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The US Shale Oil Miracle Disappears
Submitted by Chris Martenson via Peak Prosperity,
The US shale oil "miracle" has about as much believability left as Jimmy Swaggart. Just today, we learned that the EIA has placed a hefty downward revision on its estimate of the amount of recoverable oil in the #1 shale reserve in the US, the Monterey in California.
As recently as yesterday, the much-publicized Monterey formation accounted for nearly two-thirds of all technically-recoverable US shale oil resources.
But by this morning? The EIA now estimates these reserves to be 96% lower than it previously claimed.
Yes, you read that right: 96% lower. As in only 4% of the original estimate is now thought to be technically-recoverable at today's prices:
EIA Cuts Monterey Shale Estimates on Extraction Challenges
May 21, 2014
The Energy Information Administration slashed its estimate of recoverable reserves from California’s Monterey Shale by 96 percent, saying oil from the largest U.S. formation will be harder to extract than previously anticipated.
“Not all reserves are created equal,” EIA Administrator Adam Sieminski told reporters at the Financial Times and Energy Intelligence Oil & Gas Summit in New York today. “It just turned out it’s harder to frack that reserve and get it out of the ground.”
The Monterey Shale is now estimated to hold 600 million barrels of recoverable oil, down from a 2012 projection of 13.7 billion barrels, John Staub, a liquid fuels analyst for the EIA, said in a phone interview. A 2013 study by the University of Southern California’s Global Energy Network, funded in part by industry group Western States Petroleum Association, found that developing the state’s oil resources may add as many as 2.8 million jobs and as much as $24.6 billion in tax revenues.
(Source)
From 13.7 billion barrels down to 600 million. Using a little math, that means the hoped for 2.8 million jobs become 112k and the $24.6 billion in tax revenues shrink to $984 million.
The reasons why are no surprise to my readers, as over the years we've covered the reasons why the Monterey was likely to be a bust compared to other formations. Those reasons are mainly centered on the fact that underground geology is complex, that each shale formation has its own sets of surprises, and that the geologically-molested (from millennia of tectonic folding and grinding) Monterey formation was very unlikely to yield its treasures as willingly as, say, the Bakken or Eagle Ford.
But even I was surprised by the extent of the downgrade.
This takes the Monterey from one of the world's largest potential fields to a play that, if all 600 million barrels thought to be there were brought to the surface all at once, would supply the US' oil needs for a mere 33 days.
Yep. 33 days.
And along with that oil come tremendous water demands, environmental, infrastructure and air pollution damages.
So if you do go for it California, the rest of the country will be your best buddy for a little more than 4 weeks. But don't keep calling us afterwards, as we'll be off to the next oil party (if there are any other ones to be had). But know that, sure, we still respect you.
Of course I'm being sarcastic here. But if I lived over or near a shale formation, I would be putting up a hell of a fight to prevent the many long-term damages and airborne pollutants that inevitably accompany such short-lived fracking operations.
At this point, you might be wondering just how the EIA got its estimate so badly wrong. The answer is that the EIA relied on a private firm, one now scraping corporate relations and PR egg off its face:
U.S. officials cut estimate of recoverable Monterey Shale oil by 96%
May 20, 2014
Federal energy authorities have slashed by 96% the estimated amount of recoverable oil buried in California's vast Monterey Shale deposits, deflating its potential as a national "black gold mine" of petroleum.
Just 600 million barrels of oil can be extracted with existing technology, far below the 13.7 billion barrels once thought recoverable from the jumbled layers of subterranean rock spread across much of Central California, the U.S. Energy Information Administration said.
The new estimate, expected to be released publicly next month, is a blow to the nation's oil future and to projections that an oil boom would bring as many as 2.8 million new jobs to California and boost tax revenue by $24.6 billion annually.
The 2011 estimate was done by the Virginia engineering firm Intek Inc.
Christopher Dean, senior associate at Intek, said Tuesday that the firm's work "was very broad, giving the federal government its first shot at an estimate of recoverable oil in the Monterey Shale. They got more data over time and refined the estimate."
(Source)
Wait a minute. The 2011 California shale oil estimate that launched a flotilla of excited "shale miracle" headlines, led the EIA to publish an estimate of the Monterey at 13.7 billion recoverable barrels, and helped to form a national narrative around potential US "energy independence" was done by a Virginia engineering firm?
Okay, well who are they exactly?
Looking at their website, clearly put together using cheesy stock photos, early Internet font formats, and touting the fact that they've been a business "since 1998" doesn't quite project the hoped-for aura of gravitas and seasoned competency:
(Source)
Seriously? A clock in an arch? Typing fingers? A woman gesturing in a meeting and a guy on a phone?
I mean, does anyone other than me have a "no lame stock photos" requirement of the businesses they use to generate the data used to justify a major geopolitical energy realignment? It's the closest thing I have to a hard rule.
Okay, just kidding again....sort of.
At any rate, the bottom line here is that the EIA relied on this firm's back-of-the-envelope calculations which turned out to be -- surprise! -- unreliable. And now, Occidental Petroleum is scrambling to get its assets out of the Monterey and deployed somewhere more promising.
The lesson to be learned here is: don't believe every headline you read. Consider the source, and more importantly -- stock photos or not -- always question the data.
Price, It's Always About Price
However, I cannot completely write off the entire 96% as 'gone' because the media has left off the most important part, as they always do: the role of price.
Without having access (yet) to the latest well data to know exactly what sort of potential disaster we're dealing with, the correct way to write-down an oil resource is to say: at today's oil prices, this asset can yield (or is worth) $X.
At higher prices, it is certainly true that more of the resource will be 'worth' going after.
But as you and I know, the price mechanism is just a means of obscuring the most important variable: the net energy that will be returned from a given play. Generally speaking, the higher the price (which is often a function of the energy required to extract), then the less net energy will come from that play.
So anytime we hear that a given play is being 'written down', as the Monterey is in rather spectacular fashion, what's really being said is that the net energy from the play is a lot less than prior and/or existing plays, and will not be useful to us until higher oil prices come along. In the case of the Monterey, much higher prices.
Whether we have an intact, functioning and highly complex economy of the sort necessary to develop and deliver the technology required to prosecute such low-yielding plays is another matter entirely. My best guess as of today is, 'probably not.'
Conclusion
Today's write down of the Monterey shale asset is a huge blow to Occidental Petroleum specifically, to California's energy and employment dreams more broadly, and to the US's energy dreams at a national level.
This is not surprising at all to anybody following the shale story with a critical eye. We always knew that the best plays were being prosecuted first for obvious reasons; it's human nature to go after the easy stuff first. And this is especially true for the folks in the oil patch.
The best plays were tapped first, not by some accident of technology or lucky holes plunged into the ground, but because they were cheapest to prosecute. The remaining shale deposits are less rich, more costly to explore, and the profitable pockets much harder to find.
Your main take-away is this: the US has a lot less shale reserves on the books today than it did yesterday. Look for future downward revisions as the other remnant shale plays are poked and prodded and found to be wanting.
Investors need to be wary here too. The hype about shale prospects are wedded to a Wall Street cheap capital machine that is showing clear signs of over-heating:
Shale Drillers Feast on Junk Debt to Stay on Treadmill
Apr 30, 2014
Rice Energy Inc. (RICE), a natural gas producer with risky credit, raised $900 million in three days this month, $150 million more than it originally sought.
