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Guest Post: The New Abnormal
Submitted by James Howard Kunstler of Kunstler.com,
The collective state of mind in the USA these days may be even more peculiar than what went on in Germany in the early 1930s, when the Nazis were freely elected to lead the country and reconstructed the battered national psyche into a superman cult that soon beat a path to mass death and ruin. America has its own way of going crazy. We don't goose-step to tragedy; we coalesce into an insane clown posse and stumble into it by pratfall -- juggaloes dancing backwards off the cliff edge.
We've been softened up and made extra-stupid on a 60-year-long diet of TV and kreme-filled donuts. Instead of a "master race," our political fantasies revolve around a master wish - to get something for nothing. Want to feel good about yourself? Smoke some crank. Want to become economically secure? Buy a Powerball ticket or drive to the local casino. Want political esteem? Plug a flag pin into your lapel. Want status? Borrow free money from the Federal Reserve at zero interest and arbitrage it into massive earnings for your primary dealer bank. All these behaviors are the consequence of a culture that elevated advertising to such a high social good, it ended up drowning in its own manufactured bullshit.
A subset of our master wish has been on vivid display in recent months, namely the idea that God has blessed the USA with a limitless supply of new oil that will allow us to keep driving to WalMart forever. This propaganda from an oil industry desperate for capital investment has been swallowed whole by people in authority who ought to know better, just as that same class of people in Germany of 1934 should have known better about what they were bargaining for in economic well-being with the Nazi agenda. In our case, the propaganda drumbeat is being led by formerly respectable news organizations. The New York Times, National Public Radio, Bloomberg News, Forbes, and The Atlantic Magazine are media giants that have lately spread the "good news" that America will soon be 1) "energy independent," 2) the world's leading oil exporter (greater than Saudi Arabia is now!), and the "go-to nation" for cheap manufacturing.
All of these claims are false, by the way. The American way-of-life was designed to run on $20-a-barrel oil, not $90-a-barrel oil, and "new technology" has not changed that. The unfortunate and, to some extent, mendacious memes about the wonders of "new technology" have only snookered the public into a false sense of security about a future that will disappoint them badly and probably provoke an extreme political reaction as the reality of our predicament sweeps through daily life.
Most of the current "endless oil" fantasy revolves around shale oil. Just to get a visual idea of what this amounts to, consider this map. It depicts the two major shale oil production regions of the USA: the Bakken in North Dakota and the Eagle Ford "play" in Texas. Bakken production is confined almost entirely to four counties in North Dakota (Williams, Mountrail, McKenzie, Dunn). The Eagle Ford region touches perhaps ten Texas counties. Now, realize that the oil fields all over the rest of the USA (including Alaska) are in decline. Here's where the "bonanza" of new oil all comes from:
The oil coming out of these places is high cost and low flow-rate oil. This is exactly the opposite of what US oil production used to be (low cost and high flow-rate) when we were busy building all the freeways, strip malls, housing subdivisions, suburban office parks and all of the other stranded assets that now make up the infrastructure of daily life in this country. Those were the days when you could pound a single pipe vertically 1000 feet down (not much deeper than many home water wells) into the temperate wheatfields of Oklahoma (drive to work in shirtsleeve weather!) and after that modest investment in drilling you could kick back and depend on a great flow rate (5,000 barrels-a-day, not unusual) of sweet light petroleum for years.
Horizontal drilling (often more than 10,000 feet down + many "laterals" an additional 10,000 feet horizontally) and then fracturing "tight" rock for shale oil is not only a way larger capital expense (lots of steel!) but the flow rates per well (82 barrels-a-day average) are laughable compared to the halcyon days of conventional oil -- little better than "stripper" wells. Consider also that shale oil well flow-rates decline greater than 60 percent in the first year (rapidly thereafter, too) and you can see easily that there will be no "kicking back" to run the pump-jacks like cash registers, as in the old days. In fact, the rapid depletion only prompts more frantic drilling and re-drilling to keep the production at its current rate - the "Red Queen Syndrome" ("I'm running as fast as I can to stay where I am"), which means fantastic capital expenditure to keep drilling and fracking more wells (even more steel!). Consider also, that the small "sweet spots" in the shale oil regions were the ones drilled first (in earnest after 2003), for the simple reason that they were the most promising. This was the "low hanging fruit" -- easy to pick. Outside these sweet spots the oil may be too meager or difficult or costly to bother drilling for.
This is a picture of a boomlet that may run a few more years -- if the banking system doesn't implode and the massive stream of capital doesn't quit flowing to the shale counties. The excitement will all be over before 2020, but I suspect that troubles in finance and banking will put the schnitz on the shale gas mania long before that date. What will happen when the American public discovers that they were lied to about yet another important matter? The discovery will coincide with very severe changes in daily life that won't be avoidable. Everyone will be affected. Many will be impoverished and suffer real hardship. That's when the public goes apeshit and starts tearing down the house.
