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A Dark Cloud Of Disillusionment

Tyler Durden's picture


Submitted by James H. Kunstler of,

Was it such a good thing in the post-cold-war decades that the US was regarded as the supreme sole super-power? Look what we did with that privilege: fumbled around like an overfed stumblebum, blundering from one foreign occupation to another, breaking a lot of things and killing a lot of people — under the clownishly-conceived rubric of a “war on terror.”

Why is it in our interest which way Ukraine tilts? It has been in the Russian orbit for hundreds of years under one administration or another. Are we disappointed now that Kiev won’t answer to the floundering Eurocrats of Brussels? Was that ever a realistic expectation? Really, the best outcome for western Europe would be a return to the prior condition of Ukraine as a mute bearskin rug with oil and gas pipelines running through it to the oil and gas starved West. The idea that the US could supply Europe with oil and gas instead of Russia is a preposterous fantasy. Anybody wondering whether Ukraine might turn its armed forces loose on Russian forces supposedly massing at its border should ask themselves how Ukrainian soldiers will get paid.

I’m sure Russia can’t afford to annex all of Ukraine. Russia can barely maintain its paved roads. But it obviously couldn’t afford to give up its rented warm water ports and naval bases in the Crimea, either, with the new Kiev government making so much anti-Russian noise since the “revolution.” The annexation of Crimea changes nothing materially about the disposition of Russian military force in the region. They were already there. Given the size of their navy compared to the other nations in the neighborhood, the Black Sea is Russia’s bathtub and has been as long as anyone can remember. Was the brass at the US State Department shocked to discover this two weeks ago?

The recognition that there are some places on the planet where the US can’t exert its influence has also come as a shock to the so-called American Deep State — that matrix of bureaucratic toxic sludge that labors to pretend to control everything and succeeds mainly in embarrassing itself in a world that is now deeply tending away from the centralized control of anything. Nations are breaking up everywhere and for the moment there is no coherent public discussion of the ramifications. Venice voted the other day to secede from Italy — that is, to not send anymore tax revenue to Rome. That should be interesting. How about Scotland’s independence vote scheduled for September? Judging by the British newspapers, there is next-to-zero concern about that. Then there is the list of failed states, Egypt, Syria, Yemen, and probably half the manufactured nations of sub-Saharan Africa, places with no viable economy or polity and too many clamoring poor people. These are parts of the world that will neither develop nor redevelop. In a hundred years they could be no-go zones or just return to howling wilderness.

The US would be better served these days to literally mind its own business. With Detroit in bankruptcy, why would we send Kiev billions of dollars? American urban infrastructures — water, sewer, gas, and electric lines — are falling apart. We have no idea how we’re going to manage most of the crucial economic activities of daily life in ten years, when the illusions of shale gas and shale evaporate in a dark cloud of disenchantment, when we no longer have an airline industry, and most Americans won’t have the means to own automobiles, and there’s not enough diesel fuel to plow Iowa mega-farms, or enough oil and gas based fertilizers or herbicides to pour into the eroding topsoil, and not enough fossil water left in the Oglala aquifer or enough electricity to run the center-pivot sprinklers where the prairie meets the desert? How are Americans going to live and eat and get from Point A to Point B and keep a roof over our heads in this beat-down land?

We’re having no conversation about these things and the political landscape in this country is a wasteland of mirages and dust devils. That is the true weakness of the USA now. We’re incapable of seeing the disorder in our own house. Why should we even glance overseas at others?


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Wed, 03/26/2014 - 11:15 | 4593828 Independent
Independent's picture

Pretty soon the egg will fall out of the tree and it wont be pretty.

Wed, 03/26/2014 - 11:21 | 4593859 TahoeBilly2012
TahoeBilly2012's picture

The US is controlled by Zionists who could give a rats ass about anything other than their global agenda. Detroit? Are you kidding, that place was sacrificed at the alter of global Zionism a long fucking time ago.

Wed, 03/26/2014 - 11:34 | 4593925 Oh regional Indian
Oh regional Indian's picture

Exactly. I always wonder, are these people so lame and un-in-formed?

Speaking of formation or lack thereof, I gave a TEDx talk recently.

Get to know a fellow ZHer ;-)


Wed, 03/26/2014 - 11:42 | 4593966 Joe Davola
Joe Davola's picture

Funny how the generation that spawned this has become the clueless oppressors:

Wed, 03/26/2014 - 11:54 | 4594032 666
666's picture

Russia has a budget surplus, natural resources and an economy that actually produces things of value, unlike the USSA, FaceBook and Candy Crush games. Perhaps this article was written more about the USSA than Russia.

Wed, 03/26/2014 - 12:21 | 4594148 Town Crier
Town Crier's picture

Detroit was not destroyed by "global Zionists."  It was destroyed by an abyss of corruption, hubris, theft, recklessness, substance abuse, crime and utterly berserk incompetency in every level of government.

Wed, 03/26/2014 - 12:36 | 4594199 7againstThebes
7againstThebes's picture

Come on, get real about Detroit. The causa proxima of its destruction were colored folks.

    The causa remota of its destruction were white folks, especially those of liberal tendency.



Wed, 03/26/2014 - 12:51 | 4594276 new game
new game's picture

and at the bottom-08, the corporations of gm and chrysler fell under the weight of its legacy costs-shit poor management!

why they were bailed out is beyond me, but suffice to say they are back for a three peat(maybe - fiat?) and most likely a repeat(gm).

Wed, 03/26/2014 - 12:58 | 4594311 drendebe10
drendebe10's picture

Can u say UNIONS?

Wed, 03/26/2014 - 13:29 | 4594429 new game
new game's picture

ah, management couldn't say no to unsustainable for life healthcare? contracts that took into consideration that we aren't going to make 10k per suv with 50percent mix suv? many other issues-poor management-on a clear day u can (not) see gm (anymore), good ole john...

Wed, 03/26/2014 - 14:35 | 4594773 cmb
cmb's picture

If they didnt have to pay health benefits....#singlepayer universal medicine

Wed, 03/26/2014 - 13:56 | 4594558 thunderbolt7
thunderbolt7's picture

Exactily!  Well stated!

Wed, 03/26/2014 - 11:57 | 4594044 manofthenorth
manofthenorth's picture

"People do not like to think. When you think you must come to conclusions and conclusions are not always pleasant."

Wed, 03/26/2014 - 11:42 | 4593967 Ignatius
Ignatius's picture

Damn, ori, you're pretty good with that stick!

If we meet in an alley, you can have the alley....

Wed, 03/26/2014 - 11:47 | 4593994 Oh regional Indian
Oh regional Indian's picture

Musical martial art instrument, what's not to like eh, Ignatius?

Wed, 03/26/2014 - 11:56 | 4594042 Ignatius
Ignatius's picture

Yes, an amazing and intriguing instrument.

Vivek, I've just completed the entire presentation and it was/is excellent.

Thanks for sharing.

Wed, 03/26/2014 - 12:27 | 4594163 Oh regional Indian
Oh regional Indian's picture

Thanks Ignatius, really appreciate the appreciation :-) not often one gets an opportunity to be one-self on such a stage...

ori (Vivek)

Wed, 03/26/2014 - 12:07 | 4594085 Ignatius
Ignatius's picture

Questions:  Don't you think the discipline you 'rebelled' against was in some ways key to who you are today?  You've moved on without judging who you were?

Wed, 03/26/2014 - 12:34 | 4594190 Oh regional Indian
Oh regional Indian's picture

Absolutely was Ignatius, no doubt. I give great thanks to all the tough taskmasters I found. I think I internalized some of the best of what I found, like the essence.

So self discipline is far better than external (Naval style) as an example.

This quote from Dune really sums it up:


Seek freedom and become slave to your desires. Find discipline and be free...

I am because they were.

How's that?






Wed, 03/26/2014 - 12:44 | 4594238 Ignatius
Ignatius's picture

Nailed it.

Centered people are a real treat.

Wed, 03/26/2014 - 13:11 | 4594361 Oh regional Indian
Oh regional Indian's picture

No Balance No Life

Know Balance Know Life

Wed, 03/26/2014 - 13:06 | 4594346 manofthenorth
manofthenorth's picture



Let your light shine humans


Wed, 03/26/2014 - 12:14 | 4594118 manofthenorth
manofthenorth's picture

Thank you for taking the time to share your perspective commodore. I will be waiting for my "moreon" club membership card.

Wed, 03/26/2014 - 12:35 | 4594195 Oh regional Indian
Oh regional Indian's picture

I will be broadcasting the membership call far and wide.

Captcha to entah. You can check out anytime you like....

Watch this space...


Wed, 03/26/2014 - 12:00 | 4594058 nowhereman
nowhereman's picture

you are appreciated

Wed, 03/26/2014 - 12:36 | 4594200 Oh regional Indian
Oh regional Indian's picture

Grateful for the same...

Wed, 03/26/2014 - 12:07 | 4594068 Tall Tom
Tall Tom's picture



You know that to be uniformed (clothing is the outward manifestation) is to be uninformed.


For years when asked how I am doing I would respond, "Tired and retired."


Freedom is the outward expression of Love which is in opposition to control which is the expression of Fear.


That was an excellent nonperformance and I could not ever ask that you will ever perform. Thanks. That was great.

Wed, 03/26/2014 - 12:39 | 4594218 Oh regional Indian
Oh regional Indian's picture

Thank you Tall Tom, I was hoping it would strike a chord with folks here.

