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Guest Post: Building Intuition Into The Macro Environment
Building intuition into the Macro Environment and understanding the earnings discrepancy July/Aug 2009, Submitted by Adam Steinberg
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This is an *excellent* paper.
http://www.independent.co.uk/news/science/warning-oil-supplies-are-running-out-fast-1766585.html
Here we go, well paid speculation!!!
http://www.google.com/#hl=en&q=abiogenic+petroleum+origin+theory&aq=1&oq...
http://en.wikipedia.org/wiki/Abiogenic_petroleum_origin
Hydrocarbon production from fractured basement formations
http://www.ias.ac.in/currsci/jul252004/147.pdf
Petroleum Geology of Cuu Long Basin - Offshore Vietnam*
http://www.searchanddiscovery.com/documents/2004/hung/images/hung.pdf
Finally, its so good to see that someone mentions abiogenic petroleum origin. I have been reading all the papers published about that for the last 10 yrs, and i have no idea why that theory does not get more exposure. It is well supported with arguments, and when one knows the methodology of calculating the oil supply and fields peaks conducted by oil companies it is strange that this theory is known to so few people. And particularly when one reads the contra-arguments by large oil producers which are mainly ad ideologicum and not scientific or logical some questions a rise. My only hope is that during my lifetime this theory will become mainstream and discussed upon scientific basis and not dismissed on some weak arguments ...
I am ignorant on the peculiars but get the overall point. My question is whether this abiogenic theory rejects the whole ancient biomass as source of oil explanation.
Yeah, CH4 exists all over this universe, but I haven't heard of octaine <CH3(CH2)6CH3> existing anywhere but good ol biodiverse Earth.
I'm sure some petrolium can form abiologenicly, but it just makes sense that pools of long chain hydrocarbons form when you combine heat, pressure, and a big ass pile of dead carbon-based lifeforms.
nobody cares what makes sense....the only thing
that
matters is the science which can often upend
"what makes sense"....if other theories
than dinasaur decomposition explain oil formation
i want to hear about them...
Nobody is claiming dinosaur decomposition!
eyes rolling (dinasaur is a metaphor)
fine, fill in whatever biological material you
would like but there are other explanations
for oil formation than biological....
correlation does not provide causality....which
is what the biological theory uses to make its
case. i would like to see causality rather than
coincidence in such a theory.
the abiological theory has cogent ability to
explain oil formation and i am quite open and
interested in those explanations. it may fail in
the end but science has many methods for establishing
the veracity of theories.....
emotional attachments to orthodoxy or
conventional wisdom are not at all my approach to
science or nature....
Dood, why would you care about abiogenic petroleum origin. The only reality that matters as regards petroleum is that Oklahoma isn't refilling. It Is Empty. And it's going to stay empty. As is Texas. And Canterell in Mexico. And Ghawar rather soon. The reason one cares about oil depletion is that it depletes, and if it does so fast, you, personally will starve.
let them empty - there are other oil sources
to tackle - shale, tar sands, coal
A few month's back the FT had an article quoting agronomists who calculated that without petroleum based fertilizers, the Earth could support at most about 3.5 billion people. We currently have 6.7 billion.
Calling Thomas Malthus.
these fucking morons use pseudo science and and scaring tactics to elevate themselves to the level of an expert ... yes it is true that using oil you can only sustain 3.5 billion people, but what they don't tell you is that you can make fertilizers from ANY kind of oil, synthetic, derived from coal, from tar sands etc + you can spread the manure directly on the crops you want to grow + you don't even have to use fertilizers anymore ... in vertical gardening which does not need soil or fertilizers you can grow a shit load of food using only watter and vitamin supplements .... no soil, no fertilizer ... and you can feed 20 billion people like that ... + every single community can do it and that effectively decreases transportation costs which come up when you have concentrated production ... these people are full of shit, as was Malthus who thought the world as an exponential curve determined by a linear equation, and not as a convex or concave function determined by a non-linear equation which limes is not infinity but either non-negative, negative or postive interger... and guess which view is closer to the truth ... and in a long enough time period it is a wave of convex and concave functions ..... like a serpent ... mathematics never lies, only fucking morons do and their assumption based on self-interest ... they create tabloid science and nothing else ... just noise ..
All this smart talk, my aching parietal lobe.
Ahhh yeah, ditto what he said.
"... you can feed 20 billion people like that ... + every single community can do it and that effectively decreases transportation costs..."
Very nice you cheeky bastard, but therein lies the rub... no?
what rub, there is no rub, no nothing ... just special interests who do not want to see it happen (DuPont, Cargill, Big Oil ) ... that's why they pushed so hard on Codex Alimentarius, and that it be made as one of the primary requirements to enter the WTO ...
Those agronomists receive their grant money from Chemical Ag companies. Just a few years ago PhDs were claiming that large scale organic farming was impossible. Today the large scale organic growers are being vilified by small growers are industrial organics.
There are enough waste products to create enough organic fertilizer to allow all farming to be organic. There is an program in FL that takes the rotting produce from supermarkets and turn it into liquid fertizer through eenzymatic digestion.
When you hear university types talk about chemical Ag remember that the biggest whores do not stand on street corners.
please present evidence proving that the fields
will remain empty.
please prove that i will starve with empty oil
fields.
Abiogenic or not, the era of cheap energy is pretty much over. If anyone has knowledge where we can find cheap oil in abundance, by all means, let's find the stuff.
Hey there, Cheeky Bastard,
Like you, I find the lack of wide coverage of the AOH to be a bit bemusing.
I've babbled about the AOH since 2004... my first mention of it (in Sept 2004) went something like...
As with hedonics (the jiggering of GDP data), CDOs and their upcoming role in the mortgage crisis, and the fact that Greenspan was a frothy old crabber who couldn't tie his shoelaces (no link... too many references), there was always some loon ranting in the wilderness.