Apart from the issue of sheer economic suffering and all the damage that will ensue, consider that it will be generations before anyone believes the "authorities" again -- though, like the oil age itself, the era of giant national media will probably prove to be a one-shot deal, too. Future generations -- if they are lucky -- may read the news on one-page circulating broadsides, printed laboriously in hand-set type by letterpress. Or maybe they'll be reduced to just parsing out rumors.
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Peak idiotism will never be reached.
He's cranky at being proven wrong. And he's also ignorant of the many, many other locations where shale gas/oil are being drilled.
Are you familar with the term EROI????????? lol
No matter, we can burn fiat paper for warmth and cooking.
There is absolutely no need whatsoever to have any kind of an energy crisis in the US. None. The next best thing to fusion could not only produce cheap electricity, it could also economically produce liquid fuels for our hydrocarbon based infrastructure:
https://www.youtube.com/watch?v=N2vzotsvvkw&hd=1
China, without the internal vested interests of established industries in the US who don't want this developed, is spending $1 billion dollars to further develop a technology we invented. Par for the course.
Ah, yes, Fusion. It's only 5 years away, and has been for the last 50 years.
Can't wait to see how long/how much it would cost to retool shipping, aviation, the highway system, and trucking to rely primarily on electricity.
Thats not fusion! The thorium reactors are fission reactors like the current uranium based "nuclear reactors". But yeah, thorium reactors would be much more effiecient, less polluting and much cheaper (thorium is much more abundant than uranium).
Also, India is investing into thorium...
Fusion reactors like ITER are about 50 years away to be commercially usefull....
I understand that the flow rate in the great Alaska Pipeline is now way under capacity. And this causes problems for the flow, as you want that oil to stay nice and warm on the long journy down Alaska. I was lucky enough to see much of the pipeline and the oil terminal in Valdez Alaska. The Oil terminal itself was worth the long drive from Anchorage.
The arctic seas are now open for long periods and oil drilling is bound to find some developable oil. But like Kunstler says "It will be over $90 a barrel oil". The capital expenditure will be huge and this will be no cheap oil. It is either this, and the presumed oil in the Wild Life Refuge up there. that will be needed to keep oil in that pipeline. Much of which goes straight to Asia.
Fracking is contentious. I hear it talked about like the second coming of Christ. But just look at it from an engineering persepective. Frack oil is going to be bloody expensive! No if's and's or but's about it!
Beyond the Peak... are queued up for your education on the matter...
http://www.youtube.com/watch?feature=player_detailpage&v=4Z9WVZddH9w#t=8623s
A lot of what is said is correct in this essay, but why the need for exaggeration? It just ruins his credibility. The NYT is probably the most biased major newspaper against oil and gas development in this country (http://www.nytimes.com/interactive/us/DRILLING_DOWN_SERIES.html).
The 82 bopd number is also silly. True development of the Bakken and Three Forks in ND and MT didn't really get started until ~2008. Even then, the oil and gas companies didn't get their drilling and fracing optimized until 2010 and that process is still ongoing. If you look at all of the Bakken wells in the 4 counties he mentioned from June, 2012, as an example, there are 3656 of them that are producing. The average production per well for that month was 4303 bbl oil. The wells were online an average of 25.7 days for a daily average of 167 bopd.
If you look even closer at just the wells that were drilled since 2008, the number goes up to an average of 183 bopd. He's correct in that it isn't all as cost effective as his almost mythical 5000 bopd 1000' well. And it is true that we will not start pumping out enough oil to fuel ourselves. Still, there is no need to resort to blowing things out of proportion to make your case. Do we all need to scream to get attention?!?
there will always be oil---at a price. they;ll drill all the shale out and then some for $124/bbl. the last barrel of oil will cost 1million to get out, but by then we'll be doing something else.
the shale production makes up like, what, 5 days of US oil consumption? net energy exported, the US, b/c we export coal and nat gas, and import oil
Been 5 years since I learned about peak oil and its super frightening implications. 5 years later the world turns, 5 years from now the world will still turn and James Kunstler will still keep hammering away at happy motoring and Americans eating cheese doodles.
It's wise not to fall into any type of extreme thinking, whether bullish or bearish. There will ALWAYS be a "crisis" whether its a financial crisis, terrorist crisis, peak oil crisis, CUBAN MISSILE CRISIS, a red scare, drop and cover drills, fear will always be there. The point is to enjoy the good times while they last because as life and history has shown crisis will arrive whether its a personal one or economic or war etc.
Right now if u are employed and or have sufficient resources to survive and take care of yourself, are physically well and have loved ones enjoy life learn the Econ data trade markets win lose break even just live. When the REAL crisis comes u will regret not enjoying the good times
Things are very bad now; I don't know whether to laugh or cry....I would hit the bottle hard tonight after reading the latest bad news, but beer is my alcohol of choice.
Mmmm 2020, that's about the timeline to wave good morning to your favourite drone.