And yes, Uniform, Collars, Ties, always shod.... very interesting.

Words are power and they have made sneaky physical manifestations of those traps...


Wed, 03/26/2014 - 13:11 | 4594358 manofthenorth
manofthenorth's picture

Michael Tsarion speaks of the hidden power of words as well as symbols. He has some interesting perpective on the subject.

Wed, 03/26/2014 - 13:13 | 4594373 Oh regional Indian
Oh regional Indian's picture

I heard him a lot early on, very interesting perspective.

Search for Sevan Bomar on youtube and listen to anything by him. Yet another fascinating perspective. 


Wed, 03/26/2014 - 15:31 | 4595109 my_nym
my_nym's picture

I haven't watched this (Mark Passio - Occult Mockery Of Police & Military Personnel) yet but I noticed that police have been uniformed and wear stop signs on their heads.  In the UK they even wrapped the chessboard of "the base" where pawns are played around underneath the "stop thinking" sign most police wear on their heads. 


I guess it could be said that base things have been wrapped around their temples.  That's one way to subconsciously suggest that people follow orders in their chains of command, I guess. 


Wed, 03/26/2014 - 12:09 | 4594096 VD
VD's picture

nice Vivek....

Wed, 03/26/2014 - 12:40 | 4594224 Oh regional Indian
Oh regional Indian's picture

Thanks VD...

Wed, 03/26/2014 - 12:13 | 4594115 DanDaley
DanDaley's picture

Ori...glad you turned out to be who you turned out to be instead of someone are a wildman...and that's good.

Wed, 03/26/2014 - 12:41 | 4594230 Oh regional Indian
Oh regional Indian's picture

I got where you are going with that, DD, wildman indeed :-)

Wed, 03/26/2014 - 13:11 | 4594362 a common man
a common man's picture

What a wonder video. I loved the comment ..."Everybody looks for some excitement that somebody can bring to them..."


Wed, 03/26/2014 - 13:17 | 4594385 Oh regional Indian
Oh regional Indian's picture

Thanks common man and yes, only the real can be fresh, paper roses, not so much...


Wed, 03/26/2014 - 13:47 | 4594503 ebear
ebear's picture


Wed, 03/26/2014 - 14:04 | 4594599 Oh regional Indian
Oh regional Indian's picture

Apropos Bollywood reference :-) Gracias ebear...

Wed, 03/26/2014 - 14:18 | 4594673 Inthemix96
Inthemix96's picture

Ori, Vivek,

Just watched your presentation my friend.  Well played and fantastic you found inside you what needed be found.

I believe, from being a child, something different, not conformative, not willing to be part of something I wasnt, in myself I have always been un-played, un-performed, and never held a belief beyond myself, you've just put into context, something I could never explain.

You know what my friend?  Thousands of miles apart, cultures of difference we could never imagine, lives we will never cross.

We are all the same.

Thank you my friend.


Wed, 03/26/2014 - 14:35 | 4594778 Oh regional Indian
Oh regional Indian's picture

Gracias 96 and yes, the real rebel is the one who has gone inward.

And I feel you brother, and am grateful to the net and ZH among other hang-outs to bring such synchonistic/synchromystic connections alive.


Wed, 03/26/2014 - 11:36 | 4593933 BLOTTO
BLOTTO's picture

We are controlled by 'people' (if you want to call 'them' that) who think its their divine right to rule over us.


North America is just an experiment for them to create a new modern day slave.

Wed, 03/26/2014 - 11:43 | 4593970 Ariadne
Ariadne's picture

Kill them all. Follow their example and do it quietly. 

Wed, 03/26/2014 - 12:01 | 4594046 BLOTTO
BLOTTO's picture

How? We've been outsmarted, out resourced, out financed - out everything. They control everything...even the damn calendar - masters of time and space. I mean, wtf are we going to do? We are dealing with the ancient occult; a powerful entity.


We dont even have a proper 'white wizard' anywhere today that i can see- yet they have fuckin scum sucking minions all over the place who would gladly sell their soul for $.


Wed, 03/26/2014 - 12:43 | 4594234 Anusocracy
Anusocracy's picture

We are controlled through our morality with morals being cultural adaptations that help promote survival for you and your offspring.

They are motivational strings that are manipulated by our lords and masters to their benefit.

Wed, 03/26/2014 - 12:55 | 4594294 jaxville
jaxville's picture

Nothing a few well placed 30-06 rounds could not sort out.

Wed, 03/26/2014 - 15:05 | 4594921 Ariadne
Ariadne's picture

Do what they do.

People are indoctrinated to revile & ridicule religion as a place for idiots to be beguiled. As it happens, the 'they' are the ones who have perpetuated this meme both by campaigning this view, and infiltrating and corrupting churches other than their own, making them the cartoonish mockery of the original basis for religion. This is significant because organized religion is the most formidable potential opposition the hidden church has; the functional extended family is second. They have conducted a covert war on religion in the USA since the monarchs launched the religious revival psyop to promote mysticism and ignorance.

The sole purpose of the western church is to transfer critical knowledge across generations, to ensure the survival of the culture. The structure of organized religion reflects millenia of preliterate; the oral tradition. When Charles Martel established himself as the supreme monarch of Gaul, one of the first things he did was sponsor the services of Irish monks to educate first the children of his officers, then the rest of the children. At the time Ireland emerged as a surviving repository of knowledge after the dark ages. This investment enabled the Franks to ward off muslim invaders and establish France.This is what church is supposed to do.

Universities and State education are recent perversions of this role of the western church. Throughout the medieval era the catecism was grade school, and the clerics were teachers. It was trade school and a place to go to network and get help with problems like agriculture. The arts were also important. The God trip was taught as philosophy. Like it or not, one's religious belief is one's world view. What you believe the world to be, it is - for you alone. These people left whole libraries about themeselves and their beliefs, and what we are sold daily by our enemies about these our ancestors is total bullshit.

We can't be outsmarted, but we can be psyched into believing this. The enemy are just people. Their foot soldiers are the best obedient trogs they could find. They have to compartmentalize their ops, so their foot soldiers don't know much above their rank beyond rumors. Thats a major weakness. Psych warfare is incredibly cheap and effective. We can create disinfo and psych them out too. 

We may be outresourced but they are big, cumbersome and wasteful. Their mgmt know they have huge blind spots, another area to screw with their heads. Their troops are motivated by money and fear, they compete for rank - they can be fucked with. The closet monster looks bigger in the dark. Pick your ponies right and a properly motivated team can raze an army.

Finance is interesting. This kleptocratic financial fraud is distant from responsible finance.  When all the lying and hustling is done, the tangible assets remain the same. No matter what the bust or boom says they are worth, they are only worth what they are worth to you, and thats only limited by the wisdom of your community to utilize the available resources - real market principles. With no law, ownership is possession - and the force to hold it. But there is one thing no force can take or hold: your ability to think, to invent, create, strategize, execute. This is one reason they want us afraid, because desperate people can hardly think, so they do not create or imagine solutions. 

They aren't more ancient than Henry Kissinger, thats all psych warfare to daunt potential challengers. What they do throttle is access to current knowledge, by dumbing down mandatory curriculum, advancing idiots to professorships and upper management, blocking contenders and stubbing potential, robbing the patent office, and classifying the cutting edge of science and medicine through the NSF, FDA and NIMH, and obstructing research by controlling the pursestrings.

You have to be your own white hat. Don't be a scum sucking minion, get yourself as free of their fetters as you can and find the others. Form a secret church. Network, form a real Fight Club. This is a battle of wits, not force. They would love you to attempt force, because they will use it to justify their stranglehold. Pranks are good for morale.

Thu, 03/27/2014 - 00:12 | 4597343 asdasmos
asdasmos's picture


Wed, 03/26/2014 - 11:39 | 4593940 El Oregonian
El Oregonian's picture

Hello, I've got some good news, and I've got some bad news. First the bad, you are going to experience terrible, terrible financial pain, to the point that you will be relegated to dumpster-diving as a new career choice.

Now the good news, you will have dibs on a choice public dumpster next to a Burger-King restaurant.

Good luck.

Wed, 03/26/2014 - 11:41 | 4593961 Oquities
Oquities's picture

this is my favorite head thumper:

we give arms and money for arms to israel

israel uses those arms to decimate west bank and gaza

we send hillary or kerry with money gifts to rebuild wast bank and/or gaza to promote peace talks

rinse and repeat

Wed, 03/26/2014 - 12:44 | 4594237 Itchy and Scratchy
Itchy and Scratchy's picture

U forgot the 35% commission that is deducted by the 'poilitical' types!

Wed, 03/26/2014 - 12:09 | 4594095 BLOTTO
BLOTTO's picture

'They' want to build the 3rd Temple on the Temple Mount and bring in the 'Return of the King'


Wed, 03/26/2014 - 13:45 | 4594493 Kirk2NCC1701
Kirk2NCC1701's picture

Didn't the UN declare Zionism as a form of racism?  Whatver happened to that?

Wed, 03/26/2014 - 11:22 | 4593862 TeamDepends
TeamDepends's picture

What do you mean "we", Kimosabee?

Wed, 03/26/2014 - 11:26 | 4593888 y3maxx
y3maxx's picture

...Potus & the USSA is in full retard mode...deny homeland problems...unemployment, 19% food inflation, real estate and student loan bubbles..and deny deny deny the death of the US Dollar as World Currency Reserve. ...Leaves only one alternative.....blame any and all countries...initiate false flags... WW3 is now inevitable stock up on canned food

Wed, 03/26/2014 - 13:49 | 4594511 Kirk2NCC1701
Kirk2NCC1701's picture

Would not be surprised if Happy Pills are mixed in with Monsanto foods...