My last reference to the AOH was in a comment in July 2008, when I forecast that the next move in oil (which was then $141) would be a big nasty fall of at least $20 in order to ckin the newbie nuffnuffs... talk about an understatement.
The other thing that I think is very interesting, is some stuff written by Tesla (and something i heard attributed to Richard Feynman), namely that eventualyl we will find a way to extract so-called 'zero point energy': Feynman reckoned there was enough energy in a cup of the stuff to boil the oceans. (Feynman is one of maybe three people that I genuinely idolise).
Cheerio
GT
GT's Market Rant
Hey GeoffT
Yes its true that Tesla not only wrote about free energy and its wireless distribution, he constructed a Tower in Rhode Island between 1901 and 1905, but had no financial backing and he turned to JP Morgan itself who did not wish to finance the program, because Tesla had no intention on charging anything for the free electrical energy. And the concept was forgotten for many years, until recently. Google the name Marin Soljacic. He is with the MIT and he managed to put the concept back into life recently when he and his group of reserchers developed a micro-antena which can transmit free electrical energy in a radius of 7 feet.
And what Feynman was saying is antimatter. Basically antimatter is theoretically asymmetric to matter. It is built from anti-electrons and anti-protons with. The energy of which Feynman is talking about would come when anti-particles in anti-matter colide with particles in matter emitting high energy gamma rays (photons)
While there is no considerable amount of it on Earth, there is plenty of anti-matter in black holes or in the processes of star-formation.
But only a tea cup full of antimatter is enough to boil all Earths water, and we only have enough antimatter here on Earth to drive a car for 3 feet. People at CERN are also doing some experiments regarding anti-matter so one can hope they find something useful
Oil is a self renewing resource. It is not from a friggin dinosaur corpse, which is the dumbest idea of all time.
Seriously we had billions and billions of tons of dinosaur goo? What did they all pile on top of each other in big holes in the ground.
Oil is generated far below the earth on a regular basis as the article above probably mentions.
It just is no longer available near the surface because we sucked it all up.
This is easily one of the biggest lies of history that dinosaur guts became trillions upon trillions of gallons of oil. GIVE ME A BREAK.
It does not change the fact that most oil will be deeper and deeper in the ground.
I know plenty of geologists who would disagree with you, and their ability to explain their position would simply blow you right out of the water. Believe what you want to believe. I believe my friends in petroleum geology. I sure as hell don't believe someone on a message board so full of angst that it can only be explained by assuming that you were and are on the wrong side of the trade.
I'm not him, but seriously, it's not about the side of the trade. It's about the side of the food transport system. The average calorie you eat travels 1500 miles to get to your mouth. It doesn't do that in little Prius coupes. It does it in big 18 wheelers. When they stop, so do you a few weeks later.
we all know plenty of astronomers who could tell
gallileo that the earth was the center of the
universe, galaxy, or solar system
(although there is in fact some evidence
of that theory) and yet that did nothing for the
state of knowledge....
the fact of the matter is that there is credible
scholarly evidence for alternate theories of
oil formation and the dinasaur minds which do
not want to explore it and deal with it are
the neanderthals which keep society trapped in
dinasaur pits....
i also don't believe anyone on a message board
who chirps about his geology friends who may
be clinging to their dinasaur ideology because
they got caught on the wrong side of a learning
curve.
Down here in GA we have the Okefenokee swamp. Biomass has been accumulating in this basin for thousands of years. Dead plant matter accumulates in the anerobic layers of thick goo that keeps it from naturally decomposing. This process will continue for thousands more years.
No one is saying that millions of Little Foot corpses were piled together, so put that straw man back in your pocket.
Land before Time reference. Nice!
Hydrocarbon lesson 101. The deeper you go, the hotter it is. The hotter it is, the less the odds a hydrocarbon find will be crude vs natural gas. You ain't gonna find another Saudi Arabia under the first one.
Explain the why part. Why is it hotter?
I believe it's the overburden (weight of rocks above) and the relative proximity to the molten core of the Earth.
You havn't answered the question.
because the Earth does not know of Ricci flow, and thus not distributes the heath equaly in every point + because of the pressure and physical processes that take part in the earths core, mainly fission ...
Thank you cheeky.
A while ago I asked very carefully at the oildrum.com about abiotic oil. The answer was an angry bullsh*t. The guys and gals over there have a long discussion over peak oil and argue on a high level supported by a lot of research. Check out the site for yourself.
Where ever the oil in the ground comes from, a field has to be discovered, drilled and then the oil can be pumped out.
Since the late 1960's there was not a lot of discoveries, even with high prices encouraging exploration during the seventies.
If oil is forming right now in whatever way, it is extremely unlikely that it happens at the rate we burn it. Imagine oil would be produced at the rate we use it today for say the last 10,000 years. Why did the oilfields not literally explode from the pressure of the generated oil?
Investment bank Goldman Sachs' reputation among both the general public and financially sophisticated Americans has been damaged by the events of the past year, the Financial Times reported on Sunday, citing research conducted for the paper.
The paper said a survey of 17,000 Americans by Brand Asset Consulting found that Goldman's stature had suffered in 2008 and 2009.
While long-time rival Morgan Stanley also suffered a decline in stature in the survey, respondents liked and respected Morgan Stanley more than Goldman, the paper said.
http://www.iii.co.uk/news/?type=afxnews&articleid=7454130&action=article
Ya think?
Reputations are bought and sold...especially with TARP money and Bonus..;-) Besides the UK lost the plot and all their money...Imagine how much Bernanke wired the Bank of England??
Does this mean that Paulson pays back the 500 million that Golden Scam shovelled into his pockets days before he threatened congress with the bank bailout....or else.
Can money come from loans collateralized by savings accounts?
