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What's Behind The Rise In U.S. Industrial Production?
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
The domestic energy boom is behind the expansion of Industrial Production.
In contrast to other measures of economic activity that are stagnant or declining, U.S. industrial production has been rising: Industrial Production and Capacity Utilization (Federal Reserve data)
Is this evidence that manufacturing is on-shoring, i.e. returning from overseas? While there is anecdotal evidence for on-shoring, it appears that energy production (classified as part of mining in government statistics) is the big driver of rising industrial production.
Longtime correspondent B.C. submitted these two charts breaking down industrial production into mining, manufacturing and total production. While manufacturing has recently returned to pre-recession levels of late 2007, energy production (included in mining) has soared as the energy industry has put fracking and new wells into production. B.C. Commented: "The remarkable untold story: Ex mining and oil and gas extraction, US Industrial Production has been in contraction for most of the period since Peak Oil in 2005-08."
The red line is the ratio of total production to mining/energy. Its decline reflects the dominance of mining/energy in the rise of industrial production as a whole.
The second chart is percent change from a year ago. This shows the rate of manufacturing expansion has been declining since 2010 while mining/energy has been on a tear, spiking as high as 10% gains per year.
Here is a chart of the U.S. oil/gas rig count:
For context, here is a longer term look at the U.S. rig count. Note that the number of active rigs in the early 1980s was considerably higher than the present count.
For context, here is total U.S. energy consumption. The takeaway here is the reliance on oil, gas and coal, i.e. the fossil fuels:
One last bit of context: U.S. oil imports. While the increase of 3+ million barrels a day in domestic production is welcome on many fronts (more jobs, more money kept at home, reduced dependence on foreign suppliers, etc.), the U.S. still needs to import crude oil.
U.S. Imports by Country of Origin (U.S. Energy Information Administration)
* * *
Do these charts look sustainable?
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Anyone else been following the CAPEX of the large energy companies? Danger.. danger.. etc. etc.
i just look at the XOM market cap of $440B and cash on hand of $6B and assume it is a great investment for the long run. [/extreme sarcasm]
i remember greenspan talking about this and they group a lot of software writing in "industrial Production" also
Something to consider is the source of the Industrial Production Index, FRED which is the Federal reserve. They are very good with numbers.
Something else to consider, most of the time you have no fucking idea what you are talking about...
So are you telling us that the Fed is faking data to make the economy look worse than it really is?
The production index is rising. What are you talking about?
Did you read the article closely?
Imagine you have an island where coal is your only power source but the seam goes off under the sea while becomes a larger deposit. But the mines leak. So you burn coal to power the pumps, So you dig deeper and faster extracting more coal (industrial production is up!) but a increasing fraction of your coal is simply powering the pumps....
That is pretty much what the Fed data is telling us...
Show me where the word coal is mentioned in the Article. Everything is not about global warming Flak. The index is put out by the Fed and that alone make it questionable. Much like the agenda driven numbers put out by the environmentalist.
Here's the production index put out by the Fed with it's breakdowns, if you're interested in learning something.
http://www.federalreserve.gov/RELEASES/G17/current/default.htm
What fraction of mining activity is related to energy/fossil fuel extraction?
I had a sinking feeling that the parable was completely lost on you...
For coal, another way to put it is that if I remove a larger volume of crappier coal my Industrial Production index will increase. But has it really?
Point is you can't trust their numbers. Actual industrial production is lower, CO2 production is higher, mainly because you're not doing your part to stop breathing.
Ignorant is as ignorant does....
If production is up - and prices keep rising - that would tell me one of two things: 1) Either the economy is doing so well that mining/extraction can't keep up; or 2) Something is not as it seems.
I'm pretty sure, in spite of the S&P performance, that all is not well behind the scenes, so I am left w/option 2 - the production numbers are misleading.
Edit: Before somebody calls me on my alleging that the price of coal is going up - I'm including transporation costs because net cost delivered is all that matters: http://grist.org/climate-energy/big-coal-in-big-trouble-as-coal-producti...
I am in the cutting tool business and oil and gas pipe tools are ok but the real big business is in auto and aerospace. We are slammed with auto jet engine tools for milling turning and threading. Everything else seems very slow.