Not bad for the Canonsburg, Pennsylvania-based company’s first bond issue after going public in January. Especially since it has lost money three years in a row, has drilled fewer than 50 wells -- most named after superheroes and monster trucks -- and said it will spend $4.09 for every $1 it earns in 2014.
The U.S. drive for energy independence is backed by a surge in junk-rated borrowing that’s been as vital as the technological breakthroughs that enabled the drilling spree. While the high-yield debt market has doubled in size since the end of 2004, the amount issued by exploration and production companies has grown nine-fold, according to Barclays Plc. That’s what keeps the shale revolution going even as companies spend money faster than they make it.
“There’s a lot of Kool-Aid that’s being drunk now by investors,” Tim Gramatovich, who helps manage more than $800 million as chief investment officer of Santa Barbara, California-based Peritus Asset Management LLC. “People lose their discipline. They stop doing the math. They stop doing the accounting. They’re just dreaming the dream, and that’s what’s happening with the shale boom.”
(Source)
I guess there's a little less dreaming going on in the Monterey shale patch this morning.
Not to pick on RICE here, because they are more typical than not, but when you are spending $4 to earn $1, somebody ought to be asking some hard questions. Especially the investors.
More broadly, I have been clearly concerned by the recent reports indicating that the shale operators have been spending far more in CAPEX than they’ve been generating in operating earnings.
That's a larger subject that I've covered in more detail in recent reports, but the summary is this: over the past four years, free cash flow (FCF) has been negative for most of the major shale players.
Which leads us to the really big question: When will all these shale drilling efforts actually generate positive FCF?
In the case of the Monterey, and at today's prices, the answer looks to be 'Never.'
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Spending $4 to earn $1 dollar is actually not totally crazy. the fed is providing the money, and it can work as long as the $1 of gas/oil produces more than $4 of gdp. those shale plays actually producing oil/gas are surely net energy positive.
Easy to get up-votes, just introduce the word "Keynesians" into one's post with derogatory/negative statements... (seems that you're getting the hang of it)
It's about engaging in unsustainable acts, and as far I have been able to see no one is presenting any "solution" as to how to achieve our "desires" without it also being unsustainable.
A rounding error ....
As if the state of fruit and nuts will allow fracking anyplace near it. The lead in is a tad misleading. They are only talking about one basin that would never have been tapped anyway. No watie no frackie.
Actually this "one basin" was reputed to hold about twice as much recoverable oil as the Eagle Ford Shale and the Bakkan Formation combined, and, as the OP mentioned, by itself accounted for two-thirds of America's recoverable shale oil.
News like this sounds the death knell for the shale bonanza. Fracking simply isn't profitable without access to cheap credit, and the cheap credit only flows as long as the drilling companies are able to promise future cash flow. The arrival of that cash flow seems less and less likely by the day.
I think we can all predict what Kunstler's piece will look like next Monday.
I sense huge lawsuits over this "re-assessment". Someone who got in early is going to call a foul.
Naw, the early folks have likely already gotten out. Suckers never look too good appearing in court with their pants down...
But, yeah, it WOULD be interesting to have this beat out in court so we could get a better look at how all these scams are coming down.
That is a verrrrrrry cheesy website. WB7 should spoof their site with his own photos in place of their junk. I'm sure it'd be a classic.
Honestly, there's nothing really to spoof. It's already a fucking joke of a website.
Bubububut....ALL the Democratic candidates for the Pennsylvania Governor's race PROMISED US that we can fund PA's Public Schools by taxing the shale gas companies. They can't ALL be wrong!!.....right?.....RIGHT??
It's the KOCH BROTHERS!!!!!.....And George Bush!!!!!
I for one am sick of throwing bad money after even worse money at public fucking schools. Jeebus.
"Yes, you read that right: 96% lower. As in only 4% of the original estimate is now thought to be technically-recoverable at today's prices"
Fail. What Chris is saying is that there is a shitload of oil and gas to go around, but it won't be tapped until oil prices rise. Same as it ever was. The tar sand in Canada was untapped for a very long time because it wasn't economically feasible to do anything with it. Now that oil prices are over $100 per barrel, they're making billions of dollars up there. Suncor, the leader in tar sand development, is now the largest oil company in Canada. If we see oil at $110 or $120, we will see a huge surge in US oil production.
Sustained $100 brl. oil is already max that the economy can bear. We'll never see sustained prices above this level. The economy will crash and burn before that ever happens.
Same as interest rates...we'll never see sustained interest rates much above the present levels either, and for the same reason.
Correlating a piece of worthless paper to useable energy, priceless.
Why, you burn it of course.
Interest rates and new wells are more than just a little correlated ...
interest rates aren't 'paper', they are real, then written on paper.
thus, you are wrong, the op is not correlating anything, but making seprate comments related in that they address the US economy.
high oil prices can't be borne by broke businesses and consumers as the fiat value transfer mechnism sucks it's juice
and (but not correlated)
Interest rates fall when depression sets in, as values for matching liabilites fall alongside the "assets", and of course, should one choose to print up more liabilities against a given set of shitty assets the problem is (deliberately) exacerbated
His first 3 words.
Sustained $100 brl
Quoting a $ per barrel in reference to EROEI is wrong.
Right, but EROEI is all over the map when it comes to what oil is produced where. In the absence of good, sound data on the EROEI, dollars will have to be the proxy. A well that produces oil at $15/bbl is likely to have a better EROEI than a well that produces oil at $50/bbl. If it takes more drilling, more well casing and/or harder pumping and thus more energy, it is going to cost more dollars.
It won't EVER become feasible. THAT's the Point.
If Oil at $120, It will cost MORE to extract than it does now.
If it costs you a buck to make a buck, you didn't "Make" a buck.
If you were paying attention to the energy scene 10 years ago, they were saying "... If oil goes to $70 a barrel, Tar Sands would be Feasible..."
It DID, and IT WASN'T
E. R. O. E. I.
(Energy Returned On Energy Invested).
$70 inflation adjusted is $100, so it is profitable. When people say "X is profitable at Y price" They mean it in the dollars of that time. They don't try to include unknown amounts of inflation and price increases in input materials.
Anything over 1:1 EROEI is a gain, as long as you include the embedded energy in your materials.
Wages are not keeping up with inflation (and employment is eroding) so in the long run it is not profitable in the consumer market. Everyone with the back of an envelop handy and a pencil can do the math. A few years out and none of this is working any more. It very nearly isn't working right now is the point, but yeah I guess we can still discuss it on a what-if basis if you are into that kind of thing.
People in the West are going to have to get more efficient and consume less. The developing world will consume more. Whether it nets out to falling or rising production, who knows. Prices may go down then up, or up then down. There will probably be price and supply shocks. Some will profit and some will lose, and maybe it nets out to more losses than gains.
If you are saying that the global economic picture is a zero-sum game, you are correct.
But even that is a temporary condition.
The Chinese might get the last of the available oil and be the only economy left standing, but then what? Have they won a gold plated cupie doll for it? Who are they trading with? And once Canadians watch China ascend and their own fortunes fail will they still sell Canadian tight crude to China shipped via a US pipeline? I rather doubt it.
The zero-sum nature of the current situation is reflective of a greater problem; we are at the end of growth. Anyone pegging their fortunes to net-net growth is doomed. Who gets the last of the oil and is the last economic power standing is the sort of thing only historians will care about. For the rest of us the end of growth is going to become a rolling nightmare of grief and regrets.