I don't want to beat this horse here, but... There are numerous supplies of hydrocarbons besides crude oil such as tar sands, oil shale, coal and methane hydrate. Hundreds and hundreds of years worth of usage. If one looks at energy production technology, innovations such as solar elec. generation or fuel cells, there wasn't a demand until there was a need for them. Space exploration was that demand. For eons mankind deforested the globe for wood stocks, to heat, forge metal, kiln lime, the uses are endless. Is the earth devoid of trees? Advances in technology drove the use of more efficient and economically useful fuel sources. As so will happen in the future. Look at the advancement in lithium battery technology. Why the advancement? Cell phones and laptops, but that technology is driving cars today.
We will always need hydrocarbons, we will always have innovation. When usefullness surpasses inovation, there is allways a new revolution, a new step toward innovation.
I don't particularly belive in the peak oil theory. Hell, they can't even tell us what the core of the earth is made of (speculation, but nowhere close to proof.) The deepest hole in the earth is only eight miles down. Eight miles! Is it solid nickle, iron, a fission or fusion reaction, they don't know. But, they claim to know that oil is finite within this planet. I just don't buy it.
As for the post, ho hum. I would like to see more information tying foreign investment to the run up in equity prices and household net worth.
Only my opinion.
Geology and Astronomy are like GDP numbers. Subject to revision constantly. All it takes for a hypothesis to become a commonly accepted theory is consensus. Once that is accomplished, you are set for your nobel prize and the riches that follow.
and funny thing about transition from theory to knowledge is the percentage which needs to be satisfied so that would occur ... but let put it simply ... you can either measure the outcome of an experiment, and by scientific rules, something is knowledge if the outcome does not fluctuate in output by more than 1%, and the number of outcomes that satisfy that requirement needs not to be more than 70% ... and that's just for starters. If you really want to know what knowledge IS i recommend Wittgenstein, Popper, and my favourite school of thought; Vienna Circle. But one of my degrees is in philosophy with a thesis based upon epistemology, so it might be only interesting to me ... i dunno ... I'm just making a suggestion here ..
actually mankind did not deforest the planet for eons because one eon equals half a billion to a billion year and eon is the second largest division of time in geology ... and deforestation is a concept that has been around for not more than 200 yrs, or since rampant industrial revolution began, and hyper-deforestation is old not more than 40 yrs and is a result of various variables such as increase in population, need for arable land, need for urban land ( Brasilia ) or in a micro scale a need for exploration of plants and habitats in scientific purpose ... but the solution for increased output of carbon is there for almost 20 yrs and its called Synthetic Forestation ... look it up ... interesting stuff ..
Thanks cheeky for the edit. I'll file that one in the vault. Since I'm an anglophile, when I say globe, planet whatever, I mean the U.K. Eons to me is the time I lived in my in-laws basement when my wife and I were first married. Yes a billion years sounds right.
hahahah
ROTFLMAO ..... I am also an anglophile, but mostly because of the work ethics, not all the other shit that is connected with the term anglophile .... to me, the only thing outstanding in the Anglo-Saxon culture is the work ethics, nothing else ... no offense ... i generally despise all forms of unified culture mostly because of all the irrationalities in them and all the animosity those dogmatic irrationalities create among various cultures ... i take bits and pieces, which are by my own subjective reasoning the best, from every culture and incorporate them into my behaviour and belief system ...
and the basement thing is fucking hilarious
I like the food, dentistry and caste system as well as their easy acceptance of Sharia Law ;-)
i was talking about the UK not India ... and dont confuse me with my avatar ... this is young Helicopter Ben on the pic ...
Same diff.
Yeah, I used to drop 4-way with that dude in the picture in 1970.
even deforestation is a myth.....
the usa has forrest than it had a century ago.
don't be an ethnocentric prick ... think Brazil, Russia, Africa and a large part of South America and South-Eastern Asia .... if you didn't know, the US is not located on the fucking moon and is not the only country in this goddamn world .... global ecosystem would not even notice if 90% of trees would disappear in the US, but it did notice that 30% of Amazon was cut down ... I'm to lazy to write a complex explanation why it is so, but google it and you'll find it ...
Tropical forest are the greatest storage facilities of rain water. Without them famine, droughts, pestilence, fire and brimstone shit. They play a huge role in influincing the notheast/southeast trade winds and the intertropical convergence zone, The main driver of global weather patterns.
despite your ignorant diatribe i still stand
by comment regarding usa forrestation.
better read your comment you ignorant moron and then we can talk ... if you actually knew something, you wouldn't say shit like that ... whats next; you gonna try to convince me that the sky is orange ... you must work as an equity salesman on WS ...
you're an emotional train wreck
the usa has more forrest today than it had a
100 years ago....deforrestation is not a one
way street...
do you not understand that US forests mean nothing in comparison to the area that what deforested in Brazil, S.America, SE Asia and Middle Asia ... US is insignificant here ... to reverse the damage that was done to the rain forests in tropical and subtropical areas, the US would need to be nothing else than trees ... no cities, no roads, nothing, just forest ..
and plese stop trolling ... i state FACTS and you only know how to ask dumm questions and troll this forum ..
wow dude, you misspelled "dumb" so you ARE human. I thought you might be perfect. I never put on the spelling police hat either, so this a first cuz yer so
speshell.
LOL ... whoda thunk it ay
"i state FACTS and you only know how to ask dumm questions and troll this forum .."