I think It's under-ground bunker construction...8^)
They are figuring out that they cannot make enough profit in expensive new ventures... There is also a dearth of new projects that can make an impact on the top and bottom line. A play that gets 20,000 bpd barely moves the needle at XOM...
Exxon may become the great ambassador of the world.
http://www.bloomberg.com/news/2014-03-05/exxon-s-largest-non-u-s-prize-a...
public co's are not in the same league as state owned co's
OK, that's mildly interesting. I would not have expected mining to keep going up like that, especially with coal use being made illegal since 2009.
Coal has a very strong international consumer base, like all energy stores.
Not arguing, buy why are coal mines laying off thousands all over Appalacia? I get that you can't burn it in the US any more but there's still plenty of world demand for it (and growing), so what's going on with coal miners?
Automation?
Because the plays are uneconomic even at "mine-it-for-free" mineral leases from the Feds...
Correct, even robots burn watts/calories. No point spending 100,000 calories to recover 1,000.
'mericans, don't like MATH I see. < shocker >
The entire States of Indiana and Illinois are coal beds sitting right on the surface. Production is falling because pricing has collapsed.
This has crushed China btw because their infrastructure still needs trillions of DOLARES to get that coal from mine to city.
Far easier to import the coal from Australia...although that price is starting to rise now.
Same goes for natural gas and iron ore.
If Australia builds an actual steel mill or chemical complex somewhere "look out." Those supplies will be cut off.
The question was in regard to Appilacia NOT ILLINOIS.
Reading comphrension still isn't your strong suit I see, you stupid old fuck.
Let them dig up illinois, by all means (of course there might be some food production going on there as well).
The coal in Illinois is mostly subbituminus and lignite, nasty brown low energy density crap not worth burning, much less paying someone to dig up (at present prices).
It could be as simple a economy of scale and individual mine extraction & transportation costs. It's hard to complete with those Wyoming mines that can load an entire 15k ton train in a hour or two.
Powder River Basin has 7 more years before it becomes borderline economic...
This link sums things up
http://olduvai.ca/?p=22703
I;ll root around for the PRB article I read..
There's enough hydro, wind and nukers to last a thousand years.
There is no energy crisis...just a Jewish Confetti problem.
Name one city in America that utilizes no energy from fossil fuels.
There's a nuke plant about 60 miles from here that(helps) powers a city of 1 million. It was built before Rockefeller's puppet (Carter) slammed the doors shut. That's nothing compared toFrance, though. Yea, go ahead and call me a stupid old fuck(since I remember the disaster named Carter), too. I don't care.
What percentage of all the energy being used by those 1 million comes from that plant? Are they all driving electric cars, charged by the same power plant?
Pay attention, I never said it could not be done, simply that it hasn't been done yet and it sure as hell won't be done if the capital and resource mis-allocation and mal-investment continues.
If you really are an "old fuck" you would think that you would have figured out that life is hard by now. The laws of Nature and physics will always win the day and the really don't give a shit about what one arrogant species "thinks" or "believes".
There never has been, nor will there ever be a "political or "monetary" solution to resource scarcity, period.
same as it ever was.
Disabledvet....did you take shrapnel to the head? You only have enough hydro, wind and nuclear if you have a much lower energy level economy, and a debt free government and society in order to pay for the ramp up and maintenance of such an energy system. Neither of which you have now or in the future.....until maybe after the Collapse. As far as our problem being a Jewish confetti problem......just die already so we don't have to pay for your shitty care at the VA. If you are a disabled vet.....and you went to war....in your jewish conspiracy addled mind you should have realized you were going to war to enrich jewish controlled banks anyway. For whatever reason......if you fought for this fascist nation you're an idiot. Of course .....we all saw that with your stupid statement about hydro.
18 year olds, who join the military, don't know who's pulling the strings. I lived in an area where they tried to dam up a river in the mid-1970's. My dad had a job (after he was drafted and released from the MIC's Vietnam) where they laid the foundations for a transformer plant. It was still there in the 80's. After millions and millions were invested, this dam was defeated by the local Democrats. How do I know. Well, another guy my dad worked for was a big wheel in another county's politics. He would have suffered financially, if this dam had been completed. He even had a plaque on his wall with the title Admiral of the River Navy, for his efforts. This dam was stopped while Jimmy Carter was getting on TV telling every to wear sweaters and turn their thermostats down to save energy.