"... a rolling nightmare of grief and regrets" is going to become especially bad because not only will there be the objective problems, there will be even more subjective insanity. There IS a plan in place, the only one which has actually been prepared for, to deal with exponential growth reaching the tipping point of overshooting whatever might have been sustainable (if human beings had been honest and rational), and that plan is the plan put in place by the people who have actually controlled civilization by backing up lies with violence.
As far as I can tell, the ONLY plan which has actually been prepared to deal with future problems is to start more genocidal wars and impose democidal martial law ... Without a series of technological and political miracles, then the debt slavery systems which have been strip-mining the planet are going to drastically crash. There WILL be "a rolling nightmare of grief and regrets," because the only apparent plan in place to deal with exponential growth building everything on the foundation of being able to strip-mine the natural resources of a fresh planet is to mass murder the majority of the human population, when that is no longer possible to continue to do.
In my view, the vast majority of people match the ruling classes, in both refusing to openly face any real facts. There were never any practically possible ways to stop the vast majority being political idiots, while the ruling classes wanted that to be the real social situation. The ruling classes believe that they are preparing for the future by preparing for more wars and martial law. My opinion is that practically everybody has become criminally insane, and that the whole situation will go way more wildly out of control than anyone can actually be prepared to cope with, including the ruling classes.
Even IF there were proven to be some series of technological miracles (which I like to think are actually possible), without a matching series of political miracles, then those technologies will only even greater increase the already runaway social insanities that control civilization. IT IS IMPOSSIBLE TO EXAGGERATE THE DEGREE TO WHICH OUR SOCIETY IS CONTROLLED BY THE MAXIMUM POSSIBLE DECEITS AND FRAUDS. Since we all were born into that established system, we are like fish in the water that do not notice the degree to which we take for granted being inside of society which is stark raving mad, because almost everything is so totally controlled by lies backed by violence.
SINCE WE ACTUALLY RESOLVED THE CHRONIC POLITICAL PROBLEMS INHERENT IN THE NATURE OF LIFE THOUGH THE HISTORY OF WARFARE, WHICH THEN BECAME THE FOUNDATION OF THE CURRENTLY ESTABLISHED ECONOMIC SYSTEM, WE ACTUALLY APPROACH ALL OF OUR PROBLEMS TAKING FOR GRANTED THAT WE OPERATE OUR DEATH CONTROLS THROUGH THE MAXIMUM POSSIBLE DECEITS, AND OUR DEBT CONTROLS THROUGH THE MAXIMUM POSSIBLE FRAUDS.
MOREOVER, SINCE ALL THOSE SOCIAL SYSTEMS WERE WORKING FOR THOUSANDS OF YEARS, WE ARE FORCED TO TAKE THEM FOR GRANTED, IN THE SENSE THAT THE VAST MAJORITY OF PEOPLE TAKE THEM FOR GRANTED, AND THEREFORE, ARE VERY PROBABLY GOING TO KEEP ON TAKING THEM FOR GRANTED IN THE FORESEEABLE FUTURE.
Absolutely ALL of the future problems are about the possible emergence of human and industrial ecologies, within natural ecologies, which may develop AFTER the strip-mining of a fresh planet has been done enough that it can not continue to sustain any more exponential growth. In theory, we could develop evolutionary ecologies, which integrated all the combined aspects of human, industrial and natural ecology. HOWEVER, the problem is that all the current systems are human ecology built by murder systems based on the maximum deceits, and industrial ecology built by money systems based on the maximum possible frauds.
Both the ruling classes, and those they rule over, are matching bookends of that problem, where it is practically impossible to have any rational political debates about reaching the limits to strip-mining the planet's natural resources at an exponentially accelerating rate, regardless of the diminishing returns. Any rational debates regarding developing better evolutionary ecologies to cope with those limits must be centered upon the death control issues, BUT discussing those issues is practically impossible in our current civilization, which was based on thousands of years of actually operating the death controls most successfully through the maximum possible deceits regarding how those were really done, including the controlled opposition to that also operating within the same bullshit frame of reference regarding those issues.
Given those social and political realities, the ONLY plan which appears to already be in place is the covert plan of the ruling classes to start more genocidal wars, and impose democidal martial law, in order to mass murder the majority of the world's population. However, the few who see that possibility tend to never agree that some new death control system must manifest, to cope with the end of exponential growth being possible to sustain. Therefore, it is practically impossible to have any saner political debates about what the new death controls, inside what new human, industrial and natural ecologies, should be.
Instead, we get situations like this article above, where a false rosy picture gets painted, as the pleasant lies that many people want to continue to believe in, but, which eventually get revealed to have been a false hope. Multiply that over and over and over, in every other area that I have ever examined, and it becomes clear that we are actually rushing towards the tipping points faster than ever, with those points not as far off in the future as we may have wished to previously believe.
Whatever the technological miracle fixes that there may be (and I tend to believe that there are some real creative alternatives), nothing less than a prodigious series of political miracles could actually cope better with the limits to growth, requiring a radical transformation of the basic human and industrial ecologies, in ways which worked with natural ecologies, rather than continued to deliberately ignore them.
I REPEAT:
THE ESSENTIAL DEEPER PROBLEMS ARE THAT WE ACTUALLY OPERATE OUR HUMAN ECOLOGY THROUGH THE MAXIMUM POSSIBLE DECEITS, AND OUR POLITICAL ECONOMY THROUGH THE MAXIMUM POSSIBLE FRAUDS.
Furthermore, the ruling classes are the most deceitful and fraudulent, while those they rule over have adapted to accept living inside of those kinds of systems. Combined, the most probable real futures ARE "a rolling nightmare of grief and regrets." While there are lots of theoretically possible better resolutions to our problems, the ACTUAL resolutions will most probably be the ones consistent with the extrapolation of the maximum deceits and frauds, resulting in the debt insanities causing death insanities, with the ways that the human species adapts to having built its exponential growth on the strip-mining of the planet becoming Peak Insanities, through which processes the majority of the human population gets mass murdered, in one way or another, by all the possible soft and hard kill methods.
The ONLY theoretically better real solutions would require a series of political miracles, which enabled there to be better death control systems to do what needs to be be done. HOWEVER, better death control systems have to cope with the basic facts that the actually operating systems are done through the maximum possible deceits, while the controlled opposition to that establishment is just as much embracing the deceits about death controls as those they protest against. The ruling classes and those they rule over are matched in their ways of being able to rationalized and justify continuing to have exponential growth based on strip-mining the planet, and neither appears able and willing to rationally discuss the limits to doing that, and what we should do about it, which is necessarily develop different evolutionary ecologies to resolve our human, industrial and natural problems, which necessarily requires different death controls as the core of those new ecological systems.
Since BOTH the ruling classes, AND those they rule over, are in agreement about their basic bullshit way of looking at the world, in profoundly anti-scientific ways (deliberately ignoring evidence and logical arguments), the realities of limits will primarily provoke Peak Insanities, which take the form of death insanities. While saner death controls are theoretically possible, those are not practically possible within political systems whereby everybody has adapted for thousands of years to operate death controls based on the maximum possible deceits, through which BOTH the establishment, AND its controlled opposition groups, agree upon the same basic bullshit regarding death controls being discussed in profoundly deceitful ways.
Every time that we discover that the limits are closer than we previously wished they were, or we were told they were, then we are closer to having to adapt to the realities of those limits. So far, the ONLY plan in place to do that is the covert plan of the ruling classes to mass murder the majority of the population. As far as I can tell now, that is the ONLY plan which is practically possible. Anything else would require some prodigious series of technological and political miracles. While the technological miracles might be possible, the necessary political miracles are way more unlikely, since those political miracles would require enough people recognizing and admitting that we actually are operating our death controls through the maximum possible deceits, and recognizing and admitting that we MUST have better death controls, in order to resolve any other other problems better.
