the most astounding thing in this article is the author’s persistent fretting about countries which will experience population declines, as well as great concern about dependency ratios.

    What really makes it astounding is the facile characterization of ‘slow’ population growth of the Unites States verging towards half a billion people by 2100 as being ‘sustainable’.

    The topic of ‘resource burdens’ is mentioned numerous times, but the author tends to defuse that issue with assertions of ‘economic growth’ and technology and worker productivity saving the day…the author misses the mark well wide regarding limits to growth…hell, I he didn’t mention pollution at all, or environmental degradation, species extinction, and on.

    Don’t get caught in Egypt…wow, don’t get caught in Nigeria and Tanzania!

    • MarbleZeppelin says:

      I am not worried about the dependency ratio. There will be old age homes and villages that are automated like the coming Tesla cars, robots and automation will care for the elderly. Makes for an up and coming industry! Old people love an automated life anyway. The grass gets cut, the buildings repaired, dinners cooked and served, they just play bingo, watch TV, go to dances and ride the autonomous bus to the casino.

      The thing to be concerned about if (an that is a big if) the population in certain regions escalates, migration. Migration to wealthier lower population density regions may become a massive issue.

      The eagles I have been watching for years have been successfully raising young at about 3 per year. All of them leave the nest successfully. Apparently that is somewhat the norm, so one would expect the eagle population to skyrocket. In reality it is rising at about 5 to 10 percent per year depending on the area studied. About more than 80 percent of the young do not make it to breeding age (4 or five years old). Being an eagle is dangerous and it’s tough to learn how to get through winters.

      So, I say to all you young people out there, choose strong, highly adventurous, independent, physical risk takers as your mates. Encourage your young to go out and follow their nature. If this is repeated over several generations, the number of young produced will fall (they are more interested in adventure and action as well as more likely to die early). Or we might breed a really crazy super race that is impervious to most anything and take over the world!

      Aside: Book keepers, accountants, hair stylists and bankers from Africa will have plenty of job opportunities.


      • old farmer mac says:

        One thing that business oriented folks usually miss entirely when it comes to declining future populations- and declining oil supplies etc- in currently rich and well developed countries is that most of our current built infrastructure will last a lot longer with a lot less maintenance that they give credit for.

        And the younger generations are going to inherit it , collectively.

        My guess is that they are also going to collectively force the oligarchs who own big chunks of it to sell it cheap – or simply confiscate it by means of draconian taxes.

        I am not questioning the credibility of the engineering profession when it comes to the life span of bridges but the fact is that REPLACING a bridge is SUBSTANTIALLY cheaper than building a new one on a new highway.

        And while it sounds very callous to say so in so many words, an occasional bridge failure is not really any bigger deal than an occasional fire in a large factory or an occasional plane crash or landslide or flood, all of which kill people from time to time.

        Shit is going to happen more frequently in the future.

        Roads certainly require a lot of maintenance but the obvious fact is that out of a thousand miles of roads, only a few miles are damaged in any given decade by floods or landslides etc.

        A well graded road properly constructed can be expected to last just about forever if kept maintained.It won’t need much repaving if there is not much traffic on it. There will be little traffic compared to the present day.

        With driver labor getting cheaper the weight and size of commercial trucks could be cut in half – with the truck still getting about the same ton miles per gallon of fuel – thus reducing wear and tear on the roads by a factor of five or ten or more.

        If automated vehicles be come the norm the cost of DRIVING a truck will fall to almost nothing compared to paying a human. And it will be possible to run it at whatever speed it gets the best fuel economy as well most of the time. If it takes all night to go a couple of hundred miles when traffic is light no problem at all.

        Just about all of the many houses I have been in recent years will last at least a century or even two if they are properly maintained – and this includes relatively cheap tract houses.

        If a pipeline must be replaced after fifty years, assuming there is still a need for it, the right of way exists, the related infrastructure exists, there will be no fight about building it – and this saves megabucks compared to building a new pipeline from scratch.

        If it is still needed – and it will be needed- the electrical grid will be there, and it will be upgraded and rebuilt piecemeal as necessary.The real cost of upgrades and reconstruction is small compared to starting from scratch.

