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NatGas Nightmares & The Descending Deep State
Submitted by Howard Kunstler of Kunstler.com,
And so it’s back to the Kardashians for the US of ADD. As of Sunday The New York Times kicked Ukraine off its front page, a sure sign that the establishment (let’s revive that useful word) is sensitive to the growing ridicule over its claims of national interest in that floundering, bedraggled crypto-nation. The Kardashians sound enough like one of the central Asian ethnic groups battling over the Crimea lo these many centuries — Circassians, Meskhetian Turkmen, Tatars, Karachay-Cherkessians — so the sore-beset American public must be content that they’re getting the news-of-the-world. Perhaps one of those groups was once led by a Great Kanye.
Secretary of State John Kerry has shut his pie-hole, too, for the moment, as it becomes more obvious that Ukraine happens to be Russia’s headache (and neighbor). The playbook of great nations is going obsolete in this new era of great nations having, by necessity, to become smaller broken-up nations. It could easily happen in the USA too as our grandiose Deep State descends further into incompetence, irrelevance, buffoonery, and practical bankruptcy.
Theories abound about what drives this crisis and all the credible stories revolve around the question of natural gas. I go a little further, actually, and say that the specter of declining energy sources worldwide is behind this particular eruption of disorder in one sad corner of the globe and that we’re sure to see more symptoms of that same basic problem in one country after another from here on, moving from the political margins to the centers. The world is out of cheap oil and gas and, at the same time, out of capital to produce the non-cheap oil and gas. So what’s going on is a scramble between desperate producers and populations worried about shivering in the dark. The Ukraine is just a threadbare carpet-runner between them.
Contributing to our own country’s excessive vanity in the arena of nations is the mistaken belief that we have so much shale gas of our own that we barely know what to do with it. This is certainly the view, for instance, of Speaker of the House John Boehner, who complained last week about bureaucratic barriers to the building of new natural gas export terminals, with the idea that we could easily take over the European gas market from Russia. Boehner is out of his mind. Does he not know that the early big American shale gas plays (Barnett in Texas, Haynesville in Louisiana, Fayettville in Arkansas) are already winding down after just ten years of production? That’s on top of the growing austerity in available capital for the so-far-unprofitable shale gas industry. That’s on top of the scarcity of capital for building new liquid natural gas terminals and ditto the fleet of specialized refrigerated tanker ships required to haul the stuff across the ocean. File under “not going to happen.”
Even the idea that we will have enough natural gas for our own needs in the USA beyond the short term ought to be viewed with skepticism. What happens, for instance, when we finally realize that it costs more to frack it out of the ground than people can pay for it? I’ll tell you exactly what will happen: the gas will remain underground bound up in its “tight rock,” possibly forever, and a lot of Americans will freeze to death.
The most amazing part of the current story is that US political leaders are so ignorant of the facts. They apparently look only to the public relations officers in the oil-and-gas industries and no further. Does Barack Obama still believe, as he said in 2011, that "we have a hundred years of shale gas?” That was just something that a flack from the Chesapeake Corporation told to some White House aide over a bottle of Lalou Bize-Leroy Domaine d’Auvenay Les Bonnes-Mares Grand Cru. Government officials believe similar fairy tales about shale oil from the Bakken in North Dakota — a way overhyped resource play likely to pass its own peak at the end of this year.
If you travel around the upper Hudson Valley, north of Albany, where I live, you would see towns and landscapes every bit as desolate as a former Soviet republic. In fact, our towns look infinitely worse than the street-views of Ukraine’s population centers. Ours were built of glue and vinyl, with most of the work completed thirty years ago so that it’s all delaminating under a yellow-gray patina of auto emissions. Inside these miserable structures, American citizens with no prospects and no hope huddle around electric space heaters. They have no idea how they’re going to pay the bill for that come April. They already spent the money on tattoos and heroin.
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And the Reality! That is even worse than truth!
This guy can be safely ignored from now on.
Read "The Long Emergency". Published 2005.
Tell me it isn't coming true after you read it.
On second thought....don't waste your breath or my time. You can't handle the truth anyway. It's obvious.
Yawn
You mean the Catullus guy?
North Dakota is begining to wind down now ,Royal dutch shell is pulling out and they have been dumping the fraking waste water into the ground water insted of taking it to Colarado to get rid of it properly. They burn the gas off which has contaminated a huge acerage up there, and countless oil spills . I went to take a look about 18 months a go and to was unreal , I cannot berin to describe it. The wind patterns have changed here in Notrh Dakota because of the gas burning , the heat pushes the wind in a different direction and the wages are falling now, the wells only last about 18 months before they start to run dry so the ROI is high .
But but we're supposed to be the new Saudi Arabia!
It's been nothing except lies for years. But hey, take the easy money and run, it's the American way.
"But but we're supposed to be the new Saudi Arabia!"
Don't fall for the Propaganda, that's just a smoke-screen for the Fed's failing QE+ and the USD/USTs, that's going to run out of steam and unwind like something out of a Roadrunner cartoon.
That's why they need another "story" or "crisis". Lucky for them, there's a whole "ecosystem of shills" to support whatever story, as they too have to make a living.
Will not matter..US will meet all needs of Europe with send them excess as LNG soon...
someone said that...
Golly then it must be true!