Merely the technological miracles are NOT ENOUGH. Nothing less than the political miracles are sufficient for there to be any better resolutions of our problems ... which is why I presume that the real future will ACTUALLY become the mass murder of the majority of the human population, which will be experienced as "a rolling nightmare of grief and regrets."
Exactly right Cougar, under a certain level of commerce, the current configuration cannot support itself any longer. It will break down chaotically(ie unpredictablily).
Something like Ken Wilbur's Holons.
Hey nice reference, thanks for sharing.
I am immediately struck by the problem of being "part" of something bigger; you don't know you are. Humans are social animals and so we naturally interpret everything from that perspective. We know from individual experience that social groupings are artificial enough they can come and go without a lot of problems. But whole structures in collapse bring down all the parts.
When did people become holons of the global economic and financial system? And since we are (very clearly this is the case) what happens now if that structure fails? The idea that any of us are getting out alive seems like a holdover from another time when we had loose economic couplings and stronger social ones. Now that those are reversed and we are all just cogs in a giant machine I really have no clear sense how we walk away from this.
Yes,Good questions and observations.
When did people become holons of the global economic and financial system?
I think it grew like a snowflake naturally intergrating upwards. Adding on, and on,
Except I fear it doesn't work in reverse very well because of the rigidity of some of the component linkages.
Like how Transisters can be on the smallest subassembly and also individually added to higher levels of the BOM.
I remember the small soda bottler in my area(in the 60's), very small production capability. Runs in the 10s of cases.
Watching "How things are made" on some channel, watching bottling millions per day or something like that. With 20 people working there.
Now how did it go from that scale to the other? it grew incrimentally over time.
The New place can't even turn the machines on unless they are gonna run a 100,000 bottles just to get up to centerline compliance.
Going Down the scale is a different animal I fear.
You are right, I don't see us 'walking away' from this phase change either.
I think from a social perspective, When the machine fails, it will break a part in many different sizes of parts.
It will be a matter of location, location, location most of all I believe. And I don't mean that to imply that one can pick the locations that will receive the least change/effects.
It will be a scatter chart of probablities. You play the odds. "Big City = Bad, Low pop. Density, social Cohesion = Good. "
What political structures are left at what level? Have no idea.
Just some thoughts.
Whatever we have left, it should make sure that there is no such thing as property taxes. I want allodial title, damnit!
Agreed. Deadwood, here we come!
There is one more angle.
If the M/IC decides that even at negative EROEI we still need it for national security then the shale fields will be exploited at a loss. Maybe, a huge loss.
This is a very real possibility. In fact I think it is inevitable. Watch for "new numbers" to appear suddenly a few years from now that make it seem like everyone should be in there fracking the hell out of it. Even given collapsing demand and falling prices Exxon and BP and Shell will find "economic reasons" to be in there when actually they'll be working on government payroll pulling very very expensive crude oil and equivalents out of the ground to fuel "national security" with tax dollars. The amount of investment by the government might turn out to be astronomical. $trillions probably. Or they'll nationalize the oil majors (why not, in an era of peak oil they are irrelevant anyway) and just use them as puppets.
If the government gets into it to keep the M/IC alive, there will be no end to it. And no regulation, no granola eaters chained to the drill rigs. Just nothing. God help you if you live on top of a shale field they'll take your mineral rights from you with the stroke of a pen, frack your property from your back yard, and leave you homeless living under a bridge if you don't like it.
I don't see any way this won't happen. It's going to become a nightmare.
Thank you Cougar,
If it costs TWO bucks to make a Buck You are running a loss of 1buck per transaction..
AND of Course the only one who could afford that would be the Government.
You get the two bucks from someone weaker, and keep the buck you make.
It's really just business as usual, except played as an end-game. Yeah you can't do it forever, you can't do it for long, but you can do it that way until everyone around you is ground to dust.
And that is the nightmare. That they will devour all life and energy sources to get the one energy source they need to run the war machine at a profit, and they'll grind the rest of us to bone meal and fertilizer in the process. Anyone doubts that the soulless M/IC and their government overlords don't see things in such stark terms of elemental survival simply is not digging deeply enough into the pathos of our age.
There is a vein of undead evil here, and we are unlikely to escape it.
Oh, I agree that will be the attempt. And exactly, it's "An End Game". Some will be successful and some won't.
But I agree in this case with Kunstler who said about the remaining oil on the market;
"...We're getting near the dregs of the supplies and in the scramble to get the few remaining glasses on the table, many will be spilled." (sic and many a jaw busted)
There will be blood...
tech changes, costs of production fall in real terms, yet fiat denominated inputs skim a share, closing this gap.
thus, the basin can become profitable on an EROI basis, considering future tech, timing the arrival of which seems correlated to innovations resulting from humans set in the conditions of free market discovery and sound money calculating (and leakage prevention)
There is no longer a healthy capital structure to support new technology or associated risks.
We are in the end-game. Nothing goes forward from here.
Not only that, but physics is a real bitch. There is a certian minimum amount of energy required to break up rock and there is a certain minimum energy required to get any oil that is not under pressure up to the surface, and no amount of new tech is going to change that.
The way out would be to develop a new power source, and learn how to manufacture liquid fuels from CO2 in the air. The problem is, we should have had the technology developed and the infrastructure for this going in a decade ago. It was doable in the past. The question is, with the pain that we are going to experience because we haven't started, is it still doable? I have some serious doubts.
"If we see oil at $110 or $120, we will see a huge surge in US oil production."
If you're so sure of it all then it should be easy money and you should put a LOT of your money on this, yes?
I'd long ago saw the logic flaws in this/your thinking. One would do well (if one were truly interested in KNOWING the realities) by studying the undercurrents in Ukraine: Russia is, in effect, turning off the pipelines to Europe because Europe is finding it difficult to pay (read "afford") the NG. I'd wager that if Russia had it's way it would prefer to not have to embark on the construction of new lines and to have to deal with the Chinese. And when China's "wealth" gets chipped away due to declining exports and increasing energy imports I'm NOT seeing it being good for the energy sector...
"Suncor, the leader in tar sand development, is now the largest oil company in Canada."
http://www.suncor.com/pdf/Suncor_Messages_2013_en.pdf
They're forecasting 600,000 boe/day for 2014. That's what, 60% of what Bakken is producing?
"If we see oil at $110 or $120, we will see a huge surge in US oil production."
If we see home prices high then I'm sure there's going to be a big surge in home construction...
If there is one thing that the ethanol story taught us, is that net energy means nothing to these clowns as long as they get a subsidy.
Yes, Dr. Engali. The ability to subsidize flows from the power to make "money" out of nothing as debts.
I wonder whether any historian will be alive in some future civilization to describe what happened when the human species first developed science and technology, but that was applied through social pyramid systems based on backing lies with violence, which systems, of course, denied those social facts.
The shale oil story is a recent episode of making "money" out of nothing to pay for strip-mining the planet's natural resources. The flip side of the subsidization was criminalization of things like alcohol and hemp.
At an exponentially accelerating rate, civilization is becoming a more PARADOXICAL ENERGY SYSTEM, because civilization actually DOES follow the general energy laws, HOWEVER, it does that through deliberately denying and inverting the actual ways it operates. Therefore, the Grand Canyon Paradoxes of civilization that has improving science and technology, actually being controlled by its most labile components, which are the people who are the best at being dishonest, and backing their lies up with violence.