        My local utility just spent megabucks on local right of ways running thru forest lands because the right of way is only about fifty feet wide. In the future it will by necessity be widened by means of eminent domain if not by negotiation – and once it is wide enough that a tree off the right of way cannot fall on the lines , right of way maintenance will cost ten percent of what it does now.

        If I were a utility exec I would be working on making arrangements with landowners to convert their land within a hundred feet of the lines into grass or cropland or other open ground lands where feasible. This would save megabucks in a hurry. It kept six highly paid guys with half a million dollars worth of equipment eight days to do ONE side of the right of way only about six hundred feet behind my place. The other side cost not a dime – it belongs to me and is in grass and fruit trees.

        The younger generation is going to inherit an unimaginable amount of real physically existing wealth.They can collectively afford to warehouse old farts like me if it becomes necessary.

        The profession of personal servant may make a HUGE comeback.Anybody who owns a decent house is going to be able to hire his servant dirt cheap – room and maybe board plus some set time to work away plus a contract giving the servant an ownership interest that grows over time.

        I may eventually be interested in making such an arrangement myself with some young folks who want to live on a farm, learn how to run it, and eventually own it.

        The future is not necessarily ALL doom and gloom, at least not in the short to medium term. The opportunity to continue to live as well or better on less is there.

        The forty hour week could be the twenty hour week in a few more decades-IF we manage the energy transition. We won’t be needing a lot of new houses etc. A falling population is a GREAT thing. For the survivors.

        I fear most of the world wide population is not going to die peacefully of old age but being old and comfortably situated well within the borders of the USA I won’t have to witness the die off personally barring bad luck.

        • MarbleZeppelin says:

          Here is the operating cost breakdown for tractor trailers, fuel is a big part of the cost.

          Average truck driver salary is $51000 per year and can be as high as $81000. So the cost and maintenance of autonomous systems would have to be considerably less than that per year.

          • old farmer mac says:

            The costs of electronic goods are mostly all in the research and development of them.

            Once the problems are worked out- if they can be worked out- the cost of the system needed to drive a truck will probably be peanuts in comparison to the cost of hiring a driver. The first copy of Windows cost an ungodly sum. The SECOND copy cost Bill Gates about a dime – and nine cents of that was for the disk needed to record it and the wrapper for the disk.

            A truck without a driver can be dispatched any where any time without any ” home time ” for the non existent driver. It can run twenty four hours as opposed to ten hours (legally) out of the twenty four with a single driver.

            It will burn less fuel and suffer fewer breakdowns – a computer will not overlook an engine running hot.The cab can be very small and won’t need an air conditioner or a sleeper compartment thus making for a larger legal payload.

            IF the tech can be made to work reliably the cost of it won’t likely stop it being used once it is scaled up.The OWNERS of this technology will probably be able to sell it for a lot MORE than it costs to produce it and service it for decades to come….. until the patents run out and it becomes a generic item.

            • MarbleZeppelin says:

              Your proposal sounds quite plausible. There is a big push to produce reliable autonomous sensing and control systems, it will open up a huge new market. I beg to differ on the air conditioner, computer systems need to be kept within certain temperature ranges. It will be smaller though.
              Probably will see this technology become part of the railroad system also.
              I do wonder how these systems maintain lane control. I know that in many areas the paint is so worn it is hard to distinguish the lanes and in construction areas is can get really confusing.

  21. Boomer II says:

    I don’t pay enough attention to the world financial markets to have any thoughts about this. But it might interest some of you.

    Why Liquidity-Starved Markets Fear the Worst – WSJ

  22. Mike says:

    For the benefit of those few of us who actually want to discuss peak oil related issues here on POB, here is an interesting piece from Bloomberg regarding reserve write downs. Or, in the new shale lingo, reserve “impairments.” When oil prices change, everything changes. On paper, yes, but as a precursor to reality.


    • Longtimber says:

      630 million fooy, What about vaporized do you not understand? 5.4 Billion times $100 5.4 times 10 to the ?