/s
it's just another banker Ponzi, nothing to see here. They finance the upfront costs, show projections based on an oil well's depletion rate (ten times slower than gas), then sell the debt to the Muppets and leave town. Perfect scheme, banker gets another private island, Muppets get smashed, and Mom and Pop get water coming out of the tap you can light with a match.
Kinda chokes me all up, the new American Dream in action...
You might want to look into that choking thing.
Could be rising bile.
Tattooed heroin junkies are usually on public subsidies living in public housing, the bonds which secure those benefits are the most secure in the world.....for the moment
And they dont worry about utility bills. HUD and other assistance programs take care of it.
And they live on a 6 pack of diet pepsi everyday too.
Outstanding story. The truth hurts but better people understand this now rather than later.
Besides... using a highly versatile (and limted not limitless) energy source such as natural gas for electricity generation when a nation is sitting on several hundred years worth of coal deposits is about as smart as converting food (corn) into ethanol (which should be sipped) and using it to drive your Hummer.
It only appears crazy. All these things happen for a reason. They don't tell us the reason because if they did we'd lose our collective fucking minds in horror.
You can herd sheep, herd them even to the slaughter, but not sheep that are so scared they have lost their fucking mind.
"You can herd sheep, herd them even to the slaughter, but not sheep that are so scared they have lost their fucking mind."
'Mind' - singular... indeed.
Well every sheep needs to get around it themselves. I see a few are individually heading for the hills.
Sure, we can use more coal, if we don't mind China level pollution.
Chew your air thoroughly before you breathe it.
The scrubbers they already have in place eliminates most coal effect pollution.
Stop listening the 'global warming' morons who now call it 'climate change' because they have no clue as to what is really going on with the weather.
Yes the earth is fairly round and not flat.
That was kinda weak. Just so you know.
Place all new plants downwind on the east coast and use the best German scrubber technology...
"this new era of great nations having, by necessity, to become smaller broken-up nations. It could easily happen in the USA too"
That's an interesting thought. I could see this idea of independence becoming a popular mantra very soon in an area near you. Been thinking about this a lot recently, even in this state of Colorado, seriously as states what does the government do that is oh so great and wonderful for you? FSA/EBT crowd??? Maybe, but I bet that states would be able to set up better forms of socioeconomical reform programs than the bullshit the .gov does. Education? Imagine if your agreed upon tax dollars actually went to schools, basically you pay for your childrens education not to .gov.
I think then as well, what would the .gov do? Issue us statements? Offer sanctions? I mean seriously, send in the troops, cops, mercenaries? If they chose that route two things would happen, they have to fight against MILLIONS of gun owners and have a massive war front on their hands...or....they just bomb their own country infront of the eyes of the world thus killing themselves economically, which they are already in the process of doing it. Most states could be self sustainable or set up trade routes independently.
This idea wouldn't take violence unless that is what the government chose to do, but in reality politicians / lawyers aren't the only smart people that know how to handle shit. Fucks sake the people of ZH know more about things and the way of the world than any politicians I've ever heard.
People need to stop living in fear of everything, since we are raised in a world of fear from birth, and once you stop being afraid of everything we could all be a lot happier.
Google tenth amendment center
It's called nullification. Pretty funny how States can vote by referendum and trump fed law. Marijuana just the start. How about a referendum to exempt States from Obama care? No difference.
Thank you! Never heard of that before honestly. I agree, and with the marijuana statute. To be honest I don't know how to write laws or initiate a new idea to those in "power", I've written many o'letters to all government officials in my state with ZERO response, except from Jared Polis who actually will take time out of his schedule to write you....though I think he is crazy for support O-care and Immigration, but to each their own, that guy has done a lot of good as well for our state. But in all seriousness I would love to get people together and start introducing these ideas to our government, but no idea even where to begin or how much that actually costs.
Gotta' take the power back! ~ Rage Against The Machine
EDIT :: Never heard of The Tenth Amendment Center **
The American financed Putch - $5 Billion - is aleady on its last legs - no support in the East or South of Ukraine
Obama playing golf / Kerry off the air with his mouth - and the Europeans dont want any part of economic sanctions or Fascist led Ukrainian government
Obama needs to resign and start collecting promised deferred compensation package from speeches like Clinton who is now worth $115 million solely from his "speeches"
can obama use his teleprompter for those speeches? if not i don't think many will pay to listen in...
So, when will the GOP go after Obama and his Dems, for the 2014 Mid-Terms?
Of course, as we can expect McInsane & Friends to pitch for the MIC. They're all nutjobs or crooks, I swear!
http://jessescrossroadscafe.blogspot.com/2014/03/ukraine-gold-reserve-pu...
according to this report all of Ukraine’s gold has been taken to the US for safe keeping
Secession is an answer.
There is tons of opportunity in the US but none of it can take place because of the FED, Wall Street and Washington D.C.
In other words: GLOBALIST SCUM.
Yeah.....I'm sure New Hampshire will be SOOooooo much better if it seceeded.
So tell me....if they or any state seceeded who would they buy energy from that wasn't a globalist scum ?
Sorry....we're all on Prison Planet. The only secession is death.
The sun is still free, you just can't put a meter on it for profit.
Sure you can. If you are talking about generating electricity or using solar energy for "modern" purposes, it takes equipment that must be maintained and occasionally replaced that people can charge money for. Why charge somebody by the kwh when you can charge them for a new photovoltaic cell or parts for a solar boiler?
(If it requires material and equipment to harness, "renewables" are only as renewable as that material and equipment.)