That is the essential way that the general energy systems of civilization are controlled, through the maximum possible deceits and frauds. Ironically, that is consistent with understanding general energy systems, however, that does not help because civilization is almost totally dominated by the biggest bullies' bullshit stories.
Our civilization is dominated by the idea that making "money" out of nothing as debt, to finance strip-mining the Earth, is a good thing to do. Economic developments do NOT have any objective rationality, because there is a subjective irrationality, due to the ways that lies can be backed by violence in order to control society. Therefore, the economy is almost totally dominated by the history of subsidizations and criminalizations, which have distorted how it developed as much as possible.
As long as the fundamental nature of the social pyramid system stays the same, then everything swings back and forth from one insane extreme to the other, driven by the triumphs of frauds, which then cause their own collapse to chaos ... but the system as a whole still continues, to become basically even more fraudulent, which then drives even greater collapses into chaos.
The history of ethanol laws demonstrated that process. The big money foundations were behind funding the Women's Temperance Movements, and behind bribing the politicians to agree, and so ethanol production was criminalized, at a time when it could have competed with the new oil industry. Later, the criminalization swung to absurd subsidizations of ethanol production, to add to the established oil industry.
A similar history surrounding the hemp industry can be shown to occur, which makes one wonder whether there will eventually come a time when absurd subsidization of hemp will happen.
The theme that stays the same is that human civilization is actually controlled by systems of lies backed by violence, which have become more sophisticated systems of legalized lies, backed by legalized violence, but are still basically social slavery.
Since there is virtually zero chance of our political processes maturing enough to understand how and why civilization is controlled by lies backed by violence, in order to address the deeper reasons for that, and therefore, perhaps actually operating human civilization as a better energy system, that understood itself more thoroughly, we are instead headed towards bigger and bigger boom/busts, caused by fraudulent financing over and over pushing through bubbles that pop!
IF one imagines that human civilization MIGHT survive through the development of science and technology which understood general energy systems better, THEN one MUST imagine that somehow that future society had developed a culture which could admit how it operated its death controls, that backed up its debt controls.
At present, our civilization operates its death controls through the maximum possible deceits, and its debt controls through the maximum possible frauds. Therefore, our civilization is able to build itself on the basis of strip-mining the planet, while deliberately ignoring the realities regarding doing that.
Since our civilization still has the basic social pyramid system, which is fundamentally based of backing up lies with violence, that is how we operate our political economy, through bigger and bigger distortions of criminalizations, and subsidizations, etc., which are both mostly based on lies, but which have the legal power of an almost completely corrupted political processes behind them, to back those developments up.
The lies and absurdities surrounding fracking are merely more illustrations of how everything else is operating, to automatically get worse, faster, since the deeper radical truths are proportionately reversed and submerged by the systems of legalized lies, operating robberies, which were paradoxical built on top of those deeper radical truths.
http://cassandralegacy.blogspot.ca/2014/05/how-to-destroy-civilization.html
How to destroy a civilizationFucking ethanol... I so much hated this "story" that I put my butt on the line, on stage, in front of a public audience and went "against" (though I just let the info speak for itself) all the other panel members who were there to pimp ethanol/bio fuels shit. Unlike the others on the panel, no one paid me to be there; I did not make any money off of my "personal" actions; nor did I represent anyone else other than myself. I had felt so strongly against the hype that I did something about it. I crushed everyone on stage, so much so that at the end I had panel members coming up and telling me that I knew my shit.
Madison Avenue. Edward Bernays. The Dream. Selling the dream...
http://www.youtube.com/watch?v=R8M8R835Ck4
Another good one on this is Richard Heinberg's
What Happened to My 13 Billion Barrels?http://www.resilience.org/stories/2014-05-22/what-happened-to-my-13-billion-barrels
"Can we now begin a reasoned discussion about our energy future?"
Seems that Reason and Logic no longer exist in today's human lexicon, they've been replaced by "Unicorn."
I wonder if the BLS is 96% off on the jobs #'s?
I call BS on this "recoverable oil" estimate. As a kid I remember seeing gobs of off-shore rigs up and down the Cali coast until the granola heads took over.
Oil reserves/estimates have several different categories. It's all part of seeming precision, but also obfuscation and it derives from the SEC. They can't let little companies buy a few leases and declare they have a zillion barrels there, and then after the stock explodes sell all their shares.
Here are a few terms:
Oil in place -- total oil in the rock (reservoir), both producible and non producible (if coke can sized bubble is down there separated from the next bubble by 50 feet of highly compressed rock, no one is going to drill a $8 million dollar well to get it). Original Oil in Place is yet another term, pre production.
Reserves -- only the part of the OIP that is producible. This can be technology dependent, price dependent or common sense dependent (that coke can bubble scenario). The richest, best fields in the world only are about 50% producible -- like Ghawar in Saudi Arabia (which is probably going to squeezed to 60%). Typical is 30-40%. It's largely not a technology issue when that coke can sized bubble of porosity is so far from the next. You can't magically increase the % every time with new tech. When it's gone, it's gone. Maybe Star Trek transporter beams could effortlessly get that Coke can bubble up from down there, but if you had transporters, you wouldn't need oil.
Proven Reserves vs Undiscoverable Reserves -- I'm not gonna type all this out, you can go find the terms.
Point being, that oil was never going to be recoverable. There have been 80 million years of earthquakes and volcanos in California to wrinkle and rip that rock like old rags. It's not the 96% cut that is absurd. It was the original claim. They drilled some holes and got some more data and it is what it is. The oil's just not there.
And you probably did see lots of wells as a child out there in Californy. There's not much point in keeping them after the hole goes dry. It started pumping in 1913. That's 100 years. How long did you think that was going to work?
Respectfully Crash, I don't need to do any research. I've lived here for almost 1/2 a century and can assure you that if it weren't for the "omnipotent" EPA, OSHA, Costal Commision, there would be vast amounts of easily recoverable oil being pumped out of the ground starting yesterday.
YC I know there are envirowackos there.
But at its high, pre envirowackos, all they got out of Cali was 1.2 million bpd, and that was in the mid to late 80's, not ancient history where they were hauling oil with horses. It's 550K bpd now.
It's gone. Things CAN go empty. They do all the time.
The holes are drying up. You usually fight that with more holes, but the "fight" is doomed to lose. Every Time. That's how the math works. Every new hole you drill is another source of declining output that has to be offset.
This worked for a century. We grew population X 7.
But now the party is over. The cops are coming. On horseback. Four of them.
Great comment Crash. ;-)
So you continue to try and cover for a BS post? You were looking to just ruffle feathers, or to look to fit in (because it's popular to beat on "environmentalists" here).
Reality check: if Big Energy wants it they get it. PERIOD. And those that have to stay behind after the damage has been done are blamed for prematurely ending the money flow.
No facts. No figures. Labels and anecdotals. Yeah, that's a way to "enhance" a discussion...
Are you still a kid? I suspect that that's a LONG time ago, in which case I'd suggest that any decline had more to do with beancounters not finding enough "beans" to warrant continued operation.
But let's just keep pointing at everyone else for our problems of addiction...
Truck axles and leaf springs make for a good donkey cart.
Just something to keep in mind.
"Truck axles"
Make that front axles, mono-beam ones (don't have differentials in them). If you get other kinds you might end up killing the donkey...
" I call BS on this "recoverable oil" estimate. As a kid I remember seeing gobs of off-shore rigs up and down the Cali coast until the granola heads took over."