Nobody in this day and age of the internet has any excuse at any age not to know who is pulling the strings. And no....it ain't the jews. Are some of the string pullers jewish? Of course they are. But the majority of string pullers in this world are gentile.
As far as Jimmy Carter......he's the third worst president on record now. He got bumped down by George the Retard and Obama the incompetent. However.....that said.....Jimmah was right about one thing and one thing only. We should have been then.....and we DEFINETLY need to be conserving now.
Funny thing is ......Conservatives want to be liberal about limited resources......and Liberals want everybody but themselves to be conservative about limited resources.
It's ok though.......Nature and Physics will continue to right size everyone's expecttions and actions. Too bad a billion people will die / not be born over the next 50 years from the wars that the elites will wage for the remains of the limited resources we have left to keep up the high energy, Ponzi financed Utopia they have built.
Oooh. Nice website - thanks Flak!
Not enough port facilities to export it to where its needed. Just try and put a coal terminal anywhere on the West Coast. Like kicking a hornet's nest.
The problem is that the PRB is becoming uneconomic because of the overburden...
See
http://en.wikipedia.org/wiki/Powder_River_Basin
and the links therein...
coal is getting hammered by shale gas. when the oil shortages hit, followed by nat gas declines later on, coal will become the buy of the century
Its more than just that...
And if you are indeed correct about its; future, we are doomed....
i see almost perfect switching from coal to gas http://www.eia.gov/electricity/annual/html/epa_04_05.html
and i believe the switching will go back to coal because there is more of it http://gaia.pge.utexas.edu/papers/EnergyCoalPaperPublished.pdf, and no good way known either to man or to mother nature of storing electricity, as in all the coal will get burned
solar brightening over the past few hundred megayears will cause a 1.5 K increase in temperature over that suggested by these figures, http://en.wikipedia.org/wiki/File:Phanerozoic_Climate_Change.png http://en.wikipedia.org/wiki/File:Phanerozoic_Carbon_Dioxide.png , ignoring how the continent shapes / locations affect albedo. i am under the impression that net primary productivity increases both with temperature and with co2. but the real limiting factor for plants will be rain patterns, and i'm not sure we can predict those with any accuracy. we and all the other critters will just have to adapt.
Don't be coy, tell us what you really want to say...
the struggle for life and death gives meaning to our existence
"the struggle for life and death gives meaning to our existence"
.....and the meaning is......"Life's a bitch and then you die ? "
i adhere to more of a darwinian view of nature. boundless opportunities await those in accord with the will of almighty god. those lacking such foresight will wither and perish. for example, horses will not be making a comeback, despite whatever the clowns and buffoons may say, because they are markedly inferior to heat engines.
"What's Behind The Rise In U.S. Industrial Production? While mining is part of the answer, rest is Hookers and Blow at the mining camps ! We are saved.
between the frackers, the hookers, and the blow (jobs 4 all), there is one hell of a hangover.
THE.GREATEST.NATION.EVAH.
Coal factoid.
The number one coal producer in the world is China. In fact, they produce more than almost the entire rest of the world combined. Not quite, almost. Over 2X what the #2 producer (the US) produces.
Now the scary part.
China is a coal importer. They burn so much that even that production is insufficient.
China's insatiable consumption of all things energy is the source of "scarcity", and it's never going to get better until their population is reduced by 2/3 . . . by force.
There's a war in there somewhere.
And Californian's are gonna save the planet with electric cars using coal-fired electricity.
That would be Texas....
Edit: Isn't Musk building a huge factory in Texas...
Re: Now the scary part.
Yes, It is pretty amazing to consider the energy growth of China. All China wants is a McMansion for every revolutionary cadre, with the AC set to 65, and an SUV in every garage.
Crash,
WHy the ghost cities? No sarc. Easier just to build a big EZ bake oven and a giant lightbulb..no?
The "ghost cities" don't use much energy. Ghosts are known to be green. But the non-ghost cities are booming in population too, an everybody is charging their iPhones.