Cheeky Bastard you are either heavily sedated/drunk/doped for a few days on. Or you're on an emotional train wreck, as somebody pointed out here already. If abiogenic oil was so abundant and literally NO ONE knew about it apart from your obviously way too smart self, why are you sitting here dude? Go make a billion or two bucks of your crackpot theory and then we'll talk.
yes those are FACTS ( people usually hate them ) not some speculation ... and i am not suggesting that ALL oil is abiogenic ... i merely express my doubt about what biogenic supporters state, and that is that ALL oil is bigoenic ... methane is abiogenic gas, and biological traces can be found in oil if the oil goes trough stratas ..... i am not an oil researcher, and i have no plans on looking for oil ... you either deliberately or purposely distort logic and my argumentation to fit you goals to humiliate me ... and its not working ... i would like to point you to a research paper about abiogenic fuels found during expeditions to the ocean bottom ... there are " vents " thousand of feet under the sea level which emit some form of fuel and biogenic traces can be found in it, and those biogenic traces have no known markers which you find in regular oil .... and no one said that abiogenic oil is abundant because there is not a measure known to humanity to empirically certify the amount of oil the Earth crust holds .... and your little rant about me being on an emotional train wreck i a) pure bullshit and b) ad hominem argument which you use because you have no valid argument
and finally i will leave you with the immortal words of Gust Avrokatos
" Go fuck yourself, you little child "
luisvonahn,
depending on your age, I surmise that empirical evidence vis-a-vis direct personal experience will have to be your teacher (if you are old enough, you may not live to see it). I can't guarantee that peak oil theory is accurate. but, I would rather prepare for the possibility that it is accurate and be wrong (no harm, no foul) than prepare for it being inaccurate and be wrong (drastic personal consequences if peak oil theory is right).
Cheeky, please do a bitch slappin smart talk on this guy. My fingers hurt.
And how do you plan to prepare, Norton? ( In my best Ralph Kramden voice)
I'm sure each individual has his/her own way for preparing or not preparing. Here's a hint though: my method involves spending less time on internet threads/blogs and, therefore, proportionately more time on things that I "think" might prepare me for one possible outcome.
And, here's the kicker, I actually enjoy doing many of these activities. At worst, a single win for me (i.e., I enjoy doing them). At best (or would that be at worst?), it's a double win for me (i.e., happiness and preparation). Simple motives and pleasures are these I will freely admit. Far from erudite indeed.
actually peak oil has nothing to do with empirical evidence, because it is based on curvatures, which are based upon the theoretical size of the oil field, which is based upon the hypothetical maximum width and hypothetical maximum depth, which are, conveniently defined in the parameters which are pre-determined by drilling and exploration contractors or big oils themselves based on the commercial cost which was predetermined also by various business models ... peak oil represents a hypothetical sum of all those speculation and circularly derived " facts " and the sum is put on a predetermined curvature and it is then put into hypothetical model which has variables of the averages of supply and demand determined by extrapolating the data from x-years time period .... but to make a long explanation short .... peak oil has the same empirical value as does God or Higgs particle ... it is a necessity so that the Standard Model of Oil could be defined and unified,and then put into, yet, another bullshit macro-economical and commercial model, and it is not an empirical fact, because empirical facts are observable determined states, and not theorems or hypothesis ... and something is mesurable only if it is observable, but something is not mesurable if it is not observable ... and oil supply is not observable, and ergo it is not mesurable ...
thank you....i thought i was the only one on the
planet who smelled moldy bullshit when i
heard peak oil.....also good job on the
renewability of oil....
Every once in a while whenever Goldman Sachs feels like it, their left leaning media wing kicks into high gear talking about Peak oil and Global Warming. When Goldman goes short, their other media wing (right leaning) pulls the humbug on those reports and down goes oil. This has been going on for decades and in plain sight.
i hope you dont count me in, in neither of those two camps
i only state facts, and im not in the media ....
heisenberg uncertainty much?
what about it
Cheeky Bastard=Oracle of Delphi
Save us Cheeky.
that bitch was the ancient equivalent to Kudlow and the gang ... she saw green fucking shoots all the time and was always right because a) knew her grammar and where to put comas or b) the dude whom she made the prediction to never came back from the war so there was no one could point the finger and say " You goddamn whore, you're full of shit "
dont compare me to that please ...
Somewhat like Kennedy v. the Joint Chiefs circa 1963
Nice Cheekster
Thank you.
you win. blog/thread hegemony achieved. what have you won though?
agreed cheeky that peak oil is not an empirical fact. then again, neither is the supposition that the earth contains a limitless cornucopia of fossil fuels, correct? Or do you have empirical evidence to the contrary? as a cellular and molecular biology major, I'm also big on empirical evidence. So, show me the empirical evidence that the earth holds an endless bounty of inexpensively obtained fossil fuels (or whatever you want to call them).
empirical evidence please, not theory on renewability of crude oil.
cb,
before you respond (as I see you may have done later in this thread), may I just add how grateful I am that human/civilization history is purely linear progress, exhibiting no cyclicality whatsoever. as a result, humanity does not need to study history at all, merely the body of science and scientific progress.
again, i do not say that, that is your conclusion. I am a student of Feyerabend and consider science another dogmatic-epistemological super-structure and not a solution to all the worlds problems ... Also i do not believe in a linear movement of either time or events, and history, by all counts, is far more important in search for applicable solutions that religion, science and mathematics ... Even Foucault and Bergson understood that without studying the history of particular fields ( ie. mathematics, physics, philosophy, methodology etc ) we can never discuss objectively, or find objective solutions .. i, myself, support the cyclical view and not linear, linearity is pure abstract derivative and not an empirical fact ... but the problem most people make, when they discuss linearity or non-linearity is that they have Time in their mind, and Time plays not significant role in determining if the Nature is cyclical or not ... neither does our universe and the laws in it ...
i have not said that the Earth holds infinite amount of crude oil or NG ... if you read my previous post you will see that i only stated that there is no known measure to empirically verify the amount of oil and NG that is currently held in the Earths crust ... and that is not the same ... the lack of empirical evidence is not, in this particular case, the evidence of infinite supply ... i only stated that the amount of oil, and thus is there a peak oil probability in the near future, is not empirically verifiable ... no rational human being can state that something finite ( Earth ) can produce something infinite ( oil )
Two words are all that matters.....
ECONOMICALLY RECOVERABLE
Google it if you don't understand it.
Amen to that.
Let me paraphrase this site's tag line.
On a long enough timeline... hydocarbons will regenerate.
Trouble is the regeneration takes millions of years and likely will require a few climate changes that are not conducive to human survival - and that is beside any discussion of AGW one way or the other.