E.g.  High-fructose corn syrup, aka Monsanto's GMO corn, which is resistant to pesticides and fungicides.

Wed, 03/26/2014 - 11:29 | 4593901 VD
VD's picture

"when the illusions of shale gas and shale evaporate in a dark cloud of disenchantment" yeah right Kuntslter you neo-Malthusian dupe; look at the numbers before your peak oil hysterics evaporates in total unadulterated embarrassment... And Russia can AFFORD to roll into the rest of Ukraine and just might, because by doing so they ultimately better afford said lack of affordability even more...that's why the troops are amassing in the East... but will you ever admit that you are wrong¿¿¿

Wed, 03/26/2014 - 11:42 | 4593964 VD
VD's picture

PS the Chinese are buying up Detroit as i type this......extrapoloate accordingly...

Wed, 03/26/2014 - 12:29 | 4594171 Things that go bump
Things that go bump's picture

Maybe they'll repair it before we take it back.

Wed, 03/26/2014 - 12:16 | 4594111 VD
VD's picture






Wed, 03/26/2014 - 14:32 | 4594742 Things that go bump
Things that go bump's picture

Congenital syphillis?

Wed, 03/26/2014 - 23:40 | 4597265 VD
VD's picture

Kuntfuk here's the latest:


BREAKING NEWS: Russian border buildup near Ukraine now includes tanks & troops. All troops are positioned for potential military action. CNN


you fukn hysterical neo-Malthusian biyatch!

Wed, 03/26/2014 - 12:31 | 4594176 cougar_w
cougar_w's picture

Shale gas and in particular tight oil are zombie investments waiting to die. Royal Shell already bailed out at a total loss. The other majors are writing down their investments and cannibalizing hard assets to make dividend payments so fund managers don't panic and leave all at once. But that's not much of a survival strategy. In fact that is how any other Ponzi scheme ends.

So it's game over. Yell and scream all you like but it's over. Not sure what comes after the game is over, but since we're not hearing any interesting theories from the government or from the majors I'm somewhat inclined to guess that actually there is no game after this.

Infer from all that what you will. Myself, I am planning accordingly.

Wed, 03/26/2014 - 13:08 | 4594350 new game
new game's picture

they will extract the oil and leave-what is so hard to understand about that. it is all transportable as how it got there.

lets see, if i got gold in my backyard i'm going to ignore it, oh yea, sure. so when it is not profitable to extract they will "stack out". oil and lumber are about all that is left in merica. be carefull what you wish for...

what kuntsler(voted for o-dumb fuk) ignores is inovation and the human spirt to inovate. but he is right about the demise with no plan.

so, in the final analysis, evolution will determine our fate, more wars ongoing til the big one, then a peroiod of gopher living, which in turn favor the already homeless living in the via ducts and sewers...

Wed, 03/26/2014 - 13:18 | 4594384 new game
new game's picture

i am not ignoring the groundwater issue either, well aware. so as kunsler says about agala, chem dump on farmland ect. ect.;

all wish think crap that will never happen until the population purge by famine, war, and/or virus, but none the less it is going to happen.  so between now and then enjoy and ignore the destruction of the very bioshere we need to sustain ourselves...

ignorance is how keep from going insane...

Wed, 03/26/2014 - 13:20 | 4594398 cougar_w
cougar_w's picture

If it's not profitable to extract -- they don't extract it. The company that extracted oil then goes on to extract value from some other kind of resource. These are simple business decisions made every day across the globe.

Don't put much money on "innovation" bets. I work with these people every day, there's nothing out there. Apps for cell phones, yeah you got that. Innovate your little heart out Sparky.

Energy innovation? Let me tell you a story about this thing called the laws of thermodynamics.

On second thought it's really scary, so maybe later.

Wed, 03/26/2014 - 13:40 | 4594468 new game
new game's picture

they are making money over 75/bbl. some are 70 others are 80. poking holes left and right sucking up green colored oil that takes very little to refine to distolates. smells like gas. they are making money.  yes it is short term plan and toward the end many will ??? can't say as it all depends on the going price per bbl. and oh yea it is ugly spots left on the earth and water is getting fucked up... what can you or i do to stop the demand? you drive today? got a therostat? eat food? hypocrite?

Wed, 03/26/2014 - 13:47 | 4594507 new game
new game's picture

we are at 25 percent cost of energy to extract? not arguing your premiss-you are correct, i am just saying we are going to do it til it goes crash. something is gonna give. ishmal is what i believe-when the food supply hits peak, then we are ...

Wed, 03/26/2014 - 11:46 | 4593985 Liquid Courage
Liquid Courage's picture



What’s this talk about an Egg in a tree?
Cross connection in the Nursery?
Well, hey, why not?, so, let me try,
To twist it ‘round and see if eggs can fly ...

Humpty Dumpty sat on a branch,
Devouring another equity tranche,
With a slurp and a burp, it’s up he threw
Now Red Queen Yellen must mop up the spew.

OR ...

Rock-a-bye Humpty, in the tree top,
When the wind blows, ol’ Humpty will rock,
When the bough breaks, ol’ Humpty will fall,
And down will come Yellen, the “Too Bigs” and all.

Wed, 03/26/2014 - 11:59 | 4594052 tempo
tempo's picture

Frac gas is a promoter's and litigator's wet dream. All hype, very high capital cost, 30%/yr decline rate and nightmare abandonment cost with unlimited legal liability. There is so much production history, the verdict is absolute and its very bad.

Wed, 03/26/2014 - 12:33 | 4594185 cougar_w
cougar_w's picture

It is all about illusions now. Nobody creates anything, everyone speculates. The suckers pick up the tab and end up living under a bridge.

Wed, 03/26/2014 - 11:19 | 4593846 rtalcott
rtalcott's picture

Maybe Russia learned from Afghanistan while we did not learn from Viet Nam.

Wed, 03/26/2014 - 12:05 | 4594076 Rakshas
Rakshas's picture

We the American People you mean.... that would be correct ...... we never learned how to play the shell game.  DC/CIA they learned a good many lessons from VN particularly the value of the drug trade, how much money has been laundered and marginned through wall street?  The CIA and Zbig had a lot to do with inducing the soviet invasion of Afghanistan as well - to give them their own Vietnam like quagmire because the Wall Street minions know very well that all wars are extremely conducive to inflation and currency devaluation, I'm not sure they would ever even factor the human cost but so far as the Perma-Uber-Hawks were concerned it was going to stress the Soviets along many seams..........Same players pulling the strings of our Muppet Show today

The first law of elitist-dynamics evil can neither be created nor destroyed it just changes names.....  

Wed, 03/26/2014 - 16:09 | 4595362 11b40
11b40's picture

The MIC also learned they needed a mercenary army after all the problems they had trying to conduct an immoral war with draftees in VN.

Wed, 03/26/2014 - 11:19 | 4593847 LetThemEatRand
LetThemEatRand's picture

It's very simple.  The people who want to give Ukraine a billion dollars expect to make money there and/or protect their existing investments there.  They are using tax dollars for their own profit.  There's no money in it for them to rebuild Detroit.  

Wed, 03/26/2014 - 11:21 | 4593852 rtalcott
rtalcott's picture

Not sure that there is no money in it (Detroit) but I suspect it's easier money in Ukraine or that's the perception.

Wed, 03/26/2014 - 11:37 | 4593941 madcows
madcows's picture

Detroit is full of derelicts, and drugged freeloading union members.

Ukrain has minerals and other natural resources... including iron, manganese and coal.

Wed, 03/26/2014 - 12:24 | 4594160 Tall Tom
Tall Tom's picture

It is not because of Money that is in Ukraine. It is about the Money which flows through the the form of Natural Gas through the Pipelines.


If Detroit had that type of volume flowing through it then you can bet that the profiteers would have the crosshairs on Detroit..

Wed, 03/26/2014 - 11:22 | 4593860 Ignatius
Ignatius's picture

The "incompetence" meme is getting old.

As you point out, who is making money on the back end?

How come all these "incompetents" are millionaires if not billionaires?

Wed, 03/26/2014 - 11:37 | 4593942 Greenskeeper_Carl
Greenskeeper_Carl's picture

you may be right about detroit, but i think detroit wont get shit not because bailing out detroit wouldn't be profitable for those types of people(it would, who else would get the contracts to rebuild 'infasturcture' than those who give a bunch of bribes contributions to politicians), but because as much as they like to pretend our economy is recovering and will reach escape velocity any day now, it isnt and they know it. They know we havent had real growth since 2000 or so, and we won't, and we never will with this debt problem everyone has. They know if they bail out detroit, it sets a dangerous precedent, and that when the other inevitable city bankruptcies occur, they will be expecting a hand out from uncle sugar as well. It sets a TARP type precedent, but for insolvent local govts, telling them they can be reckless and the fed gov will come to the rescue

Wed, 03/26/2014 - 14:24 | 4594706 caconhma
caconhma's picture

Why do you think American taxpayers need to rebuild Detroit? What for? So they will have another utterly corrupt African and Hispanic politicians controlled by Zionist Banking Mafia?

Let them rut in heel!