But, but, King Putmoas said that Green Energy is Free Energy...
True......but enough to go off grid in New Hampshire for most of the year ?
Most people could survive. But most people don't won't to live just to survive. They want their magic creature comforts provided for them by the magic of the black liquid or the invisible gas.
Ahh one of those most of the year people. And if you die of cold during that part of the year, what good is the rest of the year?
You're not off the grid. Period.
I'm not one of those people. I won't freeze for sure here in Florida. I am half off grid with a tie in now. Will be completely off-grid in a few years. Patience.....coupled with planning and doing what you can when you can will get me there.
In other words.....I'm investing in freedom. What little I can get now-a-days anyway.
It could by law, just get 38 States and governers to sign up and, presto, over ride the Fed, WallStreet, and D.C.
Look at all the Hudson Valley love in this thread, here I thought I was the only one dumb enough to have stayed behind..
Another peak oil propagandist. Hubbert was a bullshit artist hired by dRock to promulgate the meme that crude oil is scarce. Go ahead, show me Hubbert's science. There is none because there was none.
You mean as opposed to your Old Testament derived certainty that oil is abiotic? You're an idiot.
Only an idiot would believe that the bizzilions of barrels of oil that have been pumped out of the ground came from decayed and compressed dinosaur crap...
It certainly isn't coming from your crap, that's for sure.
It might be abiotic..whether or not, it is if can be afforded to use it.
One more time.
Abiotic or ancient animals DOES NOT MATTER.
You drill where the geology says there is oil. There are 100 years of database to tell you what geology says that.
In no part of that database does the origin of the oil appear. No one drilling for oil cares where it came from. It doesn't matter where it came from. It only matters where you can find the right geology where oil might be.
We're running out of such geology.
There are thousands of capped and abandoned wells in the US where oil flowed and stopped when it was empty. In all these decades, you do not think anyone ever went back to re-examine capped wells? Of course they did.
And found them to be still empty.
So, no dry wells have refilled?
they never refill with oil...
Try to avoid "always" and "never."
On a human timescale, it is quite safe to say that they never refill with oil...
Incorrect. Do some homework.
Why the hell? Because doing so doesn't comport with your personal inner dialog about the workings of the universe?
Hello it's the universe calling and it said to go ahead and fuck off.
Avoid always and never was my polite way of saying that the guy is demonstrably wrong.
So far!
Keep the HOPE on!
(and spare me some change bro...)
Brontosaurus Livers make the best oil, just sayin...
Yummy!
Nehweh
Did I say something about the Old Testament, you fuckwit?
The only way these people in these areas are going to make it is by going back to the land to be way more self-sufficient. There's so much these people could do for themselves but now that they've been domesticated and dumbed down, they can't even see the opportunities in front of them. Instead, they'd rather kill themselves. If one sees that the future holds nothing but diminishing returns for the current paradigm, the only way is to take matters into one's own hands.
1. The Official Government. This consists of the permabureaucracy plus the theoretically changeable elected and appointed.
2. The Unofficial Government. In the US the CB is defined as "private". This definition doesn't conform to reality or to the understanding of the "commons" or "governing". Money supply, interest rates, credit creation, and police powers of banks are more governing than most of the activities governments engage in. Cartel banks aren't private. That's the literal significance of TBTF. The "leverage" ramp of derivatives, deregulation, CB puts and coordination, ZIRP and QE, isn't leverage it's confiscation/cost shifting on a global scale.
3. The Shadow Government. Consists of the Spookocracy plus other elements of 1 and 2(like upper echelon military).
Can we dispense with deep doo doo or deep throat or deep whatever?
"If you travel around the upper Hudson Valley, north of Albany, where I live, you would see towns and landscapes every bit as desolate as a former Soviet republic."
Whelp if Cumo LIFTED THE DRILLING BAN IN New Yoirk State and allowed land owners to drill for gas on thier own property, it might be a tad more better? Opps, you left that part out.
Ya, go ahead and get that done, champ. Just drill baby drill. Hah.
Exactly. How much does it cost to drill a new well and how much does the average person have to put towards drilling?
It's like a comedy act or something. Guess I'm just not in the mood for it.
Politicians and other delusional's call real people suffering "losers" and shout the rallying cry of America the great, America the ever upward, America the never failing - because that is what they are selling.
Same with the MSM news organizations; things are as they have always been, if only we can elect "X" things will be better, reforms have been passed and "Wow - look at those markets" so invest now.
Fear, guilt, envy, pandering, lies.
Rub this testosterone in your armpit and pop that ED pill and you'll be a man again competing with Attorney commercials suing for those drugs causing strokes, heart attacks, vision loss, hearing loss, seizures. Now all I need is a 65 Mustang or a big Pick-Me-Up Truck and I'll be complete.
Never mind that for 20 years we've sent our young people off with a wave of the flag and the mythos of fighting the Nazi's when it is the modern Crusades and to secure petroleum and poppies for the machine. We welcome them back in coffins, missing limbs, or with shattered minds and wonder why they can't live under the Big Top Circus anymore.
It's a sad Carnival complete with a Hall of Mirrors, Horror House, Roller Coaster, Ferris Wheel, Cotton Candy, Barkers, and cheap stuffed animals and plastic crap.
Welcome to the Show.
Dark and true... +1
Wow. Please don't set yourself on fire, we need you around here.