There is probably - my opinion anyway - much more "undiscovered" oil left than has been found, but as you noted it's not economically feasible to get it. Maybe at $200, $400, $800 per barrel at some point in the future, but not at $70. Heck Tupi is marginal at $70.00.
According to geologists and oil engineers at http://www.theoildrum.com/ it is easier to find new oil discoveries today, due to technology, than at any other time in history. Trouble is what they are finding in aggregate does not and will not make up for declines in current fields - and forget about IF - much less WHEN - we can ever return to BAU 3.5 - 4% growth. Hint - we can't because then the cost of oil - and energy in general - will smack down any economic ramp up dead in its tracks.
Where did the House "get" the next $2b is Cash 4 Clunkers - yep alternative energy allocations. So, tell me what the priorities are...
To the OP - have fun at The Oil Drum.
Pete
Thank Fuck for someone talking some sense on this thread.
Two pieces of evidence for peak oil:
- The US already passed peak oil in 1970
- The UK passed peak oil in 2000 at 120 millions tons. 2009 = 40 million tons.
http://www.peakoil.net/Publications/06_Analysis_of_UK_oil_production.pdf (DTI Analysis)
Some other facts:
It's well known that large discoveries are declining quite fast. e.g. Cantarell etc.
Shell spent $8billion capex last year to produce less oil. Similar story for BP. There is less easily exploitable oil, and it demands a higher investment, and therefore a higher price.
At 6% of GDP spending on oil (US in 2008 with oil at $147/bbl), the economy ceases to function.
Question:
Can we keep oil below $147/bbl and keep the US and world fed with declining supplies and increased cost to produce?
Your argument would be true if there were no more wells to be drilled. How can the have peak oil if they are still discovering new fields, let alone not even drilling in existing fields? I would imagine if you asked a rough neck in 1915 in Oklahoma about deep water drilling in the Gulf of Mexico, he would have said, better luck walking on the moon.
That's a good question and there is an answer that will take you on a journey into one of many rabbit holes of discovery.
Start with an idea called the Export Land Model (ELM) which has been refined further from the link provided:
Net Oil Exports and the "Iron Triangle"
http://www.theoildrum.com/node/2767
Pete
http://online.wsj.com/article/BT-CO-20090729-718874.html
http://www.reuters.com/article/rbssEnergyNews/idUSPEK32018420090728
http://www.bakersfield.com/news/business/economy/x212154491/Oxy-moves-fast-keeps-mum-on-oil-discovery
http://www.businessweek.com/ap/financialnews/D99PJQQG0.htm
All oil field discoveries for July 09. That was just from me going to google and typing "oil discovery" than clicking the news tab.
75% of the Earth is covered in water. A majority of the areas below the surface of the ocean floor have not been explored (for oil fields) I bet theres a lot of oil under there.
As technology advances people will incorporate alternative forms of energy, and the efficiency of using oil will increase drastically.
I could care less how much oil is out there. It ain't runnin out in my lifetime. I could care less if there is a an energy crisis in 500, or 700, or a 1000 years. I have more important things to worry about.
Interested parties can start here as one of many many examples:
Predicting Future Supply from Undiscovered Oil
Posted by Sam Foucher on November 26, 2008 - 10:05am
http://www.theoildrum.com/node/4785
Deep dives at The Oil Drum on oil and energy are not unlike some of the excellent analysis done here on this site's core areas of focus. And, no, not everyone at The Oil Drum agrees...which is as it should be.
Peak Oil is NOT about running out of oil - never was and never will be. It's about running out - if you will - of cheap easily extractable oil. And "cheap" - all speculation and price manipulation aside - is mostly about net oil exports (supply) - like KSA - exporting less and less because: a) their fields are producting less, b) their own internal consumption increases. And demand, which durign this 24 month or so recession has had a major damper on demand in the USA (and elsewhere). Think oil stays at $70 a barrel if the USA could even start to grow ar 2.5%, 3%, 3.5%, 4% annual? We could complicate things by factoring in China - even the BRIC's - increased oil demands/imports as a component of "simple" supply-demand dynamics.
The next "energy crisis" may be much like the "energy crisis" last time at $147 barrel oil - likely much worse. It will be way sooner than 500 years from now - maybe less than 5 - and there will still be "plenty" of oil when it happens - just not plenty of cheap easily extractable oil for world demand. Finding new fields, especially in deep water, just starts the challenges. And by crisis it may not just be about the impact on driving, or flying, or bulk freight sea transport - try fertilizer and food production with increased starvation as a likely downside.
This is not really the proper place to debate this. See you at The Oil Drum.
Pete
a free economy can always adapt to resource
limitations and allocations...there is no
malthusian scenario which has ever materialized
under such a regime....
economics changes the definition of recoverable
shell is spending substantial amounts to recover
tar sands or shale....jury is still out but it
has promise....
Bwaahahahaha. Good one .
>>
But, they claim to know that oil is finite within this planet. I just don't buy it.
>>
Look at what you just said. The planet has finite volume . How can oil be anything other than finite. I have noticed that this is the key brain lock issue for folks on this matter. As soon as they get to the logical conclusion that oil has to be finite, then they start thinking about how long we've been burning it. Then the light bulb over their head turns on.
I agree 100%. Everything is finite. Its a zero sum game. But how can you call the game at half time. Come on, you tell me they have exhausted all exploration efforts? It is not a function of use, it is a function of supply. I hope that light bulb is a CFB buddy!
no one is saying that oil is infinite, because no one is an idiot, and no one thinks that something finite can produce something that is infinite ... what we debate here is what number represents finite, and what process represents the oil creation ... furthermore, if you don't know the number which represents the finite amount of oil, and you know the time, let me tell you that you know shit .... because if x+y=z you can only speculate what x,y,z equal and they equal every number from - infinity + infinity .... but that is pure mathematics, and in this particular case the range is between - infinity+1 and + infinity-1 ...
