World Rig Counts Declining

The weekly Baker Hughes Rig Count for North America and the International monthly rig count is out. In the charts below the monthly data is through February 2015 and the weekly data is as of March 6th.

World Rig Count

World Rig Count, counting oil, gas and miscellaneous rigs are down 684 rigs over the last three months. The annual spikes you here are caused by Canada.

World Rig Count Less Canada

Removing the seasonal Canadian spikes gives you a better picture of what is happening to the world rig count.

Canada Rig Count

This is the first time since before 2000 when the Canadian rig count did not peak in February.

International Rig Count

The International Oil Rig Count is down only 67 in the last three months but was unchanged from last month. It now stands at 982. *The US, Canada or FSU countries are not included in this count.


US Weekly O&G Rig Count

Four years of weekly rig counts shows how dramatic the rig count has dropped. The US total rig count stood at 1920 as late as the first week in December and has dropped 728 rigs to 1192, a drop of 38%. From that same date oil rigs have dropped 41.5% and gas rigs have dropped 22%.

Saudi Rig Count

Saudi oil rig count jumped by 9 to 75 in February while the gas rig count fell by 8 to 45.

Iraq Rig Count

The Iraqi rig count has dropped by 40 since last summer. ISIS likely had a hand in this. However I really don’t understand what is going on here with this Baker Hughes rig count. I know Iraq had rigs working well before May of 2012 yet Baker Hughes says the count was zero.

Kuwait Rig Count

The Kuwaiti rig count has tripled since 2009. They have been working hard to increase their oil production. They appear to have peaked however.

UAE Rig Count

The United Arab Emirates have almost tripled their oil rig count since 2011. They, like Kuwait, have increased their production considerably in the last few years but not they seem to have peaked.

Mexico Rig Count

Mexico is an interesting case. In the last two years their oil rig count has dropped from 104 to 57 while their gas rig count has dropped from 16 to 3 just since September.

Brazil Rig Count

The Brazil oil rig count has dropped from 90 in June of 2012 to 44 in February of 15.

There was another huge drop in the North America Weekly Rig Counts.

Rig Count

Texas dropped 32 rigs this past week. The Permian had the biggest drop, 22 while Eagle Ford dropped 8.

News Items: While reading Google News articles on oil production this morning I came across the following passage from an article about falling oil production in Qatar.

This “heavy investment” in maturing oil fields should “limit further declines” in oil production, QNB said in its ‘Monthly monitor’. 

Heavy investment in maturing fields is called “infill drilling”. That is what every major oil producer in the world is doing. Heavy investment in mature fields produces no new found oil, it produces old found oil a lot faster. Limiting declines now increases declines later.

And from the category of “I’m not one to say I told you so… but I did didn’t I?

Russian Oil Production to drop 8% by 2016

Lukoil said oil output in Russia could drop 8 percent by the end of 2016, Reuters reported. One of the biggest oil producers in Russia said its revenues were hit by the plunge in oil prices, The Wall Street Journal reported. The decrease in oil prices combined with the rise in inflation and weak ruble worsened by economic sanctions lowered the company’s net profit by 40 percent in 2014.

Fedun said oil output could decrease by 800,000 barrels per day by the close of 2016, Reuters reported.

“Everyone will reduce production because everyone is reducing drilling,” Fedun said, according to Reuters.


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461 Responses to World Rig Counts Declining

  1. shallow sand says:

    Thank you for posting this very important information! Appears to me rig count tells the oil production story since 2005 very well. Disproves those who say, “Rig count does not matter.” That group does not understand the lag time from drilling to initial production.

    Also, the large increases in KSA, UAE and Kuwait rig count should be news. This site is the only place I have read this information. The Russian story is very important as well. Possibly one million barrel decrease there next year. Thank you for this site!

    • The “Rig Count Doesn’t Matter” chant has been shot down.

      Lessons for U.S. oil production from the gas industry: Kemp

      The gas industry’s experience holds two lessons for oil production.

      First, gas production would have fallen since 2008 in response to lower prices and drilling had it not been for the boom in crude production and high prices for natural gas.

      Second, it is the combined value of all the products from a well (dry gas, natural gas liquids and crude) that determine the profitability of a well.

      Continued growth in gas production has been, in large part, a by-product of the oil boom. Oil producers will not be so fortunate. They cannot rely on natural gas sales to improve the financial performance of their wells.

      • Futilitist says:

        Hi Ron.

        “The “Rig Count Doesn’t Matter” chant has been shot down.”

        Finally. Wishful thinkers tried to paint the lag between declining rig counts and declining production as some sort of evidence that efficiency was increasing! This was obviously never logical and now we have confirmed it.

      • sunnnv says:

        Hmmm – what’s going on here?
        If I go to and look at the gas data.

        2008 oil well gas is 5,609 Bcf/year
        2013 oil well gas is 5,428 Bcf/year

        So gas from oil wells is actually _down_ (marginally), not up like Kemp says.

        2008 gas well gas is 15,135 Bcf/year
        2013 gas well gas is 11,256 Bcf/year

        OK, conventional gas well gas is down a lot, call it 4 trillion cf/year.

        2008 shale gas is 2,870 Bcf/year
        2013 shale gas is 11,986 Bcf/year

        That’s 9 trillion cf/year – a big jump.

        while I’m there…
        2008 coal seam gas is 2,022 Bcf/year – about what shale gas was in that year.
        2013 coal seam gas is 1,326 Bcf/year – dropping off.

        Are we past peak coal seam gas?

        I kinda believe what he says about shale gas wells producing more condensate
        (somebody is, an additional 138 million bbls from 2008 -2013, but that’s only 370 kbpd increase in 5 years, roughly 1/60th of US “all liquids” consumption).
        But oil well gas (e.g. associated gas, casinghead gas) seems to be going down.

        Did I miss something?

        • toolpush says:


          I agree totally.
          Also if you look at the shale gas numbers on the EIA weekly report, the gas plays of Marcellus and Utica, total out weigh any associated gas from the Bakken and Eagle Ford, yet everybody, apart from the two of us seem to think the gas is coming from oil wells???

          • shallow sand says:

            I agree with the two of you, although I admit I know little about gas. The Marcellus has no equal oil equal.

            • toolpush says:


              Correct, there is no equivalent in oil for the Marcellus.
              So the result can not be expected to be the same as gas. Therefore after a short time we are going to see the inevitable fall in production, for sure.

  2. SRSrocco says:


    Do you think Kuwait, Saudi Arabia and UAE are continuing to increase drilling rigs to keep the illusion of high production as they can afford to do so, while the United States drilling rigs are declining because the costs are too high?


    • I don’t think that is the reason. These guys started increasing rigs several years ago and have continued to do so while oil prices were very high.

      Of course the US rig count is declining because of low oil prices.

    • AlexS says:


      Fluctuations in rig counts have always been much smaller in regions outside North America.

      1/ Investment cycles for large offshore and onshore projects are much longer than for shale/tight oil
      projects or small-scale EOR projects in mature North American fields. It doesn’t make sense to put on hold a project where billions of dollars have already been invested, but it is much easier to stop drilling shale wells.
      2/ Drilling contracts in most regions are longer-term, than in U.S.
      3/ U.S. oil and gas independents are generally highly financially leveraged and have to cut capex significantly when oil prices drop. By contrast, large IOCs and most NOCs usually follow more conservative financial strategies and tend to invest “through the cycle”, which means smaller capex cuts in low oil price environment.

    • nNgass says:

      This looks like infill drilling to keep the production steady.

      • Not really. Both the UAE and Kuwait increased their production by about 200,000 bpd from 2011. Kuwait has declined about 100,000 bpd from its peak in 2013 but he UAE is down only about 45,000 bpd from its peak in 2014.

      • NN, they are also implementing EOR and changing their waterflood patterns. Ii have a friend who worked in Kuwait and he told me they are getting serious about developing their heavy oil fields.

  3. Doug Leighton says:

    Ran into this by accident:


    “I haven’t made a final determination on it, but what I’ve said is, ‘we’re not going to authorize a pipeline that benefits largely a foreign company if it can’t be shown that it is safe and if it can’t be shown that overall it would not contribute to climate change,’” Obama said.

  4. Paulo says:


    And yet coal is better? They are still importing 40% of their oil. Fine, use ME and Venezualan oil. War and upheavel is such a cleaner source of petroleum. Of course, it keeps the Military Industrial Complex happy. What a fucking hypocrite.

    • Chris Alemany says:

      Thank you for this site. Excellent info.

      On the Obama comment, he’s absolutely right environmentally compared to a straw in the dirt. Simplest, and cheapest option is to reduce consumption no matter source if ultimate goal is to be in line with climate change mitigation needs and peak oil security.

      But back to the rig counts… Hearing lots of sad stories from friends being laid off from Alberta ops. It should hit the official unemployment rate in Canada soon.

      That said, I wonder about whether there is another shoe to drop in Canadian drilling. It seems from the graph that what has been put on hold is the spring drilling boom? So we havent yet seen a signficant decline in the number of more permanent rigs?

      • toolpush says:


        You are correct about the traditional spring break where all the rigs in frozen country are laid down, as weight restrictions come into the effort for the country roads. But it is what will happen at the other end, that is the problem. Once the ground drys, and a new drilling season begins, will be the time to watch the rig count numbers, and see how few operators actually go to work. If nothing changes to the oil price, then there will not be very many. I am sure the men being laid off during the spring, will all be looking for alternative employment, rather than sitting around, waiting for the new drilling season to begin.

        • Chris Alemany says:

          Agreed. And considering the unemployment rate in the rest of Canada currently isnt bad, I doubt very much that there will be the jobs available elsewhere. And certainly not at the wage they previously earned. Major blow in consumer buying power is going to hit the Canadian economy hard, right before or during the federal election in the fall. At least in the States you seem to have a large enough pool for the ex-oil men to go. In Camada, there is nowhere else for the eggs to go.

    • Doug Leighton says:

      Paulo, There’s also that so-called free trade thing between Canada and the US defined as the General Agreement on Tariffs and Trade (GATT) whereby duties and other restrictive regulations of commerce are eliminated on substantially all the trade between us. Of course neither of us believe that fantasy. I guess the “substantially all the trade” phrase becomes operative. Why would Obama think: “we’re not going to authorize a pipeline that benefits largely a foreign (Canadian) company be governed by such existing agreements?

      • toolpush says:


        I am glad you brought up free trade agreements. NAFTA being the agreement in question. For all countries these international free trade agreements seem to take precedent over local laws. So why is it the US says it is illegal for them to sell oil to Mexico, but sells oil to Canada, under licence.
        Surely under the free trade rules and agreements of NAFTA, the US should/must allow free trade in all goods.
        Note: Mexico did reserve the right not to import oil under NAFTA, except under licence. But to my knowledge, the US did not include any such clauses.

        • canabuck says:

          So why doesn’t the Canadian government sue the U.S. government for damages? I have heard numbers like $37 billion per year. Times 6 years, times treble damages = $ 666 billion.

          • Satan says:

            That sounds like the right number to me.

          • toolpush says:

            canabuck ,

            I am not sure why, but it always seems strange to me, everyone else has to stick to these international treaties, apart from the US. You sound like you have some skin in the game, so maybe you can find out?

            • canabuck says:

              Blowback. If the canadian gov sued, they may be legally correct and may actually win the case, and may eventually be paid. BUT, there would be hell to pay in terms of lack of cooperation, petty harassment, and further trade blockages. It is better to have a giant as a fair-weather friend, rather than an enemy.

          • Possibly because an arbitration case is going to take a long time, the USA Senate is short 6 votes to overcome a veto, and the Canadian oil is going to move anyway.

            The obvious solution is to build a pipeline from the border to Houston, then hop the border, shipping the oil using super long trains, which only move 10 km to cross the border and deliver the oil at pump station number one.

            • toolpush says:


              Great minds think a like. Unfortunately, I didn’t write mind down, so you get the prize. But sure, a pipeline approaching both side of the border. A short loop by train over the border, and Hey presto, we have a solution.

            • The train track needs to be real short. The key is to wait until there’s enough votes to override Obama and join the two pipeline ends. The other option is to make a tunnel and run both a train and a pipeline inside the tunnel. The tunnel can be say 100 meters long. This way the system will be safer, the rail cars can be filled with water, and the oil go by pipeline. Obama will be too worried counting CO2 molecules and looking out for sea level rise, and he won’t notice.

        • Fred Magyar says:

          So why is it the US says it is illegal for them to sell oil to Mexico, but sells oil to Canada, under licence.

          Because Mexico is a foreign country and Canada is a US territory

    • Old farmer mac says:

      Well said Paulo.

      It seems the Venezuelan heavy oil is just about the same stuff in terms of pollution as the tar sands oil, or so close it hardly matters.

      We are snubbing our closest neighbor while supporting one of the most repressive countries in the hemisphere.

  5. Watcher says:

    Upcoming, various companies have to restate reserves. It’s done as a function of price.

    The reserves are collateral for borrowing. If you restate downwards too much, in keeping with the SEC rules, the lenders dry up.

    And so, obvious bailout mechanism is to redefine the rules, just as was done with Mark To Market in 2009. Quiet, obscure and avoids threatening the narrative of all-is-well.

    • Doug Leighton says:

      Oh shit Watcher, why did you have to mention reserve definitions. Do you like watching me argue with Dennis?

      • Watcher says:

        You’re both wrong. The Fed controls the quoted reserves for everything.

        Ron controls what geology says.

        • shallow sand says:

          Doesn’t the SEC make the rules for US public company reserves?

          • Doug Leighton says:

            Since Jan. 2010 the SEC began allowing companies to declare both “2P” (both proven + probable) and “3P” in estimates (with certain conditions). Since 3p = possible. I’m old fashion I certainly don’t consider “possible” a meaningful metric but the reference to Dennis was a joke. In fact, I could care less. Also, the SEC isn’t the world!

            • shallow sand says:

              Doug, I agree with you that the SEC isn’t the world, especially when it comes to SEC reserve reports. Has the SEC ever reviewed a reserve report and “turned it down” or whatever they are supposed to do?

              I like how the reports ALWAYS assume cost of abandonment is equal to equipment salvage value. How can that be true with regard to ALL properties of ALL US public companies?

              • Doug Leighton says:

                Shallow Sand,

                Please note I’m Canadian and was normally involved with either the Alberta Securities Commission (ASC) or the British Columbia Securities Commission (BCSC). Also, note that I’ve been retired for 10 years. I did do some stuff that was approved by your SEC but that was almost by default. I still sort of keep up with some oil related issues out of what: habit, curiosity, masochism. Probably if it weren’t for Ron’s Blog and the fact I keep in touch with a few old buddies (and a niece in Norway who is active in the business) I would be listening to classical music (or jazz) or grinding through some paper on pulsar physics rather than typing this. You’d be much better off looking to others for information. That said; please keep your knowledge flowing fourth because I always enjoy your input, WE always enjoy your input.

                • shallow sand says:

                  Doug, thanks! I have much respect for you and others here with strong math and science backgrounds. I went the finance route because I couldn’t keep up past first year calculus, physics and chemistry. The required PASCAL programming class first year about did me in. They thought us business students would need to know that, LOL!

                  Have a young sister in law who is a chemist. Have attempted to talk that with her, also without success.

                  My oil industry knowledge is completely self taught, so keep that in mind. Our guys in the field, who average 30+ years hands on experience, are teaching me things all the time. Unfortunately, there are not many young people who appear willing to take their place as they begin to retire in a few years.

                  Keep posting. Although selfish on my part, reading here and posting here helps keep me from laying stuff off on my wife, etc.

    • AlexS says:

      Watcher, there has been several articles on this subject recently:

      The Price of Oil Is About to Blow a Hole in Corporate Accounting

      The U.S. Securities and Exchange Commission requires drillers to calculate the value of their oil reserves every year using average prices from the first trading days in each of the previous 12 months. Because oil didn’t start its freefall to about $45 till after the OPEC meeting in late November, companies in their latest regulatory filings used $95 a barrel to figure out how much oil they could profitably produce and what it’s worth. Of the 12 days that went into the fourth-quarter average, crude was above $90 a barrel on 10 of them.
      So Continental Resources Inc., … reported last month that the present value of its oil and gas operations increased 13 percent last year to $22.8 billion. For Devon Energy Corp., … it jumped 31 percent to $27.9 billion.
      This year tells a different story. The average price on the first trading days of January, February and March was $51.28 a barrel. That means a lot of pain — and writedowns — are in store when drillers’ first-quarter numbers are announced in April and May.

      • Watcher says:

        None of which means anything if the rules are changed. I can even give you the verbage:

        “It is in no one’s interest to value these properties like this.”

      • clueless says:

        The SEC reporting requirement for the quantity and value of reserves is “supplemental information” that is not audited by the accountants and is required by the SEC only annually in the 10-K. The quarterly 10-Q’s do not have it (unless something changed recently). Nonetheless, the companies will likely feel compelled to make some statements concerning the effect of the lower prices on the supplemental figures, such as Continental Resources did.
        Separate and apart from the supplemental information, I believe that the accounting rules require an impairment charge if certain conditions are met. An impairment charge generally is required when the capitalized costs of assets on the balance sheet are greater than the fair market of such assets, so a write-down occurs. If prices go up and the value of the assets shown on the balance sheet are less than their fair market value, a write-up is not permitted: – not even to recapture a previous write-down. Clearly I do not know the current rules in enough detail to say much, except to say that I think that we likely will see accounting write-downs in the 10-Q’s as the year progresses.
        Also, I do not think that he determination of the accounting fair market value uses the same arbitrary valuation method that the SEC mandates to determine the unaudited annual supplemental information. That is, I do not think that they use the average of the oil price on the first day of each month to arrive at the fair market value.
        Since the accounting rules are now like the IRS rules, there are probably many pages of information explaining them.

        • The SEC forms (the SMOG) is done once a year. if I were preparing a guidance for a large company I would use the future market projection for three years and increase by inflation after that. The statement would also explains that CAPEX for 2015 would be cut by say 15 %, and that efforts are being made to cut OPEX by 10 %. These figures are reasonable and a company with sound management is probably doing something like this.

          Behind the scenes I would also be discussing tax cuts. In some countries the government take is already dropping (Angola, Azerbaijan), in others the government is probably considering it.

    • Bryan says:

      Those reserves values are currently overstated by 50-60% at current oil price. The collateral on any current loan is insufficient and companies would need to post more collateral just to roll over existing debt. The collateral used in some 3-4 trillion dollars worth of energy derivative contracts,mainly on oil, owned by large banks is worth 50-60% less now than before oil price decline. When the housing bubble popped the value of the collateral(the homes) collapsed. Derivatives big banks owned on housing was about $2 trillion at the time. When these oil and gas companies start defaulting on their loans. Big banks derivative bets are going to blow up. Fed can’t fix this not even in the aftermath. No collateral to buy up like homes in 2008. Think twice as big as 2008 and no way to pump prices back up.

      • Watcher says:

        You think really well.

        But as little faith as you have in The System, it is still too much.

        If some numbers on a screen say civilization is going to collapse, then those numbers will be adjusted by law, and anyone who complains will be excluded from courtrooms or from breathing, whichever is easiest.

        Only oil geology makes if all fall apart. Not numbers on a screen. Not pieces of paper. Only oil geology can’t be changed by law. Nothing else matters, really.

        • Bryan says:

          Fuzzy numbers that don’t add up are almost everywhere. Like January’s NFP numbers. If i remember correctly they claimed we added 46’000 retail jobs after November and December’s retail sales data sucked! Or the fact that it appears most of the recent job losses in shale oil and gas aren’t being counted. They can falsify the data to produce whatever desired outcome they want. They will only be able to hide the truth so long. Every can they ever kicked down the road is waiting in one gigantic toxic pile.

          • Futilitist says:

            Hi Brian.

            I think you are correct. Numbers can be fudged only so far. Collapse is imminent.

            The whole fragile economic system is subject to forcing, just like the climate system. The climate resists forcing (through negative feedbacks) until it can’t. It then changes quite suddenly.

            The negative feedbacks to collapse in the economy are things like bailouts, NIRP, ZIRP, and QE. These are losing their effectiveness with each passing day. Since organic economic growth is no longer possible, the negative feedbacks to economic collapse will soon be overwhelmed. Once that happens, collapse must be very rapid.

          • Futilitist says:

            Oops, I meant Bryan.

      • shallow sand says:

        I think much of the shale long term debt is in the form of corporate bonds, which are unsecured and which are held by pension funds, etc. The banks have credit lines which are secured by company assets. I think the banks may come out better than one might think, as long as they can keep enough of the employees in place to operate the existing wells.

        However, they will sell the debt to private equity for a discount and then let the hedge funds go in and take over. Hedge funds would do a better job operating wells than banks. The operations staff from the defaulting company will largely be retained. Saw that happen right next door to us in 1999.

        The equity holders, common and preferred, and the debt holders will be the ones to get nothing.

        Where the banks could be in trouble, as you mention, is being on the wrong side of the hedges. Any media stories about counter party risk turning into counter party failure yet regarding oil and gas derivatives? Wouldn’t that stink, to be fully hedged, only to have your counter party blow up, and you not get paid. That is where the bailouts could occur, IMO. I don’t see the equity and bondholders of shale getting bailed out. No TBTF among that crew.

        • Bryan says:

          TBTF underwrote all the derivatives. So they’re exposed no matter who owns the debt. So as long as prices of the underlying collateral of their derivative bets(price of oil) never falls and nobody ever defaults on their debt. TBTF has nothing to worry about. TBTF is praying to the oil prices Gods right now for a dramatic rebound in price. They can probably handle a default or two. Any prolong low oil price that leads to many defaults then TBTF is in serious trouble and will be overwhelmed as they’ve wrote masses of insurance polices they can’t cover in the event of a prolong price slump. So unless this current oil glut ends TBTF have a lot to worry about. I don’t see anyone cutting production as they can’t cause of the load of debt. So unless production is cut elsewhere i’d expect the glut to continue for sometime and for prices to remain low.

      • Bryan, the oil business isn’t like real estate.

        • Bryan says:

          I’m talking about the Banking business, Sir. Derivatives in the oil business work a lot like derivatives in the real estate business. I’m not referring to the derivatives a company will buy to hedge against price. I’m referring to those derivatives that are used by banks to insure debt.

          • Derivatives that oil companies buy to hedge are called futures and options on those futures. What kind of derivatives are you talking about? What are they called and what kind of product are they derived from?

            Oil futures are a derivative of oil, options on oil futures are a derivative of a derivative of oil.

            • Bryan says:

              Big Banks insure other big banks exposure to risk. They sell and trade CDS (credit default swaps) among each other. CDS’s are derivatives. Same as CDS’s used to insure government bonds. The reason no country is allowed to default on their debt is because big banks have more CDS exposure on their books than they can cover. Example: 5 largest US banks each have over $40 trillion worth of derivatives on their books. So a total of over $160 trillion worth of derivative exposure. The underlying collateral supporting these bets is just a fraction of the value. I assure you they neither have the cash on hand or collateral to sell to cover. We live in a world where the value of everything is insured. By definition prices can’t go down without someone having to payout. If prices go down and or defaults occur beyond the point that they can cover then said bank is insolvent. Since all banks are trading and selling CDS’s among each other if one is insolvent then they all are! Oil is no different in this regard it is insured by big bank just like government debt.

              • Allan H says:

                There is another large exposure to default that the banks have to consider, car loans. Any recession that occurs due to tumbling economies and banks will effect the job market and consumer income. Not only will more houses be foreclosed but the first thing to go is the default on car loan payments.
                The sub-prime auto loan market is around 300 billion dollars. The next recession of any kind will take down a lot of those because the loans are much higher and longer termed than in the past.
                So banks are going to get nailed from both sides if oil is down in price for a while and the next recession starts.
                There is going to be a lot of cheap oil assets and cars on the market during that period.

          • The instruments don’t work the same. As oil prices drop we see less activity. The lower activity leads to lower oil production, which increases prices. I don’t think it works the same for empty houses, because the system is less volatile.

            What is happening now also has a sanitary effect because the price swing will scare away a lot of mullets who really shouldn’t be financing oil plays.

  6. AlexS says:

    RE: Russian Oil Production to drop 8% by 2016

    I would not take Mr. Fedun’s statements too seriously.
    Lukoil’s top officials periodically warn about worsening situation in the Russian oil industry and an inevitably decline in oil production. That’s their way to lobby for tax concessions (for the industry in general) and access to “strategic” oil fields (for Lukoil).
    Interestingly, “Fedun assured that the company’s own production will stay unchanged from 2014 levels even though all of Russia should see a drop” by 4-20 million tons (100-400 kb/d) this year, or 0.9%-3.8% [].
    The Russian Energy Ministry announced in early February it expected crude output in the country to fall 0.6% in 2015 []. However, this week the Ministry said production may marginally increase this year [ – in Russian]. Russia’s oil output increased 0.8% year-on-year in the first two months of 2015 [].
    Monthly oil+condensate output was 10.62 in December, 10.67 in January, and 10.61 in February [Ministry data, using 7.3 barrel/ton conversion rate).
    Russian Minister of Energy, Alexander Novak also said the country’s renewed Energy Strategy (to be released this summer) anticipates more or less flat oil production at around 525 million tons for the period to 2035 [ – in Russian].

    • Watcher says:

      The one thing Lukoil has a history of quoting correctly is the gross, not net, decline rate for Western Siberian fields. Given that I’ve heard them say 8% on that in the past, pretty reasonable odds the translator got this wrong.

      Of course, they also have African output, quote it as Lukoil output, and the Russkies probably pick up the total and call it Russian.

      • AlexS says:

        Lukoil is putting on hold its West African projects, as well as some of its Russian gas projects, but they are maintaining investments in domestic oil. Their overall capex
        will be cut by some 20%-25% in dollar terms this year (from $15.4 billion in 2014) but will slightly increase in ruble terms. And their cost base in Russia is mainly in rubles. In January-February Lukoil’s oil production in Russia was flat y-o-y, and earlier this year the company’s president said it will remain at last year’s levels for the whole 2015.

      • AlexS says:

        “they also have African output, quote it as Lukoil output, and the Russkies probably pick up the total and call it Russian”
        In their reports, they give a detailed geographical breakdown of oil and gas production by region. In fact their African projects were a failure, but they have a large project in Iraq (West Qurna 2) and several upstream projects in Central Asia

        • Watcher says:

          I can be behind the times on this, but my recall is the Lukoil African flow was purchased flow, not purchased exploration chunks of acreage. Did it run dry early?

          • AlexS says:

            Lukoil has stakes in several offshore exploration blocks in West Africa (Cote d’Ivoire, Ghana and Sierra Leone). As I understand, their aim was to gain experience in deepwater exploration and development (as their offshore projects in Russia are in shallow waters).
            There were some modest discoveries and several dry holes, which have already resulted in $1.5 billion in write-offs. According to Lukoil’s vice-president Fedun, the company is now freezing its deepwater operations off West Africa due to low oil prices and he also didn’t exclude they would pull out of those projects completely. That said, Lukoil decided last year to farm in to an operational development in Cameroon.

    • The IEA take on Russian oil production is in my article on the Medium Term Oil Market Report

      IEA report: US shale oil growth practically zero in 2017

  7. Remember we had a report from Energy Intelligence Weekly in 2006, on Kuwait reserves

    The issue of
    may hit the world at an inconvenient time

  8. toolpush says:

    Anadarko have come out with a revised capex.

    As a result, we’ve reduced our initial 2015 capital expectations by approximately 33 percent relative to last year, with plans to reduce our short-cycle U.S. onshore rig activity by 40 percent and defer approximately 125 onshore well completions.

    But the kicker is, US onshore is down 60%. From what I could see in the 4Q report, they had 37 rigs working US onshore. So they could be down to about 15 rigs, a loss of 20 plus. Of course there is the usual, but our oil production will be up by 5%.
    They can say what they like, but when this dropping rig count mule kicks, it is going to kick real good!!

    • Mike says:

      G’day, T. Push, are you still on the beach?

      I am not paying much attention to where all the rigs are getting stacked. Three hundred in Texas I’ve read. Half of those, at least, have to be 2000HP rigs capable of long laterals. Those big rigs directly and indirectly employ 250 folks each. That’s a lot of good men and women who have gone to the house. I hate that.

      Here is an answer I gave to Dennis earlier on something. I thought you might enjoy playing with the GIS map. BTW, thanks AlexS:

      ….On another matter, Dennis; drilling and completion costs are really dropping now. I tend to discount quick declines in daily rig rates and pumping related services the first 6 months of a downturn like this, but when pipe (casing and tubing) costs start to come down I interpret that to be an indicator of much lower costs. I am hearing price declines of 30%, even more, for the shale guys. Not that that will save them, but its interesting.

      Another interesting observation is the density of working rigs in obvious sweet spots. I saw 12 rigs running in a 5 square mile area the other day, then not another rig for 20 miles. FYI, don’t be fooled by web site dribble about rig days to drill a shale well; one of the shale biz’s neat tricks is to have a smaller rig drilling and setting surface casing (3000 feet plus/minus) on a multi-slot pad, then have the big rigs fall in behind drilling only the radius and lateral and running casing to the toe. When they brag about 12-15 days, IMO that’s big rig time working only below surface casing. 21 to 25 days, with no problems, is the real deal. Not that it matters much.

      Go to Karnes County, or DeWitt; it looks like pixie sticks. How much longer can that go on?

      Not much.


      • toolpush says:

        Hey Mike,

        12 rigs on 5 sq miles, I don’t care how close their spacing is, it will not take them long to run out of locations. 6 months at the most! Then there will be 12 more rigs on the scrap heap.

    • shallow sand says:

      Toolpush. I think the US shale companies, and unfortunately conventional people like us too, are going to take it on the chin for awhile even if US production starts to drop soon. Look at a chart comparing oil price to US dollar strength. Pretty correlated.

      Add in that Brent WTI could go another $10, and suddenly the rest of the worlds oil production is on solid footing, but US is still hurting.

      As I’ve posted, think WTI will stay down long enough to pretty well torpedo the shale oil revolution. That takes 2-3 years to play out.

      As long as you stay away from US onshore, should be plenty going on. Did you make it to Qatar?

      • toolpush says:

        G’Day Mike and Shallow,

        Yes it will take a little while for things to work their way the system, but the deeper the cuts, when the effect finally takes place, the steeper the climb out of it. A short and sharp drop will be better for us all. The revised reserves next month should start to get the financiers attention. When you think there were 3 shale players couldn’t pay their first loan repayments after their first short payment, then I feel there are few more to follow.
        Mike thanks for the map. Looks like Texas has more holes than a piece of Swiss cheese. As for time it takes for a rig drilling a well, I am also aware of time to drill your best well is a lot different to time taken for average well, and a hell of a lot different from your worst well. What does “side track mean”? lol.

        Exxon had a good chart of their projects.
        Page 24

        Three of the bottom four profitable projects in Exxon’s fleet are unconventional resources.

        I am still on the beach. Thank for asking. I am still waiting for the cogs to turn on the Qatar deal but things should work out there. But I am looking for a fill in trip somewhere if I can. But that will be a nice to have rather than a must have. I learnt early in the oilfield of the ups and downs, so borrowed money has never been high on my agenda, so I have no problems there. I am still technically on my time off rather than between jobs. I know there are lot more people out there in a lot worse position than me.
        Keep a bind on it fellas.

  9. toolpush says:

    Even though Canadian WCS has finally found a direct pipeline route to the Gulf Coast, via the Flanagan line expansion and the twinning of the Seaway pipelines, Exxon seems to be going for crude by rail.