I get the rural to urban meme. Seems like a lot of work for nothing to build cities for a bunch of Caspers. Oh well, I guess we can export jumbotrons displauing a slow moving Chinese flag.
Speak for yourself.....I'm happy right here on my farm....LOL !
Central planning gives China ghost cities. Central planning gives the US false nat. gas boom.
dont see many true facts in this post. china's coal imports are very small compared to production
Re: coal use being made illegal
Oh, that would explain the all the coal trains escorted by Mafia looking guys.
As has been pointed out, a "boom" is defined not by how many joules come out of the ground, but by how many people get jobs extracting them.
This is not a great way to define boom. If the joules coming out are less than those going in, it's a gov't jobs program equivalent.
Now, be sure that is not misunderstood. The joules ratio remains > 1:1, but it's falling sharply. Which is why the world is, too.
Exactly. As it takes 2 wells, then 3, then 4, to equal the produciton one well used to produce, the "boom" is really just more evidence of depletion and declining EROEI. Coal is the same as it takes more rail cars of lessor quality ore to get the same amount of BTUs.
Not many people realize that the low quality coal has marginally higher energy density than dried hardwood...
BTU of different woods.
http://www.chimneysweeponline.com/howood.htm
Osage Orange is easy to grow and fast growing, coppices, can be planted as tall individuals or desnely into hedgerows/fences (which are "horse high, hog tight, and bull strong" after 4 years).
These are the trees used to fight the dust bowl; they were planted by the hunderds of thousands in the 30s.
Huh, interesting link.
Important info when you need to source wood to heat your home.
My wood fired stove thanks you.
Try to explain the difference between Anthracite and Bituminous.
I don't they know there are even different types...
Peak Oil
"US Industrial Production has been in contraction for most of the period since Peak Oil in 2005-08.""
There you go.
Chris Martinson does a pretty good job tying the economic collapse to peak oil's stalling real growth, and that hitting the debt-based, fractional reserve system's ability to service debt.
Us National in 1971, before the Petro Dollar was $380 Billion.
Now, $17.5 Trillion.
They've bumped up against the ceiling. Now, they'll try to invent a war. Oil that's twice as high allows them to sell many, many more bonds to the world. Hooray!
Peak oil and peak debt are two sides of the same coin.
Wait a minute, I thought Hubbert said the US peaked in 1970. Moving the goalposts, eh? Don't, 'cause you're just going to have to do it again.
He's referring to global crude oil production...
Fracking technology has yet to disperse beyond US borders. Until it does, anyone who claims to know where worldwide reserves actually stand -- either way -- is pulling your leg. All I know is, the Eagle Ford here in South Texas came in ten times what was initially hoped. Others' results may vary, but personally, I doubt it.
learn the difference between reserves and resources...
And the fact that fracking has not suceeded outside the US should be telling you something..
What is it telling you? Lemme guess. That notwithstanding any and all evidence to the contrary, you were right all along? Go figure, lol...
Not in the least...
The efficacy of fracking is dependent upon the geology...
Every field is different...
So it has been determined that fracking won't work as well outside the US as inside? Is that your position? Really?
When it works, it works, it hasn't yet...
Do I need to mention XTO?
And for some perspective, the EFS and Bakken are responsible for ~2.5% of global production...Hardly a revolution....
Ah, The US DID peak in 1970 What the phuk are you asking?
(Just as he predicted in 1956)
"fossil" ... ha!
abiogenic, b!tchez.
cdm
Troll....
physics, much ?
the "astro" sort.
late,
cdm
At what price? Deep wells are extremely expensive.
At what depth is more like it...
and with oil/gas/home oil at near term highs, the real question is where is all this production being stockpiled to keep these prices up so high
what's baltic dry doing? right, historical lows. so who's hiding all this inventory?
See above. China.
have a look at the Chinese dropdown here
http://mazamascience.com/OilExport/
Don't mistake condensate and refinery gains for real oil....
No stockpiling necessary. The price is the reflection of monetary printing (counterfeiting). Raise interest rates back to 5% and see where the price goes. It'll lose 2/3rd's, easily. Many bankers and oil industry jobs would be lost in the meltdown.