I prefer to call them eco-terrorists. They didn't want oil companies drilling in shallow water where disasters are much easier to prevent and fix, so oil companies moved their rigs farther out where the water is much much deeper and disasters are incredibly hard to fix. Remember that BP oil spill a couple years ago? It was incredibly hard to stop that disaster because it was in very deep water. Why was it in deep water? Eco-terrorists demanded it be in deep water.
I'm not taking sides here. I'm just presenting the fact that the article is BS.
And I'm calling BS on your calling the article BS. You present no "fact" (a personal anecdotal is not considered sweeping enough to garner "fact" status, not in this context).
Do you honestly think that "eco terrorists" have a stronger lobby than the almighty oil & gas industry which if you care to look is the heart and soul of the US Dollar hegemony and trade.
No way, Jose. If there was cheap recoverable oil right off the Coast in much shallower water, it would have been tapped. Either the math doesn't add up for Big Oil or there's simply nothing left (and the math doesn't add up for Big Oil)
What Big Oil and MIC want, they get. ALWAYS. Even if it means that political leadership needs to be terminated earlier (JFK).
For once I agree with you wholeheartedly and without reservation
(h/t Uncle Remus)
@ 'spungo': a big Fonzie two thumbs up for that exquisite doublethink you're quacking over there, real quality stuff.
California's Kern County started pumping in 1913.
That's 100 years. How long did we think this was supposed to go on?
California's peak flow was about 1.2 mbpd in the mid 1980s. They are at 0.55 mbpd now. The wells are dying and there is nowhere with any to drill more. That's how fields die. It's normal and natural.
Everyone here says the government is "bought&paidfor", it's war for oil, oil companies are pulling strings at the State Dept, all that and then they blame the granola eaters for no drilling off California.
Izat so.
It's all the proof you need that people do not actually think very clearly about the stories they are telling one another.
The truth is out there. It simply is. There is the truth ... and then there are all the alternative stories about the world that we tell ourselves. It's kinda dumb but the stories are sweeter, we can tell them with conviction, we can populate our stories with whatever fictional villains and false narratives we want or need to, and then get drunk and tell our stories to each other in a logical fog of wishful thinking cuz we need it to be so or else we lose our minds.
But the truth is still out there and the truth doesn't care fuck all what we think about it.
I watch people flailing around making shit up and hiding inside a drug-induced alternative reality and I have to figure that's what you get when you let apes rule the universe.
Without major funding there's no "opposition". Period. The granolas are but a fart in the wind unless their efforts can be utilized in some way by a big player.
Yes, the truth is out there but it doesn't get reported.
Who is living in a drug induced alternative reality? I'm 100% sober unfortunately. Maybe I should start doing drugs to get with the program and believe in economic recovery miracles and the abundance of eternally flowing cheap oil.
"Maybe I should start doing drugs to get with the program"
Coming to a "reality" show near you.
"What Big Oil and MIC want, they get. ALWAYS."
Care to explain the Keystone pipeline then?
I explain it as kneejerk politics to oppose what someone else wants.
And btw, it will produce not a drop of oil. It carries it. There is non shut in anywhere. Canada is not producing oil and storing it in tanks waiting to go south. The Bakken is not held back in production for lack of rail cars.
That pipeline is about jobs, not about oil.
The controlled resistance to that pipeline is about having a ('nother) captive supplier; right now the indecision serves to keep price down by creating the illusion of oversupply via bottleneck... I've got money on my flank that says Keystone gets approved faster than a flaring permit in Brazeau County if by some miracle Brit tits Colonia manages to bribe their First Nations into allowing a different line to run bitumen from Albertista to the Canuck's west coast; which is unlikely.
Good call. I would like to know who funded that opposition (cough, Warren).
Hmmm, do you think she's inside, outside or upside down?
(from the Intercept) The New Yorker:
Perhaps simply 'useful' in this case?
"They didn't want oil companies drilling in shallow water where disasters are much easier to prevent and fix"
Yeah, just like Fukushima...
http://www.bloomberg.com/news/2014-03-19/california-city-s-drilling-ban-...
Bloomberg and the WSJ, nothing but the truth... Fucking cheerleaders in the raping and pillaging...
I heard on TV that the 4% that remains is still plenty to cover all our domestic energy needs for the next 30 years.
You heard shit on TV. Nothing else is there. Turn it off.
The US burns about 16 million bpd. X 365 is about 6 billion barrels/year.
And that 4% is what, 600 million?
Replace the batteries in your sarcasm detector.
Oops. Goddamn ancient NiCads.
Ha ha! I'd read it that way, and was thankful that I hadn't been intaking anything at that time.
But... it might very well be, given the future abilities of people to afford this energy, that it'll end up lasting 30 years.
Paging Flakmeister
We all better start learning how to speak Russian unless Keystone gets approved.
Keystone will be approved ... and the oil that flows through it will go to China.
We're broke. They are not. You wanted a free market, well you got a free market, and that oil will go where the money is.
People don't understand. Most of the oil will be from Canada.
What magical oil supply is supposed to be created by a pipeline. Nothing is shut in because of lack of transport. Railcars are carrying all the Bakken can output.
The Keystone is there to satisfy the need of people to believe. To believe that if you just keep drilling holes and building pipelines the suburbs, love miles, box shops and sports events will just keep making sense.
It's a modern cargo cult. You gotta feel bad for people. They are going to be so disappointed.
"It's a modern cargo cult. You gotta feel bad for people. They are going to be so disappointed."
Blue-Pill people...
The disappointment "resolution" will be by way of attacking the "environmentalists" and folks who were warning about all of this. Same as it ever was: sadly, no one will get this point, lots of them holding books that tell of such (individuals speaking in opposition to the status quo, to power- and then dying for doing so).
Search NAFTA + "Proportionality Clause" + "Western Canadian Select" + "Albertistan's Royalty Rates are the laughingstock of the oil producing world" and you might not feel quite so bad.
Tip: OTOH If Albertia's leadership ever again (like in late 2008) begins making noises about revamping what the oil companies jokingly refer to as their royalty rates...well, y'know.
Expect more oil spills then. Lots more. That's what goes down in Pipelinestan.
They'll blow up a few more towns is what you mean. Yeah that will shake things loose for them.
We're on the road to ruin now. There is no way off it until we reach the end. Where of course waits ... ruin. But at least it will have become the end.
Uncle Remus Expect more oil spills then. Lots more. That's what goes down in Pipelinestan.
----
The current oil spills have been by rail. So maybe you should change Pipelinestan to Railestan.
This is what goes down in Everythingisrunlikeshitistan.
This is what goes down in Humanhubristan...
and its neighbor to the north, Itsallfuckedistan.
You rang?
Keystone will not increase supply...
Keystone would only displace heavy sour imports from Vza.....
Keystone is all about exploiting a massive crack spread for tax free exports...
As for Russian...
Putin yavlyayetsya d'yavol
-----
As for the Monterey, this is hardly news to some of us:
http://www.postcarbon.org/reports/Drilling-California_FINAL.pdf
Keystone will yield some form of ongoing and steady benefit to the American economy. Even if 100% of the oil gets shipped to China. The pipeline is crossing thousands of miles of US territory. Imagine the US.gov receives only $5 per barrel of oil pumped through that pipeline.
The real reason why the deal hasn't been confirmed is because negotiations are ongoing and believe you me, nobody who matters gives a rats ass about the potential impact on the environment.