    Exxon’s new oil-by-rail terminal in Canada gears up for U.S. shipments

    (Reuters) – Exxon Mobil Corp’s new joint-venture oil-by-rail terminal in Canada, set to be the nation’s largest, will begin shipping crude directly to its own refineries in Illinois and Louisiana by March, another reminder that pipeline delays are not stopping the rise in oil sands exports.

    When they say, shipping to their own refineries, I guess the currently import oil from Saudi and Mexico, will not be in the hunt when it comes trying to compete with fully owned Canadian oil.

    • Old farmer mac says:

      Toolpush do you know of any other major expansion of cross border rail capacity ?

      Which railroad will be hauling this new production?

      • toolpush says:


        Canadian National is hauling the Exxon oil, though the Kinder Morgan terminal in Edmonton is hooked up to both Canadian Pacific and Canadian National lines.

        Hardisty also got and plans rail terminals for oil, but only appears to hook up to Canadian Pacific.

        Our Hardisty rail terminal is connected to Canadian Pacific Railroad’s North Main Line, which is a high capacity line with the ability to connect to all the key refining markets in North America.

      • shallow sand says:

        WSJ is reporting whiting is trying to sell itself. Anyone read the article?

        • toolpush says:

          Whiting Petroleum Seeks Buyer Amid Plunge in Crude Prices

          Whiting Petroleum Corp. is seeking a buyer after plummeting crude prices took a bite out of the oil-and-gas producer’s results and its shares tumbled.

          The company, which has an equity value of $5.8 billion, is in the midst of an auction process, according to people familiar with the matter. It is unclear who may be interested in buying the company and there is no guarantee it will be sold.

          Denver-based Whiting, one of the largest producers in the prolific Bakken Shale formation in North Dakota, is suffering from the sharp decline in oil prices just as it begins the process of swallowing rival Kodiak Oil & Gas Corp. The $3.8 billion deal, which closed in December, saddled the company with more than $2 billion of additional debt; Whiting now has a so-called enterprise value, which includes debt, of more than $11 billion, according to S&P Capital IQ.

          The company’s increased exposure to declining energy prices and heavy debt load have taken a toll on its shares, which are down more than 60% from their high last summer. Whiting isn’t the only oil producer buffeted by the sharp drop in the price of crude, and it is not the only one seeking a buyer either. Penn Virginia Corp. , which drills for oil and gas in Texas, Oklahoma and Pennsylvania, is exploring a sale after its stock declined and its reserves lost value,

          • Rune Likvern says:

            From WSJ November 29th 2012
            Whiting Petroleum Explored Sale
            Whiting Petroleum Corp.WLL -1.36% explored selling itself earlier this year but decided not to proceed after buyers balked over the oil producer’s asking price, according to people familiar with the sale efforts.

            • shallow sand says:

              Rune, I note at that time whiting “just” had $1.6 billion of debt, so in 27 months they took on an additional $4.2 billion.

          • John Keller says:

            Interesting. The funny thing is, they bought Kodiak who put themselves up for sale a while back. Nobody wanted Kodiak, so they called off the sale process. WLL finally bought them. WLL is not very hedged so they will have problems.

            However, in the last couple of weeks, numerous companies have raised a few billion in equity and new debt. The fact that money continues to prop up the shale companies. Goodrich raised $150 million in debt and equity. Their reserves are practically worthless at strip prices. Who are the idiots buying this stuff?

            Well, borrowing base redeterminations should be interesting next month. We’ll see what the banks plan to do.

          • Rune Likvern says:

            Art Berman just published a piece on Whiting

            Have a close look at the table with summary of cash flow and balance sheet data.
            Note that Whiting for the full year 2014 had a ratio of total debt ($5.6B) to cash from operating activities ($1.8B) just above 3.
            This is for all 2014 with an average WTI at $93/b.

            So how will a WTI at $50/b play out for leverage?
            The leverage expressed as the ratio of total debt to net cash from operating activities will increase significantly.
            If time allow I will simulate the financial dynamics in play as a function of leverage and in a world with a sustained low oil price ($50/b). The key is to understand how the extraction (production) geometry for a portfolio of LTO wells (company) plays out and a leverage of 3 (and certainly below) may be doable (have to adjust for specific companies hedging instruments etc).
            A leverage above 4 (for a company primarily exposed to shale oil and with present oil price) is material for sleepless nights.

          • AlexS says:

            “Whiting Petroleum Said to Hire Bank to Pursue Potential Sale

            The Denver-based company, which has a market value of $5.7 billion, has reached out to potential buyers including Norway’s Statoil ASA, one of the people said, asking not to be identified because the information is private.”


        • coffeeguyzz says:

          Shallow, just read the article. Tnx for the heads up. Article says they may try to suction off company.
          Amazing. Annual report was released last week showing near 1 billion barrel reserves, 2014 exit production rate over 130k/day, about one million net leased acres in Bakken and Niobrara.
          Someone (Exxon?) may pick up some extensive assets on the cheap.

          • shallow sand says:

            coffee. This goes to the point I’ve been driving at with you. The shale guys have been doing some amazing things, but bottom line still rules. They got caught up in it, and though they won’t admit it, they are in trouble.

            We are in survival mode with no debt and low decline, so I know most of them are in trouble, especially as the hedges roll off. Further, $75 would be huge to us, we could breathe easy and even do a little extra work. I suspect even $75 WTI for a couple years won’t solve it for most shale.

            Just guesses of course.

          • John Keller says:

            There have not been many takeovers of shale companies by the majors in the last few years (bar the stupid purchase of Athlon by Ecana). The majors realize reserves at the shalies are way overstated. Shell and Sumitomo found that out. Wells will not produce 30 years. That 1 billion barrels is pure fiction. I would bet 75% of them are PUD’s.

          • Watcher says:

            Amazing. Annual report was released last week showing near 1 billion barrel reserves, 2014 exit production rate over 130k/day, about one million net leased acres in Bakken and Niobrara.
            Someone (Exxon?) may pick up some extensive assets on the cheap.

            What’s the matter with you? If this is such a great deal, then WHY THE HELL ARE THEY SELLING? Picking up things on the cheap can be done by company executives of the same company. “Taking it private.” On the other hand they know what crap it is so they managed not to form their own LLC and do that leveraged buyout. Have you not noticed that they didn’t orchestrate a purchase? By themselves . . . or by their family or friends?

            Yet you think Exxon will want to buy what the people who know most about it don’t want to buy.

            • Caelan MacIntyre says:

              They are selling islands over here, more than what may be usual, and I looked at one in particular along a tidal river, where the maximum influx may just barely lick at it, but I guess the ocean tide is coming in a little more each year, and if the island is a little on the low and flat side, it could be submerged almost overnight.
              In a small town where I used to live, over a couple of days its properties along the waterfront got flooded, perhaps more than usual, and what do you know but a few of them are suddenly for sale with a ‘Great View of the Harbor’.
              The good thing about a small town like that, however, is that the relatively puny buildings can be placed on stilts or entirely moved uphill without much ado if absolutely necessary. By a team of horses and some logs if need be or however they did it back then.

              • What are the island coordinates?

                • Caelan MacIntyre says:

                  46.016948, -60.099873

                  And a few in the area in general, such as on the Bras D’Or Lakes fjord. What do you think?

                  Any suggestions on good free online topology maps for the area BTW? Maybe Google has this?

                • I see a small island near Albert Bridge, in a long enclosed water body, with an outlet to the sea near Mira Gut.

                  The island is very low level, but it’s in very calm water, so you don’t have to worry about waves.

                  In these areas one has to worry more about tides and storms, the outlet is 90 meters wide at the narrow spot near the coast.

                  I would inquire with an insurance company what their terms are for a house on the mainland near the island. Insurance companies have the local flood maps.

                  If you want to build on that island I suggest to take soil samples and build within 20 meters of the beach on sandy soil. You will need to have a boat with a high pressure pump and jet painted and covered steel pipes about 10 meters down. This will give you a working surface to keep jetting in to build a level surface for a foundation. The deck should be about 2 meters above the highest water level seen in the area in the last 50 years.

                  I do wonder how you will handle sewage and other utilities? And do they issue permits for this type of activity?

                  • Caelan MacIntyre says:

                    Good day, Fernando,
                    Thanks for the useful tips. It is very unlikely I will be building there, but it is good to know just in case.
                    If I did, I might go with a year-round insulated treehouse or even a vertically-set shipping container deal; compost toilet and some kind of rainwater collector in the tree. The river is probably clean enough to use for graywater-type uses and I’d see about some kind of graywater lagoon-treatment system with the right plants.

        • FunnelFan says:

          Interesting timing, coming out rather late on a Friday evening. Anybody read anything into that?

          • coffeeguyzz says:

            Funnel, the tone of the WSJ article sounds like Whiting has been looking for a buyer for a little while and, perhaps, rumors were starting to arise.
            Shallow, mebbe you could put in a bid to buy out Whiting and give ol’ Harold a run for the title of King of the Bakken? I’d invest in ya.

            • shallow sand says:

              I’d rather wait till the wells have settled out at 10-30 bbl per day, then offer, LOL!

              • toolpush says:

                Question to all,

                Whiting, is obviously out money, but have 12 rigs drilling in the Bakken. They are very close to being the most active driller in the Bakken. So while their more well heeled brothers have hunkered down, and slowed/stopped spending money. These lot are going hell for leather?
                so what is/was their game plan? Drill flat out, keep their flow rates up, and hope to sell before they run out of money?
                I think the vultures may have seen through their plan, and are waiting for them to hit the brick wall, and pick up the pieces for peanuts.
                I am sure the sale is a very high stakes poker game.

                • coffeeguyzz says:

                  Push, I think a lot of people were surprised that Whiting was so emphatic that they not only WOULD keep producing, but that they COULD produce at these prices and still make a profit.
                  The three wells that are in the Twin Valley field and frac’d with the CT hardware are producing at a record setting pace.
                  Your comment about high stakes poker may accurate. Also, maybe the Whiting suits want to buy a fleet of lime green Leafs before that price skyrockets.

                  • Mike says:

                    Coffee, if you do not work for the API, or the IPAA, you should. You are very good at your message and I compliment you, sir.

                    I watched a CT frac the other day. Neat. Straddle packer technology that has been around a long time. Couldn’t get a lot of rate down 2 5/8ths OD coiled tubing so they were constantly having to drop sand concentrations. Lots and lots of small “stages.” I say if you are going to be bear, be a grizzly and I’ll take 30, 200 foot, 200,000 pound stages any day. The windows in the frac van need to be rattling.

                    Whatever, its about the money, not the toys. Any shale company confident in their ability to survive this little oil price thing I would guess would be buying, not selling, and full speed ahead. These 10% IRR’s over 20 years, will take the wind out of anybody’s sails, I guess.


                  • coffeeguyzz says:

                    Mike, No API stuff for me, too much high level politicking, diverse interests, BS in general. (Nice image of the girl scouts peddling oil wells, btw).
                    Your comment about watching the CT frac and being a griz when doing something prompted me to respond.
                    The current online issue of American Oil and Gas Reporter has a step by step description of a 29 stage horizontal in the Permian being frac’d with this new generation of Bottom Hole Tool (without mentioning which one, the implication was that it was Baker Hughes’ Opti Port. Enlightening reading, IMHO.
                    More to the point, that site – – had a 2 part article in their Dec 14/Jan 15 issues recounting in extensive detail of a project by WPX that monitored numerous variables in the frac’ing process in an effort to understand just what was occurring two miles down below (an item you have correctly mentioned several times was largely unknown).
                    Well, the WPX folks discovered a great many things about the events unfolding while frac’ing … and a lot was what they DIDN’T want, like unstimulated areas, WAY out of zone fissures (300/600′ vertical when targeted payzone was no more than 50′. Unwanted water production much?)
                    In a nutshell, the days of the 30 stage, 200’/300′ long intervals, 200,000 lbs proppant/stage, 11,000+ Hydraulic Horsepower Pump output, may no longer be wanted, let alone required.
                    The ongoing evolution in the microseismic capabilites is enabling the operators to better target the most productive areas along the 10,000′ long laterals.
                    Yes, of course these are all toys (along with the techniques to best utilize them), and the bottom line – NOT the bottom hole tool – is what ultimately influences operations – but, if not Whiting, if not Goodrich, Halcon or the others who may falter in the coming months, some outfit will ultimately employ the array of innovations that continue to arise … but sure as shit not for $40/$50 per.

              • Mike says:

                Shallow, I am quite certain when 1st quarter 15 reserve numbers come out you will be able to buy no fewer than 12,000 shale wells in the Bakken and the Eagle Ford. By 2nd quarter you’ll be able to find some deals on Ebay and in September there will be people knocking on your door trying to sell shale wells like Girl Scout cookies. You might actually get to meet Harold himself at that point; he’ll be driving a beat up, lime green Leaf with a sticker on the bumper that says If You Don’t Have an Oil Well, Get One!

                Remember those long fat EUR tails are not likely to be as long and fat as the hype, don’t forget the 150-200K plugging and decommissioning costs per well and whatever you do, be sure and get lien releases at closing.

                You will of course not be offended if I pass on your new venture.


                • Watcher says:

                  There is a way one could see buyers, Mike.

                  Someone who can orchestrate a bailout might buy.

                  No different whatsoever from owning some land in your town, getting your son elected to the town planning commission and then having that land zoned commercial, instantly quadrupling its price.

                  If someone knows a bailout is coming, they might buy.

                  In that context, the oil majors really haven’t rec’d anywhere near enough notice that they all crashed their CapEx about a year ago, months before the price crash. How very prudent.

                • Synapsid says:

                  Thank you, Mike. Best laugh I’ve had for days.

                • shallow sand says:

                  Mike. I put LOL behind that little comment for a reason. I call a 2,500 ft well a deep well. Don’t think I’ll ever own an interest in one deeper than 2,500 ft.

                  Had to plug a SWD recently that wouldn’t pass MIT. Cost 4 grand. That’s the level we operate on.

                  Don’t get the wrong idea, we are small fries all the way. I like the EBAY idea. He he!

      • toolpush says:


        Here is another good piece, where they mention some of the smaller terminals. Also a comment on why they didn’t expand the oil sands faster. As well some of the likely parties that are benefiting for the delay in Keystone.

        Companies including Canexus Corp and Gibson Energy Inc are building terminals that will pump Western Canadian crude on to mile-long trains bound for U.S. refiners. In theory, these firms have the most to benefit from a months-long delay in U.S. approval to the 1,200 mile (1,900 km) pipeline that would link Canadian oil fields to refiners on the U.S. Gulf coast.


        But many are struggling to get their terminals up and running due to chronic labor shortages in Alberta, a harsh winter and cost overruns. That means they may not be able to fully exploit the growing shortage of pipeline capacity, as they had hoped.


        An estimated 1.1 million bpd of rail-terminal capacity will be available in Western Canada by year’s end, but much of that will depend on already-delayed terminal projects sticking to construction schedules.

      • toolpush says:


        Here is another, it notes 550,000 bopd loading capacity by the the end of 2014.

        At present, the oil sands are only served by manifest trains hauling smaller loads, a less cost-effective mode of transport, but around 550,000 bpd of unit-train crude-by-rail projects – terminals that can load up to 120 rail cars a day – are due to start up in Western Canada by the end of 2014.

        So i seems there is going to be plenty of WCS heading south, east and west in the near future.

        • Old farmer mac says:

          Thanks Toolpush,

          Perhaps I am somewhat on the cynical side but I AM thinking rail money has more than a little to do with holding up the Keystone given that environmentalists would otherwise be screaming bloody murder over the rail cars hauling such light crude.

          I AM not a chemist by any means but I did get thru the first two years at university level back in the dark ages and everybody knows the ultralight crude moving by rail ( which is not tar sands oil of course) has a hell of a lot of very light components prone to evaporating out very quickly if not contained in a pressure vessel. To the best of my knowledge these oil tanker cars are not capable of holding any significant amount of pressure.

          Everything that evaporates is extra air pollution pure and simple.

          IF somebody were to wave a sniffer over one on a hot day it would likely scream it’s guts out.

          Greens are as prone to acting irrationally as anybody else and I am generally as green as anybody else but I try to avoid checking my brain like a hat and coat when I get into a political discussion.

          We are NOT going to quit burning oil for a very long time. I won’t go so far as to say that we cannot develop alternative technologies to get away from oil before oil gets away from us ALTOGETHER but it these technologies just aren’t going to scale up fast enough to prevent some extreme pain in the economy as oil supplies dry up.

          I tried to tell everybody I know the whole time the debate was going on that refusing the Keystone permit was a HUGE HUGE political mistake. It isn’t over yet. The presidential election is not that far away now.

          Joe Sixpack is on average as ignorant as ignorant can be but he can and does understand political pandering when he sees it. Washington can’t say we are letting the states decide this issue as a dodge when at the same time telling the states what will be on a dozen other issues. Joe notices that sort of thing even if he doesn’t know the difference between DOO DOO and apple butter.

          It would have been and still WOULD be infinitely better to use the permit as a club to extract money from the tar sands folks to buy up a million acres of sensitive land near the pipeline route and set it aside as parklands and nature preserves. I know things are tough in the oil patch right now but they won’t stay that way very long , maybe a year or two at the most. The money could be paid in the form of a small tax on future oil transported thru the pipeline.

          If there is anything the current administration is good at, it is finding ways to do what it pleases. I have no doubt a way could be found to levy an environmental tax on oil passing thru a new pipeline. It wouldn’t have to be very high to produce a LOT of money over few decade’s time. Even fifty cents a barrel would be a handsome revenue stream that could finance some land purchases and do some nice things for poor people along and near the route.

          The free trade agreements mentioned above are sort of like the animals in the famous little anti utopian novel.

          All the animals are equal – but some of them are more equal than the others.

          The agreement gets bent into a pretzel depending on how much influence any given industry has on any given day.

          • toolpush says:

            All the animals are equal – but some of them are more equal than the others.

            I realize this is a true statement, but I just like to highlight a few of the inconsistencies from time to time and sometimes Americans can forget other people live in the world as well. My wife comes from over there, and I have have good time teasing her about it. smiles
            As for the LTO by rail, that is why the oil needs to go through a stabilizer and have the NGLs removed as best as possible.

        • I still wonder, why not build a pipeline inside the U.S., take rail deliveries and pump all the way to Houston? Obama can’t stop line construction within the US.

  10. canabuck says:

    Re: AGW
    From a NASA website, I see the evidence for GW can be summarized as follows:
    1- sea level rise
    2- global temperature
    3- less ice
    4- ocean acidification

    So, to be a skeptic, one must address each of these issues.
    1. The Maldives is the most affected by sea level rise. Has the ocean risen 20 cm there in the last 50 years or so? I have no data on this. Looking for a scientific paper on this subject, I first came up with: (2011)
    Which says two things: a. Over the past 4000 years the sea level has risen and fallen around 1000 mm.
    b. There is no sign of sea level rise over the last 50 years. It is an interesting read. This is written by a sea level specialist, and the IPCC report had no sea level specialist. It seems that this person started measuring the sea level in 1999 for the first time.

    2. There is some dispute about “heat islands” and “massaging the data” in South America. And the historical record does not go back much more than 50 years. Can we trust this data?

    3. 99% of the ice is locked up in Greenland and Antarctica. Solid data of ice loss, makes for a compelling case. The World Glacier Monitoring service says that ice loss began in 1980. This seems an odd date for the start of ice loss.

    4. It seems likely that CO2 is being absorbed by the oceans and causing higher acidity. But i don’t see how this warms the earth, unless CO2 in water will warm the water.

    Any legitimate comments are welcome. Name-calling is pointless.

    • Caelan MacIntyre says:

      canabuck, my take is that, if humans have been burning whatever vast amounts of fossil fuels as they have for the past 180 years or so, something’s going to happen.

      • Pat from Vegas says:

        First off, oil is useful. (To make an massive understatement).

        Public-sector, taxpayer-funded global warming research is mostly just expensive nonsense.

        But let’s say we actually were to listen to the public-sector taxpayer-funded climate researchers and spend trillions upon trillions of dollars destroying the only sustainably successful economic system mankind has ever known all so we can produce less CO2, how would your ordinary American citizen actually benefit? How much would we even be able to “save” the planet?

        In other words, if we did commit economic suicide, and massively reduced the standard of living for hundreds of millions of people, what would those people get in return? What is the ROI?

        I think you would find out of these hypothetical questions the real reason why the only scientists who fully buy into the anthropogenic global warming theory are the ones whose income and livelihood depends on continuing to receive taxpayer-funded government grants which mandate full allegiance to the theory.

        • sam Taylor says:

          In what way is an economy based on burning ever increasing amounts of a finite resource sustainable?

          Anyway the economics of the issue are far from settled, but in general it turns out that maintaining a habitable planet might have a positive roi!!! Have a read:

        • Old farmer mac says:

          Pat I can only conclude you are EITHER abysmally ignorant OR a troll. Respond as you please.

          Ignorance is excusable and you can cure it now that you have discovered this forum. I am personally as ignorant as few post in the opinion of some regulars here. LOL

          You are abysmally ignorant if you don’t understand that coal oil and gas come out of holes in the ground and don’t grow back like potatoes and thus that they ARE going to run out. Prices are down right now but the historical trend is sharply upward you know. Or maybe you don’t.

          We are going to be in very big trouble in terms of being able to pay for fossil fuels in another decade or two at the latest. More people , more exhausted holes, fewer places left every year to make new holes you see.

          If you do understand these things then you are just a scummy slimy troll.

          Which ???

          Just to show that I have your own interests at heart I recommend that unless you have a LOT of money you check the historical record of retail gasoline and diesel fuel prices before you buy a six thousand pound beer hauler on a seventy two month note. 😉

          • Pat from Vegas says:

            I’ve never been comfortable agreeing to the premise of “infinite growth on a finite world is impossible”. Mainly because of the vocal crowd, represented by blogs like this one, that has existed since the sixties screaming about a population bomb, peak oil, resources like copper and iron being used up, and so on. They keep up the messaging even though none of their predictions of doom and gloom have ever actually come to pass. More people exist now than ever before and we are comfortably feeding all of them. We have more oil and natural gas then we know what to do with, we have 500+ years of coal (China has 300+ years of coal). In short, I look around and see with continually improving technology, the opportunities for further human development are nearly endless. I just guess people here are a glass 1/2 empty kind of people and believe the freedom-stifling hand of a central government should be in control of all aspects of our lives. I, on the other hand, am a free market optimist, realizing capitalism and the entrepreneurial spirit has allowed humanity to overcome all sorts of obstacles in the past and will continue to allow humanity to overcome all obstacles to economic development and prosperity in the future. Never bet against human ingenuity!

            • Futilitist says:


              “I’ve never been comfortable agreeing to the premise of “infinite growth on a finite world is impossible”.”

              So are you more comfortable with this?:

              Infinite growth on a finite world is possible.

              If you are, then you are getting closer to troll territory.

              The reality is that you are irrationally discounting real scientific evidence because you have a core political belief that regulating free enterprise is dangerous to economic growth. If you keep trying to say the science is wrong, you will just look like a crank.

              But if you stick to your core argument that the economy is in danger if we try to effectively respond to climate change, you might actually have a good argument. It just might not lead where you or anyone else wants to go. Collapse.

              If we continue BAU, we will collapse.

              If we don’t continue BAU, we will collapse.

              Collapse is inevitable.

            • canabuck says:

              Rather than a collapsing civilization, we are headed to Mars!
              And in less than 25 years.

              • Futilitist says:

                Hi canabuck.

                Let me get this straight. Are you suggesting that SpaceX is going to somehow prevent the collapse that I contend is already underway? That doesn’t make much sense to me. It would seem to be a lot more logical to assume that SpaceX will collapse right along with industrial civilization.

                Are you really just ignoring the likelihood of imminent collapse?

              • Owen More says:

                everyone is being fed comfortably, eh?

                infinite growth is possible in a finite system?

                Go away, troll.

            • Fred Magyar says:

              Pat, it isn’t about doom and gloom, even less about what you feel comfortable with, it’s about basic physics and the laws of thermodynamics. Reality is what it is regardless of what you think it should be…

              I’ve posted this link before:
              Tom Murphy: Growth has an Expiration Date

        • E Auden says:

          It is fortunate we have 2% of climate scientists financed by the fossil fuel industry who have the integrity to tell us the truth.

        • Futilitist says:

          Hello Pat.

          Old farmer mac had this to say about your comment:

          “Pat I can only conclude you are EITHER abysmally ignorant OR a troll.”

          I don’t think that is correct at all. I think you are trying to make a very honest argument. One part of your argument is weak and one is strong. Here is a breakdown:

          “I think you would find out of these hypothetical questions the real reason why the only scientists who fully buy into the anthropogenic global warming theory are the ones whose income and livelihood depends on continuing to receive taxpayer-funded government grants which mandate full allegiance to the theory.”

          Unfortunately, when you draw the conclusion that the science is suspect, you are wrong. It is not just a wrong conclusion. It is a terrible argument as well. It destroys your credibility.

          But this statement is another matter entirely:

          “But let’s say we actually were to listen to the public-sector taxpayer-funded climate researchers and spend trillions upon trillions of dollars destroying the only sustainably successful economic system mankind has ever known all so we can produce less CO2, how would your ordinary American citizen actually benefit? How much would we even be able to “save” the planet?

          In other words, if we did commit economic suicide, and massively reduced the standard of living for hundreds of millions of people, what would those people get in return? What is the ROI?”

          This is a pretty strong argument. It is really your core argument and you should stick with it. I admit that your core argument is much more difficult to rebut. That is because you are describing a dilemma, not a problem. You are correct that there are no workable solutions to the climate change problem.

          Futilitist: “If we maintain BAU, we are clearly screwed!”

          Pat from Vegas: “If we attempt to change BAU, we are clearly screwed!”

          Correct conclusion: We are clearly screwed.

        • notanoilman says:

          You guys always seem to miss that if trillions and trillions of dollars were spent it would be one hell of a boost to businesses and the economy.


          • Futilitist says:

            In net energy terms it would just be a Ponzi scheme.

          • Bryan says:

            Spending more money doesn’t solve the problem of scarcity. It actually accelerates the problem of scarcity. When peak unconventional oil happens there will be oil scarcity afterwards. Spending trillions upon trillions of dollars would only bring that day forward in time. BAU will be discontinued at some point after peak unconventional oil happens. When you say spend trillions where exactly do you suppose these trillions will come from? When the Fed creates money there is a debt attached to it that is equal to the amount created + interest so the debt attached is actually greater than the sum created. So spending trillions would amount to going into trillions more debt. Which can’t be serviced due to oil scarcity. This problem can’t be solve by throwing money at it.

            • notanoilman says:

              Whilst what you say is true, my point is that those who cite the cost of change do not take into account that that cost will generate business. It does not simply go down a drain. Some of that will be transferred from BAU systems to the new systems. The money spent on a coal plant could be spent on renewables. Jobs lost in old industries will be gained in new. Money spent in patching up a grid system for the 1900s to try and keep it running with more and more consumption can be spent on a grid system for the 2100s. Much of it will be a shift.


    • John B says:

      There is a small amount of warming in the satellite data:

      However, Solar Power is doubling roughly every 2 years.
      Which means in 2029, Solar Power will be 128% of current total power production.
      Which means there will be very little industrial CO2 production after that time.
      From now until 2029, you could see a 28 PPM increase in CO2, @ the current rate of 2PPM/Yr.
      With a 3 degree C sensitivity, that works out to a .21 degree C increase in global average temps.

      Bottom line – keep ramping up Solar Power, and there won’t be much Global Warming to talk about.

      • Caelan MacIntyre says:

        John B’s link seems problematic. Here’s another chart:

      • Caelan MacIntyre says:

        From the annals of the Oil Drum to the lap of John B.


        “Bottom line… there won’t be much Global Warming to talk about.”… ~ John B

        “…because we’ll be more concerned about our very survival in the face of the ostensible impending Global Warming that’s already in the pipeline and being rampantly fed as solar panels are manufactured.” ~ CM for John B

        • John B says:

          Hi Caelan,

          Here’s another article from “The Oil Drum”

          Great experts over there eh?

          • Caelan MacIntyre says:

            What’s your point regarding the link? There are other sites/links about Spencer. Would you like some more? ‘u’

            • John B says:

              The point is, that site was BS.

              If you don’t like UAH, I can post up the RSS numbers. Or is it that you just don’t like satellite data?

              • Caelan MacIntyre says:

                “The UAH TLT dataset was a source of controversy in the 1990s as, at that time, it showed little increase in global mean temperature, at odds with surface measurements. Since then a number of errors in the way the atmospheric temperatures were derived from the raw radiance data have been discovered and corrections made by Christy et al. at UAH.” ~ Wikipedia

                Anyway, our cultural complexity is way out of hand.

                And, again, burn enough stuff on the planet at vast scales like we are doing and something’s going to happen.

                We’re playing with fire.

              • Futilitist says:

                John B.

                Quit trying to say that the science is suspect. It isn’t. Scientist use peer review and you are not a peer.

                Stick with your core argument to avoid sounding like a crank.

                All of your arguments grow out of your core belief that regulation of the economy leads to economic damage. Stick to that argument. It is hard to rebut when it comes to the issue of climate change, since any realistic solution (if even possible) would require some very drastic measures.

                • John B says:

                  Quit trying to put words in my mouth. And try and study a little, so you can keep up with the conversation.

                • Peer review doesn’t guarantee quality. Sometimes experts in other areas can detect serious flaws in a science paper which went undetected by peer review.

                  Nowadays we see many papers published in Nature and similar journals, which data mine the CMIP5 ( computer model) ensemble used by the IPCC, but this ensemble has been identified to predict temperatures on the high side. This means we are seeing hundreds of papers based on flawed simulations. All of which have passed peer review.

      • Anonymous says:

        The only reason solar is doubling every year is because it is starting from such a small install base.

        • John B says:

          I would disagree.

          I think the major reason is the falling cost. Also, new tech makes solar panels, and inverters more efficient. There’s also improved racking and installation tech. New financing and leasing options. And concerns about the environment, and possible scarcity of fossil fuels.

          So in reality, there are many reasons why Solar has seen sustained growth. Seven more doublings, and we will be @ 100% Solar Power.

          • Futilitist says:

            We don’t have time for 7 more doublings.

            • John B says:

              So you are saying that the economy will have totally collapsed by 2029?

              • Futilitist says:

                Considering that we are at peak oil right now and we are about to experience a long term, extremely severe net energy decline, the answer is obviously yes. How could it be otherwise?

      • sam Taylor says:

        “However, Solar Power is doubling roughly every 2 years.
        Which means in 2029, Solar Power will be 128% of current total power production.”

        A friend of mine is having his second child later this year. At current rate of doubling he should have over 32,000 children by 2029!

        • Doug Leighton says:

          Sam, I don’t think your friend should be having so many kids, college fees will be enormous. Of course if he’s a good Catholic that’s obviously different: Heaven’s Rewards Await.

      • Unfortunately life usually resides in the realm of reality…here’s my projected increase for the “peak oil” and the “Obama’s wishful thinking” cases:

        • Political Economist says:

          The temperature anomaly is relative to what historical period? Pre-industrial time or mid-20th century?

        • Political economist I believe I used the temperature around 1850. The graph shows a 0.75 degree C anomaly in 2013, so it’s easy to work backwards. The model I used is built into a spreadsheet, it simply lays out a set of equations for temperature increases and departs from a given anomaly departure point.

          I lost my faith in anything more complex when I realized the CGMs in the ensemble don’t agree on the actual temperature at all. They have a 2 degree C spread, which tells me they are at best a rough directional vector abd their capabilities are oversold.

      • And here’s the Climate Lab Book update. The skeptical science is mostly propaganda by Nucitelli and friends. It’s pretty useless as a learning site, unless you are into climate onanism.