Wed, 03/26/2014 - 11:22 | 4593851 PlusTic
PlusTic's picture

This Putin shit is the best thing to happen to the West in 20 yrs.  The fukkin hegemomy of the US/EUR/JP alliance needs to be pushed-back.  Fukking lack of competition in all things leads to control by a few players.  Well, finally Putin says "Fuck You" - it's awesome!

Wed, 03/26/2014 - 11:44 | 4593972 semperfi
semperfi's picture

<-- I like Putin better than Obama

<-- I like Obama better than Putin

Wed, 03/26/2014 - 12:02 | 4594063 Headbanger
Headbanger's picture

I like most dogs better than Obama!

Wed, 03/26/2014 - 12:16 | 4594125 Tall Tom
Tall Tom's picture

I do not like what either Obama or Putin are doing. They are both psychopathic murderers.


I will not be structured by the Hegelian Dialectic. No thank you.

Wed, 03/26/2014 - 14:34 | 4594767 caconhma
caconhma's picture

They are both not good. They are both agents of oligarchy. 

It is vital to understand that there is a war going on between different mafia clans.

They are both mobsters. One must be a feebleminded to support any of these two mobsters. Whom do you like better Hitler, Stalin, Mao?

Wed, 03/26/2014 - 11:21 | 4593853 Seize Mars
Seize Mars's picture

Disillusionment? Yeah I'm really disillusioned that don Corleone runs my country. If it were don Ciccio then things would be much better.

Wed, 03/26/2014 - 11:22 | 4593864 Flakmeister
Flakmeister's picture

So we are not that shining city on the hill anymore?

Say it ain't so Joe!

Wed, 03/26/2014 - 11:35 | 4593927 Oh regional Indian
Oh regional Indian's picture

It took me 12 years of living in the USA to figure that out. Actually 8 and then I hung around for 4 more.


Wed, 03/26/2014 - 12:32 | 4594156 dark_matter
dark_matter's picture

We have in-sourced the whole wretched-refuse-of-our-teeming-shore thing.

Wed, 03/26/2014 - 11:22 | 4593866 Itchy and Scratchy
Itchy and Scratchy's picture

Who stole my Keiska?

Wed, 03/26/2014 - 11:23 | 4593867 Keyser
Keyser's picture

The incompetence of the ruling class in the west is staggering. The Peter Principle is firmly in place as the folks making decisions in high places have lost all connection to reality. And we are all along for the ride and of course to pick up the tab. 

Wed, 03/26/2014 - 11:39 | 4593948 El Vaquero
El Vaquero's picture

Tab?  That shit is going to be burned then ignored.  Nobody will be picking it up.

Wed, 03/26/2014 - 11:30 | 4593880 Dr. Engali
Dr. Engali's picture

The best thing for the U.S. would be if we started having some serious discussions about disolving the union peacefully before it happens with extreme violence. 325 million people with so many ideologies and ethnicities are too many people to govern as a whole.

Wed, 03/26/2014 - 11:44 | 4593974 Greenskeeper_Carl
Greenskeeper_Carl's picture

agreed. but some people thought that was a good idea 150 years ago, and it didnt work out to well. And the tyrant that fought that needless war is now regarded as a great american president and the hero who ended slavery, rather than one who arguably did more than any president in history to destroy the consitutution. Whoever is president next time it happens will probably do the same thing, and also be regarded as 'the saviour of democracy' or some such bullshit. however it happens, i suspect it will be far from peaceful

Wed, 03/26/2014 - 11:54 | 4594031 Dr. Engali
Dr. Engali's picture

Yeah I know I'm kidding myself. But one can dream can't they?

Wed, 03/26/2014 - 12:40 | 4594222 cougar_w
cougar_w's picture

Michael Greer wrote a great series of blog posts on this topic. Speculative fiction, sort of a "what-if" kind of thing, about how the US could become dissolved into regional entities. A lot to read but well done and really thought-provoking, I encourage you to set aside an evening to do the whole series.

Part 1 here:

Wed, 03/26/2014 - 11:48 | 4593999 kito
kito's picture

no doc dont worry. its all part of ray dalios beautiful deleveraging. its just a little printing, a little debt, a little social upheavel. in a few years the cycle will return to prosperity and three car garages with a home equity loan and trips to the carribbean, all taken care of compliments of the discover card.........dont worry doc, its only temporary, ray dalio told us so. and hes rich so i believe him. and grandpa warren. he is also bullish on america. i believe him. just wait, all of those bullshit debt laden college degrees in poetry and art history will find their way into great corporate jobs, just like before. 



Wed, 03/26/2014 - 11:53 | 4594027 Dr. Engali
Dr. Engali's picture

Kito, I'm beginning to worry about you brother ;-> 

Wed, 03/26/2014 - 12:03 | 4594067 dark_matter
dark_matter's picture

Viva Cascadia!

Wed, 03/26/2014 - 11:25 | 4593883 Itchy and Scratchy
Itchy and Scratchy's picture

Ron Paul on Foreign Aid: 'Poor people in rich countries sending money to rich people in poor countries!'

Wed, 03/26/2014 - 12:41 | 4594229 cougar_w
cougar_w's picture

Sad but very true.

Wed, 03/26/2014 - 11:26 | 4593893 scuttlebutt
scuttlebutt's picture

Only a distraction. Ignorence is bliss.

Wed, 03/26/2014 - 11:27 | 4593894 Pasadena Phil
Pasadena Phil's picture

"We’re incapable of seeing the disorder in our own house. Why should we even glance overseas at others?"


Because, Tyler, in a one-world-without-borders in the process of forming a global government founded on a united and integrated central banking system, there is no "us and them". Everything is being re-distributed and/or redeployed to accommodate the new world order.

Wed, 03/26/2014 - 11:36 | 4593932 Al Huxley
Al Huxley's picture

There is definitely an 'us and them' just not in the way you're alluding to - and everybody here is part of 'them' (unless any filthy, shit-heel, rape-the-system-and-kill-the-less-fortunate-to-line-our-pockets-and-consolidate-control-of-society uber-rich sociopaths happen to be perusing the site, but you know who you are).

Wed, 03/26/2014 - 11:33 | 4593919 buzzsaw99
buzzsaw99's picture

debbie downer strikes again

Wed, 03/26/2014 - 11:35 | 4593930 Dick Gazinia
Dick Gazinia's picture

 There has been too much violence. Too much pain. But I have an honorable compromise. Just walk away. Give me your pump, the oil, the gasoline, and the whole compound, and I'll spare your lives. Just walk away and we'll give you a safe passageway in the wastelands. Just walk away and there will be an end to the horror.


The Humungus:

Wed, 03/26/2014 - 11:39 | 4593937 q99x2
q99x2's picture

I liked the article.

I'll have to study language more than I have to address comments such as: "We’re incapable of seeing the disorder in our own house".

Not sure what our own house means or if  the US can be reduced to a single concept for that matter but anyhow NYC doesn't have to worry about the President's "Nuke" comment because, like the natural gas explosion earlier this month that city is likely to crumble to the ground of its own accord.

The thing I recommed is to recall all State Senators and Congresspersons and petition for Impeachment of Obama.

People are going to be getting pretty hungry soon. Maybe that will motivate them.

Wed, 03/26/2014 - 11:37 | 4593943 Itchy and Scratchy
Itchy and Scratchy's picture

Change You Can Believe In!

Wed, 03/26/2014 - 11:38 | 4593946 semperfi
semperfi's picture

This is what you get America, when you willingly drop out of political discourse, and let your representatives do what they want unchecked, open-loop, without any feedback.   Via apathy, ignorance, and denial, this is the path Americans have chosen for themselves whether they know it or not - most don't know it. 

Wed, 03/26/2014 - 11:40 | 4593954 nowhereman
nowhereman's picture

After poking the sleeping giant. You kinow things are truly messed up when no-one is called up on the carpet and asked; "just who's fucking bright idea was this?"

No, they'll pretend it was someone else, because no-one has to take responsibility anymore.  Just ask Eric, he'll explain it to you.

Wed, 03/26/2014 - 11:50 | 4593983 Democratic koolaid
Democratic koolaid's picture


Wed, 03/26/2014 - 11:47 | 4593984 Democratic koolaid
Democratic koolaid's picture

Detroit was a victim of Neo-Imperialist corporatism. These same shifty entitys that has, critisism or not, been spiking the koolaid since 45.

Wed, 03/26/2014 - 11:47 | 4593990 Notsobadwlad
Notsobadwlad's picture

There are several key questsion:

1. Do people care or are they perfectly happy being treated as drugged up, propagandized, ignorant slaves.
2. Do people want the power to affect the quality of their lives or are they perfectly happy being give the life that others have decided for them ... treating them as simple beasts of burden.
3. Who are the people who have decided that they have the right to decide what is right for an entire world and why are they the way way they are? Is there more to it than pure psychopathy?
4. Why are the people who are in positions where they could do something about it so fearful or corupted that they will not do anything to challenge those who control them?

It is clear that more and more people are waking up to their condition and the chains that have been put in place to bind them as puppet slaves. They realize that there are controlling powers behind those that they normally see and that those powers are malevolent, not working in their best interest... but they do not know what to do ... yet.

Wed, 03/26/2014 - 11:50 | 4594007 Democratic koolaid
Democratic koolaid's picture

The people with the dough.

Wed, 03/26/2014 - 12:35 | 4594197 Tall Tom
Tall Tom's picture

The chains which binds the people are just illusions in their minds. A thin rope holds a full grown Elephant to a post because he was taught as a young Elephant that it will.