      “Six years ago, the industry pushed the Securities and Exchange Commission to make it easier for companies to claim proved reserves for wells that wouldn’t be drilled for years. Some prospects considered sure-things when crude was $95 a barrel are money losers at today’s $60. When crude crashed in 2008, 44 U.S. companies wiped 630 million barrels from their books.
      Now the stakes are higher. Of all the proved reserves of oil and natural gas liquids found by the 44 companies since 2008, more than half — 5.4 billion barrels out of the 9.7 billion — is attributed to wells that don’t exist yet, according to data compiled by Bloomberg.”

    • shallow sand says:

      Good post Mike.

      I’ll keep beating the dead horse. I continue to be amazed that these companies are able to borrow more money. Halcon, for example, recently announced the issuance of $700 million of bonds. In its 2014 10K it is disclosed Halcon has $3.7 billion of debt. PV10, however, is just $3.2 billion, using $94 oil, of course. That is PV10 all categories, so much of the PUD will disappear and the PDP will surely shrink by half at least. Maybe $1 billion or so PV10 at end of 2015. 43,000 BOE of high decline production, probably drop to 25,000 BOE at year end, with no drilling. Yet they are still drilling and completing wells, plan to spend $400 million in CAPEX this year.

      Who in their right mind would buy these bonds?

      I view a company that has more debt than PV10 as insolvent.

      Halcon borrowing this money is akin to a homeowner with a $200,000 house, who already owes $500,000 on it, borrowing another $100,000 on it to pay off $50,000 in credit card debt and spending the other $50,000 on something that cannot earn any return on investment.

      Oil and natural gas stays flat, goes lower, or even creeps up to $70 WTI by year end, almost all shale companies will have more long term debt than PV10.

      Apparently the bond rating agencies, the SEC and the banks don’t give a hoot. Wonder how many old folks have put money in a high yield bond fund that is loaded with this shale BS?

      • Enno Peters says:

        I like your posts Shallow, and completely agree with you. Understanding a bit the economics of shale companies, it is amazing to see how much money is going their way, without any coming back (except for interest payments).

        Still, there is a logical explanation for it. The banks are in a bind: they don’t want to operate wells, so they rather lend a bit more. In return, they want these companies to raise more cash through share offerings, and that is enforced in the debt covenants. Therefore, both ways of raising cash are happening now, and others are preparing for it (Continental Resources just increased the number of authorized shares). They have to raise the cash before they are required to write down their reserves (which they are required to do by the SEC once a year), and before the reduced number of new wells reveals the fast overall legacy production decline. Without any profits and dividends to show for, growth was and is their only selling point, so they need to move fast.

        I think the party with most to lose are the shareholders, who may be completely wiped out . Debt holders might still see quite some of their cash back, as the shale wells at least generate some operating cash flow.

        So the game now of these companies (and the banks as major debt holders) is to convince investors that they are viable at current conditions, and buy into these share offerings. For that the banks need to extend debts, and the companies will have to keep claiming that they are making money. I think many retail investors don’t understand the shale economics too well, and trust the optimistic accounting and company messages. Doing an actual valuation is tricky, so instead they look at other cues.

        In my opinion, the way shale companies account for their CAPEX, is an Enron-kind of accounting fraud. The legacy production of a typical shale company declines with about 30% a year, while depreciation charges are only about 10-15% of fixed assets. The difference is reported as profits, while the fixed asset value on their books keep on ballooning.

        The only possible savior I see will be rising oil prices. Without that, management and debt holders might still be able to walk away mostly wealthy and unscathed. This is a shame, and I hope people will wise up.

        • coffeeguyzz says:


          Your comment about rising prices being the only savior for these companies may go a long way in explaining the recent actions by KSA.

          The other day you inquired about Bakken well data (API #’s) and I was travelling and unable to effectively respond.
          The ND DMR site’s Gis page has a ‘Download Shape files’ button in the upper right hand corner. Clicking it prompts a drop down menu under the map. Clicking the ‘’ choice downloads well data for all ND wells. Due to computer illiteracy, I have been unable to open/view these dbf files, but I believe they should contain current API #s.
          (Re refrac’d Bakken wells, John Harju, a researcher at UND’s EERC has said 100 Bakken wells have been re-frac’d with varying results).