        • Futilitist says:

          Hi Fernando.

          Why do you keep trying to create doubt where there really is none? It is both deceptive and self-deceptive. That is the reason you are seen as a crank here. And the reason that there is a major backlash coming your way. When people begin to realize that we are all going to suffer and die because of inaction, they will begin to blame the people who covered up the truth until it was too late. And that would be you. Murderer. The times they are a changing. Good luck.

          • John B says:

            So what is your explanation for the Global Warming pause? Is it that the BBC are all murderers?


            • Futilitist says:

              I like the explanation you provided in the BBC article.

              Rising staircase of warming

              The team, lead by Prof Ka-Kit Tung from the University of Washington, US, says there is now evidence that a 30-year current alternately warms and cools the world by sinking large amounts of heat beneath these deep waters.

              Prof Tung believes that whatever the cause and the length of the pause, we are on a “rising staircase” when it comes to global temperatures that will become apparent when the Atlantic current switches again.

              “At the end we will be on the rising part of the staircase, and the rate of warming there will be very fast, just as fast as the last three decades of the 20th Century, plus we are starting off at a higher plateau. The temperatures and the effects will be more severe.”

              Several other researchers in this field acknowledge the Tung analysis is part of a growing body of evidence that suggests the Atlantic has a role in the pause.

              Prof Reto Knutti from the ETH Zurich has recently published a review of all the current theories on the hiatus.

              “I see the studies as complementary, and they both highlight that natural variability in ocean and atmosphere is important in modifying long term anthropogenic trends,” he said.

              Other scientists say that the Atlantic hypothesis is interesting but a much longer range of observations is needed.

              “We really don’t have a lot of data,” said Dr Jonathan Robson from the University of Reading, UK.

              “So if there is this 60-year oscillation in the ocean, we haven’t observed it all, basically we’ve observed the impact of it. We may have to wait 15-20 years to know what’s going on.”

              The last scientist means we will have to wait 15-20 years to know for sure what is causing the pause. Not that we will have to wait 15-20 years to know for sure that the climate is warming!

              When this pause ends, and I think it already has, there will be very rapid warming back to the long term trend.


              Please watch all of those videos. Accept the scientific consensus. Accept that we are at peak oil. Admit that the economy is failing. Then offer the honest argument that there is nothing we can do about climate change since that would crash the economy and cause collapse. You would have to give up on the EV thing, though. Sorry.

              • Old farmer mac says:

                ”The team, lead by Prof Ka-Kit Tung from the University of Washington, US, says there is now evidence that a 30-year current alternately warms and cools the world by sinking large amounts of heat beneath these deep waters.”

                HEY HEY HOLD ON A MINUTE.


                In case anybody is wondering what I am getting at—–

                Some of us with very big egos and very big mouths imply or state outright Fernando is a kook and a nut case for pointing out that there is evidence that a lot of heat energy is winding up in deep water etc.

                So to be consistent they MUST CONCLUDE Mr Tung is ALSO an idiot and a forced climate change denier.

                OF course I have the sarcasm light burning white hot.

                I have read some oceanography and know that the ocean turnover elevator works at a rate measured in centuries rather than years and decades.

                The people who study this field do not pretend to know everything about it.

                Some portion of the accumulating heat that should be warming the atmosphere faster – according to the usual models – MAY actually wind up in very deep water ( My layman’s opinion for what it is worth is that the heat energy in question is mostly or entirely in the top thousand feet where it can get back into the atmosphere over the next decade or two.) and if it does it may not find it’s way to the surface again for centuries.

                The fossil fuel age is going to be history within a couple of centuries at the longest.

                I personally tend to think it will get hotter faster than most climatologists are willing to predict publicly due to there being so many known positive feedbacks that may in turn generate even MORE positive feedbacks.

                BUT I do not KNOW this for sure.

                And after carefully reading a great deal in a great many places I do know that oceanographers and climatologists readily acknowledge that they do not yet know enough to predict with certainty how ocean circulation patterns will change as prevailing circumstances change. Once disrupted the more or less stable current circulation patterns may vary wildly in ways not easily predicted.

                There really might be feedbacks that will result in a lot of heat winding up in the very deep waters.

                Anybody who does not understand this is not as smart as he thinks he is.

                I do not buy it personally but I am not fool enough to deny the possibility.

                • Futilitist says:

                  “BUT I do not KNOW this for sure.

                  There really might be feedbacks that will result in a lot of heat winding up in the very deep waters.”
                  ~Old farmer mac

                  But you are not a climate scientist, and neither is Fernando Leanme.

                  Why place so much emphasis on doubt about the cause of a temporary pause in warming? Here is the important news about the pause:


                  The Hiatus Will End

                  It’s important to note that a pause in rising temperatures doesn’t mean global warming isn’t happening, writes Gerald Meehl, a senior scientist at NCAR, in an email. “Global warming hasn’t stopped, it has temporarily shifted to the subsurface ocean,” says Meehl, who first proposed that the Atlantic Ocean was storing some of the missing heat.

                  Indeed, it’s just a matter of time before this heat is reflected in atmospheric temperatures, says Tung. If this 30-year cycle holds, we’re starting to climb out of the current pause, he explains.

                  “The frightening part,” Tung says, is “it’s going to warm just as fast as the last three decades of the 20th century, which was the fastest warming we’ve seen.” Only now, we’ll be starting from a higher average surface temperature than before.

                  You and Fernando have sure spilled a lot of digital ink on this, Old farmer mac. You constantly endorse Fernando as a trusted expert. Are you a Merchant of Doubt? Under the circumstances, it seems like a fair question.

                  • James Stricher says:

                    Higher CO2 = more plant growth. Of course the alarmists don’t mention anything that doesn’t support their doom and gloom scenarios. In my opinion, “climate change” is both good and bad, not all bad. The “bad” effects have been, and will continue to be of a minimal nature. Many people don’t seem to understand that CO2 is a very small part of atmospheric gasses, and raising the level a few PARTS PER MILLION simply cannot be “catastrophic.” I’m really tired of arguing with some people about this, as they are deluded by the media and the Democrats into actually believing climate change is some horror. It isn’t.

                  • notanoilman says:

                    @James Stricher

                    Not all food crops benefit from more CO2. Many important crops produce less food. Also warming will wipe out some established crops while changes to rainfall can be catastrophic to food production.


                  • John B says:

                    The “warming of the deep ocean” theory has been debunked. I had asked you to study.


                    There are some new theories, complete with spin.


                • I’m not sure what the argument is about for sure. I can just point to papers such as:


                  I really dislike skeptical science, but here’s a reference which discusses the paper (please ignore the bullshit about Hiroshima bombs, those guys are somewhat juvenile when it comes to this subject)


                  The key graph is the one with the four curves labeled a, b, c, d. As you can see, the paper claims energy is increasing at all levels. However buoy and xbt coverage has only been sufficient in the last 12 years or so. And the curves ALL show a reduction in energy uptake in recent years (notice the rather sudden change in slopes.). This means a negative feedback is kicking in.

          • Futilist, are you like a parody?

            • Futilitist says:

              More like a social theorist, Fernando.

              Look up mimetic desire. We are having a mimetic conflict. You are losing badly.

              You sense that you are the one being parodied. This causes extreme cognitive dissonance which leads to desperate mirroring. This further gives you away, causing further dissonance, etc., essentially a meltdown spiral. All of this is a byproduct of being confronted with your Moral Schizophrenia. 😉



              As long as we are on the subject, I have a couple of questions for you:

              “Science has its place, but there are many important things that can never be understood by the human mind.”

              1) Disagree Strongly
              2) Disagree Mostly
              3) Disagree Somewhat
              4) Agree Somewhat
              5) Agree Mostly
              6) Agree Strongly

              “The business man and the manufacturer are much more important to society than the artist and the professor.”

              1) Disagree Strongly
              2) Disagree Mostly
              3) Disagree Somewhat
              4) Agree Somewhat
              5) Agree Mostly
              6) Agree Strongly

              • not clever says:

                I have to say, Futilitist, there is some entertainment value in reading your online interactions. You’ve shaken out the cobwebs a bit…

    • sunnnv says:

      quickly – got a hot tub waiting…

      4. CO2 in oceans -> acidity.

      You’re correct that higher CO2 in the water doesn’t cause warming.
      But where did that CO2 come from?
      Or more relevantly, what is the CO2 level in the atmosphere?

      Ah – but is it man released or natural?

      3. where does the WGMS say ice loss only started in 1980?
      And even if it did only start then, why is that “odd”?

      2. temp records

      Koch brothers money (initially) and a formerly denialist scientist look at temp records…

      1. “no sea level rise expert on the IPCC”
      Somebody citing a Heartland publication as science says there are no sea level rise experts contributing to the IPCC?
      Sorry, some denier lies are just that, lies.

      The AR5 sea level rise chapter:
      There are 50 matches of “Rahmstorf” alone in the sea level rise chapter of AR5.
      Who is “Rahmstorf” you ask?

      Enjoy your weekend.

      • Steve Gentilly says:

        IPCC is dominated by politicians and politics, but it is Intergovernmental, so no surprise. Just remember the UN absolutely loves power and money grabs wherever they may come about.

        My personal observation is: If CO2 has really risen so sharply, why haven’t temperatures risen just as sharply? If both CO2 and temperature had risen in unison between 1998 and now, we skeptics in search of the truth wouldn’t have the global temperature plateau and decline in that time period to point to and you believers would have, you know, actual evidence to support your hysteria, paranoia, and carbon tax wealth redistribution scheme.

        • John B says:

          That was my observation from Al Gore’s film “An Inconvenient Truth”, when he had to get on a scissor lift to show how much CO2 had increased.

          Also, what people may not come away with looking at that graph, is that temps did not rise in unison with CO2. Temps went up first, then CO2 went up.

          Another observation is that if CO2 was driving temps, why did the temps go down after reaching their peaks? Did aliens come and steal a large quantity of CO2 from the Earth’s atmosphere?

          • John, the temperature starts to drop because the earth’s orbit causes less solar energy to strike the belt around 55 to 70 degrees North. There’s also an interesting geomechanical effect: when the ice age ends the land rebounds, and gains elevation. Higher elevation and less exposure to the sun lead to snow which eventually survives winter. This triggers a feedback via albedo increase, which reduces temperature. At this point the ocean, being cooler, starts absorbing CO2, which drives pH down. Lower temperatures start killing plants. And this increases albedo. Which cools things even more, eventually the CO2 from the dead plants is absorbed by the ocean. And things get really cold. This causes huge glaciers to form, drops sea level (which also increases albedo). And the glaciers start pushing down on the continental land mass, which prepares things for the next cycle. There are side effects, for example volcanic eruptions can be triggered by the end of the ice age.

            • Don’t believe a thing that Fernando and John B say, as their political agenda gets in the way of their thinking with respect to global warming


              That is a simple model of global warming. Note how accurately the variability can be tracked — green model, blue data

              • Fred Magyar says:

                It can’t be, WHT, you must be fudging the numbers somehow or you are receiving tax payer funds, heck maybe you are a watermelon … (BIG GRIN!)

                • John B says:

                  More like trying different number until something fits. It’s pretty easy to predict the past.

                  • Caelan MacIntyre says:

                    On top of climate change, there are just so many other issues revolving around what we as a species are doing to the planet.

                    “The common thread was that the same tasks could be done much more cheaply… Even the boom following the second world war follows this pattern. The immense destruction preceded a re-tooling to a higher level of productivity.

                    There is nothing about the switch to green energy that remotely resembles this… It is re-tooling to a lower level of productivity and to a permanent cap on energy production. It is this simple fact that explains why the capitalist class is dragging its heels on this issue in a way that threatens our future survival.” Terry Leahy, ‘Checkmate: Why Capitalism Cannot Survive Global Warming”

                    BAU currently relies on high-energy and economic growth; the much lower overall energy output of green energy still relies on BAU, but in shrinking economy/shrinking energy/climate-change contexts.
                    So, I can understand why some people may want to ‘knock out’ (ignore/throw into question/etc.) one or more of those contexts, but again, as Leahy points out, the capitalist class is dragging its heels on this issue in a way that threatens our future survival.

                    Electric vehicles (EV’s), for example, if they ever gain sufficient traction, may become ‘stranded assets’ in a world with not enough energy for anything much in the way of their support or raison d’etre.

                  • John B says:

                    More like trying different number until something fits. It’s pretty easy to predict the past.

                    All talk, no action. You have no idea how science works.

                • We just need to test that model to see how well it does projecting 6 months forward.

                  • Fred Magyar says:

                    6 months

                    REALLY?! Fernando, please, you are better than that!


                    Climate models are mathematical representations of the interactions between the atmosphere, oceans, land surface, ice – and the sun. This is clearly a very complex task, so models are built to estimate trends rather than events. For example, a climate model can tell you it will be cold in winter, but it can’t tell you what the temperature will be on a specific day – that’s weather forecasting. Climate trends are weather, averaged out over time – usually 30 years. Trends are important because they eliminate – or “smooth out” – single events that may be extreme, but quite rare.

                  • Fred, Im like the three monkeys when I see “skeptical science”. But I was referring to the Telescope’s model.

              • The planet hasn’t warmed for 18 years. No child alive has experienced global warming. All the global warming model have been proved wrong.

                • Bill H says:

                  Mr. Archibald,

                  In 2008 you published on wattsupwiththat a model showing that by 2020 the Earth would be 1.5 deg F cooler by 2020. That’s looking somewhat out now, isn’t it? In the light of such a catastrophic failure can you give us some cause to suppose that your opinions on Global Warming are anything other than wholly worthless.

                  And as for your citing the Noble Viscount Monckton of Brenchley’s claim of an 18 year pause in global warming based on cherry picking the RSS temperature series while ignoring those of GISS, Hadcrut,NOAA, Berkeley Earth, UAH, Cowtan and Way, et al. that is just contemptible. No wonder you come up such dismal prognostications if you deliberately discard most of the evidence.

                  • Bill H says:

                    Actually, Mr. Archibald, I find that your climate model that was so enthusiastically received on WUWT was even even more dire than I had remembered: you predicted back in 2008 a fall in global temperature of 1.5 celsius by 2020 based on, wait for it, counting sunspots.

                    As for your assertion that “all the global warming model (sic) have been proved wrong”, well, in one sense, science is based on “wrong models” that are nevertheless of huge value in gaining understanding: the Newtonian model, which fails dreadfully under some conditions, is a case in point. Basically, the CMIP models make the PRIMARY prediction that increasing GHG leads to a warming Earth: when taken together the heat content of land, atmosphere and , PRIMARILY, the oceans increases . The evidence is pretty solid on the oceanic warming and it’s in line with the models, indeed sea level rise is rather faster than the models predict. Likewise, ice melt is rather more rapid than predicted. On the other hand atmospheric warming has been less than the ensemble means for the models, though in keeping with individual model runs. So, we conclude that the primary output of the models is pretty good while the secondary output: the prediction of the way this primary heating would be partitioned has been less accurate. By contrast, I would humbly suggest, your rapid cooling by 2020 model has by now been demonstrated to be primarily and secondarily and in any other day garbage.


                    The URL:


                    contains an archived version of Mr.Archibald’s Global cooling model.

                • Mr. Archibald, You are a talentless bureaucratic hack that writes for some agenda-driven think-tank.

                  This chart shows data plus a model based on natural variability plus a log(CO2) global warming trend.


                  Apparently you do not understand the climate phenomenon known as ENSO that sits right in your backyard of Australia.

                • Caelan MacIntyre says:

                  Hey David,
                  Did you see the new documentary, The Merchants of Doubt? Maybe David Bellamy, the guy you’re apparently posing with, is in it! ^u^

                  ‘Merchants Of Doubt’ Doc Exposes Spin Doctor Industry Behind Climate Change Denial & Other Issues

                  …it’s casting a strong light on the infuriating liars-for-hire spin doctor industry behind climate change denial, and a disturbing list of other public health and safety issues and environmental concerns. The film is based on the brilliant book of the same name, by authors Naomi Oreskes and Erik Conway, and early reviews from last year’s TIFF and NYFF give Kenner a big thumbs up for helping to expose ‘pundit corruption’. ~

                  “Also interviewed is Marc Morano, a former producer for Rush Limbaugh and staffer for James Inhofe (a major climate change denier in the Senate), who specializes in spin. He proudly tells Kenner about his role in ‘creating chaos’ through on-air debates with actual scientists; and he shows no remorse for the public attacks he launched against NOAA scientist James Hansen, who was among the first to warn of the dangers of CO2 pollution to irreversibly affect the Earth’s climate. Morano laughs off having sent or encouraged threats of violence to Hansen…” ~ CBS News

                  83% on the Tomatometer! ^u^

              • Old farmer mac says:

                Mr Telescope you are a first magnitude pompous stuffed shirt.

                I do not agree with Fernando on some things and some I do not.

                But you know dammed well that Fernando knows some stuff.

                I am not going to go to the barn and dig out textbooks that I used to read just for fun to quote page and chapter but his comment at 3/7 nine forty eight am is entirely consistent with what at least a couple of geology and biology texts I have stashed someplace have to say about geology and climate.

                They were written by established professionals in their fields and used at local universities such as Virginia Tech, Duke, and Wake Forest. I buy such texts for a buck or two as new editions come out and read them for amusement instead of watching football and navel gazing.

                Fernando has pointed out quite a few facts to support his arguments.

                He does not say the climate won’t get hotter as the result of pollution but rather that it may not get as hot as the current models most widely used predict.

                Folks who have made their minds up otherwise saying differently will not make it so.

                When everybody agrees all the facts are written in stone and folks who advise a bit of caution and skepticism in interpreting data are ignored and belittled there is a real possibility that individuals and societies will make some very poor decisions.

                Such bad decisions can result in political backlash that may be ten times worse than the direct impact of the decision.

                The Keystone Pipeline issue alone may have been enough to tip a couple of senate seats to the opposition party last election – and the result of that will be environmental troubles a dozen times, a hundred times, as big as the possible impact of a serious pipeline spill – which is actually a very unlikely event in the case of just one brand new pipeline in any case.

                Fernando talks some hard core common sense about the PRICE of renewables in the present tense.I am a big believer myself in renewables and advocate keeping the pedal to the metal on research and deployment of wind and solar etc.

                But I am NOT so close minded as to pretend he is talking bullshit when he talks about what renewables actually cost in the present day environment.

                Working engineers have to come up with solutions that can be paid for in real time. The techno optimists in a forum such as this one tend to forget such troublesome facts. People like Fernando who have to get results in REAL time can’t do that.

                I hope and believe renewables cost will keep coming down. So far as I can see he says the same.

                He acknowledges peak oil. He says he thinks it may well be a bigger problem than climate change.

                He may damned well be right. WWII was in very large part a resource war. We Yankees with a modest amount of help have been fighting an on and off resource war in Sand Country for just about my entire adult life.

                Peak oil may be the trigger that starts WWIII. WWIII may result in global warming being entirely forgotten by anybody who survives.

                We mostly see what we want to see unless we make a habit of trying very hard to put ourselves in the other fellows shoes on a regular basis.

                I try very hard to do this myself.

                The older we get the deeper the ruts in our minds and the harder it is to get the wheels of our intellects out of these ruts.

                A few days back I went thru a paper that supposedly points out that we are FINISHED and pointed out a lot of errors in it. My little buddy the jailhouse lawyer then not that paper but rather some other guy who quoted the paper whose paper in turn proves we are toast.

                So I went back and looked at that one too. It’s not riddled with errors but it has a few that make the author look like a true believer rather than a scientist.

                Maybe later tonight I will pull a few quotes out and post them and point out the indisputable evidence that they ARE errors.

                If not tonight some night soon.

              • Richard Herzenberg says:

                The entire Global Warming sham has been exposed world wide and it’s time that this Global Hoax be exposed and destroyed once and for all for the damage done it has done to the entire worldwide economic system.

        • Fred Magyar says:

    • Canabuck, sea level rise is a complex subject. Here’s my plot:

      My short essay on global warming

      One about drowning islands

      A comparison of market driven fossil fuel use versus my hypothetical case in which all countries follow the EU, Obama or Chinese declared targets. The difference between the two is 0.2 degrees C by 2050.

      I also recommend the “Finland threatens Europe” post. For some reason everybody likes the “President Lone wolf” and the “Prince of whales” posts but the Finnish threat is getting very few readers. The Finnish threat points out a serious problem with USA foreign policy.

      • Futilitist says:

        You are not a climate scientist. Stop pretending to be one. Nobody is buying it.

        • Vadude says:

          Earlier this month the UK’s Telegraph reported yet another instance of climate scientists pushing ethical limits in an attempt to breathe new life into climate change and global warming.

          Also during the last month, temperatures have been colder than normal across much of Canada, the eastern U.S. and Europe. The world’s ocean temperatures are basically normal, and Antarctic ice is at record levels.

          The key here? Global warming is nowhere in sight.

          But instead of rolling with the fact global warming is not living up to the hype, scientists are manipulating weather records so that it looks like the planet is still warming.

          The reason is because climate change — also known as global warming — has to be kept alive since it is the long-term tool governments are using to redistribute wealth. If global warming isn’t real, then all of the plans hinging on people buying into climate change panic will have to be redone … which is exactly what we’re seeing.

          During President Obama’s State of the Union address in January, he claimed, “Climate change poses immediate risks to our national security … that’s why, over the past six years, we’ve done more than ever before to combat climate change.”

          Sen. Jim Inhofe of Oklahoma released a prompt response to the president’s agenda, citing it would cost Americans $479 billion, with the effect of reducing CO2 emissions by half a percent … global temperatures by two one-hundredths … and sea levels by one one-hundredth of an inch.

          Do not be mistaken. As The Wall Street Journal has reported, this is a wealth redistribution scheme.

          Obama’s climate change agenda involves one of the biggest tax increases in the history of America. To cover up that fact, there have been several “world” treaties, such as the Kyoto Protocol and a recent Geneva conference, to fight climate change and send relief to underdeveloped nations.

          Don’t get me wrong — there’s nothing the matter with helping other countries. It’s just that in this case it is being done under the guise of addressing climate change.

          But what if global warming isn’t real? As I mentioned, a recent article in the UK’sTelegraph publicized that weather data is being manipulated just to keep climate change money flowing. So even if it’s not real, there’s too much riding on it now.

          It is impossible to know how much money is spent on climate change. I’ve read that anywhere between $20 billion and $70 billion are spent on research each year. Much more is spent on relief aid to these underdeveloped nations to fight rising sea levels, droughts, floods and hurricanes.

          And the fact that the aid is given through government agencies and programs of the United Nations makes it that much more difficult to figure out how much money is actually being redistributed.

          It is, of course, your money that’s being redistributed through taxes you pay.

          The flow of money depends on the idea that weather data shows inconclusively that global temperatures are warming — warming, as the theory suggests, at an alarming rate because of man-made pollution.

          The February 7 Telegraph article publicized the work of a blogger who compared original temperature observations with revised data. The blogger, Paul Homewood — who has been uncovering these statistical discrepancies for about two years — found the data for Paraguay and part of the Arctic was massaged to make it look like temperatures have been warming by making temperature records from the middle part of the 1900s cooler than they actually were.

          WeatherBELL meteorologist Joe Bastardi notes in his blog posts that NASA and the National Oceanic and Atmospheric Administration (NOAA) decided to adjust actual temperatures recorded years ago to make them more “accurate.” If that sounds a little weird to you, it should.

          The most egregious assumption is that temperatures recorded decades ago were too warm and need to be adjusted downward. For example, temperatures across the Great Plains during the Dust Bowl era have been adjusted to appear cooler.

          That’s similar to what Mr. Homewood, the blogger, found for Paraguay and part of the Arctic region. By shaving a degree or two off temperatures recorded decades ago, it appears temperatures have been trending sharply upward during the last century.

          The data manipulation — performed so the global warming theory is validated — is problematic because it wasn’t well publicized.

          But even then, that’s not the point. Never mind the fact that science needs to be changed so the theory fits the data. It’s not about science.

          The point is, the premise of climate change policy relies on any means necessary to redistribute wealth.

          There’s no lofty goal to save humanity.

          If people live in an area plagued by drought, they need to move. If sea levels are rising, move inland. It’s not rocket science. Money is not going to make the oceans recede and the rain fall from clear skies.

          Climate change proponents know the “theory” is crumbling, or else the data would not need to be manipulated. However, they cannot pull the plug on climate change until they have another wealth redistribution scheme to take its place.

          You and I — and the rest of the world — respond to fear, so whatever the next scheme is, it is going to have to be scary. And it is going to have to be scary in a big way — far more than the climate apocalypse — to dupe people into thinking wealth redistribution is a good thing.


          Chris Orr
          Certified Consulting Meteorologist

          • Futilitist says:

            Hi Chris Orr.

            You are a Certified Consulting Meteorologist and you are Certifiably Insane.


            Certified Consulting Psychologist.

            • Mike says:

              Futilitist, you have the manners of a goddamn goat.

              You have made this blog into something akin to the Gangs of New York with your never ending rants about climate change. Actually, I think you are little more than a thug, with nothing more to do in life than to stay on the computer all day trying to pick a fight with people who don’t agree with you. I am pretty sure you think you will eventually run off guys like OFM and Fernando and others and win your little chicken fight. In my opinion, people like you don’t help their “cause,” they hurt it.

              Personally, I have reached Peak Futilitist.

              When the subject matter around here returns to the dynamics of peak fossil fuels, somebody holler and I come back and help anyway I can.


              • Futilitist says:

                Hey Mike,

                Thanks for the etiquette lesson.

                You seem a bit upset. 😉

                I have a few quick questions for you:

                “A person who has bad manners, habits, and breeding can hardly expect to get along with decent people.”

                1) Disagree Strongly
                2) Disagree Mostly
                3) Disagree Somewhat
                4) Agree Somewhat
                5) Agree Mostly
                6) Agree Strongly

                “Most of our social problems would be solved if we could somehow get rid of the immoral, crooked, and feebleminded people.”

                1) Disagree Strongly
                2) Disagree Mostly
                3) Disagree Somewhat
                4) Agree Somewhat
                5) Agree Mostly
                6) Agree Strongly

                “An insult to our honor should always be punished.”

                1) Disagree Strongly
                2) Disagree Mostly
                3) Disagree Somewhat
                4) Agree Somewhat
                5) Agree Mostly
                6) Agree Strongly

          • SW says:

            Certified consulting meterologist. Cool!

          • notanoilman says:

            Then that would be a $479billion dollar injection into industry.


        • Futilist, I don’t have to be a scientist to start a fund to help natives in places like Carteret Island. As my blog opus says, it’s located right in the spot where sea level happens to be increasing (sea level rise isn’t uniform at all as I showed in my blog)

          And I’m just as entitled to collect money to save Carteret Islanders as Greenpeace is to collect to save carnivorous polar bears.

          • Futilitist says:

            I have been to Rangoroa. It is an atoll that looks very similar. The coral was badly bleached.

            Have you actually collected or dispersed any money?

            Is your fund a parody?

            And one more philosophic question:

            “No sane, normal, decent person could ever think of hurting a close friend or relative.”

            1) Disagree Strongly
            2) Disagree Mostly
            3) Disagree Somewhat
            4) Agree Somewhat
            5) Agree Mostly
            6) Agree Strongly

    • Allan H says:

      Hi Canabuck,
      Appreciate the polite skepticism on your part. I will put a graphic showing sea level data for the Maldives at the end of this response. One thing people do not understand is that sea level rise is not uniform, it varies widely across the oceans. This is due to winds, temperature changes, and gravitational anomalies. Probably the most interesting changes are due to gravitational changes from melting ice masses and ice caps. For example, Nederland will experience a limited rise at first since it already has high ocean levels due to the Greenland Ice cap. As the ice cap melts, the gravity lessens in the area and the ocean actually falls in the region, other regions experience amplified rises. The Maldives in a region that is experiencing a lower rate of rise.

      Don’t know about the South American problem so will skip that.

      As far as the WGMS site is concerned, I found references to ice sheet growth and retreat but did not find anything saying that retreat started in the 1980’s, in fact they reference the 1940’s as a period of retreat. Possibly, most glaciers have not been monitored before the 1970’s and afterward. Global dimming caused by an industrial pollution plume peaking in the early 1970’s was enough to level global warming for a decade (at least in the atmosphere), and might have caused a temporary resurgence of glacier growth. That ended however and glaciers are generally retreating, sometimes quite rapidly. We still have global dimming (about 10% on average) from pollution but the global warming is growing and no longer stopped. Also much of the dimming plume is coming from Asia now and not as much from North America and Europe. Might have a different effect on northern regions.

      Point 4, you have it right. CO2 absorbed into the ocean does not generally cause heating because it is sequestered. That means that much of the heating that could have occurred will be delayed. However, warmer ocean means more evaporation and more H2O in the atmosphere. Water is a greenhouse gas also. Eventually the CO2 will leak back out over 5000 to 10,000 or more years, extending the warming period. Thus even the absorbed CO2 will cause warming, just not right now. The immediate disaster of ocean acidification is to sea life and the oxygen cycle. The mid-term disaster (which may have started already) is the release of stored methane from heating of the ocean. This could turn out to be the most significant factor in global warming, trumping albedo and CO2.

      The fact is that CO2 is looked upon as a trigger mechanism that starts several other major changes that are much stronger warming factors than CO2. CO2 response to infrared is already saturated and most of the extra heating is from band broadening.

      • canabuck says:

        I don’t see the Maldives graphic, but I see that the Maldives paper that I referenced was weak in many ways. 1. We are looking for 20 cm sea level change over 100 years, and a tree in a bay is a lousy measure. Sea level could have risen 10 m. and produced a tree like that.

        • I put up a sea level increase map, look up. The Maldives sea level change story is baloney.

          • Futilitist says:

            So, the Carteret Island Fund is a scam parody!

            “People can be divided into two distinct classes: the weak and the strong.”

            1) Disagree Strongly
            2) Disagree Mostly
            3) Disagree Somewhat
            4) Agree Somewhat
            5) Agree Mostly
            6) Agree Strongly

            “Most people don’t realize how much our lives are controlled by plots hatched in secret places.”

            1) Disagree Strongly
            2) Disagree Mostly
            3) Disagree Somewhat
            4) Agree Somewhat
            5) Agree Mostly
            6) Agree Strongly

            “Nowadays more and more people are prying into matters that should remain personal and private.”

            1) Disagree Strongly
            2) Disagree Mostly
            3) Disagree Somewhat
            4) Agree Somewhat
            5) Agree Mostly
            6) Agree Strongly

            • Ronald Walter says:

              Futilitist is a dangerous menace and it is becoming glaringly obvious.

              Anyone care to deny it?

              No, Futilitist is not a menace, Futilitist is not dangerous, not anything of the kind. It is futile to use words, can’t be put into words. Words fail me. Ethical is the word of the day, especially today.

              Mr. Futilitist can’t seem to understand that is a blog that concerns information about oil, how much of it there is, the price of oil, is there such a phenomenon as Peak Oil, and the subsequent study of the nature of peak oil, including charts and graphs lending credence to the reality of oil’s limited amount. Facts and figures, stuff like that.

              If it can be stated in words, if I dare and if I may, the psychology belongs in a different venue.

              If it can possibly get through to Mr. Futilitist, it will be a miracle, a ‘Come to Jesus’ moment.

              Let us pray that it can happen. If prayer offers anything in this world, it would be hope. A gathering to join hands, bow our heads, and give thanks, not ask for one thing in this world, just a prayer of thanks.

              I will recommend three books to you, Mr. Futilitist.

              Gluttons and Libertines by Marsten Bates

              Ghandi’s Truth by Erik Erikson.