When you ask that people will abandon their illusions you will get resistance as they are comfortable in their illusions.


But when setting a fire in the tent where the Elephant is bound the Elephant learns rapidly that the rope will break as the situation becomes hostile to survival. Likewise when the current environment becomes hostile to survival then the masses will awaken as they are no longer comfortable.


With the current World conditions deteriorating as an Exponential Decay Function the time when the Rude Awakening is realized is approaching ever more rapidly.


So it happens gradually and then all at once. It will be explosive and volatile when it happens. You can be assured of that.

Wed, 03/26/2014 - 14:43 | 4594592 bsdetector
bsdetector's picture

To notsobadwlad: Wholly agree with most of this. Just not sure anyone is waking up yet. And, to talltom: does the wakeup point result in war or can change happen otherwise?

Wed, 03/26/2014 - 11:47 | 4593992 BullyBearish
BullyBearish's picture

We’re having no conversation about these things and the political landscape in this country is a wasteland of mirages and dust devils.


Hard to have a conversation when those with voices are muted and those with ears bombarded by constant lies, deception, and trinkets.  We are now simply a piggy bank for those who would reach in to increase their power.

Wed, 03/26/2014 - 11:54 | 4594018 Notsobadwlad
Notsobadwlad's picture

BTW, from what I see, the "deep state" if that is what you want to call it that is in complete coordination in their war against the general population of the planet, employing useful idiots to create polarizing dialectics.

Do the people who think of themselves as elite or political rulers understand that they are simply useful idiots to those who are really in control?

Maybe they do, but accept it because they prefer their golden jail cell to freedom. After all, if they don't accept the role of a rich and corrupt toady, who must follow the rules to maintains their "status", someone else will.

Wed, 03/26/2014 - 12:04 | 4594072 10mm
10mm's picture

Don't worry about the speck in my eye, worry about the plank in yours.

Wed, 03/26/2014 - 12:06 | 4594078 Nostradumbass
Nostradumbass's picture

This isn't WE, US, or OURS.


They are not part of us. 

Their agenda and decisions have zero to do with us.

They are a cancer upon us.

Wed, 03/26/2014 - 12:06 | 4594080 stuman
stuman's picture

I get that we're in real trouble. Spending is out of control with no sign of abating. The debt is growing by the second. Apparently we're spending 26% of our GDP on the interest payment of that debt.

Countries and trade partnerships are re-aligning, distancing themselves from the dollar or looking to bypass it completely. It looks like the "petro-dollar" system is heading for extinction.

My question is...what's going to happen to all of our own oil, natural gas and coal?

We have a lot, if what I've read is correct.

But no one ever talks about it.

Are we as a nation really going to sit back and watch as our nation become more and more isolated and our dollar increasingly depreciated till we're a 2nd or 3rd world laughing stock...more than we already are?

We have resources, we have energy available. Why are we sitting on it and not using it? 




Wed, 03/26/2014 - 12:17 | 4594131 Fix-ItSilly
Fix-ItSilly's picture

While the IMF loan will have 17% participation by the US, the $1B for Kiev is more insidious and not clearly a gift.

The $1B is a loan guarantee.  What US crony is gaining this gift of a high interest Ukrainian bond that has the guarantee of the US?  Here I am receiving little to nothing for my savings, yet someone is going to get a high interest rate bond with the risk of a US Treasury.  Why isn't the US Treasury giving this gift to its citizens?

And what are its bond covenants - is there a covenant that requires the money from the bond to go in a certain direction?  I wonder how to find this out...

Its a virtuous crony circle.  Surely the US will transparently tell us who the buyer is and provide the bond covenants to all who want to see!

Wed, 03/26/2014 - 12:18 | 4594132 mtndds
mtndds's picture

jump phuckers, jump!!

Wed, 03/26/2014 - 12:33 | 4594188 Disenchanted
Disenchanted's picture

re: "a dark cloud of disenchantment"

Sounds familiar...

Wed, 03/26/2014 - 12:40 | 4594214 dizzyfingers
dizzyfingers's picture

"How are Americans going to live and eat and get from Point A to Point B and keep a roof over our heads in this beat-down land?"

What did people do before all those things? They managed. And if/when it all goes, we'll figure out how to cope, and mybe real life will be better, not worse. It'll just be different from how TPTB wanted our lives to be. Maybe we'll learn to fend for ourselves like we did before, not allow TPTB to take over agian.

Maybe forcing "Americans" to figure out "how to live and eat and get from Point A to Point B and keep a roof over our heads in this beat-down land" is exactly what's needed to solve a more urgently troubling problem that exists right now:

Wed, 03/26/2014 - 12:50 | 4594272 explosivo
explosivo's picture

Who is we? I think you are confusing me and the rest of the subjects with the state. 

Wed, 03/26/2014 - 13:01 | 4594321 UrbanBard
UrbanBard's picture

Life is confusing. Especially when we read articles which are partly true, as above. How do you separate the wheat from the chaff? How do you get a realistic expectation?

Governments tend to do stupid things; they often have the oddest motives. It's appropriate to think the worst of them. Consequently, it's best to think that both Putin and Obama are acting stupid. But, who is worse? The man trying to protect his hegemony or the one trying to rebuild an old one? I'm betting that Obama will get the worst end of the stick.

Much of what is coming is beyond anyone's control. The American empire must fail because it is based on the US Dollar which will soon stop being the World's reserve currency. Suddenly, all foreign made goods will be four to five times more expensive. We can't do about this, because it is part of a return to reality.

Fortunately, we start at a higher standard of living, so we can fall quite a ways without pushing many people into starvation. Of course, the locations where people will starve and riot will be in the liberal big cities.


Regarding Peak Oil or resource depletion: I don't believe in it. There has never been a time when Oil Resources have not risen.

Resource depletion is old style "Club of Rome" Soviet propaganda. It has been proven wrong, again and again.

Only when a government intervenes does Peak Oil Theory work. Governments can prevent the discovery of new sources of energy. Almost all federally controlled land are off limits to exploration.

Huge amounts of oil and gas have been found in the Monterrey Shale formation of California, but the Liberals in Sacramento won't allow it to be exploited.

Eventually, even the Liberals will wake up or starve to death. Unfortunately, until they do, we conservatives starve with them.

Wed, 03/26/2014 - 13:05 | 4594338 UrbanBard
UrbanBard's picture

Life is confusing. Especially when we read articles which are partly true, as above. How do you separate the wheat from the chaff? How do you get a realistic expectation?

Governments tend to do stupid things; they often have the oddest motives. It's appropriate to think the worst of them. Consequently, it's best to think that both Putin and Obama are acting stupid. But, who is worse? The man trying to protect his hegemony or the one trying to rebuild an old one? I'm betting that Obama will get the worst end of the stick.

Much of what is coming is beyond anyone's control. The American empire must fail because it is based on the US Dollar which will soon stop being the World's reserve currency. Suddenly, all foreign made goods will be four to five times more expensive. We can't do about this, because it is part of a return to reality.

Fortunately, we start at a higher standard of living, so we can fall quite a ways without pushing many people into starvation. Of course, the locations where people will starve and riot will be in the liberal big cities.


Regarding Peak Oil or resource depletion: I don't believe in it. There has never been a time when Oil Resources have not risen.

Resource depletion is old style "Club of Rome" Soviet propaganda. It has been proven wrong, again and again.

Only when a government intervenes does Peak Oil Theory work. Governments can prevent the discovery of new sources of energy. Almost all federally controlled land are off limits to exploration.

Huge amounts of oil and gas have been found in the Monterrey Shale formation of California, but the Liberals in Sacramento won't allow it to be exploited.

Eventually, even the Liberals will wake up or starve to death. Unfortunately, until they do, we conservatives starve with them.

Wed, 03/26/2014 - 13:36 | 4594360 dizzyfingers
dizzyfingers's picture

Unfortunately few (including me) understand or care what's going on in the geo-science world, people would rather believe the worst rather than something that might be better than they're told or that they believe inherently. If only they'd read more!


"Jean Whelan earned her bachelor's degree in chemistry at the University of California, Davis, and her doctorate in organic chemistry from the Massachusetts Institute of Technology. Before coming to WHOI, she carried out postdoctoral work at Brandeis University and taught chemistry at Fairleigh Dickinson University in Madison, N.J. She studies how to use organic compounds to deduce geological processes. Among her research focuses are the formation and migration of petroleum, and she and colleagues have shown that large quantities of gas flowing through some of the world's oil and gas fields may be continuously altered and sometimes refreshed by pools of hydrocarbons that lie deep within the earth. Current research focuses on how this gas seeping also affects the ocean."