          • Enno Peters says:


            Indeed KSA seems to be playing the game well, preferring to ship crude to fill up US inventories, instead of sending it east.

            Thanks for coming back on my question. Indeed I have been using that data from the GIS Viewer, in combination with the monthly NDIC reports. You can open the wells.dbf file in Excel (just select to see “all files” when you want to open it). API data can also be found at
            However, both sources only list the original well API as far as I can tell, which lead to my question 🙂

            • coffeeguyzz says:


              Just scanned the linked well info and two wells that I know for a fact were re-frac’d – Marathon’s wells permit #s 16729 and 17216 had original API numbers. Interesting, as apparently re-entering, fracturing, injecting huge water/proppant material and adding additional entry points into the formation doesn’t qualify as substantial modifications?
              My interpretation may be all wrong and I apologize if I misled anyone.
              The significance to me of both re-frac’ing and EOR is the obvious effect on future output from existing wells. You guys put so much time and effort into your analysis and projections that I like to point out additional sources that may add both context and ‘color’ to the raw numbers, even though I may hold a different perspective from most who follow/post on this site.
              (To that end, the technical data recently posted online from the recent Williston Basin Petroleum Conference is full of cutting edge processes/techniques. The most surprising to me is the finding by the UND EERC folks that ethane may be FAR more effective in EOR than CO2. If field trials confirm this, the consequences may be enormous).

              • The use of co2 or light hydrocarbons needs some sort of breakthrough to enhance injectivity. I don’t think they can afford 50 year floods or cyclic injection with such low per well recoveries.

                • coffeeguyzz says:


                  The short, graphic-rich presentation put forth by Steve Hawthorne and the University of North Dakota’s Energy and Environmental Research Center a couple weeks back at the 2015 WBPC was a little over my head technically, but the gist seemed to be that the high Bakken formation temperature (110+C) prompted far lower Mean Miscible Pressure with ethane.
                  If this can be both further validated and effectively applied in the field, recovery rates should increase significantly.

              • Enno Peters says:

                Thanks for the feedback Coffee, and no problem about the API values. I hoped to be able to identify the refracked wells. I am surprised to hear that it is such a high number (100), although it didn’t move the average type curves around much, and I am not filtering anything out.

                I had quite an open mind about fracking more than a year ago when I started looking at it, but to me the data from the fields and from the financial statements speak a more clear language than the companies are providing themselves in investor updates (e.g. what value do IP rates have at all?). It’s good to hear different views on that, and this blog would be rather boring if everybody agreed. The better the arguments and proof, the more appreciated of course.

                There is a lot of hype around improving techniques, new fields and potentials, and the companies are not the last to tout them. I am agnostic about all that, but I will belief it when I see it in the data, and so far I don’t: financial ratios are worsening, well profiles are stagnant, and EURs are on a path much less than claimed. I wish you the best in steering through all that 🙂

        • Boomer II says:

          Enron is a good comparison. I remember when everyone was saying Enron was the future of energy. Then Fortune wrote a negative story. When that story came out, I asked around among folks involved with energy technology if they thought Enron would get into trouble, and no one thought so until, of course, Enron did get into trouble.

          • old farmer mac says:

            I followed the rise and fall of Enron. The rise of that company blew me away because I could NEVER find any real reason for it to exist and grow like a runaway cancer to the size it did – other than people chasing after high returns in what turned out to be a ponzi like business.

            Most investors are idiots and most investment advisors likewise in my estimation. The ones that are not seem to be compelled to a substantial extent to go along with the crowd in order to keep their clients on board. An advisor who refused to put some of his clients money into Enron on the way up may well have lost that client to a more aggressive ( less cautious ) broker bragging about HIS recent performance.

            So far as I know even today the company never did ANYTHING REALLY SIGNIFICANT to make energy cheaper or to use it more efficiently.