              Visual Thinking by Rudolf Arnheim, and, please read and remember the two criteria for intelligent behavior, problem solving and completion.

              Also, please dispense with the psychology, the training and taming of humans, it is futile. Your nom de plume states the obvious.

              Patronizing and condescending don’t fit either.

              Carry on.

              • Futilitist says:

                You brought up the subject of Nihilism the other day. Why?

                What is your definition of Nihilism?

                How do you think it applied in terms of events here?

    • Javier says:

      You seem to be missing entirely the point, canabuck, probably because of the skewed portrayal of skepticism.

      To set the stage, I am a scientist in Biological Sciences with over 30 years of experience and publications in important journals as Science or Cell.

      Nearly nobody denies GW between 1975 and 1998, and in general during the XXth century or even coming out of the Little Ice Age in the past 250 years. The main point of disagreement is how much of that warming is specifically caused by CO2 of human origin. The evidence shows that the IPCC is terribly wrong and unable to confront the reality it cannot correct its mistakes.

      Let’s see your points at the light of an skeptic (myself):

      1. Sea level rise.
      Undeniable, but has been rising for the last 200 years and more generally for the whole of the Holocene since the last glacial maximum. There is no evidence of a recent acceleration, and since consequence cannot precede cause in a linear time universe, sea level rise has no human origin for the most part. Even if we cut CO2 emissions to zero, sea level is very likely to continue rising.
      See for example Jevrejeva et al. 2008 and 2013

      2. Global temperature.
      Undeniable, but not globally. Northern Hemisphere land surface has warmed the most, while Southern Hemisphere land surface has warmed little, and ocean surface has warmed or cooled depending on region. Global temperature is not a very good metric of climate change. Northern Hemisphere land temperatures show a very well studied 60 year cyclicity that is completely ignored by IPCC and which is the best explanation for the now 18 years long lack of warming, because this points to natural cycles having an important impact in climate change that the IPCC is not prepared to acknowledge since the IPCC was not created to study the causes of global warming as many people believe but to study only the human causes of global warming.
      See for example:

      3. Less ice.
      Undeniable, but same explanation than in the first and second case. Glacier melting has been taking place since at least 1850. There is ample evidence of that. Even photographic evidence. Plus we also know that glaciers are now larger than for the most of the Holocene. Retreating glaciers are uncovering forests from 400 to 4000 years ago, as a testimony of a warmer climate. Additionally the loss of ice is also not global. Anctartica has more ice, not less ice.
      See for example: Joerin et al. 2006

      4. Ocean acidification.
      This is a controversial issue, less than settled. It appears that acidification is taking place mainly at areas of deep water emergence as the bottom of the sea is more acidic due to organic anoxic decay.

      So the main conclusion is that there is an important natural source of climate variability that is being ignored by the IPCC. Natural forzings could have been the main contributors to the global warming between 1975-1998. This implies that the chances of inducing a global warming catastrophe are non existent. We should concentrate our efforts in addressing real problems, like habitat destruction, contamination and variability extinction.


      • canabuck says:

        Alright, so to summarize:
        1. Sea level rise.
        – 200 mm over the last century is likely, on average.
        2. Global temperature.
        – 60 year cycles? How long is the historical record? How accurate is it? Land-based, ocean-based. For a trend of 1.0 degC over 100 years. For me, the evidence is not enough. Satellite data should be more reliable.
        3. Less ice
        – Yes, in general. (the increase in sea ice in Antarctica may be due to greater melting causing a less-salty ocean, which freezes more). More research needed for Greenland and Antarctica.
        4. Ocean acidification
        – doesn’t really matter for now.

        5. Are the changes man-made or natural?
        Higher CO2 seems to point to a man-made cause, but we have had high CO2 in the past with lower temperatures, so this cause-effect link is weak.
        Has anyone understood why we have had high-CO2 and a cold climate in the past? There must be other factors, which we may not be able to measure now.

        • Javier says:

          The historical record of paleotemperatures is relatively good for several thousand years for certain locations, specially the GISP ice core in Greenland and the Vostok in Antarctica up to half a million years or so. Other than that there are several proxies that give an indication, both of the recent past and with a lot less detail of the distant past. Several cycles are clearly recognized by Fourier and wavelet analysis in these records. They are all over the literature. For some longer cycles you can see for example Humlum et al. 2011

          The 60 year cycle is coincident with the AMO (Atlantic Multidecadal Oscillation). Wether that is the cause of the 60 year temperature cycle is just a theory supported by both being in phase, and by the known effect of sea surface temperatures on land surface temperatures.

          Higher CO2 has a hard time explaining the periods when there is no warming, yet the CO2 keeps increasing, like 1950-1975 and 1998-to date. In the past CO2 appears to have been a product, rather than a driver of temperature changes. It certainly has to have an effect, that appears to be maximum when the air is dry, because when the air is humid the water vapor quickly saturates the radiative effect as it is a more effective greenhouse gas. Thus global warming appears to not only be non-global, but its effect appears to be to warm the winters and nights when the air is drier rather than increase the temperatures during the summers and during the day. If the Earth keeps warming, it would become more humid, so the CO2 will have less of an effect, not more. No runaway scenario appears credible.

          One scenario where we have had a high CO2 and cold climate has been at the entrance into a new glacial period, according to the Vostok records. You see the Earth plunges into a new glacial when the CO2 is at maximal levels in the interglacial. The cooling appears to be very fast, a matter of a few decades to a few centuries, while the CO2 takes longer to disappear into the sea, up to a few thousand years. A strong reduction in the vegetation CO2 uptake due to the cold may contribute to that.

          Regarding CO2 as being responsible for all the warming, I would think that 18 years of non-warming should make us look elsewhere.

            • Javier says:

              You must be one of the few that has not heard of the so called “pause” or “hiatus” in global warming that most climatologists, all models and IPCC failed to predict.

              During the last 18 years, yearly average surface global temperatures are not significantly different within instrumental accuracy from that period average temperature, according to official records. That is a fact not subject to discussion. You only have to check the graph above.

              The fact that the so called “pause” is taking place at a maximum in recorded temperatures makes for nearly all the years to enter into the warmest years on record, duh. That makes for a lot of publicity to keep the ignorant masses into the believe that the thermometers are saying that the world is still warming.

              So they failed in their predictions, and now they are deceiving people to hide it. How much credibility do you think they deserve?

              • Futilitist says:

                You don’t understand basic science. Your expectations of perfect predictions from climate scientists is really anti-science. But you do seem well versed in science lingo.

                • Javier says:

                  Oh, I do understand basic and advanced science, since I am a scientist. If a climatologist claims to have a model that represents climate change, and the reality falls out of the 90% confidence interval of the model’s prediction, we are not talking about inability to make perfect predictions, but inability to represent reality, and thus model assumptions cannot be correct.

              • notanoilman says:

                I refer you to the link I gave. Yes, I have heard about the so called pause and I am also well able to see the invalid statistics on which it is based. Outlier data makes a VERY poor reference point.


                • Javier says:

                  Don’t you think that argument can also be used against 20th century warming? What is the statistical significance of 90 years of warming against 8000 years of cooling? It is also outlier data, and an even shorter portion. Ohh wait, you are the one deciding what data is valid statistically and what is not.

                  I find it really funny that the same people that say that 18 years of no warming is statistically insignificant get all fussed about 2014 being the warmest year on record, or 9 of the 10 warmest years on record being in the 21st century. Are these invalid statistics to you also?

                  So, what is the number of years that we can have no warming and AGW still be a valid theory representing climate? That number seems to be growing at the same time as the non-warming period. I have bad news for you. According to cyclic climate variability, the non-warming period is likely to last until around 2030 and AGW is not going to survive as a theory that long without warming. See for example:
                  Wyatt & Curry 2013 Role for Eurasian Arctic shelf sea ice in a secularly varying hemispheric climate signal during the 20th century.

                  • notanoilman says:

                    Your reply makes no sense, contradicts itself and you demonstrate a lack of knowledge of statistics.


        • sunnnv says:

          (re: CO2 high, temps low) when in the past?
          The early Phanerozoic?

          Understanding why there was (~450 million years ago) high CO2 and cold climate – the sun was 4% weaker.

          This might be of interest…

          Lots of moving parts – including the position of the continents and resulting circulation of the oceans, albedo, etc.

  11. The backlog of “wells awaiting completion” is likely to increase this year instead of decrease.

    Introducing Fracklog, the New-Fangled Oil Storage System: Energy

    From North Dakota to Texas, there are more than 3,000 wells that have been drilled but not tapped, based on estimates from Wood Mackenzie Ltd. and RBC Capital Markets LLC. Waiting gives producers such as Apache Corp. and EOG Resources Inc. a better chance of receiving a higher price. It could also delay a recovery by attracting more supply every time prices rise…

    Apache, the third-largest leaseholder in the Permian Basin, has deferred completions to trim costs and try to bring its oil to market when prices are higher, Chief Executive Officer John Christmann said Feb. 12 on a conference call with investors.

    Anadarko Petroleum Corp. expects to have as many as 440 uncompleted wells by the end of the year. EOG started the year with about 200 uncompleted wells and plans to let that inventory build in the first half of the year, CEO Bill Thomas said on a Feb. 25 conference call. Canadian Natural Resources Ltd., the largest heavy oil producer in Canada, has 161 uncompleted wells.

    “Most of these wells, they’re high-rate wells that decline fairly rapidly so it makes sense to hold off until prices stabilize,” Steve Laut, the company’s Calgary-based president, said in a phone interview March 5. “That’s where most of the value is going to be, in that first production period.”

    • I’ll try to do a pre tax estimate of complete now versus complete later. But that’s going to take me some time.

      • John Keller says:


        Will a well drilled but not completed until later, perform the same as a well drilled but completed right after drilling? Just curious.

    • Ron, I finished my analysis. As you can imagine, a lot depends on asumptions. I put together two spreadsheets, programmed with a hyperbolic decline curve, and started playing with variable oil price schedules, OPEX, and the split between (drlling+casing) and (fracking+completion+hookup).

      If a company believes one or more of the following:

      1. Prices remain flat for three years then climb to say $90 WTI, which climbs at 4 % per year thereafter.
      2. Well life is 20 years
      3. Well reserves are 320,000 BSTO
      4. Completion costs and technology may become more attractive.

      Then taking a three year delay to frack and put on production is a no brainer. They could possibly wish to keep on drilling and casing, especially if they can get really low prices. Then frack and produce wells on an occasional basis to hold a lease or obtain information.

      The numbers show fracking a well and leaving it shut in isn’t a clear cut decision. But leaving the well temporarily abandoned to fracture later is a really good idea.

    • sunnnv says:

      Anybody know if these “fracklogged” wells are “all” now being cased/cemented all the way to the end?

      I would assume so, i.e. the market for open hole packers in N.D. has gotten rather smaller.
      Or, is it the case that the Bakken rock is hard enough to stay in place for a year(s) while they wait on the price of oil?

      This presentation from the ND DMR infers “typical” is to use open hole (eg. swell) packers.

      Any thoughts on that?

      Any hard info on how long they have from end of drilling to 1st completion?
      I looked around and can’t find any hard data/rules on that.
      The closest is 43-02-03-55 in
      where with the director’s approval one can get a temporary abandoned status if
      ” the well’s perforations must be isolated, the integrity
      of its casing must be proven, and its casing must be sealed at the surface, all in a manner approved by the director. The director may extend a well’s temporarily abandoned status and each extension may be approved for up to one year. A fee of one hundred dollars shall be submitted for each application to extend the temporary abandonment status of any well.”

      Interesting blog I found along the way:
      The Million Dollar Way (The Bakken Oil Blog)

  12. Ronald Walter says:

    Well, if the Arctic sea ice melts, there will be more opportunity to explore for more oil to burn. Always a silver lining behind the darkest of clouds. The rig count can increase.

    AGW will help the oil bidness find more oil.

    Arctic Warming 1920-40

    “Knipovich, in 1921, was the first who paid attention to the changes of Arctic fauna. Marketable species of fish spread to the north after the beginning of the 20th century and fisheries in the north became more intensive.”

    “The polar ice very often came close to the coast of Iceland in the last century and in the beginning of this century. During 1915–1940 the situation changed: no ice was observed in that region; negligible amounts of polar ice were noticed there only in 1929.”

    Sea Ice Analysis

    Annual mean temperature in Haparanda, Sweden

    The decade from 1930 to 194o had the highest annual mean temperature in Haparanda.

    If it is forty below Celsius or forty below Fahrenheit, it’s still cold.

    The coldest temperature I have ever witnessed was in February of 1997 when it was minus 42 Fahrenheit.

    It was colder than hell.

    • The Arctic ice won’t melt all the way. In any case the realistic target areas are in the Barents, Beaufort, Kara, Chukchi and Laptev seas (there’s no oil nor gas in the far North).

      When we consider exploration in those areas we have to consider the ability to drill exploration wells during the period from around mid July to mid October. But production is expected to take place year round, and there’s always going to be winter temperatures, darkness, and sea ice. This makes Arctic projects a very risky affair.

      I think Exxon made a mistake venturing into the Kara, and the same applies to Shell in the Chukchi. I suspect they have climatologists who predicted sea ice may thin out and decided to gamble on a lot of Arctic warming. But that’s one hell of a gamble.

      • Ronald Walter says:

        “Scientists have pieced together historical ice conditions to determine that Arctic sea ice could have been much lower in summer as recently as 5,500 years ago. Before then, scientists think it possible that Arctic sea ice cover melted completely during summers about 125,000 years ago, during a warm period between ice ages.”

        Just have to wait for the current ice age to end and the Earth will warm even more!

        Might take a while, but the weather will cooperate and during the summer months, the sun will shine all day long.

        Really nothing to worry about except for an ocean level that will rise twenty feet.

        • Allan H says:

          Hi Ron,
          Actually, we have been in a continuous ice age for 2.58 million years. Ice ages consist of glaciation periods and inter-glacial warm periods. Currently we should be headed toward a period of glaciation, due to natural orbital variations, that will not occur or be severely delayed and truncated due to the global warming initiated by a sharp CO2 influx into the atmosphere.

          Industrialists and businessmen have been eying Greenland steadily for mining potential. As the ice cap recedes, whole new mining possibilities open up, including rare earth deposits. There are potential oil and gas sites in the nearby ocean, but I am not sure they will be useful due to ice berg formations and freezing winter sea ice.

          • Doug Leighton says:

            “Currently we should be headed toward a period of glaciation, due to natural orbital variations, that will not occur or be severely delayed and truncated due to the global warming initiated by a sharp CO2 influx into the atmosphere.”

            Are you talking about Milankovitch cycles or something else? If you are the effect of the two precessions leads to a 21,000-year period between astronomical seasons (the angle between Earth’s rotational axis and the normal to the plane of its orbit leads to a 41,000-year cycle).

            Ignoring anthropogenic and other possible sources of variation acting at frequencies higher than one cycle per 19,000 years predicts that the long-term cooling trend that began 6,000 years ago will continue for the next 23,000 years, however, THE CURRENT WARM CLIMATE MAY LAST ANOTHER 50,000 YEARS.

            Obviously climate models don’t provide a perfect picture of what will happen to earth’s temperatures across short-term intervals but how could they given to random ways in which climate can temporarily fluctuate. That doesn’t mean climate models aren’t valuable because they still give us reliable sense of the long-term picture, the one that is important, that temperatures are increasing. To be blunt, I doubt that anyone commenting on Ron’s Blog is qualified to creditably refute the findings of the climate scientists who contribute to the AGW debate. Introducing Milankovitch cycles to the discussion adds nothing useful because it’s the next century that concerns us.

            • Im worried about the next 5000 years. But I like having a really long term view, and want to make sure the cyborgs who will inhabit earth aren’t faced with really cold weather.

              • Futilitist says:

                Moral Schizophrenia reflected in a failed attempt at humor.

              • Javier says:

                Nobody knows when the next glacial period is going to start. It is just not possible to know. We know that the present interglacial is longer than most so that is not very reassuring. The next glacial period could just be a few decades away and we wouldn’t know. Of course it could also be another 1000 years. Let’s hope so.

            • Allan H says:

              Since I started as an astrophysics major, let’s get the record straight. The periodicity of eccentricity is 100,000 years. The periodicity of axial tilt is 41,000 years. The periodicity of precession is 23,000 years.
              Eccentricity appears to be the major factor, however the other two do cause differentials in received sunlight. Eccentricity varies from 0 to 5% and can cause up to a 30% differential in solar energy at the earth between perihelion and aphelion.

              Basically, the forcings of greenhouse gases and albedo changes have overcome the small (0.5 watt/meter2 to 1.0 watt per meter2) potential loss of solar energy due to orbital fluctuations.

              As to your conjecturing that I was refuting the findings of climate science, I have no idea how you came to such an erroneous conclusion. See my comment above of March 7th at 1:40 PM, in particular point 4.

              • Doug Leighton says:

                I asked you: Are you talking about Milankovitch cycles or something else? And I ended: Introducing Milankovitch cycles to a discussion adds nothing useful [to greenhouse warming arguments] because it’s the next century that concerns us.

                Simple, no accusations of anything. No conjectures. Just a simple question followed by a statement that Milankovitch cycles are not relevant to short term climate changes. You may or may not agree with this.

                • Allan H says:

                  Doug said “To be blunt, I doubt that anyone commenting on Ron’s Blog is qualified to creditably refute the findings of the climate scientists who contribute to the AGW debate. Introducing Milankovitch cycles to the discussion adds nothing useful because it’s the next century that concerns us.”
                  If that comment was not directed at me then I misunderstood, I thought it was since your reply started with a quote from me.
                  As far as ignoring negative or positive forcings, as a scientist I think it would be quite unprofessional and misleading to not include any radiative forcings in calculating current forcing. The orbital cycles are not a future event they are occurring now. From what I have read the orbital forcings are now negative. They are small compared to other forcings but still need to be included in any true accounting of radiative forcing.

              • Allan dude, the current forcing is supposed to be 0.57 watts per m2. We seem to be getting negative feedbacks (look at the slope in the Lyman and Johnson paper on energy uptake). We could see temperature increase as we reach peak CO2 (around 630 ppm), as temperature increases the CO2 forcing is offset, and the orbital forcing takes over. In 100 years the carbon cycle could remove a lot of CO2, and the orbital forcing could take over. As you mentioned the current interglacial has been anomalous, and this has given time for Labrador and Scandinavia to have unusually large isostatic rebounds. If we get one good volcanic eruption in 100 years we could just maybe go head first another ice age. At that time woul have to worry about dropping sea level and polar bears eating Icelanders.

                • Allan H says:

                  Fernando, the calculated forcings I have come across vary from one watt/ per meter2 (5 years ago) to over 3 watts per meter squared (included more negative and positive forcings). Don’t know where you got your number, dude, but I have seen no literature under 1.0 watt per meter2 positive forcing. You are also not considering methane, NOx and the elephant in the room, decreasing albedo (which is a positive forcing much larger than greenhouse gases).

                  As far as volcanoes go, their effect is short lived and not a climate changer. We have had and continue to have volcanic eruptions with little effect beyond about six months. Most of the negative forcing comes from aerosols and dust in the atmosphere which deplete quite quickly.

                  • Allan, those are the CALCULATED forcings. The calculations are theoretical based on physics and models. The forcing that’s being MEASURED is about 0.57 watts per M2. The difference is caused by the earth’s increased outgoing longwave radiation (olr increases because the planet is warmer). The current forcing is what really counts. You can use the value to estimate the temperature increase we require to reach energy balance.

            • nNgass says:

              “….. the long-term cooling trend that began 6,000 years ago will continue for the next 23,000 years, however, THE CURRENT WARM CLIMATE MAY LAST ANOTHER 50,000 YEARS. ”

              A very strange sentence. In other words, we are in a cooling trend for the next 23,000 years but it is still warm despite the cooling. So what happens after the cooling trend is over in 23,000 years? There remains 27,000 years of a warm climate unimpeded by cooling. Hence, the earth will be very hot.

              • NNgass, the overall orbital forcing hints at over 100 thousand years of ice age. The CO2 is gradually removed by the carbon cycle. One of the HUGE debatable parameters is the peak CO2 concentration. I don’t see much coherent action or economic feasibility to stop us from burning fossil fuels. This led me to prepare an estimate based on peak fossil fuel concepts, and I got 630 ppm.

                After we stop burning so much Mother Nature takes over, and the next critical parameter is climate sensitivity. Which I think is being set too high by climate modelers in general.

                Climate sensitivity sets the eventual temperature peak. If the peak is really high then everything goes to hell, it could drive us into a really high sea level stand. But the most likely outcome is a gradual co2 reduction if the climate sensitivity is lower, as projectd by Judy Curry in her 2014 paper. The lower climate sensitivity allows the carbon cycle to remove carbon. This in turn drives the temperature down. In 23 thousand years we are likely to be in a cooler period. Whether it’s a full blown ice age is a big unknown.

                By the way, the coment I made at the top about Arctic oil developments is based on my exposure to planning such developments. I also had to study the feasibility of transferring drilling equipment over the Northern Sea Route. I think the engineers planning Arctic developments for Exxon and Shell are a bit crazy, or they have a really high oil price forecast.

                • Futilitist says:

                  Hi Fernando,

                  “I don’t see much coherent action or economic feasibility to stop us from burning fossil fuels.”

                  This seems pretty reasonable to me.

                  It leads me to believe that runaway warming cannot be stopped, and that collapse must be near.

                  “This led me to prepare an estimate based on peak fossil fuel concepts, and I got 630 ppm.”

                  Which then led you on a wild goose chase to disprove the harmful effects of global warming on the ecosystem! This is so that you can get the outcome you wish for which is the continued burning of fossil fuels and BAU.

                  Are you paid to do this or do you share the delusions of those you hope to attract to your message?

        • Arctic sea ice melting doesn’t raise sea level. The impact involves changes in heat and mass transfer rates, albedo, and of course snowfall and air temperature. Your post mixed up topics.

          • Ronald Walter says:

            I am assuming complete melt of the Greenland icecap and the icecap covering Antarctica, since it is 100,000 years old, the next melt might melt the icecap covering Antarctica. The ocean level would rise then.

            • Won’t happen. Those ice masses are very old. There’s a lot of misinformation being distributed.

              • Futilitist says:

                To Fernando,

                Quit making up shit. You don’t know anything. You are just wasting everyone’s time.

                To everyone else,


                Check out the 6th video (Meltwater Pulse 2B) for the scientific consensus on the Antarctic ice sheet.

                Watch all the videos to get a feeling for the overall scientific consensus on climate change.

                And especially pay attention to the first video (Merchants of Doubt) to see what guys like Fernando are really all about.

                And to anyone here who engages in a useless debate with Fernando Leanme,


                • aws. says:

                  I’m not interested in debating Fernando, but I do feel it important to point out that he is a doubt-mongerer.

                  Unfortunately given human nature, his efforts are quite effective at sowing confusion and doubt. As you well know.

                • Do you guys REALLY think Antarctica’s ice cap is going to melt? Where did you get such an Idea? East Antarctica’s ice mass is GROWING.

                  Here’s a quote from a nature paper

                  “Since the 2007 Intergovernmental Panel on Climate Change Fourth Assessment Report, new observations of ice-sheet mass balance and improved computer simulations of ice-sheet response to continuing climate change have been published. Whereas Greenland is losing ice mass at an increasing pace, current Antarctic ice loss is likely to be less than some recently published estimates. It remains unclear whether East Antarctica has been gaining or losing ice mass over the past 20 years, and uncertainties in ice-mass change for West Antarctica and the Antarctic Peninsula remain large. We discuss the past six years of progress and examine the key problems that remain.”


  13. Old farmer mac says:

    WETONE you will find that Resilience is a site where you can get into a meaningful discussion of a lot of topics related to sustainability.

    I post there under a different system using my own name since the discussions are kept more directly to the point than they are here. Religion is seldom mentioned.

    The more people that join in the better. At first your comments will be held up awaiting moderation but after a while they will be posted immediately once the moderator knows you aren’t trolling.

    Start slinging around insults say for instance implying someone is a Nazi worshipper or accusing him of being a fascist will get you banned pretty quick.They aren’t interested in jail house lawyer weasels who say something in not quite so many words and then deny they said it like a sleazy lawyer defending HIMSELF rather than a client .

    Now some people believe that there can be too many comments but I think otherwise. My thoughts are that wide ranging discussions build traffic and the whole point of an internet forum is to get the word out – whatever the word might be.

    If the regulars here would post comments frequently there it would be good for traffic there too imo.

    A lot of old TOD hands do post an occasional comment there.

    Lots of comments enable a site to grow into a community of regulars interested in the bigger and broader implications of the core content.

    If Ron were to restrict comments here to ones relating strictly and directly to peak oil I believe his traffic would fall off substantially within a few months and after a while this would be just one more place to check on the numbers.

    There are at least a couple of dozen such sites with only a few visitors excepting the hard core numbers guys. They are basically preaching exclusively to the choir since nobody else is interested in joining the congregation.

    • nNgass says:

      “If Ron were to restrict comments here to ones relating strictly and directly to peak oil I believe his traffic would fall off substantially ….”.
      I believe otherwise. The blog is called peakoilbarrel and clearly, one mostly expects comments about oil and related subjects. But
      “Ants will crowd over each other and get trapped at exits ” (rattling on for a dozen or two responses), “rice paddies”, “about Jews treating women as second class citizens…”, “Mobile banking is an East African invention…”, etc., etc. are commented by people who are not experts in any of these but like to give opinions. I have the impression that talking about oil related issues is the least favored by people since I have to scroll through many comments to find oil related ones. That is annoying and turns people off since one expects peak oil issues to be discussed. The other stuff is a waste of time.
      Go and count how many oil related comments are in “Petroleum Supply Monthly + Guest Post” or among the 514 comments on “The Bakken, What the Data Tells US”. Very few, perhaps 10-15%.

      • FunnelFan says:

        I completely agree. I come here mainly to learn about the present and speculated future of the oil industry. Unfortunately stuff like the endless climate change BS and bickering is making these comment threads increasingly unreadable.

        Ron, if you want to continue accommodating people determined to argue over climate change, I suggest creating a climate change subpage so people have a specific place to post, rather than clogging the comment thread to every single main post regardless of if it even mentions climate change in the first place.

        • wimbi says:

          Future of oil industry. Has a deadly and ever growing threat from another energy source getting cheaper as it gets more expensive. Relevant to future of oil??

      • notanoilman says:

        If conversation on AGW is banned then the deniers will see it as a victory “Another blog closed”. Perhaps it is better that we police it ourselves by restricting responses.


        • Fred Magyar says:

          I agree! I know I have been guilty of rising to the troll bait myself and it seems to have just attracted more of them! However we seem to have gotten a slew of really obnoxious ones recently. I’m not sure if ignoring them is the best policy either but I’m willing to give it a shot.

          • Futilitist says:

            NAOM and Fred.

            I strongly disagree with this line of reasoning.

            Derision and exposure of deception are the best tools for dealing with deniers.

            Deniers have been controlling the debate by deceptively creating doubt about climate change. They are winning by deforming the whole debate. Their presence here distracts and confuses every argument. They play on people’s good manners.

            By shinning a light on their deceptive tactics, I hope to make people more aware of this insidious and dangerous shit.

            When Ron posted about those Siberian methane blowholes, I was totally shocked and alarmed. I was certain that we would have an economic collapse long before the climate would kill us. Now I am not so sure.

            People are becoming more and more aware of the tactics deniers are using.


            I think ‘Merchants of Doubt’ comes out this month. There may soon be wide spread recognition of how the deniers have fooled us for so long. There may be a backlash and their ideas will fall from favor. Hopefully they will become a joke, or worse.

            Caelan posted about the rising ethical issues around all of this. My instinct to protect my offspring from this shit is very strong.


            Let the deniers declare victory. No one will listen to them.

            • Joey Flodan says:

              Why are comments disabled for that video? Is Naomi afraid the actual truth about the climate change boogeyman will come out in the comments, like what usually happens? See for example

              • Futilitist says:

                Retracted comment since I did not see Joey’s post below. I moved my comment to after his post.

            • Joey Flodan says:

              Trying a link again, This video


              8 months ago

              Yeah ‘scientists’ tell us the earth is warming, but measurement ( actual science) tells us it is not.
              Pathetic shill, pitiable really. One wonders; Who did what to her to allow her to degrade herself publicly like this?
              View all 113 replies
              Garbad Kishkashta
              3 days ago

              It is hot = climate change
              It is cold= climate change
              It is windy= climate change
              It is freezing= climate change
              It is a nice day= climate change
              It is a muggy day= climate change.

              The whole climate change movement is a lie and the biggest hoax in history.
              3 days ago

              +Garbad Kishkashta
              Five Dinners
              8 months ago

              So now we vare supposed to believe state funded scientists? Whose wages depend on toeing the corrupt government line? Gimme a break TED, What happened to your critical thought?
              View all 101 replies
              Matt Petersen
              4 days ago

              +plainlake I love the troll era of the internet.
              8 months ago

              We should tentatively trust scientists because they have the evidence and they base their conclusions on evidence. I suppose stating this fact wouldn’t make a good (yet brief) TED presentation, though.
              View all 26 replies
              Robert Lominick
              8 months ago

              I thought at one time TED was about Science and technology???…… Its scary, the lenghts these COMMUNIST will go to advance the leftist agenda.. They have certainly fooled alot of people.. When are demoratic voters gonna realise they are selling out there own country and helping communist take over there own country.. I think the Southeast USA should just succeed from the union..Buisnesses are moving to the SE USA in droves escape the high taxes and liberal money wasting, crooks we call democrats.. Look at the states run by Republicans, most has supluses of money that they can “give back to the people” while the democrat run states are all asking for a bailout and are beyond broke..
              View all 20 replies
              Garbad Kishkashta
              3 days ago

              Global warming is a lie , it is freezing and heavy snow from were I stand. 
              Joseph Ang
              8 months ago

              I have faith, and I love science.

              I also have faith in friends: it’s trust.

              I have faith in the future: it’s hope.

              I have faith in people: I believe in democracy, for example.
              View all 32 replies
              7 months ago

              +finfan7 It’s never been about the law for you because you’re not qualified to make a legal argument. “One never assumes anything without evidence” that’s a statement about the law. Evidence is covered in the law. I just asked you for a simple logic syllogism (valid) so that I could respond to you in a way that would make sense for you.

              I can do this for you. I believe in the law, I used to practice the law as a Landlord. I practiced all kinds of law for people because I love people and I wanted to learn the law. I wanted to win at the law. I can prove that we are souls by the legal definition of malice, intent, and will.

              1. Major premise: Malice in the law.
              2. 1st degree murder is malice.
              3. Malice proves the murderous intent comes from the heart (the center of our being as opposed to brain).
              Conclusion atheism is proven false. The idea that the brain produces the will and intent is proven false.

              It’s always about the law. Peace out. 
              7 months ago

              The dictionary comes prior to legal training.
              3 weeks ago

              Global warming? So far Jan/feb 2015 has been the coldest months in 40 years here on the east coast. Ask Boston, Buffalo, Philadelphia, Pittsburgh, Cleveland….Etc.
              8 months ago

              Collective folly happens also. And the size of your brain does not make you immune.
              View all 32 replies
              8 months ago

              +doGoNsIylbaborPerehT I think you are right. The field ceases to exist in the absence of the generator. Every scrapyard laborer knows this (you know the big metal picker-upper with the big round electromagnet). My inspiration was the permanence of energy.
              I like to think the brain is affected by nearby (maybe even far away) brains on a level we cannot yet measure. My mind and emotions suggest to me this is so.
              Lemme go sci-Fi and thanks for the idea.
              The subatomic vibrational resonance that results from the expression of genuine selfless love of an individual for all his fellow creatures permeates all space/time (energy/matter) simultaneously and upon origin.
              8 months ago

              +doGoNsIylbaborPerehT and when the em field is present outside the skull does the effect that ambient em fields have on the field directly affect the brain. It stands to reason that either answer is equally plausible/possible.
              Back to sci-Fi. Now of this universal love-based resonance, a person who enjoins and becomes a conduit to/of it by emoting love is the a ‘point of resonance of the entire field. The entire field is open close and current to them.
              Nathan Callidor
              8 months ago

              Trusting science and trusting scientists are very diff things, scientists can be biased, greedy and down right sociopathic in their quest for invention and or answers.