This is about $$$$$$$$$ and more $$$$$$$$$$$$$$$$$$$$$$ for as long as Canada can pump heavy crude or tar crude from their Northern Alberta production sites. Those sites are massive fyi. If you haven't done so, "google earth" Fort McMurray or Fort Mackay. All the big players have spent billions and billions there to establish infrastructure. The major shareholders of these oil companies are also major shareholders of American banks and pay the politicians to rule in their favor.
There is alot of money at stake for the banksters and their elite oligarchs. This isn't going away and neither is the other controversial pipeline project for NG to Canada's Westcoast (Kitimat) and sending LNG ships to China. Apparently the Russian gas deal has no impact on the region that's getting supplied with LNG from Canada.
"Keystone will yield some form of ongoing and steady benefit to the American economy."
[in agreement, just adding]
Sure, but it all depends on how it's measured... given that activity associated with cleaning up [proven] toxic dumpsites is a "positive" for GDP, well... one would think that by this logic Japan's economy/GDP would be off the charts!
"This isn't going away and neither is the other controversial pipeline project for NG to Canada's Westcoast (Kitimat) and sending LNG ships to China."
The Easter Islanders were carving out statues up until the bitter end. TPTB
Lots of caveats there: technically recoverable at today's prices, implies both that technology won't improve and/or prices won't go up. The same study 10 years ago would have likely said no shale oil was technically recoverable for any price
Same "technology" that isn't finding any real appreciable new conventional oil?
"Economies of scale." All this unconventional stuff won't hold up the declines in the conventional, and as such the loss of volume will mean that the truer costs of the unconventional will start to show to be much higher; and higher costs will necessitate higher end-prices, and, well, more spending on energy means less available for development of new technologies...
Here chick chick chick, here chick, chick, chick, chicken little.
Here unic, orn, orn, orn, orn, orn, orn, orn, shittin' skittles.
Gonna get me one of those when my cut of the Monterrey play makes me a bazillion-aire. Heck I'll prolly stop playing the lottery too, but maybe not.
The good news is, we'll all be bazillionaires. The bad news is that we'll all be bazillionaires. Who's face will be on the bazillion dollar bill? I say Timmah.
aaannnnnddd.....it's gone
It seems to me that there ought to be a whole boatload of '3 sheets to wind' ZH commenters lining up to offer Flakmeister (and others) their lavish apologies...
GoinFawr It seems to me that there ought to be a whole boatload of '3 sheets to wind' ZH commenters lining up to offer Flakmeister (and others) their lavish apologies...
---
Why? Because you trust government and believe a report that supports your opinion when there are other reports that contract your believe? Peak oil theorist have been wrong and continue to be so, just the the global warming nuts. All left wing people that are about government controlling people - that is you if you believe in that.
I would never apoligize to such nuts.
Peak oil theory is not wrong, it's spot on.
There's a Hubbert curve, every field has one, and the aggregate sum of fields has one too. That's all that peak oil theory says.
Eventually production declines as it falls down the right side of the bell curve. If demand doesn't fall correspondingly, we have to find new sources of oil - at higher prices - that's where shale and tar sands come in. The era of $20-$30 oil is over, it's now $85+, and after that step change we now have new Hubbert curves that describe the new sources. That won't last forever either.
Production costs are over $100 a barrel. Btw
The ONLY things that matter are; Flow Rate, Doesn't matter if you theoretically have a zillion barrels in the ground, if you can ever only produce 50,000 barrels a day.
And the production cost (fully burdened) per barrel.
My eyes! Burning! Too much maths!
/s ;)
AND, further, what matters, to energy importing countries, is world oil EXPORTS. ALL countries with energy "abundance" tend to ramp up their internal consumption*, thereby reducing available exports (note that this is one of the reasons why the US was trying to get nuclear energy into Iran back in the 50s), resulting in less available to energy-importers.
* http://oilprice.com/uploads/AD3.png
http://oilprice.com/uploads/AD6.png
http://euanmearns.com/russian-power/
\blush
20 years ago very little oil shale because technology not there yet. New technology will unleash the Monterey in the future. The anti progress - carbon haters are economic terrorists (ETs).
Horizontal drilling and fracking have been around for decades. And used for decades.
Where it was profitable.
There is a famous quote . . . I am reluctant to predict what North Dakota will produce because in 2009 I thought it would produce very little. -- The reply: Well, if the price of oil was what it was in 2009 North Dakota would produce almost nothing and you would have been right.
The bad news is the next batch of oil that may become economic might not be $10 away, or $20 away. It might be $100 away. There is no law of the universe that says it has to be gradual and linear.
the only thing fracting in CA is going to unleash is an 800 mile long fracture in the earths crust. Check ya later CA
A house of cards -- on fire.
Last one out jumps from the 8th floor.
I'm afraid, we're a LOT higher than just the 8th floor. But I suppose what really matters is what the makeup of the ground to which we shall fall. Generally tall buildings are not built on really soft geologic formations... (read "expect a VERY hard landing")
How could anyone give these numbers credance when the regulations in California are so heavily restrictive, especially when it comes to extracting anything out of the ground.
Hell, there are caps being put into place that will limit the amount of earth you can grade for a new home in "ecologically sensitive" areas. That's code for just about anywhere someone would want to live.
That crude will never see the light of day unless someone's ambitious enough to tap into it from Nevada or international waters!
Or when Mother Nature unloads her bootie on the San Andreas fault and we have Texas Tea pools all along the Camino Real.
"Caps" amd regulations are put there by big indsutry lobbyists. The "magic" has all been about rigging it all up with "environmentalists"* being the scapegoats for what would be certain calamity (read "inability to hide the sure fuck-ups") if the free-for-all were to be let out (which would severely taint the "reputable" folks).
* Actually, "environmentalists," according to the very person who actually coined the term "environmentalism" -Murray Bookchin- are but agents setting something up for future exploitation: no "preservation" really happening (those that would engage in such would be "ecologists").
"Hell, there are caps being put into place that will limit the amount of earth you can grade for a new home in "ecologically sensitive" areas. That's code for just about anywhere someone would want to live."
The irony:
http://www.nbcnews.com/storyline/deadly-mudslide/mudslide-victim-wanted-...
If Satterlee hadn't perished I'd wonder whether he'd be refusing govt "interference" (help)? (i'm neither promoting or demoting govt action or secession, just pointing out that most people tend to vastly underestimate things and vastly overestimate their abilities) If there had been secession would Satterlee be open to a lawsuit (such as is happening now against the govt)?
Knee-jerking is for jerks... sometimes plain old common sense should be exercised.
hahahha...whoops....
Tee-hee....! OOPS.
The "eternal-faith-in-technological-advancement" crowd won't like this...
Oh so you must be one of those godless heathen granola eaters who hates America, because without eternal progress and growth there can be no America, therefore there will be eternal progress and growth because God loves America and will simply make it so.
Get to a church. You need religion.
You need a couple of Tylenol and some rest.
You probably need to learn how to appreciate the subtle pleasures of sarcasm.
Subtle, you weren't.
Oh for the love of ...
Look. For me that was subtle. Consider it in the light that I'm a sad little pagan and don't know any better.
Here try this on, see if my unsubtle side is any more entertaining:
http://madscienceunlimited.com/fiction/aTearForTheSinner.html
A real angel and her insanely predatory sister. One of them is the reputed daughter of the almighty God. Give you one guess which it is! Puts a whole new twist on drink for this is my blood ...