"IIASA-IEW June 19, 2001
-Comments by Jean Laherrere on the « theory of abiogenic origin of oil
and gas »
presented by Vladilen A. Krayushkin

-1-Examples of abiogenic fields in the Dnieper-Donets basin
From Kenney 1996 ( :
<< Professor Vladilen A. Krayushkin, Chairman of the Department of
Petroleum Exploration, Institute of Geological Sciences, Ukrainian
Academy of Sciences, Kiev, and leader of the project for the exploration
of the northern flank of the Dni eper-Donets Basin, at the VII-th
International Symposium on the Observation of the Continental Crust
Through Drilling, Santa Fe, New Mexico, 1994.
"The eleven major and one giant oil and gas fields here described have
been discovered in a region which had, forty years ago, been condemned as
possessing no potential for petroleum production. The exploration for
these fie lds was conducted entirely according to the perspective of the
modern Russian-Ukrainian theory of abyssal, abiotic petroleum origins.
The drilling which resulted in these discoveries was extended purposely
deep into the crystalline basement rock, and it is in that basement where
the greatest part of the reserves exist. These reserves amount to at
least 8,200 M metric tons of recoverable oil and 100 B cubic meters of
recoverable gas, and are thereby comparable to those of the North Slope
of Alaska. It is conservatively estimated that, when developed, these
fields will provide approximately thirty percent of the energy needs of
the industrial nation of Ukraine."<<
Kenney seems to report wrong figures. 8.2 Gt oil & 100 G.m3 gas represent
60 Gb and 2 Tcf ! The real data are quite different.
USGS 1997-463 « Ranking of the world’s oil and gas provinces by known
petroleum volumes » gives:
rank oil Gb
gas Tcf condensate Gb Mboe
Northern Alaska 24 14.4 33
1.1 21
Dnieper-Donets 45 1.4 59
0.2 11.7

USGS « World petroleum assessment 2000 »

Dnieper-Donets Basin
Rank Province63
Code 1009
Major CommodityGas
Cumulative Oil Gb0.11
Remaining Oil Gb1.501
Known Oil Gb mean1.611
Undiscovered oil Gb1.098
Oil Endowment Gb2.7
Oil discovery maturity %59
Undiscovered gas Tcf24
Undiscovered condensate Gb0.9

USGS PROVINCE: Dnieper-Donets Basin (1009) GEOLOGIST: G.F. Ulmishek
TOTAL PETROLEUM SYSTEM: Dnieper-Donets Paleozoic (100901)
ASSESSMENT UNIT: Carboniferous-Lower Permian Clastics (10090101)
DESCRIPTION: Assessment unit encompasses rocks of the postrift sag
(Carboniferous-Lower Permian), and platform (Triassic-Tertiary) sequences
over the entire basin area. The unit contains large hydrocarbon (mainly
gas) reserves in more than 200 discovered fields.
SOURCE ROCKS: Two identified oil families demonstrate the presence of at
least two source rock suites in the Upper Devonian and Lower
Carboniferous sections. The latter are Visean organic-rich black shales
and marls; Devonian source rocks occur deep and have not been penetrated
by wells.
MATURATION: Source rocks are mature in the marginal areas and overmature
most of the basin. Maximum maturation was mainly reached by Late Permian
time, but could
have continued through early Mesozoic in the central part of the basin.
MIGRATION: Migration could have started as early as Early Carboniferous
time, but an important stage of gas migration took place after deposition
of Lower Permian salt.
RESERVOIR ROCKS: Carboniferous-Lower Permian sandstones contain almost
all reserves. Most of undiscovered resources are expected in Lower
Carboniferous rocks.
TRAPS: Structural traps are related either to plastic flow of Devonian
salt (in deep areas) or to basement fault blocks (on basin margins).
Stratigraphic traps are underexplored.
SEALS: Lower Permian salt directly seals reservoirs that contain more
than half of reserves.
Other seals are Carboniferous intraformational shales.
Gavrish, V.K., ed., 1989, Geology and petroleum productivity of the
basin—Deep framework and geotectonic development (Geologiya i
Dneprovo-Donetskoy vpadiny. Glubinnoye stroeniye i geotektonicheskoye
razvitiye): Kiev,
Naukova Dumka, 204 p.
Shpak, P.F., ed., 1989, Geology and petroleum productivity of the
Dnieper-Donets basin—
Petroleum productivity (Geologiya i neftegazonosnost Dneprovo-Donetskoy
Neftegazonosnost): Kiev, Naukova Dumka, 204 p.
Ulmishek, G.F., Bogino, V.A., Keller, M.B., and Poznyakevich, Z.L., 1994,
stratigraphy, and petroleum geology of the Pripyat and Dnieper-Donets
basins, in Byelarus
and Ukraine, in Landon, S.M., ed., Interior rift basins: American
Association of Petroleum
Geologists Memoir 59, p. 125-156.

USGS PROVINCE: Dnieper-Donets Basin (1009) GEOLOGIST: G.F. Ulmishek
TOTAL PETROLEUM SYSTEM: Dnieper-Donets Paleozoic (100901)
ASSESSMENT UNIT: Devonian Synrift (10090102)
DESCRIPTION: Assessment unit includes poorly known Devonian rocks. No
fields have been discovered although many oil and gas shows have been
detected. The unit occurs at drillable depths only along basin margins.
Resource assessment is based on analogy with the adjacent Pripyat basin.
SOURCE ROCKS: Oils derived from source rocks within the Devonian section
are known in stratigraphically overlying assessment unit 10090101. These
source rocks are probably similar to organic-rich marine anoxic shales of
the Pripyat basin.
MATURATION: Source rocks are probably in the oil window along the basin
margins and
rapidly dip into the gas window zone basinward.
RESERVOIR ROCKS: Carbonate reservoir rocks including reefs are principal
producers in
the Pripyat basin and are expected to contain almost all undiscovered
resources in the Dnieper-Donets basin.
TRAPS: Structural and combination traps are expected along crests of the
tilted fault blocks,
which control reef development.
SEALS: A shale formation is regionally developed at the top of the
Devonian sequence. Salt,
although deformed, may be an important seal for some prospects.
Gavrish, V.K., ed., 1989, Geology and petroleum productivity of the
basin—Deep framework and geotectonic development (Geologiya i
Dneprovo-Donetskoy vpadiny. Glubinnoye stroeniye i geotektonicheskoye
razvitiye): Kiev,
Naukova Dumka, 204 p.
Shpak, P.F., ed., 1989, Geology and petroleum productivity of the
Dnieper-Donets basin—
Petroleum productivity (Geologiya i neftegazonosnost Dneprovo-Donetskoy
Neftegazonosnost): Kiev, Naukova Dumka, 204 p.
Ulmishek, G.F., Bogino, V.A., Keller, M.B., and Poznyakevich, Z.L., 1994,
stratigraphy, and petroleum geology of the Pripyat and Dnieper-Donets
basins, Byelarus
and Ukraine, in Landon, S.M., ed., Interior rift basins: American
Association of Petroleum
Geologists Memoir 59, p. 125-156.

USGS PROVINCE: Dnieper-Donets Basin (1009) GEOLOGIST: G.F. Ulmishek
TOTAL PETROLEUM SYSTEM: Dnieper-Donets Paleozoic (100901)
ASSESSMENT UNIT: Continuous Basin-Centered Gas Accumulation (10090103)
DESCRIPTION: Continuous gas accumulation has been identified in
Carboniferous clastic
rocks at depths of 3.5 to 5 km over most of the central basin area. The
accumulation extends into the adjacent Donbas foldbelt (USGS province
1014) where it occurs at a depth of 600 to 800 m. No quantitative
assessment of this unit is provided in this report.
SOURCE ROCKS: Devonian and Carboniferous anoxic black shales and
Carboniferous coaly clastics and coal seams (in the southeast) could have
sourced the gas.
MATURATION: The entire gas accumulation occurs deeper than vitrinite
reflectance surface of Ro=0.9.
RESERVOIR ROCKS: Reservoir rocks are low-permeable sandstones and
siltstones. Loss of permeability was caused by deep maximum subsidence.
TRAPS: Capillary forces provide the trapping mechanism.
SEALS: No regional seal exists above the gas accumulation.
Law, B.E., Ulmishek, G.F., Clayton, J.L., Kabyshev, B.P., Pashova, N.T.,
Krivosheya, V.A., 1998, Basin-centered gas evaluated in Dnieper-Donets
basin, Donbas
foldbelt, Ukraine: Oil and Gas Journal, November 23, p. 74-78.
Ulmishek, G.F., Bogino, V.A., Keller, M.B., and Poznyakevich, Z.L., 1994,
stratigraphy, and petroleum geology of the Pripyat and Dnieper-Donets
basins, Byelarus and
Ukraine, in Landon, S.M., ed., Interior rift basins: American Association
of Petroleum
Geologists Memoir 59, p. 125-156.<<
No a word on basement reservoir fields. There is no doubt about the
organic origin of the oil and gas.