Bravo. Amazing!
So we use about 30 billion barrels of oil a year world wide. At $100 barrel that equals $3 trillion in oil sales.
If production drops to 20 billion barrels and prices raise to $150 barrel we stay at $3 trillion in sales and less pumping means lower costs and continued higher profits for the oil companies.
Shortages are good things when you control the industry.
Bottom line is that the oil companies will be fine and it will be the consumers that pay more and more to ensure their profits.
At $150/bbl the global economy evaporates in a blink never to return.
You had a Plan B perhaps?
You're being silly. The world is not black-and-white. Things don't start and stop full force. Things change and the situation is ALWAYS grey.
Oh ho! An optimist!
Grey doesn't constitute an economic engine, that's just failure. And as for change, talk to the last generation's US industrial workforce. Those fuckers are extinct and not coming back to America ever.
Shit starts and then it stops, and shit don't wait around for the hesitant to jump off in time to save their pension. The tall ship sail riggers are gone. Maybe one guy working part time in Maine still rigs sails. But other than him that shit is just gone.
Nothing we've witnessed in 5 generations is going to prepare us for the massive, across-the-switchboards reset that is coming our way. So many stars are lining up in so many dreadful constellations that even if only half of them resolve into earthly events, we are totally blown.
Because the consumers can afford to pay more? What happens when they cannot afford to drive to work?
Move closer. Ride a bike. Telecommute. Jeez, THINK dude!
What happens if oil production drops as mentioned, and food doesn't transport to shelves.
Can we solve that by "THINK, dude!"
Cargo bikes.
Also, push carts. Pushed by the unemployed. That for bonus points.
I got nuth'n but answers, bitches.
Move closer to a farm. Use bicycle-powered plows. Telecommute to your job as a farm laborer. Jeez.
Sure. Fine. I'll move closer to the shopping mall for a shitty retail job. Consumers will still need to get there, which either means expending a lot of energy rebuilding all of the cities that are built on the urban sprawl plan so that they too can be close, or they will need to be able to afford the gas to get there. And what about paying to have the shitty goods that I'll be selling shipped in? That requires oil as well. Or I could just work at a supermarket that I can walk to. Now, where does that food come from again, and what is used to plant it, harvest it and ship it to the supermarket?
Our infrastructure and our economy are simply not set up for expensive oil and we are doing NOTHING to remedy that situation. Once you realize just how pervasive oil is in our modern lifestyle, you'll understand that "move closer, ride a bike, telecommute" is like putting a band aid on a bullet wound.
I am in the "shale gas industry" and very much beg to differ with your analysis that it is unprofitable. I don't disagree that it's been oversold however.
Google the Ruins of Detroit for an authoritative photo essay on America in tatters.
What prissy limp dick motherfucker downvoted you for saying that you should do a google search for Ruins of Detroit?
Must be the NSA doom bots and "keep calm and slave on" bots.
Shitty Andriod browser duplicate.
Fuck you Golfer in Chief and all you demon cat limousine communists.
These guys are going to suck you dry and leave the mouldering corpse of America behind them as they trample the world.
Here's the thing. It took Britain 40 years to admit it was no longer the world's superpower... 40 years, after it was generally clear that it couldn't afford it, people (the elites) were still talking about projecting power across the globe.
Don't expect decline to be a quick reset. It isn't. There are millions of idiots out there determined not to face up to reality.
We have moved beyond every resource shortage in the past. It worked every time with increasing jumps in productivity and joltingly accelerating at each step. Mathematically, this is an envelope curve, a typical example is linked below in regards to the energies achieved by accelerators. Innovation has no limit! That is the real force moving humanity forward. It's a critical and very counter-intuitive idea, but it is true, empirically and historically:
http://3.bp.blogspot.com/_YJvargjuS7s/SxQrL6pXQSI/AAAAAAAABKI/ib8BW9KSop...
example here. I have my own ideas of what I will do when the price reaches a point, but there's no reason that it needs to be the same thing as my neighbor. A completely different strategy may be appropriate for him.
This fear of "exhaustion" of resources has happened at every turn in world history. One such case documented in Matt Ridley's book "The Rational Optimist" and one of the oldest examples, in 1798, Robert Malthus (the first Malthusian) famously predicted with his "Essay on Population" that food supply could not keep up with population growth, England should be evacuated and that the population of the world would die back. This gap in time wasn't necessarily easy, but it ended soon enough to greater prosperity. In 1830 someone discovered the vast quantities of bird droppings on the South American and South African coasts on islands that didn't get any rain. The bird droppings were nitrogen rich and had been accumulating for hundreds of years. Guano mining became very profitable. Around 1880 the droppings were becoming more scarce, so the miners turned to saltpeter and mineral deposits in the Andes mountains, which were ancient bird islands. Those reserves went eventually into decline.
At the beginning of the 20th century, the world was in crisis once again with Malthusian predictions on the dying off of humanity, until the development of both a stronger wheat crop, and the invention of fertilizer production from steam, and the internal combustion engine. In modern times, agriculture is beginning to move to a decentralized model, where urban homesteading is becoming the new cool thing to do for the kids.
We have seen both an increasing shallowness in the impact of the Malthusian pause between innovations, and an decreased duration. The "bad times" that are linearly projected to be die-offs and global disasters are getting less bad and shorter, before the next innovation comes along. This is something that Julian Simon and others have written about for decades.