            AT SOME POINT, the basic truths involving the oil industry will become obvious to the general public. I hope that this day comes while there is still time for the public to order a new LEAF – with a twenty four month delayed promised delivery date.

            Any of the regulars here with money in the airline industry will know to get out of that particular investment when the msm first starts running serious articles on peak oil.

            Nice little houses very close to good jobs are looking like a decent investment. Such a house within walking distance of a supermarket will be worth a substantial rent premium to one of the assistant store managers. Somebody who can buy one now with a low interest rate thirty year mortgage can probably get double the locked in payment in five or ten years.

        • shallow sand says:

          Enno. I thank you very much for your work. It has helped me see how tenuous the economics are for these well, given the high earlyvdecline.

          I really didn’t pay much attention to shale until about a year ago, when I became concerned they were going too fast. So if I was missing the story and had a financial incentive not to, imagine all the investors with no oil and gas background.

          I agree that only high oil prices, and soon, will save them. Some are beyond saving already.

          The parallel to the home mortgage crisis is a huge story that is being missed. The TBTF banks loan the money to drill and complete. When the credit line is full, the TBTF banks then pay off the credit line by issuing bonds to investors who are starving for yield. The TBTF banks earn tremendous fees on the bond issuance, then the cycle repeats.

          I’m just surprised the cycle is still repeating after the crash of oil prices. I do acknowledge rig count has fallen tremendously, so it has at least slowed. Will be interesting to watch this play out. Should make for a good finance class case study some day.

          The statement of cash flows in Q1 for these companies is a sight to behold. So many billions of cash burn in aggregate in just 90 days.

          • Boomer II says:

            I really didn’t pay much attention to shale until about a year ago, when I became concerned they were going too fast.

            I didn’t pay much attention to it either until about 2-3 years ago when it became a hot topic where I live. Companies wanted to drill next to schools and parks, communities were trying to ban it, and the state was overruling the communities.

            My concern was precisely what I see happening in the industry right now: Companies would come in, disrupt communities, run out of money, and leave a mess behind for the communities to deal with.

            It’s been about zoning and planning public services (e.g, road construction, water, community land use, waste disposal, noise).

        • Mike says:

          Enno, I think we sometimes over use the word, “banks” and forget that 240 billion of the estimated 340 billion(?) floated to these shale guys is thru junk bonds. I don’t know about such things as junk bonds and don’t want to know. Venture capitalists that funded the other 100 billion and change will jump all over oil and gas production that is in default. I watched them do it for 50 years with great fervor. Finding operators is easy.

          I agree with you that time is now of the essence for the shale industry; it is no longer booking new reserves and it is staring into the abyss of reserve impairment. I don’t think that “rising” oil prices is going to save them now, however; not in the long run. It wasn’t high oil prices that allowed the LTO business to flourish (on borrowed money), it was high STABLE oil prices. Those days are gone. The shale oil industry works on too thin a margin to handle price volatility. I actually think that grandmas, and teacher’s unions, and college endowments know that and are done buying shares in the shale oil business. Once bitten, twice shy. In my roughneck opinion the shale oil party is over.

          I wish that were not true, we need the stuff. LTO companies were like kids in a candy store. Money was cheap, they could not control themselves.


          • Enno Peters says:

            I appreciate your comments Mike.

            But I am not sure that the party is over when prices rise again. Maybe housing in the US is a comparison, which quite rapidly after the 2009 recession, attracted investment again. As long as there are low interest rates, any potential income stream is capitalized to very big numbers, which is hard to resist. I think there are enough investors interested in volatile earnings, as long as they look promising. Warren Buffett is on record saying that he prefers higher volatile earnings, over steady lower ones. But at the moment we are far from such a price level yet.

          • Mike, I think there’s a way to optimize a “shale” development to make it work, but it takes a sharp pencil, going slow to have a quality learning curve, and at least $80 per barrel wellhead price. I think I know how to do it (spent a big chunk of my life playing this game), but it can’t be done if a bunch of crazy dudes rush in, go nuts, and go broke in the process.