              Until a moral code is enforced on scientists there really is no reason to trust any of them until they prove their science is unbiased and for the good of all man.
              View all 6 replies
              8 months ago (edited)

              Please don’t make up your mind about this post until you read ALL of it.

              If you want a better understanding of how science and morality interact, you have to look no further than Albert Einstein, Richard Feynman, J. Robert Oppenheimer, etc. They understood what it meant to ignore morality while practicing the scientific method, and they experienced the consequences of that kind of practice. Many of these men have given their thoughts and feelings on the matter.

              Oppenheimer: Feynman:
              Feynman again:

              Feynman is interesting in particular because he persisted in making comments about morality right up to the end of his life. You can see him continuing to make such comments even in official documents such as the Rogers Commission Report (official investigation into the Space Shuttle Challenger disaster). One of his most famous quotes comes from there: “…reality must take precedence over public relations, for nature cannot be fooled”

              Having said that, the assertion that we must enforce some moral code on scientists before we can believe them is beyond asinine. The proof is in the proverbial pudding. It doesn’t matter who makes the prediction, so long as it agrees with experiment. That is the test, and no other test can override it’s results unless it works on the same principal. (by “no other test” I mean that only another experiment with new findings can override it. That’s “the test”)

              Besides, who’s moral code should we choose? Where would it come from? Islam? Buddhism? Hinduism? Christianity? Judaism? Atheism? These moralities are diametrically opposed in many ways.
              Nathan Callidor
              8 months ago

              some seriously caveman like personalities out there today it seems.

              8 months ago

              i love science, it is scientists agendas i question. No one pays for something that science is not sure of. But it is easy to find scientists that will approve it for the right price.
              Some vaccines do cause problems, and global warming was found to be a cheat for carbon taxes.
              There are scientists that disagree with global warming , Darwinian evolution and vaccines. So they are not scientific fact but faith in a belief.
              View all 36 replies
              Tornike Khomeriki-Berdzenishvili
              8 months ago

              +Lisa Kratzmann
              8 months ago

              +Lisa Kratzmann Well said!
              5 months ago

              Naomi, you’re an idiot. There’s a difference between trusting the idea of the scientific method and what really happens when humans get together to make decisions. I don’t trust or distrust scientists any more or less than, say, historians. That’s not the point. When public policy is made that is “informed” by science that’s not science, it’s public policy. It may be good or bad policy, but it’s not science. You call people who question carbon taxes “climate change deniers.” That’s so idiotic it’s beyond belief. People who question useless expensive taxes, which by IPCC estimates, will have no measurable impact are climate deniers? What kind of religion are you into? Do your penance even if it changes nothing.

              • Futilitist says:

                Hi Joey Flodan.

                Ha ha. Thanks for the link, I would recommend that everyone watch it.

                It sounded very convincing to me. Did you think she was wrong in some way? I honestly can’t tell if you are joking or not.

                Yes, those are some pretty good arguments, I must say.

                I can see why Naomi Oreskes might be okay with not having those kinds of idiotic comments interfere with the message she wants to send.

              • nNgass says:

                Above we were discussing that the endless rattling about climate change should have another forum. And now this 71004 words on climate change from Flodan . It is almost as it was done to retaliate.

                There are people inhere that are experts of at least knowledgeable in oil related issues but who is a climate scientist? Most is just rattling along with half-backed ideas.

                As I said earlier, one has to scroll and scroll to get rid of the BS before one find an article that caters to the theme of

                • Futilitist says:

                  “It is almost as it was done to retaliate.”

                  You are correct. It was done to retaliate.

                  The deniers felt a disturbance in the force.

                  Should we fear this retaliation, or welcome it as a sign that we may have uncovered an important weakness, their obvious Moral Schizophrenia?

                  The deniers see this as a war. They will never accept the science.

                  But emotional arguments trump science arguments every time, in terms of the effect on the undecided. Normal people will instinctively trust an argument that is heartfelt and sincere over one that is a contrivance and a deception.

                  What would the deniers think if we gave in now? What would normal people make of it all?

            • notanoilman says:

              It will be of no use attacking the deniers. They are sent here with a mission and, often, a script. They are not interested in a debate though we seem to be getting a few more sophisticated ones lately.

              What we need to do is limit our response so that the 3rd parties, that do not participate in the debate, are educated as to the falsities that are being put forward. Let us keep it cool and present good, sound, knowledge based rebuttal and put a cap on emotional response.


              • Javier says:

                Two huge mistakes on your position.

                First, this is not a debate. This is science, and theoretically we are all seeking the truth, and when truth is found we all win. If you think in terms of debate and victory you are not thinking in terms of science, but politics.

                Second, in science there are no deniers or we all would be deniers, as there’s always competing theories and if you support one you are negating the other, as you are a denier of the hypothesis that climate change has always been and still is dominated by natural forces. Thus the concept of negationism is foreign to science and does not apply to science.

                You do a disfavour to the hypothesis that climate change is dominated by man activities and what you say has nothing to do with science but with beliefs, and science is all about not having beliefs. Think about it.

                • Futilitist says:

                  Several HUGE mistakes on your position, Javier.

                  First, this is a debate. We are not doing science.

                  Second, why did you bring up negationism? Talk about politics! Most people don’t know what it means, yet you were familiar enough with the term to try to slip it in and conflate it with negating something ‘scientifically’. Negating is not the correct scientific term to use anyway. You mean scientific falsification. It seems very unlikely to me that you did this bullshit unwittingly.

                  Negationism is historical revisionism! The best example being Holocaust denial. I think your use of the term here seems more a little creepy. It may say something about you. Please explain why you chose this cheap rhetorical trick?

                  Third, neither one of us really does any disfavor to any scientific hypothesis or theory since we are not scientists.

                  • Javier says:

                    Talk about you. I am a scientist. We are talking about science, so your political arguments and name callings have no weight whatsoever. We have competing theories to explain climate change, each one with supporting data and models and each one with a different explanation for past data. Scientific theories have to have predictive powers and have to be falsifiable. AGW is showing a poor predictive power and is falsified by lack of warming. Naturally induced climate change has a strong cyclic component with a 60 year period and thus predicts lack of warming until around 2030 and is falsified by breakdown of that periodicity. I believed in AGW until the data started to support naturally induced climate change.

                    Your problem is that you have fallen into a core belief. You are no longer capable of analysing data (or arguments) critically. You accept without question those that support your belief and reject uncritically those that question your belief. Now you expend your time going around the internet preaching your belief.

                    To create a religion around un unproven scientific theory is extremely amusing until billions of dollars of taxpayer money start to be diverted without proper auditing for the benefit of some. You are not only a victim of a deception like millions of people, you are actually doing unpaid work for the deceivers. At least climatologists are being paid for it.

                  • Futilitist says:

                    Hi Javier.

                    Your problem is that you have fallen into a core belief. You are no longer capable of analyzing data (or arguments) critically. You accept without question those that support your belief and reject uncritically those that question your belief. Now you expend your time going around the internet preaching your belief.

                    And if you won’t explain your use of the word ‘Negationism’, or even tell me what sort of scientist you are, then I am done talking to you.


                  • Javier says:

                    I understand you wanting to take the discussion away from science where you don’t seem comfortable, but I do not. I have no problem with you being done talking to me.


                  • Futilitist says:

                    No Javier,

                    I am plenty comfortable with science.

                    But you claimed to be a scientist and then refused to back up your claim in any way. I asked you why you tried to insert politics by using Negationism as a creepy, cheap rhetorical trick, and this you also refused to answer.

                    Quit trying to play me!

                    You are being deceptive. So, basically, I don’t trust you. I try to make it a policy not to talk to deceptive people that I cannot trust. It is just not a productive thing to do.

                    As I said before, trust is the only currency of reciprocity in internet discussions.

                    And you are like a climate denial specialist.

                    You come here armed with lots of ‘sciency’ lingo. I was just sitting here on this peak oil website, and you came here to “debate” climate science. So you are clearly the one who spends time going around the internet preaching your beliefs, not me.

                    I don’t generally get involved in stupid global warming debates. 😉

                  • Javier says:

                    No Futilist,

                    I don’t refuse to back up my claim of being a scientist, just not publicly and just not to you. I also don’t trust you and I don’t see how giving you information about me is to my advantage. I have no problem in passing my scientific credentials to a neutral third party, like Ron, so he can confirm them. I have my personal reasons to not be on the internet with my full name.

                    In Spanish negationism and denialism are translated exactly the same. We have an issue of not having the same first language that is not worth getting into.

                    I don’t come here for climate change discussion. I have been following peak oil for some time to the point that I have my own personal blog in Spanish regarding peak oil and the crisis we are facing and I include climate change and economical analysis. It is quite popular with over 6000 hits per article ( Ron’s articles are fantastic and from time to time I use his data and graphics with full credits and links.

                    The tide of climate change attribution is turning. As a scientist I used to accept the prevalent theory coming from a different field. The disparity between predictions and reality made me check into the issue. I am very used to critically reading scientific literature. I was appalled to find what goes as science in climatology. Models are not the arbiters of scientific theories, they are just a way of checking our knowledge of the issues involved, and in climatology our knowledge is seriously lacking. To see that they were claiming “settled science” made me shiver. I know science from the inside so it didn’t surprise me that a field that until three decades ago was small, marginal and relatively unattractive do to the intractability of the problem has become dominated by a committee. Add political pressure and tons of money and you get a bad science recipe and marginalization of opposing views.

                    I was reading this post, as I have read dozens in this site before (not so much the comments), when I saw incorrect conclusions about climate change being drawn in a comment by Canabuck. As an interested party I offered my knowledge of the issue. If you think that I came here to refute you, you need to moderate your ego. I don’t like your fundamentalist way of attacking and name-calling other people in the blog. You and Notanoilman were the ones coming after me after my answer to Canabuck, despite your claims that you don’t get involved in debates. If that is true, stop initiating them. I have no interest in a discussion with you since you are not out to learn anything that could disprove your beliefs and I cannot learn anything from you regarding climate change since I already know the basis of your belief.

                  • Futilitist says:


                    “I don’t refuse to back up my claim of being a scientist, just not publicly and just not to you.”

                    Dude, I just asked you what kind of scientist you were.

                    “I have no problem in passing my scientific credentials to a neutral third party, like Ron, so he can confirm them. I have my personal reasons to not be on the internet with my full name.”

                    And I never asked you for any actual personal information, let alone credentials. You are making a straw man argument.

                    Why not just tell me what kind of scientist you are?

                    I think it is a fair question. Different sciences have different inherent approaches to things. As a scientist in a different field, you may have some prejudices.

                    “The tide of climate change attribution is turning.”

                    That is totally false and ridiculous! In the real scientific world, the exact opposite is true. You just slipped that extraordinary bullshit in without any offer of proof. Wow.

                    You then immediately assert:

                    “As a scientist I used to accept the prevalent theory coming from a different field. The disparity between predictions and reality made me check into the issue. I am very used to critically reading scientific literature. I was appalled to find what goes as science in climatology.”

                    That certainly sounds reasonable.

                    But it also kind of sounds like blatantly obvious, transparent PROPAGANDA!!!

                    (Onlookers should reread that paragraph carefully. It is a classic from the climate change denier handbook!)

                    “The testimony of a ‘real’ scientist who used to think global warming was real!” Gee wiz!

                    Ha ha. Give me a break.

                    “I also don’t trust you and I don’t see how giving you information about me is to my advantage.”

                    Why do you seek “advantage” in a discussion that is supposed to be about the truth? You should just put your cards on the table.

                    As far as trust goes, I think the readers and I have more reason to distrust you so far.

                    I changed my mind. I do want to debate you on the science of AGW. Bring your best arguments. 🙂

                    And it’s Futilitist, not Futilist.


                  • Javier says:

                    That I have no problem in telling. My PhD is in Biochemistry and Molecular Biology, my work has dealt with molecular genetics and molecular neurobiology.

                    Of course I can provide proof that the tide of climate change attribution is turning. The proof is in the scientific literature obviously. A survey of papers presenting experimental measurements of climate sensitivity ordered by date of publication shows that the mean and median of measured climate sensitivity keeps getting lower. For the 2013-14 papers (15 publications) the mean is at 1.84 ( As the non-warming period extends, that value will keep getting lower. With low values of climate sensitivity not only the IPCC future scenarios become unrealistic, but the attribution of all climate change to CO2 becomes untenable. More and more scientists are becoming doubtful. Not very many are speaking out yet, but soon one is going to point out that the emperor has no clothes and everybody will start laughing.

                    You may believe what I say is propaganda, but amazingly you believe in the IPCC propaganda without question. If you are so versed in science, you can do your own fact check as I did. IPCC has been active since 1988, a quarter of a century. How many of its predictions have become reality? Why do they deserve your credibility?

                    You are wasting your talent for debate. Nobody is reading this any longer except you and me, and this is an oil forum, so almost everybody would rather not have us debating this here, and that includes our gracious host whose patience must be growing thinner.

                  • Futilitist says:


                    “That I have no problem in telling. My PhD is in Biochemistry and Molecular Biology, my work has dealt with molecular genetics and molecular neurobiology.”

                    Thanks. Quid pro quo, I have a BS in Biomedical Visualization. In my professional career I have done many things, including social robotics, mechanical design, puppeteering, computer animation, CG software design, movie producing (Shrek), screen writing, and drumming.

                    I have had a life long interest in ecological and resource issues. I first learned about global warming in 1980, and I have followed the science pretty closely ever since then.

                    I have recently (in the last 10 years) been doing independent research in social theory, with a special focus on imitation science (mimetics), social psychology, and group psychology. I am studying you.

                    “You may believe what I say is propaganda, but amazingly you believe in the IPCC propaganda without question. If you are so versed in science, you can do your own fact check as I did. IPCC has been active since 1988, a quarter of a century. How many of its predictions have become reality? Why do they deserve your credibility?”

                    I think you would be surprised how little respect I have for the IPCC. It I think their mandate largely enforces a code of Groupthink. Their hypercritical, conservative, consensus-based, political process basically produces old science. It takes 7 years to get a paper through their peer review process. I think that makes the IPCC 7 years behind the times.

                    I think the IPCC was created to act as an institutionalized mechanism of denial for society. The fact that you are now attacking the IPCC for making the bad predictions they were designed to make, seems more than a lot ironic!

                    “Of course I can provide proof that the tide of climate change attribution is turning. The proof is in the scientific literature obviously.”

                    I read through the link you provided. The ‘study’ is essentially a pile of bullshit! Very easy to refute. But not on this page where no one is watching. As you yourself so wisely note:

                    “You are wasting your talent for debate. Nobody is reading this any longer except you and me, and this is an oil forum, so almost everybody would rather not have us debating this here, and that includes our gracious host whose patience must be growing thinner.”

                    We will just have to have our debate on a current page, in front of everyone and the world, just like any other energy related discussion on the site. I don’t see why Ron would mind.

                    There is no rush. I don’t do this stuff full time. I will wait for you to bring up the topic whenever you are ready.

                    I look forward to an enlightening debate. 🙂

        • Charissa Yong says:

          Do you think it scores you points for calling people that don’t buy your climate crapola “deniers”? Doesn’t that imply that you and your ilk come from a position of “truth” when, in fact, AGW is anything but settled science?

        • wimbi says:

          Yep, that’s the right thing. Ignore it, hard tho that may be, and hope that Ron with a wave of his magic wand, will cause them to go

          “back to the vile dust from whence they sprung,
          unwept, unhonored and unsung.”


    • Futilitist says:

      Hello Old farmer mac,

      I do so enjoy your long-winded, rambling, folksy, home-spun wisdom. I especially love how you artfully employ the writers craft to weave your fanciful comments. Your ever voluminous posts call to mind such vivid imagery, I am forced to admit some reluctant admiration for your literary flair when constructing your tall tales. You have a gift.

      This wonderful example caught my eye and I just couldn’t keep myself from commenting:

      “Start slinging around insults say for instance implying someone is a Nazi worshipper or accusing him of being a fascist will get you banned pretty quick.They aren’t interested in jail house lawyer weasels who say something in not quite so many words and then deny they said it like a sleazy lawyer defending HIMSELF rather than a client .”
      ~Old farmer mac

      Bravo, sir. You have quite a way with words. 😉

      • Old farmer mac says:

        Thank you sir futilista.

        Personally I have worked hard at it for a long time.

        I must admit I am impressed with your endless frontal assaults using the heavy artillery words denialist, fascist, liar, Nazi etc.

        Goebbels would be proud of you if he were still around. It takes real plastic balls to use his techniques so consistently while accusing OTHER folks of being the NAZI.

        I know a young man who was like you when he was growing up. You could watch him throw rocks at the chickens or a car windshield and confront him and he would look you right in the eye and scream that you were lying to him and about him.

        Hopefully he won’t actually set off any bombs.

        You are also good at finding quotes but so far I have not noticed you composing an original comment of any sort worthy of mention.

        You are still a fucking idiot.

        I sent Ron an email earlier today suggesting that he ban both of us as examples and also posted a comment to this effect somewhere in this thread a while ago.

        Hopefully you will get some professional help.

        I make this suggestion seriously given that I have some modest professional training in screening people for depression etc as the result of getting halfway thru nursing school before dropping out to look after some elderly family members.

        Your comments indicate you are off the red end of the scale on some commonly used preliminary assessment tools.

        People who want to read me will know where to find me. Your proper home is someplace like the Doomstead Diner but I think I remember reading here you have been put in some sort of isolation chamber even there. Or maybe it was the Cassandra site. Don’t remember and don’t care.

        But I hope he hasn’t yet done so since I want any regulars who do like my stuff to know I will be live with my own blog in a few days.

        I plan on posting a couple of ADVERTISEMENT comments to that effect over the next week or so.

        • robert wilson says:

          Should Godwin’s Law apply?

          • Old farmer mac says:

            Hi Robert

            Here is an excerpt from the wiki podia article you linked.


            ”Godwin’s law applies especially to inappropriate, inordinate, or hyperbolic comparisons of other situations (or one’s opponent) with Nazis – often referred to as “playing the Hitler card”. The law and its corollaries would not apply to discussions covering known mainstays of Nazi Germany such as genocide, eugenics, or racial superiority, nor, more debatably, to a discussion of other totalitarian regimes or ideologies[citation needed], if that was the explicit topic of conversation, because a Nazi comparison in those circumstances may be appropriate, in effect committing the fallacist’s fallacy. Whether it applies to humorous use or references to oneself is open to interpretation, because this would not be a fallacious attack against a debate opponent.

            Although falling foul of Godwin’s law tends to cause the individual making the comparison to lose his argument or credibility, Godwin’s law itself can be abused as a distraction, diversion or even as censorship, fallaciously miscasting an opponent’s argument as hyperbole when the comparisons made by the argument are actually appropriate.[9] Similar criticisms of the “law” (or “at least the distorted version which purports to prohibit all comparisons to German crimes”) have been made by Glenn Greenwald.[10] ”

            Sometimes in discussing topics of the utmost gravity such as the life and death of nations and civilization itself it is in my opinion perfectly acceptable and necessary to point out things that the the Nazis accomplished. Genocide is appropriate. Starting WWII is appropriate etc.

            So far as I am concerned the survival of industrial civilization itself is an ever more important topic that genocide considering the implications of the entire world collapsing into a state that will make WWII look like a Sunday school picnic.

            The Nazis were no doubt among the most evil people ever to gain control of a large powerful country but and this is a very big BUT:

            They not only gained control of a country in desperate economic straights – they turned it into an economic powerhouse in the space of less than a decade that was capable of building the most powerful war machine that had ever existed by a mile at that point in time.

            People who believe nation states are helpless in the face of adversity are idiots who refuse to face up to the evidence that LEVIATHAN is not going to just roll over and die when the shit hits the fan.

            Nazi Germany was the most evil Leviathan of our times but only a fool can even think about denying that governments CAN make things happen even when they seem utterly hopeless.

            If some idiot who cannot appreciate this argument wants to label me a Nazi or a fascist then so be it. He will still be an idiot or an ideologue in the eyes of anybody with brains enough to understand what I have said. I will continue to label him as such- or worse.

            If the Germans had worked as hard at peaceful goals as they did warlike ones they would be the leaders and envy of the world today as likely as not.

            Troubles we are going to have. BIG troubles indeed. But only a fool could possibly think that the situation is entirely hopeless and that the federal governments of large powerful countries such as the USA and Canada will not once aroused react to problems such as peak oil with extremely aggressive policies enforced at the point of a gun if necessary.

            We yankees and Canadians may go down fighting but by Sky Daddy we WILL fight and there is a good chance we can avoid collapse. Not forever but even the universe itself may not be forever.

            The rest of the world will fight too as best it can. Unfortunately most of the rest of the world is handicapped by a lack of domestic resources to a far greater extent that Yankees and Canadians and far less able to defend such resources as they have with a few exceptions such as the Russians. They have resources out the ying yang and the means of protecting themselves as well.

            Don’t get caught in EGYPT and best wishes.

            I gather that you must be approaching the century remark from past comments you have made. I hope you get there and past with a sound mind and a body sound enough to enjoy whatever time you have left.

            • Futilitist says:

              Old farmer mac,

              “Godwin has stated that he introduced Godwin’s law in 1990 as an experiment in memetics.”

              To begin to understand our conflict, look up mimetics.

              • Futilitist says:

                “I sent Ron an email earlier today suggesting that he ban both of us as examples…”
                ~Old farmer mac

                You clearly should not have done that. It shows an extreme lack of character.

                I have not sent any e-mails to Ron during this conflict. I have not attempted to sway him unfairly. All of my comments are here on this page so that everyone can see them, as they should be. I did not try a sneaky, cowardly, backdoor trick like you did.

                You are a tattle-tale and a brown-noser. Gross.

                Perhaps you could post your e-mails to Ron so everyone here can see what you tried to do.

            • Futilitist says:

              Dear Old farmer mac,

              Since we are talking again about Leviathan, here is a question for you:

              “The true American way of life is disappearing so fast that force may be necessary to preserve it.”

              1) Disagree Strongly
              2) Disagree Mostly
              3) Disagree Somewhat
              4) Agree Somewhat
              5) Agree Mostly
              6) Agree Strongly

              I would really appreciate an answer to this. Thanks.

              Quit trying to run away.

  14. Schinzy says:

    If I understand correctly, LTO producers are cutting capex on expensive oil and concentrating on the sweet spots. It seems to me that this is the worst possible tactic for a producer. If I understand correctly, an oil well that is not producing (or property with oil in the ground) is considered an asset that is valued by the quantity of oil it can produce times the price of that oil (estimated from past prices) minus the production cost. An oil well that is producing is considered an asset that generates a certain amount of income and no long term analysis is made. By concentrating on sweet spots, future oil production falls at a slower rate, maintaining low prices. Thus the value of the non producing wells on the balance sheet is low not only because they are not sweet spots, but because the price of oil is low. It seems to me that it would be smarter to avoid the sweet spots which would cut future production faster. This would increase the price faster and balance sheets would look better because the long term analysis would be done on the sweet spots.

    Am I missing something?

    • Watcher says:

      Yes, you are missing something. There are no sweet spots, unless you define areas outside the field as part of the field and not sweet.

      The lease acreage is the asset that functions as collateral. Not its flow rate.

      Most of all you are missing that it’s largely bullshit and sold to whoever they need to borrow money from. Don’t look for intricate analysis. There’s none needed. The price is too low for any of it to work. There, analysis done.

      • Yes, you are missing something. There are no sweet spots, unless you define areas outside the field as part of the field and not sweet.

        I don’t understand that statement at all. The Bakken is a layer of sedimentary rock. There are a lot of places in this Bakken sediment that produces more oil per acre than other places. The areas that produce the most oil per acre are called sweet spots.

        • Watcher says:

          But we haven’t seen it in the output records pre price crash. Graph after graph showed no decline in IPs the last 2-3 yrs, constraining to 2-3 yrs to have a pure measure (equal stage count), when we know perfectly well any “sweet spots” would be drilled first.

          You could make a case for there being sweet spots that are so extensive they haven’t been exhausted yet, but for the purpose of this guy’s comment, that would not be relevant.

          • Sweet spots aren’t necessarily drilled first. Sometimes we have to find them. 27 years ago I got a really nice award because I convinced my company to drill a 10 thousand BOPD well in a field they were planning to abandon. Sometimes it’s like fitting puzzle pieces.

    • Futilitist says:

      Hi Schinzy.

      “If I understand correctly, LTO producers are cutting capex on expensive oil and concentrating on the sweet spots. It seems to me that this is the worst possible tactic for a producer.”

      I believe that is an incorrect assumption.

      Game theory would maintain that it is not only the best possible tactic, it is also the only possible tactic for any individual producer in a prolonged low price environment. And that thesis is essentially confirmed by the current behavior of producers.

      “Am I missing something?”

      From here on, cash flow is much more important than any potential balance sheet.

      All producers are ‘all in’.

      • Schinzy says:

        From here on, cash flow is much more important than any potential balance sheet.

        Thanks. Short term cash flow problems are forcing producers into the worst possible long term strategy. Oil service companies will continue to see a contraction in their market until production drops. During this period, LTO producers balance sheets will look worse and worse. By the time production drops and prices rise, bad balance sheets will prevent banks from lending and investors from investing in LTO production. Classical boom bust economics. 2015 will be a very interesting year indeed.

        I do not understand your reference to game theory. In general I am not impressed with game theory’s ability to explain economic phenomena.

        • Futilitist says:

          I think your analysis is correct.

          In the simplest of game theory terms, there are currently only two choices available to any producer (until the price rises).

          1) Stop producing = Die immediately

          2) Produce as fast as you can = Maybe outlive your competition and steal his market share (or at least die trying)

          Which would you choose?

    • shallow sand says:

      I have been reading about Burgan Field in Kuwait. Largest sandstone field in the world and in the top five of world’s largest fields. Appears primary productive sand is about 3,400′. Discovered in 1938, but first oil not produced until 1946, due to WWII. Maximum production believed to be in 1972 at 2.4 million bopd. Estimated current production 1.2 million bopd, much currently under water flood. CO2 flooding going on there as well.

      One interesting thing, apparently there are still lakes of oil which date from the Gulf War destruction wrought by the retreating Iraqi Army. Just starting to undertake a multi billion dollar clean up, which is estimated to take years, but could also recover over 5 million barrels of crude oil. The oil lakes, among environmental issues, are hampering further field development.

      Could Burgan be described as a super sized Yates Field?

      Given Kuwait is very small yet has an estimated 100 billion of estimated recoverable barrels, and produces close to 3 million barrels per day, who, what and how is it being protected militarily? Don’t hear much mention of Kuwait, but seems its a pretty important place concerning crude oil.

      • shallow sand says:

        I encourage those interested to read up on the environmental damage remaining from events which occurred 25 years ago, plus view the images. I did not realize the extent of the mess and that it hasn’t been addressed all these years and am embarrassed that I didn’t.

      • Shallow, Burgan is the field God made for oilmen to have orgasms. I have seen the well logs and that sand is absolutely gorgeous.

        Not too far from Burgan, in Iranian waters, there’s a field with an identical shape and sandstone development. But the oil is 10 degrees API.

        • Mike says:

          Shallow, Fernando is right, Burgan is a beautiful thing. Some 2M BOPD was being lost in Burgan in 1991; that went on at declining rates for 7 months as wells were capped. None of those wells made water while they were blowing. I have forgotten the cumulative loss but it was a lot. Subsequent BHP pressure tests done after the wells were capped indicated a loss of only 3 PSI of BHP. I do not know your source but some mates of mine went back to Burgan 2 years after 91 to do some WH tie backs on wells that could not be killed and took photographs of lush green grass growing in the desert and were stunned at how quickly, and completely lots of areas had already recovered.

          Burgan is the perfect oilfield in every sense of the word.


          • shallow sand says:

            Mike. Google Kuwait oil lakes. I found news stories indicating many still exist and in other places the mixture of oil, sand and sea water turned the land into something similar to a parking lot. I agree that personal observation beats Internet stories so I welcome anyone who has personal experience in Kuwait to post.

            Also, agree Burgan is an incredible field, possibly the worlds best. Pointing out that they likely have more rigs running there than ever and that daily production is currently half of the peak should be at least as news worthy as our, me included, laser focus on the rise and fall of us shale?

            We can yammer on and on about shale, but if the worlds great fields are on the decline, and world wide CAPEX is taking a big hit, shouldn’t we be more than a little worried? My time horizon on this issue is measured in years, not months.

            • Doug Leighton says:


              An friend of mine works in Kuwait via some kind of Enhanced Technical Service Agreement which among other things is there to assist Kuwait in EOR on mature fields. This guy has no special access to information (I think he works mainly with pumps) but speculation from rubbing shoulders is most new development is directed at offsetting declining Burgan production; also, there has been a lot of infill drilling in Burgan to help arrest decline, I hear.

              • shallow sand says:

                Thanks Doug. Any inside info that may be obtained about there or the other giant conventional fields is of interest to me.

                • shallow sand says:

                  I think it has been established there is quite a bit of $100+ profitable oil left in the world. I’m thinking a focus on the sub 100 USD profitable oil is pretty important. Seems like maybe Matthew Simmons had the right focus, even if some of his predictions were on the wild side.

      • MBP says:

        It depends on what you are comparing them on. Geology is not one of them. As you said, the Burgan is the worlds largest clastic reservoir. A 1,200 ft. thick braded steam and deltaic system with the pay being mostly the cross bedded sands within the streams.

        The Yates is a dolomite and limestone reservoir that was a large shoal/island complex. Most of the primary porosity is in the shoals of the San Andres. However, the Yates is famous for its karst, formed from fractures, that formed when the top of the San Andres was exposed as an island during early Grayburg times, allowing for an extensive cave system to form. When the field was first being drilled, there were bit drops of over 20 feet in these caves that were 100% filled with oil. There was a well that blew out in the late 20’s in the field that was flowing >150,000 bopd. Crazy stuff.

        They may have some similar characteristics, but in terms of deposition and geology they are very different.

        • shallow sand says:

          MBP. Thanks for your comment. I did not know the geology of Yates, and now I know more than I did before. I had read about the gushers at Yates, I guess there is a CO2 flood that has been going on there awhile.

          Also, I appreciate your contributions to this site. My geology knowledge is lacking, I will admit. For the past 17 years I have been trying to improve upon that. If there are any texts that you think someone like me, who doesn’t know enough about geology, could benefit from reading, please pass them along!

          • MBP says:

            There is a CO2 flood at the Yates field, it started sometime in the 90’s I think, but as far as I know it is not a miscible flood. They are still getting incremental production from the CO2 injection, but the field is just too shallow. As for geology info, a good (and free) place to start is AAPG wiki: which has a lot of good info on geology related to the industry. Beyond that, the AAPG has a lot of good articles that it publishes for members, or you could try some of the BEG publications.

          • MBP, thanks for the link. I used to have access to IHS, CAC reservoirs and other data bases, but I lost them after I left the company where I worked.

            You sure sound like you know the statistics. Would you say the largest conventional fields in sandstones are Burgan and Samotlor?