It will get better. We just need to kick out the fascists and develop resilient systems and communities.
You will be right! Again!
There will be people saying exactly what you're saying, and they'll be able to prove it. And soon.
About 800 million of them worldwide. Innovation saved them! Malthus was a wacko.
So, what technology is going to take the place of oil? Research teams are getting bigger out of necessity and bona fide scientific discoveries aren't coming as fast as they used to. As with oil fields, all of the low hanging fruit in science has been plucked. If you want to solve this problem, it will likely take another Einstein who can actually nail down Grand Unified Theory or something of the sort. It could happen, but it needs to happen very soon.
I don't know. But have you heard about graphene?
http://www.technologyreview.com/view/521651/graphene-supercapacitors-rea...
Similar potential to Lithium Ion, and you can charge them in 16 seconds. Then when they wear out, you can compost them. They're non-toxic.
Thorium LFTR is also a pretty promising developing technology.
Neither of those are direct replacements for oil. Oil is only marginally fungible with other energy sources due to the fact that you can get liquid fuels from oil. Liquid fuels are easy to transport and fast to fill up a tank with. Liquid fuels provide unprecedented mobility, and it is that mobility that is important. It is that mobility that allows us to mine thorium and ship coal to power plants. If you want those other sources to take the place of oil, you will need to mess with charge times, or learn how to use them to manufacture liquid fuels. That requires knowledge and/or infrastructure that aren't there. I suspect that we could manufacture liquid fuels if we had enough thorium reactors going, but how long does it take to get a new thorium reactor going? It is something that, if it was going to save us from hard times, should have been in the works years ago.
Keep in mind that everything from the roads that you drive on to the food that you eat to the elastic in the waistband of your underwear all require oil to manufacture. Oil is necessary for almost everything in our modern economy. You do not just up and replace that overnight.
Dude, in the words od Dr. Emmet Brown, you are thinking 3 dimentionally!
Dude, in the words of Dr. Emmet Brown, you are thinking 3 dimentionally!
Q: So, what technology is going to take the place of oil?
A: The United States is part of an international collaboration to construct and operate ITER, a full-scale
experimental device that aims to demonstrate the scientific and technological feasibility of fusion energy.
ITER will be constructed in Cadarache, France, and is expected to be completed by 2018. The U.S.
ITER Project Office (USIPO), hosted by Oak Ridge National Laboratory (ORNL) with partner labs
Princeton Plasma Physics Laboratory (PPPL) and Savannah River National Laboratory (SRNL), will
manage all U.S. activities. The project will be accomplished through a collaboration of DOE
laboratories, universities, and industry.
Who needs nat gas or oil! Throughout history, when one source of energy became scarce, either productivity enhancements bought more time, or a new technology. Hydrogen is fuel for fusion reactions. Hydrogen is also the most abundant element in the Universe. 2018 sounds optomistic, but possible.
I agree. Fusion would be great. Now show me a working power generation plant that uses fusion. Show me the technology to manufacture fuels that provide mobility that is so necessary in our modern society using that energy. How much would it take in the way of physical resources (requiring energy that will not initially come from fusion) to build up the infrastructure around such a system? How much time would it take to really get those plants built and integrated with our infrastructure?
Like I say, we either come up with an oil substitute, or modern industrial society ends. Not a coal substitute and not a natural gas substitute, but an oil substitute. I personally think we might very well come up with something workable, but not until AFTER disaster hits and a lot of people suffer and die. Projects like ITER may be relegated to the dustbin of history due to the enormous complexity and the amount of resources that it requires.
Sorry, can't let your logic or lack there of pass.
When in humanitys past have 7.5 billion souls been alive at the same time?
The only reason the 7.5 billion exist is due to a "cheap" abundant energy source. That source has been used.
It took 220 million years of the carbon-ferrous era to store the energy we as a species have used up in little over a century.
A once in a planetary cycle concentration of energy is nearly gone. New technology will not feed and water 7.5 billion mouths.
The economic collapse will lead to a massive species collapse.
lol, instead of your boring pondering rant, why don't you look at the data, somber idiot?
The adults are talking right now. Go back to your basement hovel spanking it to dwarf porn.
I've been studying the subject of peak oil for about 10 years. Unless you are willing to look at the data as you're so fond of saying, and have an intelligent conversation, fuckoff you mindless twit.
uh oh , lol..
What about iPhones? Isn't it tats, iPhones (for selfies), and smack? The big 3. Go college!
Heroin? Fuck, that's a rich folks drug. Methbillys can't even spell it correctly. How did Kuntstler get this vision of Damnation Alley when if he even drove up there I doubt if he even got out of his limo? I bet he watched "Book of Eli" or "The Road" this past week.
Try "Neon City" Howie, it's a pretty good dystopian future flick.
Wow! I knew it was Kunstler from the headline!
Uh oh, more failures of capitalism that will have to be blamed on socialism or fascism.
"tattoo's and herion"
A brush so broad I'm surprised you can lift it.
"Contributing to our own country’s excessive vanity in the arena of nations is the mistaken belief that we have so much shale gas of our own that we barely know what to do with it."
I thought the idea of "drill, baby drill," was to make the U.S. energy self sufficient, not to export ourselves back into energy dependency. Just the other week i was reading the oil producers wanted permission to export, because they feared a glut of supply, that would bring down prices. I thought that was the other point of "drill, baby, drill," that it would bring down prices.