Another way. If an acre of land produces 183 bushels of corn. Peak corn is 183 acres. Assuming total utilization and ideal conditions. Explain peak oil with numbers for total utilization and ideal conditions.
Peak corn, 1 Acre = 183 bushels
Peak oil, _______=_________mbd
screen the comments and read my post on vertical cultivation of food .... land is not a limit for production of food, neither is oil ... Japanese are doing vertical cultivation for almost 10 yrs ..
Maybe for certain food crops, but not for stalk or cane type vegetation. For your benefit I will use onions, no potatoes.
Peak potatoes - 1 acre = 30 tons of potatoes
Peak oil - ________=_________mbd
After much tought and sleep, I would like to ask Cheeky Bastard to change his name to
Cheekipedia
Do I have a second?
best class i ever took in mba program was one where professor argued that gdp is a bullshit number made up to show whatever states needed it to show.. his case in point, no way greece and italy ever made it into the Euro legitimately.. so how to measure relative quality/value of national economies? his answer at the time was look at stock markets... best expression of bets on future potential.. so I call him the other day and say hey.. market manipulation, yada yada, what now? he say bond markets too big to be manipulated.. so Tyler, let me ask you.. what are bond markets saying? we toast yet? when do we run for cover?
Bond markets are manipulated through OTC interest rate swaps, which control 5yr , 7yr, 10yr durations. Since they require bonds as collateral, and they have notional values in the hundreds of trillions, they create artifical demand for USGovt bonds. According to latest BIS data, the main banks involved are JP Morgan, Goldman Sachs, Citigroup, BofA, and HSBC. In other words 5-10yr yields are artficially suppressed. The short end of the curve (<=2yr) is controlled by the Fed Funds rate. See the BIS data , Rob Kirby's work, or email me if you'd like further details.
The Elephant in the Room
Rob Kirby
http://www.beearly.com/pdfFiles/Kirby25042008.pdf
with all due respect, why does that create "artificial" demand and if they are artificially depressed where should they trade?
just as inflation erodes the real value of coupons deflation enhances the value... ie if you have a 3.50% nominal yield on 10YR but you have 2.50% deflation your real yield is 6.00% the bond yield is a market reflection of this dynamic, either you think they are expensive because of inflation or cheap because of deflation but they aren't artificial they just are....
during this whole credit market bubble the US gov't bond market is the only one that got it right proving Greenspan's "conundrum" and Bernanke's "savings glut" to be incorrect - they both tried to fade the bond market's message and got burned.. all they had to do is watch the yield curve and they would have not eased or tightened too much but they drink their own Kool-Aid and believe they are omnipotent - idiots
in the long run the bond market is too big
to manipulate....in fact all markets are too
complex in the long run to manipulate....
by long run i mean 1-2 decades or so....
however bonds can be manipulated short term...
that is precisely the purpose of quantitative
easing (currency debasement) - the fed buys
bonds to prop up their
prices....there are many other ways to do this....
your professor's comments need to be considered
with great care....
stock markets are no better than the voodoo
economics we use now to generate gdp numbers
Well now, the MBS and Securitized bond market is many times larger than
the US Treasury market and it is full of shit.
Result? I think it's manipulated a tad don't you?
Not TD but Right now bonds are saying what they said pre-crash 1987.
Uh huh, betcher ass.
BTW, here is the latest draft of the President's next press conference.
O: "Read my lips... not my lips dummy, the dummy's lips, my lips aren't moving... NO NEW TAXES ON ANYONE MAKING MORE THAN TWO HUNDRED AND FIFTY DOLLARS A YEAR. Who said two hundred and fifty thousand? How could I have said that, my lips weren't moving! What was that? You heard me say that? How could I say two hundred fifty thousand? No one in American middle class makes that kind of money. I said Two Hundred Fifty Dollars.
Ask Gibbs, he heard me. Ain't that right Gibbs? ...
author Mad Greek....Mr. President, I heard it with my own eyes. And may I say Mr. President, you're lips are perfect for this job and so is the dummy's next to you.
Technically he is correct. I do not think they will be payroll taxes on the 250K bracket. A value added taxation will be enacted and that is supposed to solve the problem. But, I doubt it will solve anything in a recession and the real recession is not going to end soon. People will simply buy less.
pollution free electric cars run on electricity. Is anyone asking where TF the pollution free electricity to run these things origniates from -- e.g. nuclear, coal, gas -- the same irrationallity that has overtaken the markets has overtaken the American (global) psyche.
PS Roubini(speaking in (OZ)) calls the current market rally excessive, predicts a double dip recession, employment(un) at >11%, commodities overblown etc...
Roubini jumped the shark...BFD!
Unfortunately, Roubini already had his day in the sun.
As we speak, Dr. Copper is rallying to new recovery highs in Asia.
wow i wonder how much of this is usdx-inverse
hmm 5day inverse correlation coefficient doesn't look like it's anywhere near 1.0 but i'm too lazy to bother testing this lol
"Is anyone asking where TF the pollution free electricity to run these things origniates from"
thank you!!!
Question:
Where will the money come from?
Answer:
Printing press. According to Doug Noland, the amount of "government bubble" finance created is now over $2 trillion, which already exceeds the entire amount of the $1.4 billion mortgage finance bubble.
You have money confused with debt. What the printing press spits out is debt, not money. Says so right across the top. Federal Reserve NOTE. Debt. Next.
I have a hard time believing thet RobotTrader is confused about money = debt. I'll go ahead and rephrase it for him:
Question - where will the money come from?
Answer - Debt, by printing money, on the printing presses.
Doug Noland is always an excellent read
Robot -
If you are going to quote Doug Noland, at least put it in context.
It's not "MONEY" but rather intstruments with
"MONEYNESS"" (namely exponetial debt growth)!