            I bring up the subject because those workhorses are starting to be running out of oil in a hurry. And I can’t visualize a realistic EOR technique to give them a large boost.

            • MBP says:

              I would say you are probably right about the Burgan and Samotlor, though the Burgan has been managed much better than its Russian counterpart. The Burgan was PoP in the 1940’s and peaked in the mid 2000’s, while the Samotlor was PoP in 1969 and peaked in 1980. Though the Burgan is a bigger field, I feel that the Russians mishandled the Samotlor by ramping it up so fast, they had to bypass a large portion of oil when they had breakthrough as fast as they did. I understand the need for waterflood so early because of reservoir conditions, but you have to think they would have though about the high porosity sands channeling the water.

  15. ezrydermike says:

    available on Netflix now…

    The Overnighters

    The film depicts the lives of people chasing the dream of high salaries in the North Dakota oil boom, only to discover that affordable housing is almost impossible to find. Much of the focus is on the efforts of a local pastor, who has allowed over 1,000 different people to stay at his Williston, North Dakota church over a period of about two years.

  16. Old farmer mac says:

    An old friend from TOD days sent me this link which I find highly amusing as well as indicative that our doomsday cult leaders just might barely possibly conceivably be a tiny bit mistaken about collapse overtaking the entire world all at once.

    The whole thing is worth reading but the video center front may be the best part.

  17. Old farmer mac says:

    I don’t actually know how history is going to play out. I don’t even know about tomorrow with any real degree of certainty.

    But I do have a knack of being able to sort of step out of my own personal reality and sort of step into the reality of people who hold to entirely different word views.

    Learning to do this took me a long long time.

    Sometimes it is scary as hell when I do it.

    Now here is a piece that both thrills me to the ends of all my nerves so that little hairs stand up out of both fear and excitement that it might actually portray the coming reality.

    Some people get fixated on doom and gloom.

    Some get fixated on WHAT MIGHT BE and the part they can play in bringing it about.

    It’s a great read in and of itself as a study in character of a certain sort of man and worth reading for that reason alone.

    I haven’t read anything recently that impressed me more with just how uncertain the future really is.

    One thing is for damned sure. The people who make the modern world go around are not much worried about it collapsing in the near term. Arrogant they may be and are but as Yogi said about Mickey waving his bat at the fence , it ain’t bragging if you can do it.

    I do not believe Silicon Valley is going to solve all the problems of the world but Silicon Valley is going to solve some of them for damned sure.

    I did not read this and believe . I don’t recommend anybody doing so.

    But read it and think .

    Thinking saves a lot of trouble and a lot of mistakes and wasted effort.

    Thinking sets you free of the ruts of the mind.

    • Old farmer mac says:

      Incidentally Der Spiegel and the Gaurdian are both places that you can comment in a civil atmosphere on issues involving oil in particular and the economy and ecology in general.

      I post at both places occasionally under my own name.

      • The Guardian banned me. I drove the commies who run the paper completely nuts writing comments about Venezuela and Cuba. They have a tendency to publish a lot of propaganda and lies about what goes on. I pointed this out, and would offer information contradicting their baloney. I wrote a little bit about their climate change bs, but I don’t think that’s what got them mad at me.

    • Fred Magyar says:

      I read the article… Whenever I hear Kurzweil praised as a genius together with talk about ‘The Singularity’ I just tune out. The guy may be bright but he is also a certifiable nut case of the highest order…

      Kurzweil has dedicated his life to thinking about technology, and not long ago he reached the following conclusion: In 2029, computers will be able to do everything that humans can, just better.
      Kurzweil is 67 years old, but is as spry and energetic as a 35-year-old. Slender, with wispy hair and angular glasses, his appearance is slightly reminiscent of Woody Allen. Every day, Kurzweil swallows 150 pills — vitamins, minerals and enzymes — and injects himself with additional supplements. His goal is to hang on long enough that technological advances make it possible to extend human life indefinitely. He is convinced that such advances aren’t too far off. After all, Google and a dozen other companies are working on putting a stop to aging and on finding a cure for cancer.

      Thank Sky Daddy that he is still just as mortal as the rest of us! I’ll give him another 20 years before the grim reaper calls on him…

  18. aws. says:

    Telling chart from this week’s TWIP….

  19. Okay people, stop the name calling. Everyone quit calling idiots or telling them they are insane. Several people have emailed me personally telling me they are going to stop posting if the name calling continues.

    They won’t have to. I am fed up with this crap myself and unless people start acting like gentlemen I am simply going to shut the site down. I just don’t need the aggravation. I don’t need a web site to track oil production around the world, I can do it all by myself.


    • Chris says:

      Dear Ron, I think the forum is too polluted by the climate change debate. Your web site is very helpful for tracking oil production and news and models related to peak oil. Climate change debate seems to be a philosophical debate with more insults or name calling. Moreover almost nobody has enough scientific knowledge to understand the whole picture, either to explain there is climate change or to explain there is no climate change.

      • nNgass says:

        Above we discussed this issue and right after this Flodan came on with a 71004 word comment on climate change. I feel that the endless discussion on climate change should stop, regardless of the content of the comments.

        I remember the endless discussion on climate change and many other unrelated subjects to oil issues at the site. It became so bad that the admin issued a moratorium on climate change comments.

        And now we have a similar problem. A enjoyed reading this site but I do it now less and less and I am looking for a replacement.

    • Andy Hamilton says:

      Ron, the solution is simple. You wouldn’t tolerate idiots on your blog claiming that cigarette smoking was not a prime cause of lung cancer, so just step in and delete the posts by the climate change denial trolls. If you simply pull the plug then the climate change deniers will have won, and they will have shut down a blog where scientific analysis was once front and center. The deniers are the enemies of humanity and the planet, time to treat them as such.

      • Futilitist says:

        Hi Andy.

        “The deniers are the enemies of humanity and the planet, time to treat them as such.”

        Well said.

    • Old farmer mac says:

      Hi Ron,

      I suggest that a better strategy would be to ban a few people beginning with me and futilista. I am about ready to strike out on my own anyway.

      Anybody else will get the message.

      Pretty soon some friend of mine or a few different ones who lurk in this forum will register and post links to a blog of my own which will be up pretty soon where I will discuss energy, adaptation, climate, agriculture and whatever else seems relevant to the big picture. Anybody who wants to read my ramblings will be able to find them easily enough.

      I fully intend to post links to your blog on a regular basis. As a matter of fact I expect to use it as a jumping off point on a regular basis.

      It won’t be any problem for me to go live within the next few days.

      I promise to ignore him for the duration of my stay here. Anybody who wants to know what I think will be able to find me easily enough on the net.

      Incidentally I am also going to start a round robin type of email discussion group that will require asking for membership. It may have only a handful of members. The subject matter will involve peeling back the layers of the communications onion among other things.

      A whole lot of people including some genuine environmental activists fail to realize that screaming collapse is not the answer. The more people hear such crap the less attention they pay to serious analysis.

      If anybody wants to get in touch with me personally any regular here is welcome to ask you to forward a request to me including their email address. I know you are a nice guy and won’t mind helping out in this fashion.

      Thanks a million. I will be reading your stuff as long as you continue to publish and insulting futilista as long as he insinuates I am a nazi lover or a fascist etc.

      Best wishes for a long life and lots of satisfaction with continuing to publish this invaluable blog.

      I apologize for crapping in your intellectual home and won’t do it again but the only way I can promise to do so is to go else where so long as idiots such as futilista are allowed in.

      This situation is the kick in the butt I have been needing to get me motivated to go my own way ANYWAY.

      If he ever has a rational day I hope he explains just what he means by starting a revolution given that according to his comments there is no hope for anything but collapse in any case. Of course if he responds to this comment he will say I am twisting his words and a liar etc etc etc.

      If it is not too much trouble you might want to consider the suggestion made by a couple of other folks about having a separate section to separate comments not DIRECTLY related to oil issues . That would be ok with just about everybody I am sure and convenient for everybody.

      Maybe the software you are using will allow it. ???

      • Mac, your plan would not work because the ban system works on IP addresses, not names or handles. It is not that easy to change your IP address. If you buy a new computer you will find you still have the same IP address.

        No, I will just start deleting posts that call people, who post on this list, names. And if that person continues to call people vile names I will ban that IP address.

        If you are talking to a person on this list then you should show the same courtesy you would show them if you were talking face to face. It is just too damn easy to insult a person when you are hid behind a pseudonym and don’t have to look him or her in the eye. It has happened for far too long on this list. I let it go because I did not want this site to be like TOD. But now it has gotten out of hand.

        • shallow sand says:

          I think a combination of deleting offensive posts by Ron Patterson plus those of us simply ignoring the BS works best. I don’t mind off topic stuff, but droning on and on about off topic issues gets old.

          I try to post by thinking to myself, “Would I say this to a person one on one, or when speaking to a group?”. But I realize this is the internet, and the net has spawned a lot of bad and strange behaviors in our society.

          • Futilitist says:

            “I think a combination of deleting offensive posts by Ron Patterson plus those of us simply ignoring the BS works best.”

            I don’t think we have the power to delete Ron’s posts, and they are not really that offensive anyway. 😉

        • Futilitist says:


          “If you are talking to a person on this list then you should show the same courtesy you would show them if you were talking face to face.”

          What you are talking about is the principle of reciprocity. And that is exactly what I am applying.

          Of course I agree with you in principle, Ron, but the internet isn’t exactly like a face to face conversation. As humans, we forget this and lose ourselves in the discussion. In this type of discussion, you first have to be able to trust the person behind the pseudonym. Fernando violates that most basic rule of trust by being deceptive. He plays on our trust. I am showing him the same courtesy I would show him face to face if unconstrained by social convention or fear, which I am not in this case.

          Reciprocity is the important thing. Not manners. Reciprocity is the instinct. Social manners grow out of that instinct. That is why they are different in different cultures. They are situationally arbitrary. With different opportunities for deception on the internet than in face to face conversation, it should be not be unexpected to see different responses to deception. That is just evolution in action.

          The greatest deception is to say that conflict is necessarily bad here in the unreal world because it violates separately evolved rules of etiquette in the real world. It really makes no sense. That incorrect application of manners effectively silences any useful debate. It just ties our hands and allows deception to rule.

          I think people are *WAY* overreacting. I’m pretty sure it will all sort itself out quite naturally. I think it was kind of starting to.

          I certainly did not come here to cause any disruption, nor do I enjoy it that much, except for the occasional humor and insights into human nature it provides. I came here to share insights with intelligent people. I want this to be a place for serious discussion.

          I hope you will take what I have said here into consideration.

          It is your blog, Ron. You are free to run it as you choose and I will respect any decision you make about how to run it.

          —Loren Soman (aka Futilitist)

          • No, I just don’t buy that.

            The whole purpose of debate is to make people think, not to make them furious with rage. A shouting match is not a debate, it is and admission that that you have no debating skills and must resort to name calling.

            If you can’t answer a man’s arguments, all is not lost; you can still call him vile names.
            Elbert Hubbard

            • Philip Backus says:

              Ron, I do notice that the serious researchers here seen to stay out of the fray. I also notice that they post under their own names as I do or that their names can easily be found through their website. While I don’t at all care when things go off topic ….to a point I feel that civil discourse can only be maintained by serious adults who think and then act rather than those who are easily offended by the thoughts of others who disagree and then react rather than reason and ignore when the connent was obviously meant to be inflammatory. The subjects discussed here will have life and death consequences for real people world wide over the next years and decades. As we are possibly right now attending the wake of industrial civilization I think that our attitude should be one of sober humility and rational thinking geared toward finding solutions should there even be any. Right now is truly the point in history when every man and woman needs to put away childish things and grow the fuck up as should one choose to live as well as possible through future events maturity will be the first prerequisite. Best to all, Philip

            • Futilitist says:


              “A shouting match is not a debate, it is and admission that that you have no debating skills and must resort to name calling.”

              I will show you that I do have some debating skills. Let’s explore this further in a civil debate.

              “The whole purpose of debate is to make people think, not to make them furious with rage.”

              People and them are not the same, but you run them together in your statement above.

              The people that I want to make think are the larger audience of general readers, not necessarily the people in the actual debate. I want to shine a spotlight on deceptive techniques so that they are less effective. I think people need to understand the anatomy of denial. For example:

              “Given my partly Irish ancestry I love a fight and a fuss and may take either side just to keep it going but my remarks will always be honest.”
              ~Old farmer mac

              That is a completely self contradictory statement. How can it possibly be honest to disingenuously switch sides in an argument?

              Old farmer mac and Fernando Leanme don’t care about winning over the debaters either. But their ultimate goal is different. They want to influence the readers by creating a site that is boring, confusing, and doubt raising. And they have formed a mutual support society here to accomplish this. And they have largely succeeded. Till now.

              In terms of mimetic theory, first Old farmer mac, and then Fernando began to struggle against me for control what they saw as the ‘object of desire’. Their case, the audience’s affection.

              I was totally locked with them in this mimetic struggle, but I had a different object of desire in mind: The audience’s respect. Not just for me, but for the whole site as well.

              I think the big uproar is much ado about nothing. Please don’t be fooled by it. It is just another application of a social trick. Create so much fuss, that the only thing to do is blame me for it. They attempt to make you an unwitting cat’s paw. And it’s really only simple scapegoating.

              Denial is real. It is time to face that. I am only the messenger.

              Combine the evolutionary argument, the imitation science (mimetic) argument, and the moral argument for the general welfare and continuous improvement of future debate, and I think I have made a pretty good argument.

              The only currency of reciprocity in an internet discussion is trust.

              For now, I may have to rest my body, if not yet my case.

              Discuss amongst yourselves. I think this is a pretty important moment. Everyone who cares should certainly weigh in at this time. I’ll check back later. Thanks.

              • I wrote: “The whole purpose of debate is to make people think, not to make them furious with rage.”

                You replied: People and them are not the same, but you run them together in your statement above.

                I think my point was perfectly clear. However let me rephrase it:

                The reason for debating a person is to get that person to think, not to make that person furious with rage.

                I understand your point that you are addressing a wider audience than the person you are replying to. But it should be obvious to anyone that this wider audience is not impressed when all you succeed in doing is inflaming your opponent with rage by calling him vile names or impugning his intelligence.

                • Futilitist says:


                  “But it should be obvious to anyone that this wider audience is not impressed…”

                  Really? Why should that be obvious? Do you any specific evidence of this claim?

                  So far, we have only heard from the debaters.

                  We don’t yet know the effect on the larger social sphere.

                  Are you getting more blog hits? You can check them against my arrival time here. Have they fallen or risen?

                  “…when all you succeed in doing is inflaming your opponent with rage by calling him vile names or impugning his intelligence.”

                  The possibility of the valid ad hominem cannot be discounted. And I would suggest that that is exactly what happened. Please review all of my comments here chronologically to see that I have not really been so far out of line, as characterized by some.

                  What I really ended up causing was embarrassment which I contend was largely self-inflicted, due to both OFM and Fernando being locked in mimetic struggle with me. The larger audience was treated to the two of them comedically digging themselves ever deeper in their respective holes.

                  And they discredited themselves long before I got here. I just helped expose them. You’re welcome.

                  “One of the saddest lessons of history is this: If we’ve been bamboozled long enough, we tend to reject any evidence of the bamboozle. We’re no longer interested in finding out the truth. The bamboozle has captured us. It’s simply too painful to acknowledge, even to ourselves, that we’ve been taken. Once you give a charlatan power over you, you almost never get it back.”
                  ~ Carl Sagan, The Demon-Haunted World: Science as a Candle in the Dark

                  • robert wilson says:

                    In the past I frequently posted links to peakoilbarrel at twitter and elsewhere. However I am no longer inclined to do so. The comment section has become too embarrassing.

                  • “But it should be obvious to anyone that this wider audience is not impressed…”

                    Really? Why should that be obvious? Do you any specific evidence of this claim?

                    I, for one, is not impressed when you change the entire context of the sentence by quoting only part of the sentence, leaving off the most important part. The whole sentence read:

                    “But it should be obvious to anyone that this wider audience is not impressed when all you succeed in doing is inflaming your opponent with rage by calling him vile names or impugning his intelligence.”

                    That is the very epitome of “quoting out of context”. I am a little shocked that you would pull such a cheap debating trick. A lot of people change the context by quoting only part of a paragraph, but not many people will try quoting half a sentence.

                    Please don’t try that on me again.

                    That being said, if you do have an audience that is impressed by calling people names an impugning their intelligence then that is not the type of audience I thought this blog had, and if so I might as well close it down now.

                  • I just want to make sure it’s clear I’m not engaged in a mimic struggle. I’m interested in the peak oil issue, and I find the Bakken and other information extremely useful. The climate issue is impacted by peak oil, big time. I think we are on the way to an RCP6 type scenario, without anybody lifting a finger.

                  • Futilitist says:


                    Not fair. You are completely wrong. Please read my post again. I did use the whole quote!

                    Here was the structure:

                    “But it should be obvious to anyone that this wider audience is not impressed…”

                    I then questioned whether you had any evidence for this part of the sentence.

                    Then I completed your entire quote in an absolutely proper way:

                    “…when all you succeed in doing is inflaming your opponent with rage by calling him vile names or impugning his intelligence.”

                    I then broke down this part of your quote, exploring the possibility of a valid ad hominem, etc.

                    Please review and acknowledge that this is true. I made no unfair partial quotation. I feel a little insulted by this charge.

                    I don’t think you are understanding my argument at all. Is that possible? It feels like you keep jumping to conclusions.

                    Is it possible that I have misread you?

                    Are we locked in a mimetic struggle now as well?

                    I just noticed you end with another threat. Are you making a good argument?

                  • Futilitist, the sentence cannot be divided into parts without changing the context. Once I read how you butchered it by quoting half the sentence… Then asking if I have evidence of that, I read no further.

                    Evidence of what? You were asking for evidence of an opinion that I did not express. There was no need to go further even if you did quote the rest of the sentence later. You asked for evidence of an opinion that I never held.

                    Good grief man, can’t you see that?

                  • Futilitist says:


                    The sentence contained two clauses which I chose to examine separately for clarity. Each clause can be evaluated on it’s own merits without causing any contextual problems at all. Your objection is not valid. Please look at it again. Thank you.

                    What about all the other things I brought up? You don’t address any of them, and instead insist on this highly questionable argument over my posting style.

                    What gives?
                    Here is a crude reconstruction that should be more to your liking:

                    “But it should be obvious to anyone that this wider audience is not impressed when all you succeed in doing is inflaming your opponent with rage by calling him vile names or impugning his intelligence.”

                    Really? Why should that be obvious? Do you any specific evidence of this claim?

                    So far, we have only heard from the debaters.

                    We don’t yet know the effect on the larger social sphere.

                    The possibility of the valid ad hominem cannot be discounted. And I would suggest that that is exactly what happened. Please review all of my comments here chronologically to see that I have not really been so far out of line, as characterized by some.

                    What I really ended up causing was embarrassment which I contend was largely self-inflicted, due to both OFM and Fernando being locked in mimetic struggle with me. The larger audience was treated to the two of them comedically digging themselves ever deeper in their respective holes.

                    And they discredited themselves long before I got here. I just helped expose them. You’re welcome.
                    See? It means exactly the same thing as my original post! Please address some of my other arguments now. Thank you.

                  • The sentence contained two clauses which I chose to examine separately for clarity. Each clause can be evaluated on it’s own merits without causing any contextual problems at all.

                    Are you serious? The sentence contained one thought, not two. Let me explain it once again. I wrote:

                    ” But it should be obvious to anyone that this wider audience is not impressed when all you succeed in doing is inflaming your opponent with rage by calling him vile names or impugning his intelligence.”

                    Okay, if I wrote: “People will not eat food when it smells like shit.” And then you replied:

                    Ron, you wrote: “People will not eat food.” Do you have any evidence of this? How do they live if they don’t eat? Then when I objected that by quoting only half a sentence you changed the context, you objected saying. “But I was breaking it down for clarity, I addressed the smelling like shit separately.”

                    Give me a break. You know damn well that breaking it down in such a way does not add clarity, it deliberately changes the contest of everything. The sentence cannot be broken down without completely changing the context and you know that. And I know you know that.

                    I am through with this thread.

                  • Futilitist says:


                    I just re-presented the whole post with the quote issue fixed in a style to which you are more accustomed. This clearly proved that the context never changed. Ever. The meaning of the original post and the re-edit are exactly IDENTICAL. Please take the time to compare them instead of just reasserting your objection over and over. I am literally now afraid to even make this post. But I just did. I hope you can understand why. This argument feels a bit unreal to me.

                    And now you bow out entirely, without ever having addressed any of the considerable substance of what I said.

                    Deaf ears. Lead a horse to water, etc.

                    Okay. I tried. Have it your way.

                    I am also finished with this most uncivil debate. Thank you, sir.

          • Mike says:

            I for one appreciate the insight into the manner in which you address people. I think you are correct; how uncomfortable you are making people was beginning to sort itself out. They were getting sick of it and leaving.

            Manners and grace toward others should always be “instinctual,” even on blogs, even if you do not agree with them. If it is “evolutionary” to move away from “social conventionalism” you should not worry too much about climate change, that won’t be what gets you. It will be that all people feel like you do and angry chaos will ensue as people begin hacking each other up with machetes…in the name of reciprocity.

            I definitely get the talking tough in the safety of your own home, fear, thing. In Texas that kind of face to face behavior would last about 10 seconds and then it would be lights out.

            Its definitely an emotionally charged issue, this climate stuff. I am in no denial about that.


            • Watcher says:

              A wise man once pointed out that excluding climate discussion from an oil production blog should not be all that novel a thought. Unless the relevant folks aggressively go and discuss proppant on climate blogs. I suspect that doesn’t happen.

              And like most things internet, none of this is new. Happens everywhere. The answer is always to restrict discussion to the topic, or sometimes to set up a separate area of the blog for those discussions, which usually die out fast because the folks in question are just trying to tap traffic and increase the eyeballs seeing their not really very important thoughts. When they are sequestered to an echo chamber, they soon lose interest.

              Oh, and another item. Don’t know Ron’s arrangement with his hoster, but the more pictures and videos posted, the more bytes per month get eaten and Ron doesn’t have a funding mechanism set up. This could eventually extend above his hoster’s limits. My recall is a youtube link will open a seperate tab or window and play there, but if you embed the vid and click it within the blog, the bytes are tracked by the blog host. I can be out of date on this, but that’s what used to happen. If you want to post a vid, post the link, not the embedded link.

        • Old farmer mac says:

          I have access to numerous IP addresses so no problem for me as I don’t intend to post here anymore after today or maybe this week anyway.

          I could get a dozen people to register and mention my new blog any old time which is all I want to do at this point.

          People here including some very old and bright hands are making a fundamental mistake in insisting that anybody who disagrees with them is unethical and a mouth piece for business as usual.

          They ought to know better. Saying the preponderance of the evidence indicates one thing IS one thing. Denying that there is any contrary evidence is ANOTHER thing altogether.

          There are tens of millions of bright and well educated people out there who are doubters who can be won over with an honest discussion of the OVERALL evidence but insist that they are idiots for believing there is evidence to the contrary to any position and you have lost them forever.

          I will go back and hunt up a you tube link to a Berkeley professor who went thru the whole mess with Koch brothers money and came out and said he was wrong.

          His video is specifically geared to talking to sophisticated skeptics.

          It would BEHOOVE every body here to watch it twice a day for month or until they can repeat what he has to say word for word. I have posted this link before but don’t know when and can’t locate it among my not too well organized bookmarks.

          My idea is simply to have various friends and acquaintances register here and point out what the name of my blog will be and to remark that my take on whatever you are posting on is to be found there.

          No more no less.

          I genuinely admire your work and think you should continue it while just getting rid of people who create a disturbance. That would include me of course but while I have apologized to you personally and others here often I would rather be banned that to fail to call futilista what he is.

          Keep up the good work and when I find my privileges here revoked know that I truly am a redneck conservative who believes in property rights among other quaint things and will continue to admire both you and your work with no reservations and no hard feelings.

          • Old farmer mac says:

            MOST of us realize Berkeley is not exactly a hotbed of right wing business as usual types.

            This is not the specific link I was looking for but it illustrates my point- intelligent people often JUSTIAFIABLY think there are questions still unanswered and that maybe the models are wrong.


            I will post the one I am still looking for shortly.

            What we think depends on what we know and what we know is dependent on who and where we live intellectually. There are plenty of extremely intelligent and extremely well educated (in certain fields at least) people who do not believe in collapse.

            There are numerous people in this forum who SEEM to be convinced that we are totally fucked as far as the climate is concerned NO MATTER what steps we might actually take to change our ways.

            Some of these same people ridicule Fernando for pointing out that we should at least consider doing some research on geoengineering.

            So far as I am concerned anybody who is convinced runaway change is baked in and that ecological collapse is a dead certainty is making a very bad mistake in failing to realize that if we REFUSE ( very likely to dead certain we will so refuse) to quit burning coal -OR if the tipping point leading to disaster is already past – then engaging in geoengineering research is a no brainer.

            One way we might soften the crash a little if it works and if not well then we are FUCKED ANYWAY.

            Maybe I am the idiot here but giving up is not part of the history of life that resulted in my being here at the end of one particular twig on the billion year old tree of evolution.

            • Old farmer mac says:

              Here is a link that everybody ought to watch and think about very carefully indeed.

              Whether we here as individuals are right or wrong hardly matters at all in terms of the big picture.

              What matters is whether the people in the world who control the levers of power are convinced we have grave problems.

              A few of these people are pretty stupid but a hell of a lot of them are extremely bright and predisposed to question EVERYTHING.

              Nobody is ever going to convince them they are wrong by screaming denialist at them.

              Nobody is ever going to convince the typical voter on the street we have grave problems by constantly crying wolf even though the wolf is really out there.

              The screaming doomers get tuned out.

              Anybody with a basic grasp of the way people really think simply must realize this is so.


      • Futilitist says:

        Old farmer mac,

        “Pretty soon some friend of mine or a few different ones who lurk in this forum will register and post links to a blog of my own which will be up pretty soon where I will discuss energy, adaptation, climate, agriculture and whatever else seems relevant to the big picture. Anybody who wants to read my ramblings will be able to find them easily enough.”

        I look forward to reading your new blog.

        • Old farmer mac says:

          Rest assured your comments will be deleted as fast as you post them and that I will have software – maybe not right away- to block registrations as I see fit.

        • Ronald Walter says:


          Maybe not new, but it’s there.

          Not that difficult to do.

          • Old farmer mac says:

            not active .what I have done there was to protect the handle OFM and experiment with the software.

            I will be moving the title to a hosting site that offers me more control before too long. I may or may not retain the name as such. Most likely I will. I will not let the registration expire

      • nNgass says:

        Old farmer: “…. Anybody who wants to read my ramblings will be able to …” .
        Who are these people that would have time to listen to your ramblings? Perhaps you are teaching at a university or have written papers and books that gives recognition and substantiated your knowledge and thus a reader can learn and draw value from it?

        In any event, I wish you a successful blog and watch out for those how want to highjack your site similar to the present one.

    • Synapsid says:

      Thank you, Ron.

    • notanoilman says:

      Gentlemen, please be gentlemen. Please keep comments concise, I don’t like having to TL;DR things. I see peak oil/renewables/climate change as all interlinked, I feel that eliminating climate change or renewables would be to hand a victory to the old school of BAU. Ron, please keep up the good work though there are always times when a ruler to the knuckles is required.


      PS A though, can comments be restricted in length as at Twitter?

  20. aws. says:

    For Mike… may it provide some limited solace.

    Conventional Oil Exploration & Production – A Natural Hedge?

    March 5, 2015 by Mark Nibbelink, Drilling Info, DI Blog

    One thing that hasn’t changed is the role of timing in developing—or destroying—oil patch fortunes.

    Consider that, using type curves for the Bakken and Eagle Ford from DI Analytics, an Eagle Ford well will have produced 50% of its total recoverable volume in 14 months and a Bakken well will have reached 50% depletion after 29 months.

    Which is fine, if the price environment in which that depletion occurs is consistently within your modeled price decks. But if a meaningful portion of your drilling portfolio is dedicated to drilling operations with these kinds of declines, and first production is occurring in a time of suppressed prices that historically seem to take, at minimum, a couple of years to reset, then the best image for your ROI is (see image below)

    Ponder this- depleting 50% of your producing Eagle Ford wells during $50 oil will cost you nearly $4,700,000/well. Or $7,400,000 if you’re producing the Bakken.

    So maybe now is the time to start seriously thinking about how to hedge against depletion timing risk (DTR).

    And what comes to mind is a fresh re-think on the value of conventional exploration. Perhaps modern exploration portfolios should have a greater percentage of assets dedicated to plays that deplete more slowly.

    • Mike says:

      Thank you, sir. As unconventional LTO resources worldwide currently make up less than 5% of all oil production I believe there is far too much focus on predicting the future of shale oil. In the big scheme of things, it’s not going to help us much. Arresting the average decline of existing production from conventional resources by 1%, from EOR, or more inefficient infield drilling, will far better serve our energy future. I am sure you have heard the adage, the best place to look for new oil sources are in old places that have produced before. That’s been my MO for a half century.

      Thank you again. I don’t know what the toast is about, but I think I’ll go have a piece with some coffee.


    • I don’t think conventional exploration has that much of a future unless oil prices are clearly above $80 per barrel.

      On the other hand it sure seems attractive to locate light tight oil fields which yield 300 thousand barrels per well, drill to hold the lease, and wait for oil prices to increase.

      I can see your point, a play with very steep declines has high price risk. But if one hits it at the right point in time the return on investment seems to be very attractive. The key is not to go nuts and pay too much for drilling and completion services.

      • shallow sand says:

        Fernando, the question I have, is how high does the price have to be? I know economics vary well to well, but we have really only had two months of what I would call “short checks”, yet it appears many US shale drillers are already on the edge. Plus, many of them have a decent amount of oil hedged, so one would think they should not be hurting yet.

        We have had strong oil prices from late 2009 to Thanksgiving of 2014, yet two months of bad prices have them in a bind?

        I have always felt our production was among the most vulnerable to a price shock. We are high cost. That shale is apparently more vulnerable should be a concern to anyone looking to invest in it.

        I think my 100/1 comparison to our 100+ year old field still holds, at least no one has shot it down yet, not even made an attempt.

        On another note, if US oil rigs continue to drop at 60 per week for just 7 more weeks, will be at just 500. Anyone want to take a stab at predicting where US oil rigs will be the first week in May?

        • shallow sand says:

          I also read that Citibank is still putting out the meme that wells in US will have to be shut in as storage capacity is about to top. They must be really short, or is this some reverse psychology setting up a short squeeze?

        • Shallow, I just took a wild guess and mentioned $80 per barrel steady, before we ought to consider conventional oil exploration. I haven’t seen the industry data for a few years, but I think exploration prospects sure look grim.

          If you have spare cash and partners, and want some risk, try the Wolfcamp in the gas condensate window. That ought to produce pretty good after a series of fracs (just a guess).

          • shallow sand says:

            Fernando, sorry, I was referring to what price does shale need, but re reading the post I can see how I made it confusing. I agree with you that most conventional projects in US need at least $80. There are some that do not, but the scale is small.

      • Mike says:

        Fernando, I think the ultimate number of shale wells that make 300,000 BO in their life is going to be the great exception, not the rule. BOE maybe, not BO. I don’t consider < 100% rates of return on 8 million dollar expenditures, over a 20 year estimated shale well life span, it be all that exciting myself. Its a track home manufacturing business model, a DR Horton kind of thing, that the big boys can knock themselves out on if they want. Just pay the money back.