" but the flow rates per well (82 barrels-a-day average) are laughable compared to the halcyon days of conventional oil -- little better than "stripper" wells. Consider also that shale oil well flow-rates decline greater than 60 percent in the first year".
I don't know where you obtained these figures, but, I can tell you for fact that, after drilling in the EFS for almost 4 years, the 'Operator' I have solely worked for (I stay in constant contact with their Geology Dept Every Day) has flow rates ranging from 200 to 1500 BPD, AND ... The numerous wells that they have had online for up to 3 to 5 years ... Have Not .... Lost a beat in production numbers (yet) .... None!!!
But then again ... Much of the production data comes from Karnes Couny .... The 'Heart' of the EFS.
Just Sayin ...
:)
I don't see the point of this post..this is the second post about the finite nature of fossil fuels in a few weeks. What do the glorious zerohedge geniuses suggest that we do? stop using it? conserve it? what?
IDK what everyone else recommends - but I recommend working on improving your family's resilience to long-range supply chain disruptions and currency devaluation.
I completely agree with you! What's the point ? Beyond that, the article is pure bluff and the assumptions all wrong. Did this fall off somebody's desk in the '80's and someone just decided to print it ?
This mentality said we should have run out of oil 30 yrs ago and I'm quite frankly tired of this ever moving target as the catastrophic end of "fossil" fuels. The reserves continue to be newly found or enlarged, the technology continues to improve yield as well as capture abilities.
With a hat tip to Jack Nicholson [As Good as It Gets], take your leftist wack-a-doo BS and failed eco-socialist policies to a different country – “Sell crazy someplace else, we're all stocked up here”.
There is enough natural gas under the sea to keep us going for 1000 years. The Japanese are starting to mine it now, they expect to have it fully developed in 6 years.
http://news.nationalgeographic.com/news/energy/2013/03/pictures/130328-m...
Long nuclear.
This author is only capable of being a spinmeister to the low information audience. The map he presents is woefully inadequate in the representation of the size of the shale resevoirs. For the Bakken he only shows a samll area in North Dakota. Then the southern productive area is limited to the Eagleford shale in Texas.
In fact, the productive shales in the north extend into South Dakota, and aslo west into Montana. Although not in US territory, the productive shales are being developed across the border into Canada. It should come as no surprise to anone reading here to learn that Obammie has made Federal Lands off limit for shale development and that would represent a large portion of Montana and Colorado.
The entire extent of the Marcellus shale has not been determined as NY State is still controlled by the anti-science nitwit Cuomo. However both Pennsylvania and Ohio are moving foreward so that oil and liquids production are increasing rapidly.
And of course the author ignors the vast acreage in the California Monterey shales. Why let the facts get in the way of the story?
This is silly communist propaganda -- Club of Rome style.
Of course, we will run out of oil, in about two hundred to a thousand years. The world has 50 years worth of oil Reserves at today's price and technology. It has ten times that of recoverable Resources at some higher price and better technology.
The point is that there is no need to panic. If we have a relatively free market, then the world will adjust.
Some of Oil's price rise is due to a declining value of the US dollar. The Dollar is slowly being abandoned as the World's Reserve Currency. The US will be hit hard from that.
We will use whatever resources are the cheapest. Japan is getting ready to tap Methane Hydrates of which there is a ten thousand year supply in the coastal shelves around the world.
Ps. Of course, every one of the fracked deposits are declining, but that doesn't say that these wells will be abandoned. The likely consequence will be a decline and a leveling off. This is how most oil wells are now. A well may be forty years old and still pumping. Most wells have 90 to 95% of the oil still in the ground. Newer technologies will improve the extraction.
We need solar powered machines that extract CO2 from the air and H2O from the ocean and converts them back into hydrocarbons plus O2. Yes, I know it is "inefficient" and "violates" the 2nd law of thermodynamics - actually, it doesn't. Technically, it wastes energy but that energy was free from the sun and we weren't using it anyway. (Or the barren land for the solar collectors). All this method does is give us a convenient way to store energy - petrol - that is alot easier to play with, compared to having 200 m2 of solar panels sitting on the roof of your car or waiting for battery technology to get an energy density similar to petrol.
As a bonus, such a method would suck CO2 out of the air and keep the greenies happy. Note the amount of CO2 won't decrease, it will stay the same as we keep re-burning it.
I don't know if this method is feasible for the whole earth to adopt, I still have to look further into it. Apparently a couple of companies are already trying this (just Google something along the lines of "turn carbon dioxide and water back into petrol").
After I repay my debts and become a zillionaire, I will go back to uni and investigate this myself (along with any other fun ideas I come up with.) Note that I am not interested in going back to uni as an impoverished "debt creator". So this will take me a while ...
Actually, these machines have already been invented, several billion years ago in fact --- they are called "plants".
akak sez ... '--- they are called "plants".'
Excellent summary akak. Although I would still like to find out how to make the process happen a little faster, and perhaps with a less divergent output.
Almost on par with the solar powered sea-water de-salination plant. Did I say solar powered? It's the sun!