            First thing I would do, say in the bakken, is to drill the bakken and three forks from 30 well pads with very tight well head spacing, choke the wells back to avoid having to overbuild my facilities, have a central plant with the disposal wells connected by pipeline, and have a very tight control on well costs. It’s a completely different approach to what they do now.

            • coffeeguyzz says:


              You just described to a “t” what Liberty Resources is currently doing in the Bakken.
              This is the company Shallow sands has referred to these past couple of days as this company was the subject of a recent Wall Street Journal article describing the “future” of shale drilling.
              This company and their CEO are highly regarded in the industry.

      • Watcher says:

        “I’ll keep beating the dead horse. I continue to be amazed that these companies are able to borrow more money. Halcon, for example, recently announced the issuance of $700 million of bonds. In its 2014 10K it is disclosed Halcon has $3.7 billion of debt. ”

        I have been nosing around this.

        Not them specifically but how is this money being borrowed.

        The answer appears to be several fold:

        1) HY paper yields have risen. They are agreeing to more interest.

        2) The revaluation of reserves is incremental. The March 31 date did not redo all of them because the 12 month first day of each month calculation eased the decline in price. Given flat oil for the next 40 days or so, the end of June will worsen the calculations.

        3) This is the big one. There are signs that HY paper is getting credit default swapped in much higher numbers than in the past. The debt is essentially getting insured. The risk counterparties are extending outwards from the oil finance world.

        • Boomer II says:

          The risk counterparties are extending outwards from the oil finance world.

          I think this is incredibly stupid. Another mega-bubble. And yet, I don’t know what will make it pop. If enough wealthy investors are willing to keep their money in, what would make them pull it out?

          We’ve also got a Silicon Valley bubble. That one is definitely been propped up by wealthy individuals and funds that don’t know what else to do with their money.

          We’ve definitely got excess money floating around, but it seems to be channeled into certain investments rather than causing inflation. So as long as those investors don’t get spooked, it should stay propped up.

          Now, if the banks decide they need repayment, then I suppose we could have a crisis. But as long as they are willing to promote the cycle and unload it onto investors, then it seems like this will continue for awhile.

          Most of us are on the sidelines watching. I suppose if the popping bubble makes the wealthy a little less wealthy, we won’t care. It could destablize the world economy, but that is happening already, right?

      • Longtimber says:

        OMG – explains one reason for the disappearing barrels as new Benchmark price gets factored into valuation. “Highly inaccurate” ?? Just face the drivers seat backwards and drive using the rear view mirror. What could possibly go wrong?

        “Remember PV-10 pricing is SEC regulated, but it does use an average of past pricing to predict present or future value, which at times can be highly inaccurate, despite the full legality and industry acceptance of measuring reserve value in this fashion.”

        Looks like anyone can use whatever price they want??
        Love to see a Matrix of PV-10 and Oil Price key used for the Top50 over time. Would make a Bombshell of a post.

  23. Ronald Walter says:

    The loans to shale companies are pre-bailout bailouts, not really loans. Oil must flow at all costs, positive or negative, it doesn’t matter. The money will flow to keep the oil flowing, at possible staggering losses, no problem.

    You never know, you know.

    World Oil Demand

    Peak Demand won’t happen, that is, each day will be a new peak demand.

    Peak Supply will happen.

    Consuming oil at a rate of 94.78 million barrels per day, at some point in time, the supply will begin to wane.

    Already is for China, they demand oil but the supply can’t be there says the oil supplier. receives approximately 10,000 visits each day, judging from the counter. Not a lot, but quite a few.

    • Ves says:

      Yup. Oil will flow no matter what, even at uneconomical prices. I know it is counter intuitive but hey how long was running before the plug was pulled 🙂 10 yrs? and somebody was buying those shares.

      But oil scarcity is showing its face not necessary in actual oil price but somewhere else: in 9 euro espresso on Champs Elysees or 200k for 4 year Psychology degree at University of USA. Everything is inflated in order to keep oil subsidized and flowing and majority somewhat employed even if the job is separating white carbon copy from yellow 🙂

      • Boomer II says: only lasted two years. 1998 to 2000. – Wikipedia, the free encyclopedia

        • Ves says:

          well there was literally 1000’s of similar type of “build and they will come” online business that did not make 1 cents. And that was my main point. So I am really wondering why everybody is “shocked” that shale guys are not making any dime. The same thing was RE bubble where actually great majority investors lost money.