        I like 300% rates of return on 1/10th the CAPEX expenditure myself. And we better all get on our knees and pray that conventional resources throughout the world have a future, at any oil price. Shale oil is not going to save us.


        • Mike, I thought the Bakken and Eagle Ford wells were headed for 300,000? In any case, it doesn’t really matter. The soft spot in the evaluation is water production and the way the economic limit evolves….the OPEX for a 12 year old Bakken well is a key parameter. And I don’t use a contant OPEX dollar per barrel. I use a fixed plus variable concept.

          Regarding your rather expensive taste, I’ve never worked for anybody who came close to such lofty returns. In my world, we move beacoup billions and are incredibly happy with 10 to 15 % FULLY RISKED return. I would argue that if you have the nose then you ought to drop the return hurdle way down, to 20 %. Just make sure your risks are covered and you got a lot of trials.

          • Mike says:

            Mr. Leanme, I assume you mean 15% ARR? I enjoy your opinions about matters but in my case I am not always looking for advise. I have probably, most certainly, been in the oil business longer than you have. I don’t have expensive tastes. I spend my own money and must do so wisely. I can’t get fired, or retire; I fail, I don’t eat and my dog runs away.

            Most shale wells I have studied and read about thru the SPE, for instance, will struggle to pay back drilling and completion costs x 2, from birth to death, including variable operating expenses associated with increase WOR, etc. That, in my neck of the woods, equates to a <100% total IRR, or 1:1 ROI. A shale company has a funky way of speaking Plutoism about rates of return, excluding leasehold costs, for instance, and debt service, corporate overhead allocations and reducing their CAPEX accounting to after tax tangible costs only. I am just dumb 'ol country boy that likes to use real dollars. I make drilling decisions based on minimum projections of 300% IRR over the life of the well, or 3:1 ROI. I operate a number of wells, older wells, that are nearing 750% IRR and still making 12% ARR, even at 50 dollar oil.

            That does not make me smarter than anybody, only smart enough to stay out the shale business. And smart enough to know that arresting decline rates from conventional resources as much as possible will better serve us in the future than 5 Bakkens, 4 Eagle Fords, and 349 imaginary Monterrey's. And throw the great Cline Shale in there as well, or as Jeff Brown calls it, the De-Cline.


            • Mike: I think we got a terminology problem. I was taught to discount cash flow using the e^-rt formula. The r was the discount rate. T was time in years.

              The internal rate of return was the rate at which the sum of all cash flows was zero. The present value was set using a fixed company value, over the years this changed, but pv10 seemed to prevail.

              If you tell me you are used to 100 % internal rate of return it tells me you must have very very good investment opportunities. Or we just use different terms. But if indeed you have a portfolio with 100 % IRR projects you are sitting on an emerald mine.

              Regarding the light tight oil wells, the spreadsheet I put together shows very healthy pv10 if the wells are completed when prices start on the way up. A company with drilled but not completed wells can wait three years, frac them, hook them up, and do well. The hyperbolic decline brings forward the cash flow, it’s barely discounted, so it pays.

              You see, I learned this game drilling and completing wells with hyperbolic declines in the 1970’s. We pushed the completion as hard as possible because the average well had a first day initial rate ~ 180 bopd, with the rate at the end of the first year down to 60 bopd. We drilled 50 wells a year and tried to do some extra water flooding, and the operation made about 7 % rate of return. But we kept 700 men and women employed. So the company just left us work with this play, and we recovered hundreds of millions of barrels over the years. I suspect this Bakken play is similar. They just have to learn to keep costs down.

  21. aws. says:

    Derailed BNSF Train Still Burning as Second Crash Catches Fire

    (Bloomberg) — A Canadian National Railway Co. train carrying crude oil derailed and caught fire in northern Ontario, while a BNSF Railway Co. train carrying Bakken oil for Mercuria Energy Group Ltd. continued to burn in rural Illinois two days after it jumped the tracks.

    Canadian National said on its website that the train derailed around 2:46 a.m. Saturday near Gogama, about 373 miles (600 kilometers) north of Toronto, with no injuries reported. Meanwhile, five of the BNSF train’s 105 cars remained on fire after Thursday’s derailment.

  22. aws. says:

    Fake Snow, Real Money: The High-Tech Fight to Save California Skiing

    by Evelyn Spence, Bloomberg, March 6, 2015

    To varying degrees, this is a problem for the global ski industry. Among the 19 cities that have hosted the winter Olympics—including Calgary, Chamonix, Nagano, and Oslo—the average February temperature is up to 46 degrees, up from 32 in the 1920s. These days, everyone is making snow. And among them, Heavenly’s system is known to be one of the most expensive and sophisticated. If they can’t save their season, no one can.

    Snowmaking equipment has become more energy efficient, but in the long term, new technology can only do so much. If winters continue to get warmer, as they’re predicted to do, resorts will need more and more guns and will blow them more and more often. “At 20 degrees, it’s easy and takes relatively low power and relatively little water,” says Jordy Hendrikx, director of Montana State University’s Snow and Avalanche Laboratory. “At 32, it takes huge amounts of both to make low-quality snow, and there isn’t a lot of it.” The power required for snowmaking exacerbates climate change and causes temperatures to rise, which in turn requires more snowmaking.

    Energy and Climate Change… Climate Change and Energy. You can’t talk about one without understanding the other.

    • nNgass says:

      “The power required for snowmaking exacerbates climate change…” This comment is very upsetting to me. What has this to do at the site. Haven’t we discussed above that such comments are not helpful to understand the issues with oil? Scientifically, what is the contribution of snow-making equipment to climate change in the world? Perhaps 0.00000000001%. These type of non-issues clogs the site and should be banned.

      • Aws. says:


        I came here from TOD, where the raison d’être was to have “discussions about energy and our future”. I have held to that, and I belive that was Ron’s intent in establishing this site post-TOD.

        You might want to step back and look at the passage I highlighted and recognize the positive feedback loop that it implies of increasing energy demand leading to increasing emissions, leading to increasing energy demand… repeat.

        The excerpt is a good example of where we’re headed with respect to “energy and our future”. There will be many industries desperately trying to adapt, who will in futility throw lots of energy at the problem until they are ultimately overwhelmed.

        Sure, it is one anecdote, but the collection of anecdotes here in sum end up filling out a model of where things are heading.

        If this site wants to be only about oil supply, as you see to suggest it should be, then it will be of little benefit to the understanding of “energy and our future”.

        • Futilitist says:

          Hi Aws..

          I agree.

          There is no way to separate the climate change debate from the peak oil debate. Or the EV debate. Or the solar debate. Or the economic collapse debate.

          The topics of alternatives, climate change, and peak oil all fall within the larger, more holistic debate on collapse, which is really not discussed here very much. I think there is a reason they are always separated. Denial. It is much easier and more comfortable to confront each of our problems separately, while scrupulously ignoring the big picture of where all this leads:


          The great collective unconscious still has it’s head well buried in the sand.

  23. Caelan MacIntyre says:

    “Climate change denial is a… dismissal of the scientific consensus on the extent of global warming, its significance, and its connection to human behavior, especially for commercial or ideological reasons. Typically, these attempts take the rhetorical form of legitimate scientific debate, while not adhering to the actual principles of that debate. [It] …has been associated with the fossil fuels lobby, the Koch brothers, industry advocates and free market think tanks, often in the United States…

    Although there is a scientific consensus that humans are warming the climate system, the politics of global warming combined with some of the debate in popular media has slowed global efforts at preventing future global warming as well as preparing for warming ‘in the pipeline’ due to past emissions

    conservative billionaires secretly donated nearly $120 million… to more than 100 organizations seeking to cast doubt on the science behind climate change…” ~ Wikipedia

    There seems to be an unusual influx of new monikers out of the woodwork in this article’s threads… I wonder where they’re from… ‘u^

    • Futilitist says:

      Self Deception and Denial – Human Behavior and Climate Change

      Humans are great at denial. It keeps us going in times of war and crisis. It gives us hope even when reality points to a disastrous outcome. Think about the passengers and crew on the deck of the Titanic as it started to sink. Were they in denial? Absolutely! Because it is genetic and there is plenty of evidence to support this.

      If you don’t believe me read Denial: Self-Deception, False Beliefs and the Origins of the Human Mind. The authors, Ajit Varki and Danny Brower, hypothesize that denial comes out of awareness of our mortality and our natural aversion to believing in it. This characteristic has often been thought to be unique to humans, but it appears that some species of birds, elephants, dolphins and probably bonobo chimpanzees also display self awareness. It explains why cigarette smokers continue to smoke in denial of the link to cancer. And it explains religion which serves as an instrument of self deception as we deal with life and the certainty of our inevitable death.

      So we go on and on in this state of denial even in the face of overwhelming evidence such as we have for climate change, clinging to the 5% uncertainty in the recent IPCC Report, just like smokers. Our leaders are as good at denial as we regular citizens. So they dither or pay lip service to the issue of climate change and the impact it will have on every aspect of human existence, from where we live, to the air we will breathe, and to the food we will eat.

  24. billd says:

    Gee RON..this is the best place to learn about oil and the future of all fossil fuels…
    I read the Oil Drum for years…it went threw some tuff patches allso …but kept on going

    ALL of the other PO sites seem to have the same kind of prob. Almost like a attack of the same type of persons or person doing them , cant let them win !

    Dont let afew rune it . I dont care if you have to clamp down …it wont chase away the True PO guy or girl.
    But if you go ..THANKS BUDDY…i learned alot

  25. Futilitist says:

    “Science is a way to call the bluff of those who only pretend to knowledge. It is a bulwark against mysticism, against superstition, against religion misapplied to where it has no business being.”

    “One of the reasons for its success is that science has a built-in, error-correcting machinery at its very heart. Some may consider this an overbroad characterization, but to me every time we exercise self-criticism, every time we test our ideas against the outside world, we are doing science. When we are self-indulgent and uncritical, when we confuse hopes and facts, we slide into pseudoscience and superstition.”

    “I have a foreboding of an America in my children’s or grandchildren’s time — when the United States is a service and information economy; when nearly all the manufacturing industries have slipped away to other countries; when awesome technological powers are in the hands of a very few, and no one representing the public interest can even grasp the issues; when the people have lost the ability to set their own agendas or knowledgeably question those in authority; when, clutching our crystals and nervously consulting our horoscopes, our critical faculties in decline, unable to distinguish between what feels good and what’s true, we slide, almost without noticing, back into superstition and darkness…

    The dumbing down of American is most evident in the slow decay of substantive content in the enormously influential media, the 30 second sound bites (now down to 10 seconds or less), lowest common denominator programming, credulous presentations on pseudoscience and superstition, but especially a kind of celebration of ignorance”

    “If we can’t think for ourselves, if we’re unwilling to question authority, then we’re just putty in the hands of those in power. But if the citizens are educated and form their own opinions, then those in power work for us. In every country, we should be teaching our children the scientific method and the reasons for a Bill of Rights. With it comes a certain decency, humility and community spirit. In the demon-haunted world that we inhabit by virtue of being human, this may be all that stands between us and the enveloping darkness.”

    “We’ve arranged a global civilization in which most crucial elements profoundly depend on science and technology. We have also arranged things so that almost no one understands science and technology. This is a prescription for disaster. We might get away with it for a while, but sooner or later this combustible mixture of ignorance and power is going to blow up in our faces.”

    “I worry that, especially as the Millennium edges nearer, pseudoscience and superstition will seem year by year more tempting, the siren song of unreason more sonorous and attractive. Where have we heard it before? Whenever our ethnic or national prejudices are aroused, in times of scarcity, during challenges to national self-esteem or nerve, when we agonize about our diminished cosmic place and purpose, or when fanaticism is bubbling up around us – then, habits of thought familiar from ages past reach for the controls.

    The candle flame gutters. Its little pool of light trembles. Darkness gathers. The demons begin to stir.”

    “If we long to believe that the stars rise and set for us, that we are the reason there is a Universe, does science do us a disservice in deflating our conceits?”

    “Avoidable human misery is more often caused not so much by stupidity as by ignorance, particularly our ignorance about ourselves.”

    “For me, it is far better to grasp the Universe as it really is than to persist in delusion, however satisfying and reassuring.”
    ~ Carl Sagan, The Demon-Haunted World: Science as a Candle in the Dark

    • nNgass says:

      Futilitist, this is an excellent well-phrased comment I fully agree with. The problem you address is most evident in the US where millions believe that the earth was created 5800 years ago among other things unimaginable for educated people..

  26. Ronald Walter says:

    World Rig Counts

    You have to count how many rigs are operating worldwide to be able to know how many. Can’t really guess.

    How many oil rigs are drilling in all locations worldwide?

    I don’t know, but I’ll hazard a guess, maybe 100, something like that?

    No, the actual count was at 3,642 in August of 2014, with the bulk of them operating in North America. However, since that time there has been a collapse in the price of oil and the rig count has dropped precipitously. The count in North America stands at 1492 as of March 6, 2015, in August the total rig count was at 2303 and the rest of the world had a number of 1339 for the total of 3642 in August of 2014.

    That seems too high, how can there possibly be that many rigs drilling for oil?

    I’ll believe 100 at the most and that’s my guess, can’t possibly be more than 100 rigs working, who can do all of that work?

    Nobody, that’s who.

    Even if you show me the proof, the pictures with circles and arrows, I’ll never believe it.

    Well, suit yourself, it’s true.

    No, it’s not, it’s not true and that’s because I said so! Harumph!

    OK, don’t believe me then, I’ll believe you and four lying eyes can tell the truth better than two lying eyes, so 100 it is, no more, no less, just what you and I believe.

    Revise the numbers to total 100 and stop counting oil rigs that are drilling for oil!

    That’s an order!

    And stop calling me all of your family names!

  27. Allan H says:

    It appears that the US loss of rigs is comparable to the world loss of rigs for the Oct 14 to current date. So is this just a US phenomenon due to the large reliance on fracking source rock and it’s sensitivity to price.

  28. Watcher says:

    Yo, Mike, you hearing anything down there in Texas about that refinery yield chart Jeffrey posts showing kerosene and diesel falling off sharply above API 40 to 42? Repeating the context, there was a blurb noting that the vast majority of consumption increase is in diesel (read China/India, they are drinking diesel as new consumption).

    • Jeffrey J. Brown says:

      Interesting chart showing the EIA’s forecast for US Crude + Condensate production by type, note their forecast for a very modest increase in 40 API and lower crude oil production (light blue and lower liquids).

      (I haven’t able to find an updated chart).

      • Jeffrey, a very useful chart. This information keeps telling me the us government really needs to allow exports. Maybe Obama needs to learn a bit about refining technology….

  29. Bryan says:

    Ron, Your Blog is really great. Don’t stop doing what you do. PEOPLE this is a place where you can share information, knowledge, and ideas. It’s not a contest to see who is the smartest persons in the room in order to get self validations of ones own personal views. Anyone who thinks they know everything about everything and is not open to the possibility that things can be or can turn out to be slightly different than they currently see it are both naive and are clearly not the smartest person in the room. Is peak oil real? YES! Is climate change real? YES! Do both of these subjects have major implications of what the future holds? YES! Is it all going to play out exactly like anyone on here thinks or on the exact time scale anyone here thinks? NO! Why bring your ego to a conversation then get ugly when it gets bruised. If one can’t be civil during a simple conversation on a blog. How will one react to the world once we’re on the other side of peak oil and there is oil scarcity?

    • My reaction would be to buy some land in the Caribbean and start planting sugar cane and making ethanol. It ought to fetch a very attractive price.

      • Watcher says:

        See Belize. A lot of people did that. The price fell and now they’re hurting.

      • Bryan’s question was about our reaction AFTER peak oil. We aren’t there just yet. But I may send my son down to Belize and buy into a sugar plantation now, when prices are down, and become the King of Ethanol. Meanwhile I’ll export sugar covered donuts.

        • Fred Magyar says:

          My cousins’ have a farm in Botucatu, Brazil, the same city where they manufacture the Embraer EMB 202 Ipanema ethanol powered crop duster. Let me know if you want one or two…

  30. Old farmer mac says:

    I BEG ANYBODY with an iq over eighty five or so to watch this video and take it to heart.

    See some of you on the flip side some other place folks.

    Hardly anybody seems to have enough brains to listen to anything contrary to what they THINK they know when it comes to communicating the truth to skeptics etc.

    If a doomer with a sense of humor latches onto the previous sentence as evidence I am totally mistaken about collapse all I would be able to say is that I stuck my chin out for it lol.

    So far I am just about alone in defending Fernando from accusations of being an idiot and a shill for bau.

    If I am unable to convince anybody to think twice about such a mistake in ridiculing a capable and competent engineer I am wasting my time here.

    If only one or two regulars feel strongly enough about futilista implying I am a nazi or a fascist and a liar to condemn him then I don’t WANT to be here.

    • Mac, keep your cool. I don’t think the lack of civility adds quality, therefore the best way to handle it is to ignore it. I find the blog extremely useful, and I use the ideas I pick up here to help me invest a little wiser. And I don’t think Ron should shut down the global warming posts. But I sure wish we could focus on the links. Evidently most of us are convinced the world is running out of oil, and the world is getting warmer, and some of it is caused by humanity. The question in my mind has been which is more critical? I think running out of oil is a much more serious problem. Which is why I think we do need to get serious about geoengineering. It all sort of ties together.

      • Dennis Coyne says:

        Hi Fernando,

        I find your posts on the oil business very useful. I don’t agree with your views on climate change, but I do agree that both peak oil (peak fossil fuels actually) and climate change are serious problems, the solution to both problems is to transition substitute forms of energy such as solar, wind, nuclear, and geothermal.

        You are correct in pointing out that such a transition with have many technical difficulties, my opinion is that this is a better approach than geoengineering.
        I think the risk of serious unintended consequences is too great.

        We both agree that the current understanding of the climate system is far from perfect, under those circumstances, does geoengineering really seem wise?

        Also you assume climate sensitivity is low(1.2 C), others assume it is very high (4.5C),
        There is about an equal probability that either estimate could be correct, the best guess is 3C, based on current science.

        • Caelan MacIntyre says:

          Dennis and Fernando;

          Geoengineering– unless one is talking about the kind that plants/encourages lots of native flora and fauna really fast– and nuclear power, which relies on vast quantities of fossil fuel use over its entire lifecycle, will likely exacerbate the problems we already have and even increase the rate and likelihood of our demise.

          Neither are required, nor ethical, and even seem as forms of acts of war on populations that offer no real consent.

          Dennis, you do not ethically steal people’s labor for taxes and land and environment for your dangerous nukes and their wastes, and Fernando, you do not tamper similarly with people’s planet on a planetary scale without their full consent, and neither of you will ever get it, not without a system of embedded violence that your highly-questionable responses apparently rely on.

          These kinds of ostensibly-reckless, irresponsible, immoral, insolent, coercive/violence-embedded/advocating attitudes and actions are precisely why we are in increasing danger globally.

          It’s my planet too, I withhold my permission & support for both of your schemes as currently interpreted, and I can see why we have the likes of the Deep Green Resistance movement which may well turn out to be your environmental equivalent of ISIS. Should that transpire, ‘you’ brought it upon yourselves. Fair warning.

        • Dennis, I’m proposing geoengineering RESEARCH. I took a chemical oceanography course in college, and I had to work with water chemistry simulators at one time (we get these really damaging scales in wells due to water chemistry and changes in temperature, pressure). I can visualize a series of really well instrumented experiments we really need to perform. The budget would have to be about $500 million over 10 years.

          My focus originates from the following logic:1. we know we will be hitting peak oil soon. 2. When we do we will see oil prices increase steeply. 3. Renewables lack the legs to replace oil. They aren’t ready for prime time. 4. We have sufficient coal to justify building some coal to liquids plants. But the CO2 emissions are a concern. This makes me lean towards supporting geoengineering.

          I’m not “amateuring” this sequence, I spent years studying the subject, and I think we just may have an escape hatch. But it requires subsequent success finding a fusion engine and getting effective population control.

          Things are looking grim, but I’m not willing to give up.

    • shallow sand says:

      OFM. I for one would not want to see you go. I will say that when people attack others here personally, it is a downer, but I just try to ignore it. If I’m attacked, I just try to ignore it.

      It is very difficult to find a place to get information and opinions about oil and related topics. But even thought everyone uses oil, many find it evil. I think it would be difficult to have a site that concerns oil that is not peppered with some of the stuff on here.

    • Doug Leighton says:

      Hi Mac,

      Hang in there (here) man, you`re one of us!

      Cheers, Doug

      PS: I enjoyed Dr. Richard Muller`s video.

      • Dennis Coyne says:

        Hi Old Farmer Mac,

        I am not sure if I have said this publicly here (I have e-mailed Ron about it), but I find Futilitist’s attacks on you quite offensive. I disagree with many of Fernando’s views on climate change, but don’t resort to the name calling by Futilitist. I just try to ignore him, Fernando seems to have done the same. I would prefer for you to stay as well, you will be missed.

        You probably don’t need or want advice from me, but comments that go beyond 10 or 15 lines may not be read in full by most people. Though I am often not concise.

    • Fuser says:

      OFM Buddy … don’t get worked up about posters. I’ve been reading your posts for years and have learned a great deal from most of them. I think you’re taking some too personally. For fun, I’d like to share my opinion on a few of them … 🙂 good fun

      Ron – Learned the most from him -more than anyone in my life. Would love it if he taught a college course. Recommending ‘Overshoot’ had a huge impact on my thinking. (Watching The Postman was the worst idea ever) 🙂

      OFM – Read your stuff for years now – Always smart -I think you try to come across Independent and do a fair job … but you are a reluctant Republican. ..and a good one.

      Web Hubble – Sooo friggin smart – I wish I understood your stuff better.

      Futilitist – Smart guy – I get it.

      Fernando – Weird obsession with Communism and Socialism. You remind me of my grandpa who thought communism was this evil satanic threat. He died in 1977.

      John B – Absolutely insane. Nothing changes his mind about easy transition to a new world order of clean cheap energy.

      ..all good fun folks

      • Fuser, I fled a communist dictatorship when I was 14 years old. I left alone because my parents couldn’t get away, and landed in a UN refugee camp. Eventually I graduated from college, got a job, and was transferred to Russia, and I got to see the horrible things the communists had done. I won’t give a full run down, but later I landed in Venezuela and I got to see the horrible things the communists are doing there. To you it may be weird, I see it as a natural reaction to being exposed to the evil things they do in real life. Some of you think of this as a political game and theories. I see tortured and murdered people, theft, and horrible abuses.

        I wouldn’t bring the subject up, but I see an effort by communists to use discontinuities (peak oil, global warming) as Trojan Horses to destroy societies as we know them and install themselves in power. The Amy Goodman book and all the verbiage we can read make it plain these issues have been put in the political arena. And if communists want to use them to take humanity down their dark path I must point out the ugly reality they carry in their closet.

        • Fred Magyar says:

          I got to see the horrible things the communists had done.

          I’ve been around the world also and have lived outside of the USA for long periods, even under a military dictatorship. I think you need a serious reality check. I have personally seen the extreme poverty and environmental disasters caused by free market capitalism as well. Which is why I get so tired of your black and white or is it red and green world view. Get over it, communism, capitalism or any other ISM are all different sides of the same coin, namely power to the few. Disclaimer: I’m more of a non ideological anarchist… but before you shoot from the hip to criticize me on that, please research what that really means. Hint, it basically means being a responsible adult. Thank you!

          • Fred, to me it’s a very simple issue. I don’t see a single right wing dictatorship emerging in Latin America. I do see two cancerous growths run by communists in Cuba and Venezuela. I see other communists abusing people in places like North Korea. and I see a lot of communism being peddled under the guise of fighting climate warming. If the radical left wasn’t so morally flexible and willing to countenance gross human rights abuses they might have a teensy bit of my sympathy…

            • Fred Magyar says:

              I don’t see a single right wing dictatorship emerging in Latin America.

              I have seen a few in the past and lived under one and once the full consequences of peak oil hit, I could easily imagine that happening again. But that isn’t my point.

              I do see two cancerous growths run by communists in Cuba and Venezuela.

              Maybe Venezuela is going to become a communist state maybe not. As for Cuba they are looking more and more capitalist every day and frankly I’m not sure that is such a good thing either.

              I see other communists abusing people in places like North Korea.

              Yeah, they may be the last true communist state on the planet not particularly important in the big picture.

              and I see a lot of communism being peddled under the guise of fighting climate warming.

              Sorry! Your watermelon ideology doesn’t hold water IMHO and I’m absolutely not interested in extending the AGW debate on this blog any longer.

              Fred out!

  31. John B says:

    Hi Mac,

    I think it’s best to look at both sides of an issue, and make up your own mind.

    The skeptic’s side:

    • John B says:

      Forgot to include this presentation:

    • BC says:

      I invite readers to examine Niroma (deceased) and de Jager’s work on the convergence of the Gleissberg (Jovian oribital cycle 0f ~88 years) and Suess/de Vries (~210-220 years) cycles and the implication for a period of the average number of sunspots being at the lowest since the early 19th century with mid-latitude global cooling (anticipated since the mid- to late 1990s) during the next 2-3 solar cycles 20-22 to 30-33 years, which could coincide with mega-drought conditions that might have been the cause of the collapse of the Anasazi and Maya civilizations.

      If so, multi-decade-long global cooling will coincide with Peak Oil, population overshoot, depletion of water, arable land, forests, fisheries, acidification of the ocean, “Limits to Growth”, unprecedented debt to wages and GDP, peak demographic drag effects, fiscal constraints, and extreme wealth and income concentration to the top 0.1-1% to 10%.

      The last time the Gleissburg and Suess/de Vries cycles converged with three solar cycles of low sunspot minima/maxima was prior to, and during, the French and American Revolutions prior to the Napoleonic war era, during the “Little Ice Age”, when the human ape population was 1 billion vs. 7 billion today, and the number of liquid fossil fuel-based “energy slaves” per capita was negligible compared to what we require today to sustain the modern, high-tech, high-entropy, liquid fossil fuel-based economy, society, and civilization today.

      • sunnnv says:

        Thank you for a civil invitation.

        I found a blurb by Niroma – he predicted ocean cooling after 2003, atmospheric from 2006.
        Well, that’s clearly wrong. And his assertion that CO2 has no part in this play is quite ludicrous to me – I have a good background in spectroscopy, lasers, etc.

        I did read this by C. De Jager and S.Duhau.

        From the abstract:
        “…About 40% of the gradual increase of terrestrial surface temperature is correlated with solar variability….”

        So, we have less warming, but still warming.
        n.b. It was as recent as 1885 – 130 years ago – that coal passed wood as an energy source in the U.S. During the revolutions, etc., there was essentially no fossil fuel use.
        see particularly comments 1 and 30.

        While a little less warming will certainly be a relief,
        (see the link posted by aws. about Fake Snow…),
        I wonder if people will be so busy trying to grind out a living after Peak Oil/Peak Energy Slaves is apparent (to all but the most dogmatic), that climate change will still seem nebulous to most, e.g. 30 year moving average of temps/rainfall -vs- food needs to be on the table *now*.

        I vote for further discussion of climate to move to,
        they now have a monthly open thread,

        I would like some answers to my questions about the fracklog (above).

        • notanoilman says:

          Maybe a move to an open thread here with a ban on posting in oil threads.


  32. Philip Backus says:

    Ron, Just in case you decide to pull your string and shut down I want to thank both you and all the posters and connenters here for another part of my education. It would seen that climate change is a far more emotionally charged subject than peak oil. This is why I personally do not connent on this subject though I think it both important and germane to energy issues. I can think of scores of ways that the end of the age of oil plays out but all my ruminations on this subject will likely cone to nothing as I will probably be surprised by the unforeseen….just as the next guy. Hopefully any damage can be repaired and your blog will remain the place to go for good quality information. Again I thank you. Philip

  33. Rune Likvern says:

    The chart below shows how the LTO extraction profile [lh scale] for the generic company develops together with monthly added number of wells [rh scale].

    FOR ALL!

    This presentation is split in two, the first part shows the LTO extraction profile used for the model runs of the financial dynamics (leverage) together with producing wells added by month.
    The second part the results from the model runs about how some leverage ratios (financial dynamics) develops with time.

    For the model and for all the simulations of the leverage dynamics no producing wells were added after December 2014.
    The key to understand is the geometry of how LTO extraction develops as no more wells are added for whatever reasons.
    What follows are the results from some simplistic model runs of how leverage with debt (here defined as the ratio of debt to annualized net cash flow) develops if the oil price remains at $50/Bbl (WTI) for a generic LTO company operating in Bakken.

    • shallow sand says:

      Rune. What do you use for LOE and G & A?

      • Rune Likvern says:

        I (still) use an OPEX of $4/bbl, which also should include G&A.
        And yes I have very good reason to believe that is in the low end, especially as water cut grows and handling of produced water adds to OPEX.

        If there is good reliable data on OPEX (per bbl), it takes close to no time to plug those numbers into the model….and everything gets updated at the speed of the CPU.

        • shallow sand says:

          That is a low figure, as you say. How about plugging in what whiting reported in their 2014 10K? OPEX $11.89 per barrel of oil equivalent. G&A $4.24 per barrel of oil equivalent.

          Admit that above includes OPEX for North Ward Estes CO2 flood, but that is about 9,500 barrels of oil equivalent out about 133,000 company wide, so should not skew much.

          Maybe plugging those figures into your model will show us whether their proposed sale is distress sale?

          • Rune Likvern says:

            Shallow thanks.
            My OPEX number is from back in 2012, and awhile back a colleague and myself went through the numbers and there are several revisions needed,
            In the simulation royalties used are 15%……… 17-18% seems more on target.
            The OPEX number ($4/Bbl) is oil only, including nat gas (about 1 MCf/Bbl) adds about $1/Bbl.
            Transport $12/Bbl.
            I have split oil and nat gas.
            In the North Sea (Norwegian sector) OPEX is around $7/BOE, and these are big fields (even if many of them are heavily depleted).
            The netted back number should be somewhere between $3 – $6/Bbl lower. (OPEX around $5/Bbl higher)
            I would like to see OPEX numbers from several companies and estimate a weighted average.

            And yes I ran the model with the numbers proposed by you and leverage goes up, ref chart.

            Rant on
            Oh, if it is a distress sale I know about an oilman in Texas who would be interested if he could get the wells with acreage for free.
            According to him it is not the wells he would be interested in, but the acreage which he intends to use for……goat pasture.
            Rant off

          • Rune, I would use a fixed plus variable cost for OPEX. To set it you would need an operator to discuss the fixed costs for a well when it produces at low rates.

            When I set this up for real I set up multiple fixed rates, one for total company G&A, another for field or division G&A, another for Well incurred G&A, and then I put in the well direct costs. I make a separate line for well workover and repair. I realize this is way too complex for a broad analysis, but the fixed plus variable concept really ought to be used. It impacts a well economic limit and can have a really big influence on reserves in low decline rate and high OPEX cases (for example in fields undergoing CO2 wag).

            • Rune Likvern says:

              Fernando, thanks.
              EOG (all operations) in their 10-K presents L&O at $6.53/BOE and G&A at $1.85/BOE for 2014.
              The thing is to break out area specific costs.
              Nat gas in general has higher specific costs.
              These are big companies which has (or should have) the benefit of scale.
              Fixed plus variable costs would be preferred, this as it better would include the effects from declining flows.
              Lots of LTO wells gets shut in for some reason, likely issues that needs some kind of intervention, and interventions costs money.
              From the numbers I have seen total OPEX of $7-9/Bbl (incl G&A) should bring us close.

              I think that anyhow we cut it we will still be left with some uncertainties, question is how far off are we at the end of the day?