So let me get this straight ... the article is about an estimate correction to a bad estimate made by the same people who made the original bad estimate? Oh, I have a lot of confidence in everything I read after seeing that.
I don't follow shale gas well enough to comment on the business in general, but if you're burned once by someone do you go back to them to get further information? Am I missing something here? There must be additional INDEPENDENT information that could be used as a check on the recoverable oil estimate. And investing in third party estimates of recoverable oil is like investing in inferred mineral resources ... you're investing in an unproven and legally undefined quantity. It's not really investing, it's gambling. I'd prefer to let it all ride on "Sunnyside" in the 3rd ("Run you nag, run!).
Considering the amount of oil they're bragging about being able to recover here is what the US uses in just one month, I don't see what the big fucking deal is.
SilverFish Considering the amount of oil they're bragging about being able to recover here is what the US uses in just one month, I don't see what the big fucking deal is.
----
And perhaps you don't know that the US actually exports oil. Yes, exports oil. Producers sell to the highest bidder and that helps keep oil prices down globally, which includes the US.
According to EIA, the US exported 3.5 million barrels of petroleum related exports in 2013. Current oil prices are stll below the President Carter 1980 peak. Take away what we produce and see oil skyrocket. It is a big fucking deal. To bad you can't see it until it hits your wallet harder.
Except in isolated circumstances, the U.S. does not export crude oil. We export oil products. Big difference.
600 million bbls might make someone rich but in the big scheme of things it doesn't amount to much.
Didn't I read here a few years back that the object of the game was to use everybody else's oil and when the cryiing got the loudest, pull out the stops and sell our oil at stupid prices? You know...all that oil under fed parks?
And that's pretty much the point about this article, that such a paltry amount was being played up as being crucial for US "energy independence" (or so the spin would have it).
As someone else mentioned (Cougar?), perhaps a lawsuit might appear. I'd think it interesting to see what kinds of documents would pop out of any such hearing.
Look at how not-profitable tar sand in Canada is:
https://www.google.ca/finance?q=TSE%3ASU&fstype=ii&ei=jkt-U7iFBuO8iwKloYF4
10 billion in operating cash flow from a company with a 62 billion market cap. Oh noes! Peak oil! Durrrr!
And the Titanic was still above water when they knew already it was going to sink like a rock. What anyone thought about it then was of no importance whatsoever.
Think what you want. Nobody cares what you think. Reality is coming around the corner and those paying attention are very carefully vectoring out of the way.
And look how profitable war is for some companies.
But, hey! thanks Canadians for chewing up your land so that we can have "cheap" energy! We'll have fond memories of the party...
Keystone, come on Barry, all together now...... "Yes we can"!
Long bottled water.
+1
Long privatized breathable air
We can allow a look at short-term ROI Keystone pipeline to fund ACA (ObamaCare Ponzi Model). We can always duplicate the UN oil for Healthcare business model to lie about the medical plan endorcement.
/sarc
In the Rocky Mountain West, where I grew up they said, "Rocky Mountain Oil Shale is the energy of the future...and always will be." My great-grandfather was excited about it before WWI...
I don't know how much crude oil is recoverable from the Kerogen there. But I do know that if you put a couple of rocks in your campfire it will continue to burn long after the wood has turned to ash.
And as the easily recoverable oil is extinguished I have to ask, "Why does it have to be oil? Isn't it good enough that it burns??"
If we carried back today's viewpoints to the past, there would never have been any 'recoverable' oil in the first place - because everyone would be trying to convert modern crude oil into "Whale Oil".
But, of course, that would require creative thinking, entrepreneurship and would upset the existing order... and according to our NorthEastern Elites can't have that!
Stone Age right ahead!
Coal burns. But trains don't use it anymore.
For good reason. I'll let you figure it out.
coal is less convenient than diesel, but once diesel is scarce / expensive, you either burn coal or convert coal into diesel at a >50% loss plus large CapEx on a facility.
" but once diesel is scarce / expensive, you either burn coal or convert coal into diesel at a >50% loss plus large CapEx on a facility."
I'm kind of thinking that if/when it comes to this point that the necessity of doing this is going to be dramatically reduced. More available energy is going to be used for essentials and less for transportation and manufacturing*.
* Anyone think we're going to be increasing manufacturing? Where will the markets (buyers) be for increased manufacturing output, when people's incomes decline and the are spending more of their incomes on energy for heating/cooling/cooking?
I'll be one of the first to raise their hand as one who is not looking forward to the days of diesel scarcity. Please excuse me while I go out and split some wood for the stove...
cause no one will pick up a shovel anymore?
There was nobody stopping them. They didn't do it because it was stupid and costly.
If they are not doing it now then it is because it remains stupid and costly.
Tell yourself any story you want to. Nobody cares.
Just to be clear, oil shale and shale oil are not the same thing.
Oil shale (kerogen) is not economic in the Rockies. Yes, it's a hydrocarbon but the btu content is so low that it's not worth drilling for, not at any price. Producing it would likely be a net energy-LOSING process.
Also, what CrashIsOptimistic said.
Here's how it all goes down, how the circus performs (http://thearchdruidreport.blogspot.com/2013/02/the-end-of-shale-bubble.html):
No extra water in the West to exact oil from shale. There isn't enough water for the current needs of the four corners as it stands today.
if I put a couple of those rocks in my gas tank will my car run long after the needle is on E??
Of course! It's been a conspiracy to cover up this, just like there's been a massive plot to cover up the fact that humans can live off of just air alone (from "rocks in the tank" to "rocks in the head"):
http://en.wikipedia.org/wiki/Inedia
There's only 1 way to settle this argument. Money. I'll bet on oil by buying $1000 worth of Suncor stock. The people who want to bet against me each buy $1000 worth of Solar City, First Solar, or any other renewable energy company. If I'm right about the abundance of oil at higher prices, my stock will do great over the next decade and renewable energy won't really catch on. If we hit peak oil to the point where it's no longer practical to use fracking or tar sand, my stock will crash and renewable energy will surge. I promise I won't sell it on the way down. I'll ride it all the way to zero because that's the bet.
As for energy and water, it takes lots of both to process tar sand. I think water will be the next big thing. As we start digging into lower quality mineral ore and lower quality oil, the amount of water required increases dramatically.
Anyone who understands the laws of physics gets the part that this is not an argument.
Dood, if you're right about the abundance of oil at higher prices, then why does Suncor benefit? They'll suddenly have competitors taking market share.
If oil finds a new equilibrium price at $150/bbl and gas at $10/decatherm, you can bet that renewables will start to look much much better, to the extent allowed by substitution.
And I wonder what oil sustained at $150, plentiful as it might be, would do to everything else downstream on the economic value chain. What would food prices look like?
We're slowly being squeezed. If we want to keep this civilization thing going, we're going to have to find sources of energy that are cheaper and more abundant, not more expensive and more abundant.
"If we want to keep this civilization thing going, we're going to have to find sources of energy that are cheaper and more abundant"
Not likely to happen. In the developed world, especially North America, Australia, etc, we could cut energy consumption probably 75% and still have civilization. Less commuting, less disposible crap and more quality goods that last, there are plenty of opportunities for improvements that will only come with steadily, slowly rising prices.
plenty of opportunities for improvements that will only come with steadily, slowly rising prices.
a reduction in the ubiquity of multiple layers of plastic wrapping for every single consumer product for one.
Yeah, I buy something that comes in a plastic bag and am asked if I want it in a bag. I tell the clerk that It already comes with a bag: like if I don't have it in another bag I won't be able to transport it.