"Does Barack Obama still believe, as he said in 2011, that "we have a hundred years of shale gas?”
He also said "clean coal." Obama will say anything.
"Boehner... Does he not know that the early big American shale gas plays (Barnett in Texas, Haynesville in Louisiana, Fayettville in Arkansas) are already winding down after just ten years of production?
Does a politician not know how to play politics? Politicians will say anything.
Grow your own. Don't drive so much, and, while I'm spouting axioms and advice, this Kunstler guy (you know he's a raging libertard, right?) and half the commentators here should STFU.
Sgt Shaftoe (above) had the comment of the month... so far, with "We just need to kick out the fascists and develop resilient systems and communities."
Bingo.
And BTW, upstate NY is generally NOT the lower Hudson Valley. Try Syracuse, Rochester and Buffalo. We have a small town up here called ALBION, which, I just found out, stands for All Losers Belong In Our Neighborhood.
But, the land is good, and pretty cheap if you know where to look. As for living through the winter, it takes balls, something sorely lacking in a lot of people these days. Every heard of FIREWOOD?
Fuckin' Ay!
Ya 7.2 billion people using firewood for cooking and heating. That should turn out well.
You know that prior to the advent of coal Europe was encountering massive deforestation problems - with a FRACTION of the current population.
THE DECLINE OF THE WORLD’S MAJOR OIL FIELDS
Aging giant fields produce more than half of global oil supply and are already declining as group, Cobb writes. Research suggests that their annual production decline rates are likely to accelerate.
http://www.csmonitor.com/Environment/Energy-Voices/2013/0412/The-decline-of-the-world-s-major-oil-fields
THE TRUTH BEHIND SAUDI ARABIA’S SPARE CAPACITY
The Saudis have also made public plans to start injecting carbon dioxide into the world’s largest oil field, Ghawar, no later than 2013. CO2 injection is what you do when an oil field starts yielding progressively less oil. It gooses the output…for a little while) http://www.forbes.com/sites/greatspeculations/2011/03/04/the-truth-behind-saudi-arabias-spare-capacity/
WORLD IS SLEEPWALKING TO A GLOBAL ENERGY CRISIS
Mark C. Lewis, former head of energy research at Deutsche Bank's commodities unit highlighted three problems facing the global energy system: "very high decline rates" in global production; "soaring" investment requirements "to find new oil"; and since 2005, "falling exports of crude oil globally."
http://www.theguardian.com/environment/earth-insight/2014/jan/17/peak-oil-oilandgascompanies
DREAM OF US OIL INDEPENDENCE SLAMS AGAINST SHALE COSTS
The path toward U.S. energy independence, made possible by a boom in shale oil, will be much harder than it seems. Just a few of the roadblocks: Independent producers will spend $1.50 drilling this year for every dollar they get back. Shale output drops faster than production from conventional methods. It will take 2,500 new wells a year just to sustain output of 1 million barrels a day in North Dakota’s Bakken shale, according to the Paris-based International Energy Agency. http://www.bloomberg.com/news/2014-02-27/dream-of-u-s-oil-independence-slams-against-shale-costs.html
FORMER BP GEOLOGIST: PEAK OIL IS HERE AND IT WILL ‘BREAK ECONOMIES’
http://www.theguardian.com/environment/earth-insight/2013/dec/23/british-petroleum-geologist-peak-oil-break-economy-recession
THE FRACKING PONZI SCHEME
Robert Ayres, a scientist and professor at the Paris-based INSEAD business school, wrote recently that a "mini-bubble" is being inflated by shale gas enthusiasts. “Drilling for oil in the U.S. in 2012 was at the rate of 25,000 new wells per year, just to keep output at the same level as it was in the year 2000, when only 5,000 wells were drilled." http://www.forbes.com/sites/insead/2013/05/08/shale-oil-and-gas-the-contrarian-view/
WHY AMERICA’S SHALE BOOM COULD END SOONER THAN YOU THINK
http://www.forbes.com/sites/christopherhelman/2013/06/13/why-americas-shale-oil-boom-could-end-sooner-than-you-think/
SCIENTISTS WARY OF SHALE OIL AND GAS AND U.S. ENERGY SALVATION
"Tight oil is an important contributor to the U.S. energy supply, but its long-term sustainability is questionable. It should be not be viewed as a panacea for business as usual in future U.S. energy security planning."
http://www.sciencedaily.com/releases/2013/10/131028141516.htm
Toil for oil means industry sums do not add up (FT.com)
Rising costs are being met only by ever smaller increases in supply
The most interesting message in this year’s World Energy Outlook from the International Energy Agency is also its most disturbing.
Over the past decade, the oil and gas industry’s upstream investments have registered an astronomical increase, but these ever higher levels of capital expenditure have yielded ever smaller increases in the global oil supply. Even these have only been made possible by record high oil prices. This should be a reality check for those now hyping a new age of global oil abundance.
According to the 2013 WEO, the total world oil supply in 2012 was 87.1m barrels a day, an increase of 11.9mbd over the 75.2mbd produced in 2000.
However, less than one-third of this increase was in the form of conventional crude oil, and more than two-thirds was therefore either what the IEA calls unconventional crude (light-tight oil, oil sands, and deep/ultra-deepwater oil) or natural-gas liquids (NGLs).
This distinction matters because unconventional crude has a higher cost than conventional crude, while NGLs have a lower energy density.