              • Rune, it depends on your objective. let me give you a bit of background: in the past I coordinated a technical team looking into large purchases. I also consulted for companies looking at properties, had to audit operations, and in some cases we were hired to give advise to management on how to cut costs.

                When we did this type of work we found that properties with long tails had to be looked at by segregating costs and trying to pin down the real cost to operate and produce a well. These properties and wells can see huge reserve increases if one changes asumptions. A fixed $ per barrel cost tends to mask real well costs, extends well life, and leads to inflated reserves.

                In some cases we can look at a property and identify a real cut in OPEX (say by closing down a treating plant and routing fluids to a different plant). In some cases we can extend life and gain reserves by drilling and implementing EOR. But in all these cases we found that segregated and benchmarked OPEX was really important.

                OPEX becomes less important for greenfield if the decline rate at the tail is say over 15 % per year. But for these tight oils the tail could be less that 10 % decline.

  34. Rune Likvern says:

    The take away is that companies that are highly leveraged will find that with a low oil price a growing portion of its net cash flow goes towards servicing its debts (the cash flow declines faster than its debts) and has little room to finance additional wells from the net cash flow.
    A leverage of 3 (in December 2014!!!!) seems doable, but it is recommended to study companies balance sheets and financial reports in detail with regard to hedging, cash and cash equivalents, future commitments (drilling contracts, transport costs etc.).

    The model and its assumptions
    Oil price (WTI) at $50/Bbl during the simulation period (net cash flow includes sales of natural gas).
    The weighted interest of debt at 6% p.a..
    No hedging.
    Debt is paid down as fast the net cash flow allows (in the real world money would be put aside to retire the debt as it comes due, for model purposes this is assumed as a continuous process).
    No producing wells added after December 2014.

    What if a highly leveraged company continued to add producing wells?
    The effect of this is dependent on the quality (productivity) of the wells added with well costs at $8.5M and oil price (WTI) at $50/Bbl, wells that yield about 110 kb during the first year would be helpful (since these are likely profitable and yields a return).

    A LTO company with a very high leverage (above 4 as of December 2014) will find it difficult to continue to add producing wells funded from operating net cash flows. Adding more debt has the effect that it increases the leverage for such a company.
    The LTO miracle happened due to high oil prices and massive use of debt (leverage)!
    Leverage (with low interest) works fine as long expected financial growth is met, but it turns nasty in a low price environment.

    The chart (below?) shows how the leverage of the generic LTO company develops with time, given the presented assumptions for the model runs. Actual oil price as of February 2015.

    • Watcher says:

      Can you clarify some text:

      Debt is paid down as fast the net cash flow allows (in the real world money would be put aside to retire the debt as it comes due, for model purposes this is assumed as a continuous process).

      This would seem to say debt is in decline for all your scenarios. Unless misunderstood. Suggests that as long as there is cash flow (revenue – expenses) then there is available cash to reduce debt.

      That’s fine if “expenses” include the costs of new wells completed, ie, capex. Otherwise, debt is added per well completed minus the rate of retirement you’re presenting.

      The generic concept looks legit in that yes, the more indebtedness a company carries, the greater the burden faced. But digging into the numbers looks delicate, and of course even more so absent covenant details.

      • Rune Likvern says:

        Watcher said;
        ”This would seem to say debt is in decline for all your scenarios. Unless misunderstood. Suggests that as long as there is cash flow (revenue – expenses) then there is available cash to reduce debt.”

        Think about it as the company continually puts cash available after all operational and financial expenses to a separate account used to retire debt as it comes due.
        For a highly leveraged company and of course depending on several factors, they could find themselves in a situation where debt actually increased from some point in time. (The Red Queen of the financial dynamics.)

        I did not state so explicitly, but one of the assumptions for the model runs was that no well manufacturing (not even drilling for inventory) takes place post December 2014 for the company.
        In the real world we know things works differently, drilling may be continued (from available cash) either due to contractual obligations that are costly to get out of and/or there is hope the downturn in the oil price is transitory so things will improve sometime down the line.

        Did that help clarify anything?

        • Watcher says:


          “I did not state so explicitly, but one of the assumptions for the model runs was that no well manufacturing (not even drilling for inventory) takes place post December 2014 for the company.”

          That did. If you ain’t borrowing more money and paying debt down, then ya, all scenarios lead to debt decrease. You fund it with dying wells until their proceeds fall below (opex plus interest — assuming opex includes cap-and-abandon costs for no longer dying, ie, dead wells).

          Looking at the charts in that context, the debt can’t fall if they started with their leverage ratio above about 2.5.

          Jesus, who would lend these bozos money now? American Eagle had an 11% coupon and never made a single payment. There were lenders at 11%, but wow, that pool of lenders is going to dry up even offering 11%. BTW, if it’s 11% for your interest on debt, what happens to the graphs?

          • Rune Likvern says:

            For the scenario of high leverage (above 4 based upon an annualized cash flow for December 2014) and 11% interest rate the company would struggle with servicing the debts. Retiring the debt is out of reach so the company becomes dependent on the boards’ skills to renegotiate an extension of their debt.

            There are several scenarios that are possible. Adding new wells from available cash flow could slow the growth in leverage. This again has to be weighed against the success for rolling over the debt. The oil price is still the dominant parameter for LTO.

            Simulation runs through 2018 and does not include costs for plugging and abandonment.

            Drilling for inventory does not make much sense as long there is drilling rigs available (drilling one well takes about one month) and there is no way to predict the future movements of the oil price.

            Asset sales, which merely draws earnings forward in time and accelerates the future decline the cash flow. This becomes threading water, hoping for a future growth in the oil price will save the day.

            Adding lots of LTO producers while there apparently is an oversupply in the market delays the process of balancing global supply and demand and thus growth in price (it is counterproductive).

            • Watcher says:

              This is almost like running a hedge fund. You’re billing 2/20. 2% per year of assets and 20% of all profits.

              So if you’re a shale executive, you go out and throw your best sales pitch at rollover HY paper lenders and Try To Keep The Wheels Turning, because you know your bonus is only going to make you rich if you can keep operating and get higher oil price. If you actually care about your investors and lenders, you shut it down rather than lose them more money. haha who thinks such an exec will do that?

              This is bad.

              • Bryan says:

                Shale oil = sub-prime oil. And at the end of the day shale oil’s biggest problem will be liquidity. It’s not too much unlike the liquidity problem equities are facing. Every major company from Verizon to Beds Baths and Beyond have borrowed massively and used some 95% of this money for stock buybacks. Not CAPEX that would increase sells and profits down the road. At some point the ability of these companies to borrow more cash will simply stop. In order to repay the loans these companies will have to become net sellers of there own stock. They will be selling into a market with no buyers, no liquidity. Oil is different as the majority of money borrowed goes directly to CAPEX to produce more oil. But the source of the liquidity for shale oil companies are mainly HY bonds . The liquidity for both shale oil plays and equities were made possible by cheap money and low yields made by the Fed. Fed appears to be moving towards interest rate hikes which creates a whole lot of unknowns and uncertainty for investors,CEO’s,CFO’s anyone who manages money. Shale oil will be trying to sell HY bonds in a market with few buyers.

              • Watcher, it depends on the amount and quality of their undeveloped reserves.

                Let me take a wild guess. Say you have a medium size producer with 200 Bakken wells, 20000 bopd, and so much debt the PV 10 at strip prices is zero.

                But if this company has an additional 200 quality undeveloped locations it could fetch $500 million to $1 billion. The price depends on the purchaser’s internal cost of capital and expected return. A company like Total or Repsol may find such a purchase very attractive.

    • Allan H says:

      Rune, do you think that oil prices will rise significantly by year’s end?

      • Rune Likvern says:

        Short answer; NO!
        I consider (I like most have an opinion about the oil price) the oil price being subject to several factors like changes to global credit/debt, total global credit/debt levels, interest rates, supply/demand balance (including stock changes), some speculative influence (playing the forward curve) and major geopolitical events.
        I look upon the present softness of the oil price as a reflection of slower global credit/debt creation and rule changes seems to be the means by which balance sheets may be allowed some more expansion given that customers still have an appetite for more debt.
        The recent strong stock builds reflects the supply/demand balance and the supply side appears to be good for the near future (next 1-3 years), which to me suggests that the oil price will remain at present levels and possibly go lower before the supply/demand balance tightens.
        The big unknowns are how demand develops and if OPEC could at some point curtail production to support a higher price.
        The charts Ron presented in this post has in my view a powerful message, number of drilling rigs with some OPEC members is generally increasing while production (IIRC, and I am sure Ron will set me straight on this one) moves sideways. If those charts had production (2 y axis) plotted together with number of rigs…..

        Demand is what one can pay for, and through the last 3-4 decades, growth in credit/debt allowed for growth in demand and also helped negate a higher price. I believe it will take a long time before we see the oil price sustained at $100/bbl.

        To make it clear the intention with the model simulations is not related to forecasting the oil price but to illustrate the financial dynamics from (debt) leverage. A higher oil price will of course be helpful.

        • Sam Taylor says:


          Two questions.

          1) In the second graph you posted, simulating the leverage dynamics, anything over a ratio of about 3 looks pretty bad. What fraction of LTO companies do you think are this leveraged?

          2) Regarding your opinion on the oil price, I think it’s strange, but at the moment the near future might be a bit murkier than in a few years. Looking at the current pullback in CAPEX for exploration in the offshore business, and given the lags, it seems like supply is almost certain to tighten very significantly in 3-4 years time. The near term is much harder to call, depending as it does on financial dynamics, as well as just how violently shale and other sources of production respond to the price drop (which is as yet unknown). If you’re right and the low prices persist then it’s hard to see the likely shortfall in a few years time as being anything but massive. Perhaps the Saudi’s have played their hand perfectly. Maintain market share, get more rigs in while rates are cheap and then profit in a few years when supplies tighten (Assuming that they can in fact raise production levels if desired).

          • Rune Likvern says:

            Sam, thanks!
            1) I do not know what fraction of LTO companies or extraction (production) that was leveraged around 3 as of December 2014. Some of the companies are big integrated so it is difficult (with a couple of exceptions) to split out what portion of their debt is allocated towards Bakken.
            The metric I use is sensitive to movements in the oil price.
            I can give you some other data to ponder.
            Look at all Bakken (ND) LTO as one company. This “company” would as of December 2014 have leverage above 1, but less than 1.5.
            Given the number of companies involved in Bakken it is reasonable to expect some distribution of leverage among these. Big companies are likely aware of both the benefits and pitfalls of leverage and likely has used debt accordingly. Then there are those that are high on the meme of growth by leverage.

            2) Through some years I have looked at the oil price also together with interest rates and credit/debt growth and total levels of credit/debt. GDP growth is very much linked to credit/debt growth.
            BIS last summer came out with a report advising the world to move away from credit/debt as vehicle for economic growth. In other words as limits for total debts are approached, credit growth slows and may reverse.
            I think the world is close to its debt limits and will start deleveraging (default is one way of deleveraging).
            Deleveraging is deflationary and affects demand (also for oil) and thus prices.

            It is the relative movements between demand and supply that matters. In a deflationary development demand could decline faster than supplies and thus suppress the price.
            No, I do not by into the projections form EIA, IEA, all the majors about growth towards 2030 (and beyond for oil) as none of these forecasts incorporates the effects from debts and interest rates I mentioned.
            Demand is what one can pay for!

            I do not know what OPEC (the Saudi’s) base their policies/strategies on, but I am not convinced they see the future market through the lens of total global debt.
            In a deflationary environment OPEC may see growing market share (while prices are low) as more costlier production goes off line.

            One thing is for sure….we are headed for some interesting times!

      • Dennis Coyne says:

        Hi Allan H,

        It is not clear what you mean by “significantly”. The futures market currently expects Brent to be at $65/b by Dec 2015. I would expect $75 to $80/b by Dec 2015 because at low oil prices very few new reserves will be developed and the oil supply will stop growing and possibly may decline modestly. Demand for oil will pick up in May and most of the excess oil in storage will be drawn down over the summer.

    • Dennis Coyne says:

      Hi Rune,

      I am having trouble interpreting these charts. Does this mean companies with leverage of 3 or less may be ok? You assumed here that no new wells are drilled (I think), if wells are drilled using only cash flow from operations (after paying necessary interest etc, I may not have the financial terminology correct) so that leverage does not increase, does that change the model or is my assumption of no new wells being drilled incorrect?

      • Rune Likvern says:

        Hi Dennis,
        3 or less appears doable.
        Manufacturing additional producing wells from cash flow may slow the growth in leverage (all things equal), but that may make the companies bet on that they will be able to roll over debt as it matures. (Creditors may disagree to such a strategy.)
        Lower oil price reduces the Net Assets Value (NAV) and some creditors have covenants that allows them to recall the loan if NAV drops below some threshold (described and agreed).
        This needs to be seen in context of future movements to the oil price, upwards is a OK, downwards and the companies find themselves in a difficult spot.
        I would say that deleveraging (for those that are exposed to high leverage) makes them more resilient going forward.
        I think I also described these dynamics in a post at The Oil Drum a couple of years ago.

  35. Anonymous says:

    Just a general question here.

    Are we really so sure that economies can’t adapt to a moderate and steady increase in the price of oil?

    What sort of YOY price increases would it take to sink the global economy?

    Likewise, who is to say we couldn’t marshal our resources, institute rationing and the like, and get by with just less stuff in general?

    • Watcher says:

      No one gets elected telling voters they must erode their lifestyle.

      People do get elected telling voters that the evil XXXXXXXXX people are out to erode their lifestyle, and XXXXXXX must be stopped.

      So . . . I am to say no one will want to get by with less. It’s much easier to campaign on killing your enemies than telling voters to endure misery. Look at Greece’s election.

      • Ilambiquated says:

        Walkable cities, which use a lot less resources that suburban sprawl, also improve the lives of their inhabitants.

        Right now America’s developers and realtors are staging a quiet revolution against the state DOTs. The DOTs want to increase mobility at all costs. The realtors want to increase land values, and roads decrease urban land values.

    • Jef says:

      Never in the history of life on earth has any living thing evolved to a lower quality and more costly energy source and continued to thrive.

      • And then there’s indonesia, which used to export oil and now is an importer. They have an interesting mix, with subsidies, government deficit caused by subsidies and yet the economy performs a lot better than when they were so dependent on oil.

        • Rune Likvern says:

          I think a key to understand Indonesia has to do with its rapid growth in private debt in the last decade.
          In the post

          Look at figure 4 (based upon data from Bank for International Settlements, BIS) where also Indonesia is included.
          A common feature for several of the BRICS are that they went to expansive credit policies to grow their economies….just as many advanced economies entered debt saturation.

          Demand is what one can pay for!
          Credit/debt has the same properties as money.

          • Dennis Coyne says:

            Hi Rune,

            Too much debt is clearly a problem, not enough debt can also be a problem, that is what happens in a deflationary environment, not enough lending and borrowing. The government debt to GDP is quite low in Indonesia around 24 to 26% from 2011 to 2014.


            • Rune Likvern says:

              Dennis, the point you misses is the rapid growth in private debt during the recent decade in Indonesia.

              Credit/debt adds to aggregate demand.

              What matters is the total of all debts, private, public, corporate, financial.
              Debt to GDP ratios and potential may vary among nations due to the structure of their economies, quality of collateral, taxation etc.

              Would you like to elaborate on what you mean by “not enough debt can also be a problem”?

              What makes Gross Domestic Product (GDP) grow?

              From where does a major portion of the money within an economy come from?

            • Maybe the answer for Indonesia’s performance is the way it stopped exporting oil (very gradually). It seems to have exited a dutch disease environment, the non oil economy was forced and allowed to grow, it became dynamic and thus it could attract loans.

              In this case Indonesia isn’t a good example for higher cost energy being helpful. It was too distorted by dutch disease?

              • Rune Likvern says:

                According to BP Statistical Review 2014 Indonesia became a net oil importer as from 2003. This is about the same time the strong growth in private debt started.
                As long it was a net exporter, that created collateral (for the public), as it became a net importer the collateral represented by oil is not there anymore (for obtaining foreign loans).
                Indonesia developed other industries, and growth (GDP) was achieved by other means…like growth in debt.

                Yes, similarities to the Dutch disease may be apt, as long they were a net exporter of oil.

  36. Lloyd says:

    Hi Ron and all.
    This is in response to your plea for civility further up.

    I thought about it for a while, and then did something very much in the spirit of this blog:

    I gathered some data.

    I went through the comments for this post as of 9:20pm Sunday-about 350 comments- and picked out those that were about Oil, those that were about AGW, and those that were about the state of the blog.

    The stats were:
    State of the blog-40

    The first mention of AGW happens at 12:17am on March 7th, about 7 hours after the article went up, about 100 comments in.

    The next 100 comments have only a few mentions of oil; they are 90% about AGW. Many are from people who don’t post here regularly, or who post mainly on AGW. They are, of course, joined by Futilitist, Fernando, OFM, Caelan, AWS,, etc. (I’ve been busy, so none of mine…)

    I recently started to answer AGW comments, mainly because I was pissed off that so much of the blog was taken up with them. There was also the issue that the battle was not just with outsiders: the amount of space taken up by Fernando and OFM, in number of replies, number of words, and the breadth of topics they respond to, makes it difficult to avoid engaging with them. To not argue with them around AGW and collapse is to allow the impression that no one here disagrees with them.

    I went back and looked at those 160 AGW comments again: this time I looked at the usual suspects.
    Fernando: 19
    OFM: 8
    Futilitist: 28

    Total: 55, more than one third of the AGW comments. Notice that the numbers for Fernando and OFM are almost equal to those for Futilitist (didn’t do a word count, sorry.) When someone on the left takes the time to rebut a couple of guys on the right with nothing better to do than type all day, it throws the blog’s Oil-AGW balance off in a huge way.

    So: outsiders come here and see a real battle going on. The stars will engage with them. And they can take the place over: the actual purpose of the place is perverted. Arnold Schwarzenegger once wrote (say it in your head with the accent): “The way to make a gym a body builder’s gym is to fill it with body builders.” Same thing goes for blogs and Climate Change debaters.

    I have to read their shit, Ron. I come back at least once a day and look at new posts: I don’t have a way around the AGW stuff. Unfortunately, when I see that light blue box, I don’t know what I’m gonna get: could be pearls, could be turds. The turds piss me off, and almost always occur around non-oil topics. I would rather read Mike’s cogent, funny thoughts on his favourite oil fields than some AGW denier who has holes in his argument and rhetoric… and sometimes I will unload my temper on these easy targets that irritate me.

    Mike thinks Futilitist is impolite: I think Mike’s anger is misplaced. He could just as easily be talking about the right: Fernando with his talk of watermelons, the outsiders who come in for their one shot to call those who accept that Climate Change is real are godless commies and un-American, the anti-science types who think because it was cold last Tuesday, there can be no climate change, Mac with his rants at Futilitist.

    But even if we’re all on our best behaviour, it’s still taking up half the blog.

    This is a problem: I don’t want to stifle debate, and we can’t avoid talking about AGW entirely. However, I do have an idea.

    You might limit to the number of comments, and number of words, each user can make on AGW per main post. If you are allowed 5 comments per thread and 1200 words total, and the punishment was be to be banned from the next post for a first offense, and to be banned for longer if you do it consistently, it might cause people to consider their posts more carefully. And it would be self-policing: we can all count, after all. One would hope there would not be an endless stream of these complaints coming to you. You could let the regulars know and occasionally post it in the comments when the AGW talk threatens to get heavy.

    Though I think it would be easier to just get rid of threads that start with AGW comments …I really wouldn’t miss them.


    • Lloyd,

      Thank you for your work and attention to this matter. I have no control over the subject matter other than telling people what they can post. Also there is nothing in the program that allows me to limit the comments to any one particular post.

      I agree with you that there is way too many posts on AGW and I hope people will post a lot less on the subject in the future. However I don’t want to put that subject completely off limits right now.

      Thanks again.

      • Sam Taylor says:


        Perhaps it would be posible to introduce a time limit to how rapidly people can comment, or maybe a maximum character limit? I appreciate your laissez faire attitude towards the comments, but at the same time it’s a pity to have to plough through so many tedious arguments about climate change, when the real strength of most of the commenters here is their combined knowledge of the oil industry. I don’t participate in website comments sections unless I think it’s actually worthwhile, and I certainly feel like the comments here generally add value and that I’ve learned quite a lot from reading them. It would be a shame to lose that to yet another online argument about climate.

    • Mike says:

      Lloyd, I am Texan, old, and outspoken, which is not to be confused with anger and which has absolutely nothing whatsoever to do with politics, right, left or down the middle. I placed my frustration at the feet of an individual who, in my opinion, consistently berated folks who did not agree with him about climate change and who I viewed as being the source of new conflict on the site that was getting worse.

      I do not believe I was the only person frustrated and wanting it to end. However, if my reference to the lack of manners and goats offended anybody on this blog, I apologize to all.


      • Doug Leighton says:


        You are one of the more lucid/valued contributor’s and I’ve yet to see a comment by you that wasn’t appropriate (and informative). Besides, calling out BS isn’t something you need to apologize for. I agree with Sam (above) that people should abridge comments. And personally, I find some of the prima donne personalities irritating but can live with that. Hang in with us man, please.

        • Mike says:

          Thank you, Doug. You know how us Texans can be but I will mind my potty mouth best I can, promise.

          For the record, I would willingly use my formal name when I post but lots of shale oil folks in Texas would recognize it and I might end up forever planted in a reserve pit somewhere, face down.

          I respect your comments as well, sir.


          • MBP says:

            Which is why some of here us made up names. But then that name gets taken to mean something that its not meant to, and then people here start chasing you towards that same pit. So you have to edit your name to avoid a revolt. Us Texans have it rough.

            • Mike says:

              Ain’t it the truth. I still don’t get all the hubbub about your name, honestly. Shouda kept it, if you ask me. It had character.

              I appreciated your comments on Yates, by the way; I have a selfie taken standing above the plague of that 150K a day monster. Twenty foot drilling breaks in a dolomite, man-o-man; when I get to heaven I am going straight to the Geology Department.


      • Lloyd says:

        Hi Mike.
        You have nothing to apologize for.
        It was late and it was a long post. I didn’t intend to suggest that you were singling out Futilitist on political grounds: only that he was one among many (including myself) bad-behaviour-wise. I should have structured my argument in a less partisan way. My apologies.

        The reason I mentioned you in particular is that you are a contributor whose viewpoint is unique and difficult to replace, and you complained out in the open (and I was pretty sure everybody would remember the goat metaphor.) The sideshow on AGW is/was affecting the actual business of the site. If you, and other posters with singular skills and experience, are not comfortable here, it would make the site a lesser place for all of us.


    • Futilitist says:

      “I recently started to answer AGW comments, mainly because I was pissed off that so much of the blog was taken up with them.”

      That is exactly what I did and why I did it. And it only made it worse!

      Now I am seen as a regular AGW commenter! Ha ha.

      • Futilitist says:

        I am the new guy here.

        The first thing I noticed on this site was that Old farmer mac and Fernando Leanme were totally dominating the comments section. I noticed that they constantly fed and endorsed each other like a well oiled propaganda machine. People here seemed to accept this elephant in the room without notice or comment. I thought this was weird, so I decided to try to do something about it. I went after both of them. I admit to being a bit forceful, but I don’t think I was too far out of line.

        Farmer mac’s over the top reaction pulled me into a useless running battle. It got personal. I did not intend it to go that far. I certainly did not intend to upset the whole site. Sorry.

        As far as Fernando is concerned, I don’t have any real regrets. He is a professional full time propagandist. He is here to mess the site up. He really shouldn’t be here.

        And Mike, no worries on the goat thing. You were accurate. And you were just responding to what was going on. I have never had a conflict with you and I enjoy your thoughtful comments.

        MBP, I wasn’t involved at all in the discussion over your handle. I don’t think you should have changed it, though.

        And thanks Lloyd, for looking into it all and seeing the big picture.

        Hopefully, we all learned a little something from all of this. I know I did.

        No promises, but I will try to tone it down a little from here on.

  37. Ronald Walter says:

    “Scientific Expedition into the Great Arctic”

    Some good video from 1922. Silence is golden, speaks volumes.

    Must have used Leica lenses.

  38. AlexS says:

    Dune Energy Falls to Oil Price Drop in Texas Bankruptcy Filing

    Dune Energy Inc. filed for bankruptcy protection in Austin, Texas, as the Houston-based energy company became the latest victim of falling oil prices, citing between $100 million and $500 million in debt and assets.

    • shallow sand says:

      AlexS: Did a quick look at last financials on their website, which is still up. Ending June, 2014 producing just shy of 2,000 BOE, mostly oil, $104 million of Long term debt. Maybe Mike has heard of them. Article says trying to revive old Texaco fields in S. Texas and S. Louisiana.

      • AlexS says:

        Yes, shallow sand, $104 million of Long term debt and market cap of less than $4 million

        • shallow sand says:

          I guess I would note as I often do, if we scale 2,000 boe per day and $104 million of debt times 20, we get 40,000 boe per day and a little over 2 billion of long term debt. Times 50 we get 100,000 boe per day and $5 billion of long term debt.

          Now compare that with your larger public companies in the Eagle Ford, Bakken or Permian who are focused only on US onshore plays. I believe you will find debt to flowing boe ratios similar to Dune.

          I understand the assets are different, etc. etc. I really do not know anything about Dune other than it looks like they have lower decline production, with higher costs, and they also let G & A and CAPEX get out of hand. Sound familiar re CAPEX getting out of hand?

          However, as I have also stated ad nauseam, the shale assets on a per capita basis are basically stripper type assets. EUR of 800,000 BOE like EUR of 8,000 BOE for a $60-$100 thousand well. I’ll beat that dead horse once again, where I am from, wells will commonly beat the 8,000 BOE to the tune of one and a half to two times. There has not been a rig running here since September, and there will not be absent $80+ oil IMO.

          Also, if we see ExxonMobil lay off people, I’d say we are in for a world of hurt. I’d take that as a sign this downturn might last awhile. They have a lot of inside information plus the best analysis money can buy. They also hire only the top of the heap, spend a lot of $$ on employees, and I do not think they lay off people of that caliber lightly.

    • AlexS says:

      “Dune is the latest among a number of companies–including Endeavour International Corp., Cal Dive International Inc. and Gasfrac Energy Services Inc.–that have recently sought bankruptcy protection as a result of plummeting oil prices.”

  39. Yetanother Mike says:

    Rumors and gossip out of Houston, involving Exxon, BP, Anadarko, layoffs and buyouts:

  40. Bryan says:

    I’m going to throw out an idea that’s been bouncing around in my head for awhile. See what people think about it. I’m going to make the case that demand for oil in China is about to fall off the face of a cliff due to capital flows and the current QE and negative interest rate policy in Europe and QE policy in Japan. Capital is leaving and has been leaving both Europe and Japan mainly to the US. Driving up the value of the dollar. Chinese renminbi or yuan is pegged to the dollar so when the dollar rises against currencies like the Euro or the Yen so does the renminbi. Making Chinese exports more expensive. Not only that but the trillions of dollars that investors borrowed when the US cut interest rates from 5.25% to 0.25%. A lot of hot money ended up in China. When the dollar strengthens that money starts flowing back the other direction. So China is under massive deflationary pressures. It’s also well documented that there running at over capacity in almost every area of their economy. China will end up devaluing their currency by 30% or so to the dollar. But it won’t stop destruction of demand for oil. I wouldn’t go long Brent Oil Futures if i were paid to do so. I see the possibility of a massive oil glut resulting from this.

    • shallow sand says:

      Bryan: Not far fetched at all. I really have to wonder about world wide demand if oil stays sub $60 WTI and/or Brent this year into next. I just do not think, outside the Middle East, there are any projects of any significant scale that work sub $60. It also appears to me that the largest Middle Eastern fields are not in a growth stage in general, but in a production maintenance stage. Quite a bit of secondary and tertiary recovery going on over there. Those projects can extend field life for many years, but are not going to increase those countries’ production, just maintain it.

      Given there is a world wide decline of 5-10% annually, and given it looks like US shale production and Canadian production will drop if the price stays that low that long, falling demand would seem to be what could keep prices low. I also think the strong dollar has a lot to do with the oil price, and it appears in the short to medium term, the dollar is going to only get stronger.

      If prices persist below $60 WTI for 2-3 years, I question how companies with more than minimal amounts of debt will make it through. I also think what you suggest could lead to another severe world wide recession. Seems we are all connected, maybe more than we like to be.

      Would be interesting to see what OPEC will do if prices do not recover in 2016. I know if they stay sub $50 WTI into 2016-2017, we are not going to be in good shape in our little neck of the oil woods.

      • Watcher says:

        China has over a billion mouths to feed. Those mouths get fed with oil transport of food. Car purchases there are growing every year. No evidence that oil consumption in China is cratering.

        While I am aligned to impacts of USD “pricing” as the yardstick against which oil is measured, the Yuan’s peg is one of decree. The degree to which China’s economy is not free doesn’t differ a whole lot from the US or Europe, which are completely controlled by their central banks. So I am reluctant to embrace a projection of something “falling off a cliff”, when government decree or central bank decree can stop such a thing by printing money.

        • Bryan says:

          I fully expect them to print. First they will cut interest rates to zero. Then they will do western style QE. I fully expect their economy to collapse along with oil demand as well. Printing money hasn’t worked wonders for those who done it. China has actually printed more money since 2008 than the Fed,ECB,BOE, and BOJ combined.

          • Watcher says:

            We’ve dabbled in this before here.

            What is collapse? What are the specific logistics of collapse? Who starves? What towns don’t get water?

            Decreasing GDP numbers or currency peg changes or esoteric this or that has to translate to actual people explicitly dying before “collapse” really means anything, yes?

            Point being, a government “collapsing” and getting replaced by another is somewhat small potatoes. Huge migration of hundreds of millions of starving Chinese flowing out into surrounding countries looking desperately for food and water — now that is a proper collapse.

            • Bryan says:

              Yeah when the Chinese riot it will make Furgerson look like Sunday morning at Church.

            • Futilitist says:


              Chinese demand for oil may or may not fall off a cliff. But, given the current oil glut, if Chinese demand for oil begins to drop even a little, the price of oil might just fall off a cliff. Again.

              • Watcher says:

                The oil glut is not proven. All that “evidence” out there, would you still say that proves an oil glut if price were $100? Because that evidence HAS occurred before at much higher price.

                • Bryan says:

                  First Russia an now China has come up with an alternative to SWIFT so they can bypass the dollar during global trade. Oil prices might get a swift correction to the upside and any glut would disappear when bombs start falling out of the sky. Thinking out loud it would be difficult or would become increasing more difficult to engage in war the further on the other side of peak oil we are. They might opt to do it while oil is still plentiful.

                • Futilitist says:

                  Hi Watcher.

                  “The oil glut is not proven.”

                  I don’t know what you mean. We are having an oil glut no matter what the price. The proof is not in the price of oil. High oil inventories are the real proof. The current price just makes that proof stronger.

  41. The USA government has ratcheted up sanctions against Venezuelan regime individuals it considers serious human rights abusers and/or extremely corrupt.

    I haven’t seen the Maduro reaction. Maduro had made a call for all world governments to fight the USA, and seems to be looking for a U.S. response. I think the escalating tension will lead to a higher oil production decline. This would be caused by lower numbers of oil industry technical personnel who know how to work in Venezuela’s oil fields. I also expect a renewed flow of emigrants from Venezuela, quite a few of which work in the oil industry. But these emigrants will only surge out if oil prices rebound and we see renewed activity in places like Canada, Argentina, and Mexico. It wouldn’t surprise me to see Venezuelas production to drop to 2 mmbopd within two years for these reasons.

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