Doug Noland:
There are a number of reasons why the government finance Bubble is even more dangerous than the Wall Street/mortgage finance Bubble. First of all, the $2 TN or so of “government” issuance over the past year is greater than the $1.4 TN peak total mortgage Credit growth during 2005 and 2006. I would expect another $2 TN next year and the year after. Government debt enjoys the attribute of “moneyness” in the marketplace to a much greater capacity than mortgage securities did during the boom. The risks associated with debasing this “moneyness” are momentous. And there is, as well, the dynamic where the greater the government finance Bubble inflates the more convinced the marketplace becomes that the Federal Reserve will do everything within its power to accommodate the debt markets (ultra-loose monetary conditions for the duration). And destabilizing speculation can return to all markets…
Hypothecation. Say it. Hypothication. I love the way it rolls of my tongue. Hypotication.
Where will the money come from ? We will PRINT it - Goddammit !
“There is now potentially light at the end of the tunnel,” Roubini said today at the Diggers and Dealers mining conference in Kalgoorlie, Western Australia.
http://www.bloomberg.com/apps/news?pid=20601110&sid=aQwbwmRnTEsg
It's gonna be a hoot watching that train run over his dumb ass.
King salmon vanishing in Alaska, smokehouses empty....I guess he predicted this too!!! But me thinks it has Palin written all over it...lol
First money vanishes, then jobs, then cars, now food????
NR is being careful to not fully sign on like a restaurant review with flowery
prose but not many stars.
Seriously though - Isn't the stock markets going up in the face of all this, an indication that the consensus is for Inflation because the players know that devaluation of the dollar is in the cards ? Wouldn't a devalued dollar jack up the earning numbers of the MNCs ?
Dollar is being devalued everyday. There doesn't need to be a formal devaluation. Just let it slide without any intervention and that should be enough.
Think like an Argentinian. If dollar devaluation is in the cards, the last thing you want to hedge with is equities ( especially during a collapse in forward earnings!). Though the Zimbabwe stock market makes highs in nominal terms you are not really hedged against currency risk because there is massive 'geopolitical risk' in owning stocks under an oligarchy or dictatorship. The government and their cronies tend to seize companies rendering their stocks worthless. FNM. GMC. FRE. etc.
You are much better hedging with A) cash and either B) foreign currency or precious metals. I like USD, Canadian Dollars and Swiss Francs. And of course gold. If you hold stocks in 401k that you can't sell, another hedge idea might be put options.
Insurers blame rising home & car premiums on the weather..I guess they invested our premiums (ponzi Scheme) on derivatives with rotting correlating assets!
But why would the forward earnings collapse ? A weak dollar is a positive for the earnings of the GEs & IBMs. I understand the currency risk if you are in dollar and the dollar is devalued. If the earnings even if it is nominal terms go up - the stock market is going and then that is where you would want to be. What am I missing ?
Peter Thiel proposed the thesis that : 1. there has been zero real growth in the US since 1980; 2. that perhaps the massive growth in the US economy 1940-1980 was due mainly to the immigration of millions of high IQ european peoples. The article basically concludes that the US education system is a fraud. However at University they taight us Rational Expectations economics which concluded: 1. you cant profit in stocks, 2. you cant profit in owning housing. Both were true, ultimately. Thanks, University.
Can you earn a negative profit in stocks or housing? A zero sum game...no?
there is no such thing as negative profit ... that's an oxymoron ... it like saying positive negativity ... it some lingustical bullshit made up by the media and investment industry to put a spin on something that is a LOSS
which concluded: 1. you cant profit in stocks, 2. you cant profit in owning housing. Both were true, ultimately.
I think you need to pass this info onto the IRS for me. Because then I desere a refund.
I tend to agree with his view. As far back as 2000 I remember asking myself how people could afford all this crap....cars, cloths, mcmansions...all seemed pretty idiotic to me.
At any rate, if the new "normal" for GDP is quite a bit lower that would suggest that the new "normal" for government spending is (at present especially) substantially higher as a percentage of GDP...which is a bad thing. The last 20 years have been nothing but an illusion.......an illusion that is now just circling the drain of the porcelain fixture.
NEW YORK, Aug 3 (Reuters) - Despite a pick up in sales, commercial real estate prices posted a record drop in the second quarter, according to an index developed by the Massachusetts Institute of Technology Center for Real Estate (MIT/CRE).
With an 18.1 percent drop, the index, which tracks commercial property sold by major institutional investors, is now down 22 percent year-to-date, 32 percent from a year ago and down 39 percent from its mid-2007 peak, according to the report released on Monday.
http://www.reuters.com/article/bondsNews/idUSN3144067820090803
Uh-Oh
http://www.nypost.com/seven/08022009/news/regionalnews/face_of_buyers_remorse_182608.htm
http://www.financialsense.com/fsu/editorials/schiff/2009/0731.html
"Sell-Side Research"
http://www.financialsense.com/fsu/editorials/2009/0731a.html
Correct me if I'm wrong, but I think the point Adam Stienberg is trying to make in his paper is that the only thing that could get us back to "normal" is a return to the very same conditions that got us into this mess in the first place. And that just ain't gonna happen. Not in our lifetimes, anyway.
Any idiot could see this. The administration has shot all its bullets. The banks aren't about to go back to handing out credit cards to anyone and everyone; the days of people using the equity on their homes like an ATM are over; even once the economy stabilizes and we are no longer shedding over 1/2 a million jobs a month, the people who lost their jobs are still gonna be out of one (where are they gonna work - installing solar panels?); the ones that are still working are earning less and working less hours; taxes are gonna go up; the price of gas and commodities are gonna go back up... there is only one answer to the question posed in his paper - The money's not gonna come at all. Period.
And, thus, the S&P trading at 16X Fantasy earnings is unsustainable. Or is it? Nothing's making a whole lot of sense these days.
Where will all the money come from? FROM THE GOVERNMENT! (at least, for the time beinggggg).
But...I don't want to buy Gold.