          • Boomer II says:

            What I think surprised people is the lack of learning. Yes, there were a ton of unprofitable companies during the dotcom boom and the market and investors paid the price for that.

            The fact that anyone is again investing in questionable companies, and relatively soon after previous crashes, is a concern.

            • Ves says:

              Maybe it’s not “lack of learning” but that is how the things are always done in the bubble fashion on the market, from tulip bubble onward.

              • Boomer II says:

                I don’t know if anyone has charted the time between bubbles, but we seem to be getting them faster these days.

                And I think each one of them does its share of damage.

                I wonder how fast the cycle can continue from bubble, to crash, to bubble again.

                • Boomer II says:

                  Also, if bubbles are just the way things go and easy money facilitates them, I wonder if those who are concerned about a total collapse because of debt are wrong to be concerned.

                  If we can create money out of nothing, and fund bubble after bubble, we should be able to do it for quite awhile.

                  Peak oil is a reality, but the debt tied to it may not be an issue.

  24. Jeffrey J. Brown says:

    A long NYT Magazine article on Greece:

    A Finance Minister Fit for a Greek Tragedy?

    Yanis Varoufakis knows when he will go. “I’m not going to humiliate myself, and I’m not going to become compromised in terms of principles and in terms of logic,” he told me in early May. The Greek finance minister had just returned to Athens from a hopscotch tour of European capitals, during which he warned his fellow European leaders that they faced a Continental crisis: If they didn’t lend money to his ailing country soon, Greece might end up forced to leave the eurozone. And yet Greece wouldn’t accept many of the conditions they were demanding in return. He sounded angry. “I’ll be damned if I will accept another package of economic policies that perpetuate this same crisis. This is not what I was elected for.” He would resign, he said, rather than push the Greek people deeper into economic despair: “It’s not good for Europe, and it’s not good for Greece.”

    Varoufakis has been Greece’s finance minister for only four months, but the story of how he has thrown Europe into turmoil is one many years in the making. After Greece joined the European Union’s monetary union in 2001, the tiny country of 10 million was flooded with money from elsewhere on the Continent. Over the course of the next decade, Greek leaders, whose sclerotic and corrupt economy had long been rife with patronage and tax evasion, borrowed billions from imprudent European banks and then lied to E.U. officials about its mounting debts. When the financial crisis finally rolled into Greece in 2009 and 2010, the country was an estimated $430 billion in debt, a staggering figure that imperiled the economic health of its near and distant neighbors — indeed, all of Europe. The European Commission, International Monetary Fund and the European Central Bank (often referred to as the troika) agreed to bail out the sinking economy by loaning it $146 billion. In return, as Athenians rioted in the streets in protest, the government promised the troika it would reduce state spending by slashing pensions and wages, eliminating jobs and raising taxes, an approach to debt reduction known as “austerity.”

    That bailout, along with another, even larger rescue in 2012, temporarily buoyed Greece, but the spending cuts have produced what many Greeks consider to be a humanitarian crisis. Twenty-five percent of the country’s population is unemployed; Greece’s gross domestic product has shrunk by a quarter; suicides and homelessness have increased; hospitals, woefully underfunded, scrounge for medicines. Just this month, Varoufakis warned that the country could run out of money in weeks.

    In successive elections after the crisis, both dominant political parties — Pasok and New Democracy ruled Greece for the last 40 years — failed to transform the Greek economy or protect its people. In January, more than a third of the electorate voted into power the Coalition of the Radical Left, a collection of older leftist parties now known as Syriza, which pledged to end austerity. Its ascendance amounted to a kind of democratic revolution. Its victory, however, threatened an ominous evolution for the eurozone: The rise of a “radical” party in the region has frightened conservative and centrist European leaders facing anger at home amid declining living standards. And while most of Syriza’s officials, including its leader, Prime Minister Alexis Tsipras, want to stay in the eurozone, as much as a third of Syriza’s membership would be willing to abandon the euro to avoid more austerity. It’s an outcome more likely than ever before, and its consequences are frightening and unknowable. . . .