The IEA’s long-run cost curve has conventional crude in a range of $10-$70 a barrel, whereas for unconventional crude the ranges are higher: $50-$90 a barrel for oil sands, $50-$100 for light-tight oil, and $70-$90 for ultra-deep water. Meanwhile, in terms of energy content, a barrel of crude oil is worth 1.4 barrels of NGLs.
Threefold rise
The much higher cost of developing unconventional crude resources and the lower energy density of NGLs explain why, as these sources have increased their share of supply, the industry’s upstream capex has increased. But the sheer scale of the increase is staggering: upstream outlays have risen more than threefold in real terms over the past 12 years, reaching nearly $700bn in 2012 compared with only $250bn in 2000 (both figures in constant 2012 dollars).
Coinciding with the rise in US tight-oil production, most of this increase in upstream capex has occurred since 2005, as investments have effectively doubled from $350bn in that year to nearly $700bn in 2012 (again in 2012 dollars).
All of which means the 2013 WEO has the oil industry’s upstream capex rising by nearly 180 per cent since 2000, but the global oil supply (adjusted for energy content) by only 14 per cent. The most straightforward interpretation of this data is that the economics of oil have become completely dislocated from historic norms since 2000 (and especially since 2005), with the industry investing at exponentially higher rates for increasingly small incremental yields of energy.
The industry has been able and willing to finance such a dramatic increase in its capital investment since 2000 owing to the similarly dramatic increase in prices. BP data show that the average price of Brent crude in real terms increased from $38 a barrel in 2000 to $112 in 2012 (in constant 2011 dollars), which represents a 195 per cent increase, slightly greater in fact than the increase in industry capex over the same period.
However, looking only at the period since 2005, capital outlays have risen faster than prices (90 per cent and 75 per cent respectively), while in the past two years capex has risen by a further 20 per cent (the IEA estimates 2013 upstream capex at $710bn versus $590bn in 2011), while Brent prices have actually averaged about $5 a barrel less this year than in 2011.
Iran not a game changer
That prices have fallen slightly since 2011 while capex has risen by a further 20 per cent is a flashing light on the industry’s dashboard indicating that its upstream growth engine may finally be overheating.
Without a significant technological breakthrough reversing the geological forces that have driven the unprecedented increase in upstream investment over the past decade, prices will have to rise further in real terms from here or else capex – and with it future oil production – will fall.
It should also be emphasised that this vast increase in capex has occurred during a prolonged period of record-low interest rates. Once interest rates start rising again, this will put further pressure on the industry’s ability to make the massive capital outlays required to keep supply growing.
Of course, the diplomatic breakthrough achieved with Iran over the weekend could provide some much needed short-term relief to the market, as Iran’s exports could ultimately increase by up to 1.5m barrels a day if and when western sanctions were to be fully lifted. But this would not change the dynamics of the industry’s capex treadmill in any fundamental sense.
Even if global oil demand only grows at 1 per cent a cent a year, those extra barrels would be would be fully absorbed by the market within about 18 months. And that is probably how long it would take for Iran’s production and exports to return to pre-sanctions levels in any case.
Alternatively, if we take the IEA’s estimate that global production of conventional crude oil from all currently producing fields will decline by 41m barrels a day by 2035 (that is, by an average of 1.9m barrels a day per year), then Iran’s potential increase of 1.5m barrels a day would compensate for just 10 months of natural decline in global conventional-crude output.
In short, behind the hubbub of market hype about a new age of oil abundance, the toil for oil is in fact now more arduous and back-breaking than ever.
This should worry everybody, because with the evidence suggesting that consumers are reluctant to pay much above $110 a barrel, it is an open question what happens next to the industry’s investment plans and hence, over time, to the supply of oil.
Mark Lewis is an independent energy analyst and former head of energy research in commodities at Deutsche Bank; Daniel L Davis, a lieutenant colonel in the US Army, is co-author
Big oil counts the cost of tapping new discoveries
“One hundred dollars per barrel is becoming the new $20, in our business.” With that pithy analysis, John Watson, chief executive of Chevron, summed up the oil industry’s plight.
As companies pursue the ever more challenging oil reserves that they need to increase or merely sustain their production, their costs have risen to the point that the most expensive projects, such as deepwater developments or liquefied natural gas plants, need an oil price of at least $100 a barrel to be commercially viable.
Now a growing number of oil executives are saying that has to change. As discussions at the IHS Cera Week conference in Houston made clear, cost-cutting is back at the top of the industry’s agenda.
The issue has come to a head after three years in which the price of crude has drifted down, in part because of the extra supply coming on to the market from the US shale oil boom, while costs have continued to rise.
The result has been a squeeze on margins, declining returns on capital, and underperforming share prices.
Chevron and ExxonMobil’s shares have both risen 11 per cent in the past three years, and Total’s by 8 per cent, while Royal Dutch Shell’s have fallen 2 per cent. In the same period the S&P 500 index rose more than 40 per cent.
Futures prices show oil is expected to fall further, with five-year Brent at about $91 a barrel, suggesting that the pressure on oil producers’ profits will intensify.
Shares in companies such as Schlumberger and Halliburton, which provide services to the big oil groups, have over the past five years comfortably outperformed their customers. Under mounting pressure from their shareholders, oil companies are being forced to act.