But T.D...I don't want to buy Gold.
Ha,ha'ha.
Really. First the big picture, then the Macro.
Someone needs to run the spell checker on the headline of this article.
There are some holes in the argument. Firstly firms earnings and margin are not necessarily linked to demand. If a firm drastically cuts its capacity and small pick up in demand will increase profits providing the firm does not increase its capacity. The nature of the cost cutting exercises by firms is also miss understood and anyone expecting an inventory bounce does not understand this. Different size firms have reacted differently with larger firms typically having cut capacity, cut capital expenditure but also adjusted their systems to order more regularly and put in place permanent measures to reduce stock. You will get a bounce in raw materials based on low prices, but not in retail or wholesale stock. My firm will also be changing its ordering pattern in the run up to Christmas making sure we don’t hold too much stock and have to discount.
In summary we should expect a deep decline in the purchasing managers index during the September to October period and a pick up from there on in. The assumption that firms cannot make big profits from low demand may not be correct over the short term, although initial unemployment claims will be eagerly watched because as its stands it is now looking increasingly likely that firms will have to cut capacity even more. My feeling is that unemployment has been stubbornly high for too long and we are now on the verge of a tipping point where we see a second dip.
It's time to face the facts: the market, and the economy has been, is, and will be operated solely for the benefit of the financial elite. The taxpayer's wallet is there for the taking, and the printing presses turned on at the financial types' whims.
Not only have the ones who created the debacle not been punished for their corruption, incompetence and failure, they have actually benefited from it. They are actually better off for having fucked up than if they had not done so. Not a single one of them has lost his job. Failure and incompetence not only carries no cost, it carries a reward.
The taxpayer gets thrown a bone in the form of a billion or two for their old cars, though most everyone who has gotten new wheels under this sham will lose his or her care to repossession. There is a damn good reason why those folks were driving 6 mpg $300 cars in the first place, and $4500 dollars in gifts does not make a single one of them rich or solvent. Just as not everyone should own a home, not everyone should own a new car.
The rest of the non-elite can suck eggs. They are welcome to pick up some change by buying stocks---if they have any money left---but mostly they have the pleasure of knowing their tax dollars, and the tax dollars of their children and grandchildren, will go toward funding the lifestyles of the partners and Goldman Sachs and the other "bank holding companies".
And what drove this madness, other than the obvious fact that the world moves to the wishes and desires of GS and its associates? Three things: Paulson wanting to make his friends flush, Bernanke's ego and his fear of "being the Chairman of the Federal Reserve during the second Great Depression", and Geithner's desire to make partner at Goldman Sachs once his tenure at Treasury finishes.
For that we all pay and guarantee $24 trillion.
We let it happen, so it is our fault. If, or more correctly when this all blows up again, we will be the ones to pay. Given their cynicism, the powers that be might even try to foist a second bailout on the taxpayer, further benefiting everyone from Blankfein to Lewis. At the very least, the elite will remain flush, while the taxpayers get it up the butt again.
Since none of us is willing to stand up and be counted, we might as well all just grease our backsides and let them fuck us over again, and again, and again.
I'm amazed by how many people are adhering to the conventional wisdom on how oil is created. I know you are experts in the field but when did expertise keep conventional wisdom from being wrong.
Any insight into what is happening in Europe? Needless to say that developed, healthy markets should be expected to jump up 2% intraday.
Good Morning Children:
I always look to the MSM to see what drug our Banana Republic has sold them and they are smoking today. The cash-for-clunkers has been deemed a success and we need more of it, the recovery is in full swing because the negative GDP was better than expected, multi-billion dollar losses are better than expected, showing that we have hit a bottom - things are much better and looking up (psychology is the key to a recovery you know). This all will be in time for them to spoon over Barry, Michie and the kids as they wallow in the mire of their $50,000/week vacation rental.
The insolent ruling elites of our Banana Republic will tell us through their media whores that all is well and they are ramping-it-up to make sure too many don't pay attention to those websites and blogs, replete with the truly intelligent and genuine writers and readers, who are marginalized at every turn - do not pay attention to them, the crooks, pulling the levers behind the curtains.
And, please do not read any history, especially how Rome rose, fell and burned, or what happened at Jekyll Island, or with the South Sea Company, Mississippi Land Company, Dutch Tulips or any other pyramid scheme. And please don't try to bring yourself to understand Palyi's Marginal Productivity of Debt. If you do, you might come to the conclusion that if you ran your finances or business like the elites, from the "President" on down, ran our Banana Republic, you would be prosecuted and jailed for fraud. Don't pay attention to those things.
Most importantly, you need to be focused on helping spend our way out of bankruptcy - do your duty to those whom you serve.
http://www.zerohedge.com/forum/good-morning-children
yo wazzup Chumly
i see you have a brain, so i would like to suggest some read you might find enjoyable .... read about Compagnie de l'Occident and
Compagnie française des Indes orientalesand the bubble of 1720 which brought England, France and Italy to its knees and set ground for the French Revolution ..
Where will all the money come from? Why, from "the sidelines", of course ... I think I see a big pile of it near the advertising stripe running behind the Man U home goal, it's such a big pile in fact that it completely blocks the "AIG" advert. Technically of course that's the "endline", but 'tis a quibble.
As far as the we-are-running-out-of-fertilizer debate is concerned, I think a huge untapped source of nutrient-rich nitrogen-packed fertilizer has been overlooked: The oversized poops of American fast-food establishment frequenters. My local coffee hangout is right across a mini-mall from a Hobee's, and let me tell you, when the wind blows the occasional waft from their rooftop restroom vent in the direction of the coffee-place patio, it's frickin' nasty. (But oh-so fertilicious). Just ship bargeloads of AmeriCrap around the world, and maybe collect some valuable Nitrogen Credits to help offset the environmental cost of the American Diet.
Now, whether fast-food waste is "organic" or "abiogenic" is of course a legitimate question.