From more recent data, there are 185 oil & gas fields in the
Dnipro-Donets basin with a total discovered of 1.4 Gb oil, 67 Tcf gas and
0.5 Gb condensate.
List of 4 giant and 15 major oil and gas fields in Dnipro-Donets basin by
decreasing size
Dnipro-Donets :
major oil & gas fields (>100 Mboe)HC TypeNumber of ReservoirsDiscovery
Khrestyshchi ZakhidnyGas,condensate11968
Hlyns'k-Rozbyshiv (Group of Fields)Oil,gas,cond21958
Talalaivka (Group of Fields)Oil,gas,cond21971
Yablunivka Gas,oil41976

On the second largest gasfield ( Khrestyshchi-Zakhidny), the gas
production does not show any sign of refilling from the « abiotic »
The annual production display a natural decline with time and with
cumulative production/ The ultimate estimate from decline is 10 Tcf when
the reported value is 11.6 Tcf.
-2- Fractured basement reservoirs
Tony Batchelor Geoscience Limited in a paper Nov 2000
« Hydrocarbon production from fractured basement formations » lists all
the fields with hydrocarbons in basement reservoirs. But he quoted the
origin as :
<< Source of oil in basement rocks?
There are many possible sources for the oil accumulations in basement
reservoirs, however,
three sources are referenced most commonly:
1) Overlying organic rock from which the oil was expelled downward during
2) Lateral, off-the-basement but topographically lower, organic rock from
which oil was
squeezed into an underlying carrier bed through which it migrated updip
into the
basement rock.
3) Lower, lateral reservoirs from which earlier trapped oil was spilled
due to tilting or
overfilling (Landes et al, 1960).<<
Many fields are listed in many countries, and for Russia :
Former Soviet Union Countries
There are said to be numerous fields in the FSU producing from fractured
basement reservoirs (Kenny, 1996), but very little detail has been
published in the West. Kenny (1996) states that more wells have been
drilled into crystalline basements within the FSU than all other nations
combined with the consequence of greater production. For example, the
Caspian district has a total of eighty fields producing from crystalline
basements. Unlike the majority of drilling operations which cease as soon
as basement rocks are encountered (Aguilera, 1995b), Krayushkin et al
(1994) state that all of the hydrocarbon fields within the FSU producing
from crystalline basements were developed intentionally. Published
articles from a working conference on oil in granite held in Kazan,
Tatarstan, Russia in late 1997, (see latest reference section), refer to
basement oil shows in the Chibuiuskoye, Verkhnechutinskoye and
Iskosgorinskoyeoil fields, together with the Zelenetsky, Chernorechensky,
Lekkemsky and Timansky oil productive areas. Production statistics from
individual wells or fields were not made available. One such example is
discussed by Krayushkin et al (1994) involving an exploration project on
the flanks of the Dnieper-Donets Basin. An initial geological study of
the sedimentary, metamorphic and igneous rocks in the 'Northern
Monoclinal Flank' of the Dnieper-Donents Basin concluded that there was
no potential for hydrocarbon production. The conclusion was made because
of the absence of any source rock and the presence of active, strongly
circulating artesian waters. However, the exploration and drilling
programme which followed the initial study resulted in the discovery and
development of 12 fields with oil reserves equal to 219 million metric
tons of oil equivalent, the major part of which, according to Krayushkin
et al (1994), is produced from the PreCambrian crystalline basement.
However, this is difficult to demonstrate, partly because of multiple
completions in basement and overlying cover (Kitchka, pers. comm., 1999).
The fields were discovered in an area covering 30-35 km by 400 km where
the oil and gas bearing rocks are Middle and Carboniferous sandstones and
PreCambrian granites, amphibolites and schists of the crystalline
basement complex. The exploration programme also resulted in the
discovery of a gas field with reserves of 100 billion cubic metres. From
a total of 61 wells drilled in a corridor 35 km wide by 400 km long, 37
produced commercial quantities of hydrocarbons (an exploration success
rate of 55%). Initial flows from the productive wells varied between 40
and 350 metric tons/day of oil and 100,000-1,600,000m 3 /day of gas.
Production interval depths within the PreCambrian basement varied between
3,135 m and 4,041 m. Recently we have learnt of a new discovery in
PreCambrian basement called Goshinovskoye field (Kitchka, pers. comm.,
2000). Near Khark another corridor 30 km wide by 100 km long is
associated with 3.5 Tcf reserves (Kitchka, pers. comm., 1998) <<
I lived for several years in the 50s and 60s in Calgary exploring for oil
all around Canada and Michigan. I went to visit the site of the first oil
discovery in Western Canada called Oil City. Located on seepage on
Cameron Brook, Original Discovery n°1 found 300 b/d at 311m in 1902 in
what is now the Waterton Lakes National Park in Alberta. The site was
abandoned in 1907 after 7 other wells. The discovery is in the basement,
as the Lewis Thrust has pushed (100 km) over Cretaceous sediments a sheet
of very old rocks. The oil comes from the underlying sediments. North to
the Park, there are today producers at 6000 ft. Finding oil in fractured
basement is not new !

-3- Refilling oil and gas fields : Case of Eugene Island 330 oilfield
Eugene Island 330 oilfield discovered in 1971was taken by the Wall Street
Journal (Cooper Ch.1999 “ Odd Reservoir Off Louisiana Prods Oil Experts
to Seek a Deeper Meaning -Something mysterious is going on at Eugene
Island 330” April 16 as the
example of refilling reserves to wonder about a deeper origin for oil and
to explain the huge increase in the Middle East reserves in the second
half of the 80s. This thesis was defended by a geochemist Jean Whelan in
1996, Volume 14, No. 2 -
May 1996 The estimated oil reserves of Penzoil's Eugene Island Block 330
in the Gulf of Mexico have declined much less than experts had predicted.
Dr. Jean K. Whelan of Woods Hole thinks the field may be refilling itself
naturally from hitherto undetected gas and oil reservoirs more than
30,000 feet below the surface. (NYT). Cooper claimed that the reserves
reported previously at 60 Mb now are estimated at 400 Mb after an
increase of production from 4000 b/d in 1989 to 15000 b/d.
The production in 1989 was in fact 20 000 b/d ; the low was in 1992 at 15
000 b/d and the peak in 1996 at 30 000 b/d (28 000 for OGJ and 33 000 for
MMS). The reserves were in fact estimated in 1978 by OGJ at 325 Mb (500
Mb by the famous explorer Klemme in 1977) and increased to 388 Mb in
1996, normal reserve growth with the poor US practice of reporting (SEC
rules) only the proved reserves, neglecting the probable reserves. But
MMS estimated tthe reserves at 464 Mb in 1986 and only at 416 Mb in 1998
(negative growth !).
In fact this field is reported to have been charged again now because the
depletion of pressure from the source-rock (or a deeper reservoir) by one
of largest and best studied fault (the Red Fault) in the GOM by many
university seismic studies as 4D
(, study
carried out to show the present migration through the fault into the
producing reservoirs..
The annual production of the field displays a strong decline, then a
minor rebound and a new decline shows only a minor refilling, very easy
to explain with a minor charge from the original .source-rock as
explained in the article « Recovering dynamic Gulf of Mexico reserves and
the U.S. energy future » Roger N. Anderson, Lamont-Doherty Earth
Observatory of Columbia University et al. Jean Whelan was a co-author.
Most of paragraphs in this article were published in the week of April
26, 1993 by OIL&GAS JOURNAL, it is written
<< The organic geochemical signature of the reservoir oils and gases are
equally persuasive that an injection event has occurred recently in the
EI 330 field. Texas A&M's Geochemical and Environmental Research Group
has conducted a four-part, Gulf of Mexico Oil Correlation Study. Phase 4
included the analyses of 33 oils from all the major reservoirs of EI 330.
Among the conclusions: the oils are biodegraded in the shallow
reservoirs; there is little biogenic gas present; and the biomarkers,
heavy metals, and sulfur isotopes indicate a carbonate marine source of
probable Cretaceous age.
Combining the maturation and fractionation evidence, the organic
geochemistry indicates the EI 330 hydrocarbons are derived from the first
gas-rich, fluid discharges from mature oils presently cracking to gas and
undergoing evaporative fractionation. The gas-saturated fluids, expelled
from deep within the sub-basins, entrain less mature oils from shallower
depths on their way up the synclinal turbidites to the distributary
network buried within the Red Fault Zone. From there, the fluids lose
their hydrocarbons preferentially to the first low pressure reservoirs
encountered in the transition above geopressure. Some water, and
accompanying methane makes it all the way to the surface, where seeps are
active along the Red Fault Zone today. Effect on U.S.
reserves Our working hypothesis for the rock mechanical behavior of the
system is that volume changes from the generation of gas produce an added
pressure increase to that of compaction within the geopressured
"kitchen." Periodically, pressures build to hydraulic fracturing
stresses. Faults like the Red Fault Zone open to release bursts of fluids
upward toward the surface. The hydrocarbons, being the most buoyant
components of the released fluids, fill the first available space in the
more weakly pressured (down-thrown side in the case of the Red Fault
Zone). Filling is in a deep-to-shallow sequence. The oils are swept with
the fluid, whereas the gases are dissolved in the fluid. Such bursting
events have occurred repeatedly during the Plio-Pleistocene evolution of
the Gulf of Mexico, and billions of barrels of as yet undiscovered
hydrocarbons must exist within the geopressured depths of the basin. To
think otherwise is illogical.<<
They see a large potential from refilling from the deeper sedimentary
reservoirs (proof with biomakers), but not from abiogenic sources in the
basement and the mantle !

« Eugene Island Block 330 Field--U.S.A. Offshore Louisiana « by David S.
Holland, John B. Leedy, David R. Lammlein (Published in AAPG Treatise of
Petroleum Geology, Atlas of Oil and Gas Feilds, Structural Traps III, p.
103-143; adapted for online presentation)
gives a good description of this field.

There are other examples of refilling fields, mainly gasfields, as
Groningen. The seal of most gasfields is not good enough (except
evaporites) to keep for a long time and most are in charge from the
source-rock. When a gasfield is depleted enough, it could be partly
refilled as Groningen giant gasfield in Netherlands from its source-rock

-4- Attempts of drilling abiogenic HC
Drilling for abiogenic gas by the astronomist Thomas Gold in the Siljan
crater in 1988 and 1991 has been failure, as methane was not found and
the rumored 80 b of recovered oil in granite is assumed to come from the
drilling mud. In Saskatchwan, in 1991 Warren Hunt has leased 9600 km2 on
Precambrian bedrock aiming to abiogenic HC in the Craswell crater (35 km
diameter and 478 Ma old). No drilling (as far as I know) has been carried
out ; as I presume that Hunt has not found anyone to invest in his ideas
after the failures in Sweden.
No one major oil and gas companies explores for abiogenic HC.
The IFP (Institute Francais du Petrole) school discards the abiogenic
theory, as there is no proof of it.