    Economic crises in modern countries are not always easy to see; the suffering doesn’t reveal itself everywhere. Athens is a cafe civilization. Its streets are lined with tables that in springtime, when the sun is pale yellow and soft, are full of people. The vitality of the scene might cause a visitor to wonder: what financial crisis? Where is the emergency? Shops are still open, crowds flow from the Metro exits, automobile traffic clogs the streets. The Acropolis still stands.

    Only someone who lives in Greece can look at that busy restaurant and tell you that a souvlaki and soda costs only $5; that the college graduate sits outside for hours because he is unemployed and has no future; that the elderly man sitting with him lost his pension and has been nursing that same beer all day. A few minutes from the tourist center of the city, the streets are desolate, the stores boarded up; farther out, much of Athens is grim and poor. According to one Greek political theorist, the recession in Greece has reached a level “unseen in a Western country since the 1930s.” Anthony Kefalas, a former adviser to the Hellenic Federation of Enterprises, a business lobby, told me that if something isn’t done soon, “an entire generation in Greece will never be employed.”

    • Watcher says:

      The article uses phrasings that suggest things not true.


      The bailouts were more loans. They were overly indebted to begin with and more money was loaned to Greece. Mostly all that was done structurally in the initial bailouts was a change to maturity, but loan service on those cumulative various manifestations of debt now consume over 90% of new loans provided. Meaning, when a new tranche of money arrives (additional loan), over 90% of what comes in just services the loans already in place, while adding to those loans.

      The plan? Austerity via tax increases and spending cuts. It’s important to understand “austerity” is both, not just one. Austerity can only achieve a primary surplus (govt revs > govt spending(not including debt service)). That’s its whole purpose in an early phase. Then the plan imagines that somehow the magical primary surplus will get “invested” (aka spent) in some magical amplification of govt revs via . . . some undefined something, road improvement or better tourism advertising or whatever. This is imagined to translate into an eventual outright surplus that actually organically funds debt service.

      Greece has fallen back into recession in latest numbers. No further primary surplus exists as a result of that (and an increase in govt spending as Syriza rejects austerity).

      Again we are faced with the philosophical reality that
      the-powers-that-be dare not allow to be prominent in thought — What is the morality of effortlessly creating something from thin air, lending it to someone at interest, and then at enormous pain and suffering to that someone, demand repayment? Greece’s Fin Min has alluded to this . . . saying to haircut Greece’s debt. The ECB is presently QEing over 3X the total Greek debt by September of next year. Why not just expunge Greece’s debt?

      Answer: Because Spain owes even more and is poised to elect a Syriza-like entity that would demand even more expungement.

      ZH is splashing an article about Greek hospitals running out of supplies. Yawn. Probably EU planted to pressure Syriza.

      Greece still burns over 300K bpd of the good stuff. In the final analysis, Russia may be their only hope.

  25. coffeeguyzz says:

    The Canadians just announced the existence of approx 200 billion barrel OOIP in the Northwest Territories, in two shale formations, the Canol and the Bluefish.
    More info to be forthcoming in the next few days.

  26. Boomer II says:

    I posted an article about the Silicon Valley bubble, but don’t see it here, so maybe I posted it on a previous discussion topic. I was going to try to add this new article to that one, but since I can’t find it here, I’ll add it as a freestanding comment instead.

    Who Will Be Hurt Most When The Tech Bubble Burst? Not VCs | TechCrunch

    • Boomer II says:

      I forgot to add this quote. As I have assumed, the public isn’t driving up these valuations. From the article.

      Interestingly, there is reasonable sanity prevailing in the public markets as the tech bubble, at large, is being driven by the surge in late stage VC financings. It is taking much longer for tech companies today to go public, unlike 2000 when several rushed to go public before any revenues. And as the number of IPOs has reduced significantly, more IPO companies are profitable than ever before.

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