In part, the roots of the industry’s cost problem lie in part in the increasing technical difficulty of the new projects being developed, such as large LNG plants or offshore oilfields in deep water. They demand complex equipment such as drilling rigs, specialised materials such as sophisticated steel pipes, and highly-skilled engineers, all of which are in limited supply.
As Peter Coleman, chief executive of Woodside Petroleum of Australia, put it when explaining the soaring cost inflation in the country’s LNG projects: “Everybody jumped into the pool at the same time, and we’re all trying to fight for the same floatable toys.”
Paolo Scaroni, chief executive of Eni of Italy, argues that his rivals’ rising costs also reflect their failure to discover more easily-developed resources. Companies such as Exxon and Shell have been adding production in the oil sands of Canada and US shale, which generally have higher costs per barrel because of the need for techniques such as hydraulic fracturing to extract the resources from the shale, or processing to separate the oil from the sand.
Exploration is more risky, but offers higher returns, Mr Scaroni says. Because with oil sands and shale the resources are known, “you are sure of everything, but the point is profitability is lower than if you make a discovery”.
Christophe de Margerie, chief executive of Total, adds another explanation: companies – including his own – have lost sight of the need to control costs. When oil prices are rising, managers are tempted to relax on cost control because their projects will still be profitable.
“If you have $110 [per barrel], and the budget is at $100, it’s easier. You can say ‘we’ve made it’. But what about the ten dollars? Where are they? Gone with the wind,” he says. “That’s not the way engineers or commercial people should behave.”
All the large western oil companies have reached similar conclusions. Andrew Mackenzie, chief executive of BHP Billiton, the mining and energy group, suggests the oil companies have reached the same point the miners were at a couple of years ago: facing up to the need to improve productivity in an environment of weaker commodity prices.
Total, Chevron and Shell have announced cuts in capital spending, and were joined on Wednesday by Exxon. Several companies have been “recycling” projects: delaying them to try to work on improving their economics.
BP’s Mad Dog phase 2 development in the Gulf of Mexico, Chevron’s Rosebank oilfield in the Atlantic west of Shetland, and Woodside’s Browse LNG project in Western Australia are among the plans being reassessed.
Mr Coleman told the Houston conference that as originally planned Browse had an estimated budget of $80bn, which was “not a commercially acceptable risk”.
The prospect of an investment slowdown already appears to be having an impact. David Vaucher, an analyst at IHS, says the firm’s survey of oil and gas production costs shows they levelled off last year, in a sign that the industry is moving into a more sustainable balance.
Day rates for drilling rigs have started to fall, even for advanced deepwater rigs. The prospect of further falls has helped send shares in Transocean, one of the largest rig operators, down 20 per cent in the past 12 months.
However, Mr Vaucher observes that costs tend to be easier to raise than to cut.
At Total, Mr de Margerie still sees a lot of work to be done. He is promising a cost-saving plan throughout the company, a new process for designing projects to build in cost control right from the start, and reshaped relationships with service companies.
“You need to create a new culture,” he says. “Yes, safety first, yes environment. But also at the same time, yes cost is important. And to achieve a project with lower cost is good.”
http://www.ft.com/intl/cms/s/0/b7861cc8-a51b-11e3-8988-00144feab7de.html#slide0
High energy prices = less consumption because everything including the fuel in your tank costs more = layoffs = less tax revenue = government cutbacks, layoffs and debt increases = less consumption = more layoffs = less taxes ===== economic death spiral.
Compounding the problem is the fact that a weak labour market means real wages drop - as they are across the world right now - that means everything is more expensive and your buying power is dropping at the same time.
Governments recognize this and are trying to offset with debt, easy lending (they are purposely inflating bubbles), lower interest rates and money printing.
Of course they will fail - because the disease is expensive oil. And there is no substitute
The economic death spiral will accelerate when the QE and ZIRP no longer have any effect and the confidence game collapses.
This moment will be known as the end of the industrial revolution by the few who survive.
This is not a Hollywood movie where the hero saves the day. This is the reality we are facing.
That's alot of rocket science there bub.
You sure you're qualified?
Anyway, nice links. Pity nobody reads or understands fuckall anymore.
If you travel around the upper Hudson Valley, north of Albany, where I live, you would see towns and landscapes every bit as desolate as a former Soviet republic.
tell LIBTARD Cuomo and the rest of the libtards to GO FRAK YOURSELVES...
new york is a liberal shithole that is getting exactly what it deserves... and will eventually go the way of Chicago and Detroit and all the other lib shitholes
Wow. Urban/Suburban decay and general pestilence can all be blamed on Natural Gas now?
I kinda blame the general political pressures and socialistic nature of the area myself, but what do I know? I'm just some semi-literate Southerner (actually a Texan) behind a keyboard.
Now, we must all ask ourselves if this is the landscape ol' Leo K saw and decided to go all-in on Chinese Solars?
yo kunst-hustler.
The Kardashians sound enough like one of the central Asian ethnic groups battling over the Crimea lo these many centuries — Circassians, Meskhetian Turkmen, Tatars, Karachay-Cherkessians — so the sore-beset American public must be content that they’re getting the news-of-the-world. Perhaps one of those groups was once led by a Great Kanye.
dat's be raciss. i thought you were a liberal. i luv's does big bubble butts and the one's pimping them. me, i am offended.
I hope everybody here reads 'Our Finite World' blog to get a better understanding of the energy and capital shortfalls Kunstler remarks on in this piece.
http://ourfiniteworld.com