Conclusions :
The proposed proofs of evidence of abiogenic origin in the Dnieper-Donets
basin and in refilling fields are dismissed in front of real data.
The Great Oil Age
By Peter McKenzie-Brown, Gordon Jaremko and David Finch
Others advocate a new variation of inorganic theory they call abiogenic.
The best-known modern advocate of inorganic origin is Thomas Gold, an
astrophysicist at Cornell University. When explorations of space revealed
that meteorites and other planets contained hydrocarbons in the total
absence of life forms, it seemed to Gold to be strong evidence that
petroleum could have originated abiogenically on earth as well.
Gold suggested that hydrocarbons may be abundant deep within planet
Earth, and that the oil and gas already found originated at least in part
in these deep zones. To test Gold's theories, a group drilled a deep well
in the Siljan Ring - an impact crater in Sweden - and apparently found
some 80 or more barrels of oil in a granite reservoir. But results proved
inconclusive and the group began drilling a second well in 1991.
An iconoclastic Calgary geologist has developed even more radical
theories than Gold's about the formation of oil and gas in the earth.
Through a family-owned company, in 1991 Warren Hunt acquired the oil and
gas rights to 960 000 hectares of Precambrian bedrock to test his
theories. What is remarkable about this exploration play is that,
according to conventional geology, he has acquired exploration rights in
a geological region which could not possibly contain oil or gas.
In Hunt's two books - Environment of Violence and Expanding Geospheres, -
he proposes theories which, if proved, will fundamentally alter the
geosciences. One test of his thinking is the exploration play in northern
Alberta, which assumes that the Alberta oil sands had a deep-earth
In Hunt's view, Earth's core contains vast amounts of hydrogen which can
sometimes migrate toward the surface. Deep within Earth's mantle, it may
react with silicon carbide to form gaseous hydrocarbons and silane gas.
When disturbed, these brews move up to the underside of the earth's
brittle granite crust. There, the silane can react with water to form
silica sand. The slurry of sand, water and hydrocarbons is lighter than
the granite above, creating instability.
Hunt believes the granite ruptured through what he refers to as the
Carswell Gastrobleme, a 37-kilometre wide crater in northwestern
Saskatchewan. Silica erupted violently, then oozed eastward from this
conduit. Over time, 50 000 cubic kilometres of sand wound up sitting in a
granite bowl across northwestern Saskatchewan - a phenomenon Hunt claims
has never been explained geologically.19
He speculates that the shifting granite eventually resealed the Carswell
rupture, trapping hydrocarbon-rich silica sand layers under Alberta's oil
sands. His exploration play is based on the notion that only some of that
oil rose to the surface to be degraded into today's oil sands. Hunt
suggests that a great deal of conventional oil - perhaps hundreds of
billions of barrels - could still be present in reservoirs west of the
Carswell rupture - under the oil sands. If they exist, those reservoirs
would have been formed by fractures in the granite which filled first
with sand, then with abiogenic oil and gas.

In 1901, John Lineham of Okotoks, Alberta, organized the Rocky Mountain
Drilling Company and in 1902 drilled the first exploration well in
Alberta on the site of these seepages. Now part of Waterton Lakes
National Park, the Historic Sites and Monuments marker commemorates the
discovery well and Oil City, the boom town which sprang up briefly in the
area. The discovery well briefly produced up to 350 barrels of oil per
day, but neither this well nor seven later exploration attempts resulted
in steady production. Perhaps the greatest contribution of the Oil City
play came about when the Western Oil and Coal Company drilled there and
collected 256 rock samples at different depths which they examined for
traces of oil. This method of systematic sampling set a precedent that
drillers now routinely follow."


Thu, 03/27/2014 - 02:45 | 4597570 kurt
kurt's picture

Take a Poo Already!

Wed, 03/26/2014 - 13:21 | 4594399 bsdetector
bsdetector's picture

More public and private discussion of "debt" is needed. We often think of debt in the form of money but debt means more than that. Debt is the medium of control in this millieu. It is nice to have choices in life but when choices are limited by promises made from others to others negative things happen. Deception and demagoguery often initiate indebtedness and secrecy enables the process to flourish. Indebtedness is not the lifestyle I like so I avoid it. But others are making debts that I am obligated to perform on a daily basis. I wish the masses could grasp the meaning of debt and the harm that it portends.The OWS crowds missed the true crisis in 2007 and 2008; the crisis was successfully co-opted by the status quo to mask the true nature of the theft and control that was reimposed on the masses. Writers like JHK should hammer this message endlessly.    

Wed, 03/26/2014 - 14:14 | 4594646 Jack4952
Jack4952's picture

What do you think about a world-wide DEBT JUBILEE ?

Just curious . . .


Wed, 03/26/2014 - 14:37 | 4594782 bsdetector
bsdetector's picture

We are all responsible for the promises we make but why should we be responsible for the promises others make on our behalf? Debt Jubilee for those third party promises may be in order. 

Wed, 03/26/2014 - 13:53 | 4594526 shovelhead
shovelhead's picture

Whaddya talkin Kunsler?

Detroit has enormous investment potential...

As a Post-Apocalyptic Theme Park.


Why just the money on the AR & AK rentals would be huge. Franchises to other failed cities in US...

Prizes for Bag-a-Bro high score...

Sure fire winner.

Wed, 03/26/2014 - 14:11 | 4594633 Jack4952
Jack4952's picture

As an American currently living in Ukraine, I doubt if Russia wants the entirety of Ukraine. I know that the people in Odessa and Simferopol (Crimea) - where we have homes - do NOT want to be associated with northern and north-western Ukraine. Except for Kiev, those regions of Ukraine are relatively POOR. Yes, there is skiing in western Ukraine on some hills they euphemistically call mountains - but that is it! (For people living in Massachusetts, the slopes are a lot like Mount Wachusett.)

The heavy industry is in eastern Ukraine and the major port and cultural center is Odessa in the south. These areas are RUSSIAN in language, culture and history - and until 1954 were formally part of Russia. I can NOT imagine them wanting to remain a part of Ukraine, especially with the current post-coup Kiev government OR any right-wing government that may be elected in the upcoming elections.

Except for "security" reasons, WHY would Russia want to burden itself with north and north-western Ukraine, where the Russians are hated?


Wed, 03/26/2014 - 14:20 | 4594683 iamrefreshed
Wed, 03/26/2014 - 14:50 | 4594870 epwpixieq-1
epwpixieq-1's picture

To add, Europe is coping with around $8/gallon gas price, now for about 5 years, and US is muddling thought only with around $3.5/gallon. How US will measure when ( note not if, but when, and the when is coming soon ) the price doubles. The truth is that Europe, with its dependency, on some level, on Russian gas, has a lot more efficient usage of energy, due to its limited resources, than US, and this will tell you a lot who is investing in the right technology for the future. Regrettably US is falling behind in anything associated with energy efficiency, but of course it it number one, when to comes to drilling more, even if it means getting less.

Wed, 03/26/2014 - 14:52 | 4594885 rosiescenario
rosiescenario's picture

Yet, once again, we see that special interest groups are firmly in control of D.C. Unfortunately their interests do not mesh with those of the average tax paying citizen.


It also does not appear to matter which "party" is in charge.....Bush just had to start wars in the ME to serve 2 obvious specaial interests, while projects needed at home got 0. Under Obama, it is just more of the same.


Paul is the only one singing a different tune and he appears to be getting nowhere.


Just my opinion but the special interest groups will run us under before there is any real change.

Wed, 03/26/2014 - 15:03 | 4594948 Itchy and Scratchy
Itchy and Scratchy's picture

Raise the bebt ceiling! Raise the debt ceiling! Raise the debt ceiling!

Wed, 03/26/2014 - 15:26 | 4595072 kurt
kurt's picture

Short answer: Adapt and Survive

Wind to pump water. Take composting seriously. Mega farms downscaled. Act locally based on local conditions. That is, Think about a problem and solve it. Yankee ingenuity is bottom up, not top down.

I agree WTF are we doing ANYWHERE when we have so many problems at home. Not "homeland" a term I hate, but, HOME!

Wed, 03/26/2014 - 19:41 | 4596385 Notarocketscientist
Notarocketscientist's picture

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.


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.





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)



According to the results of a quantitative exercise carried out by the IEA in collaboration with the OECD Economics Department and with the assistance of the International Monetary Fund Research Department, a sustained $10 per barrel increase in oil prices from $25 to $35 would result in the OECD as a whole losing 0.4% of GDP in the first and second years of higher prices.



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."



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.



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.




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."





"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."



“I look at shale as more of a retirement party than a revolution,” says Art Berman, a petroleum geologist who spent 20 years with what was then Amoco and now runs his own firm, Labyrinth Consulting Services, in Sugar Land, Tex. “It’s the last gasp.”



Overinflated industry claims could pull the rug out from optimistic growth forecasts within just five years.  A report released in March by the Berlin-based Energy Watch Group (EWG) concluded that: "... world oil production has not increased anymore but has entered a plateau since about 2005."  Crude oil production was "already in slight decline since about 2008." 






Toil for oil means industry sums do not add up (

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.”



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