You realize that oil is wet, and therefore has exactly zilch to do with the Baltic Dry Index. Right?
Fighter jets for Iraq?
We "need" to import oil because it's so friggin cheap.
Thy can produce oil for a buck a barrel.
The competitive advantage come from the stupendous increase in natural gas supplies over the last year.
We do have the cheapest natural gas in the world by far...and are now a major exporter...THE major exporter actual...of actual "condensate." (Diesel, unleaded gasoline, propane.)
Not just that but the long term impact of Teslas and Nissan Leafs will be enormous as variability in the grid which has been a traders delight for many years now goes the way of the doe-doe bird.
At some point the wiring of the grid is going to need a big time upgrade...but right now given the still ridiculously cheap dollar (Canadian dollar has gotten hammered the past year) there's more than enough residual energy left over to keep ramping up production...and indeed so much so we've entered into a recession it would appear.
I think prices are going to continue to fall...perhaps quite dramatically come fall...but the problem isn't the "fundermentals" but the fact that the totality of the State has taken on too much debt and with all this liquidity sloshing around eventually there will be a more "Generalized Detroit" as folks will simply buy the liquid asset and sell the one that has no hope of generating return on capital...let alone return OF capital.
So in the end once the "flood of imports" starts again it's really gonna be hard to see how interest rates move much higher here. Food production alone in the USA is simply enormous.
How is it possible for you to type so many wrong things in a week? If you just said random things, your odds would improve.
Because he is disabled. He's not right in the head. Let him be. He's just coming to grips he went to war for a fascist state.
For the hard-core
Check out pg 8
http://www.howardweil.com/docs/Reports/WEEKLY%20REPORTS/CoalWeekly.pdf
Edit: also pay attention to S02 and N0X emissions cost on pg 8 and the graph of steel plant utilization on pg 10
Let's see how long this fracking hype lives. After that energy production will plunge.
The hype will be dictated by the FED's policy. They are already tapering, so watch out below!
All the fracking and such being done...we were told it would create all kinds of jobs, make us energy-independent.
Yeah right. Apparently their master plan was to export the crap to more lucrative markets overseas...with another side order of jobs.
They want subsidies to extract the stuff (which isn't meant for you), then they want to take it on the road and shop it around for the best price. Then they want tax breaks so they can keep all the profits for themselves, and have you paying 10 bucks a gallon for gas here at home.
Isn't the global marketplace wonderful? *snark!*
They just increase the size of the Market (Demand)
Which means we will pay more at the Pump even if some of us convert to Natural Gas.
Win Win for big Oil & Dick Chaney.
-War is a Win
-Chaos in the Middle East or Europe is a Win
-Crop Failures a Win
-Water Shortages a win
-Ranching problems a win
Hey they call this Racketeering. It is punishable under RICO Laws.
Laws, RICO or otherwise are for the poor to worry about.
That would be "JustUs".
Don't ever say I did not tell you so...
And when I tell you that Keystone XL is more of the same, believe me...
Guess there are lots of side jobs in warehousing, storage, pipelines, transportation, security, construction, but not that many Employees in the actual Drilling.
Mining, Drilling, Logging
http://research.stlouisfed.org/fred2/series/USMINE (Peak was 1981, now .9 Million down from 1.3 Million) All Employees: Mining and logging
All Employees: Mining and Logging: Oil and Gas Extraction
2014-05: .210 Millions of Persons
http://research.stlouisfed.org/fred2/series/CES1021100001 (Top was 1982) All Employees: Mining and Logging: Oil and Gas Extraction
Problem finding data
Full-time equivalent employees: Domestic private industries: Pipeline transportation
2012: 41 Thousands (Discontinued in 2012 maybe)
http://research.stlouisfed.org/fred2/series/N4349C0A173NBEA
All Employees: Transportation and Warehousing: Truck Transportation
2014-05: 1,400.9 Thousands of Persons
http://research.stlouisfed.org/fred2/series/CES4348400001
For a brand new shale oil well, from start to the end of year 1's production, 2000 truck trips are required.
Hauling drill pipe. Hauling water. Hauling proppant, and then hauling oil.
2000 trips.
author doesnt seem to be aware of what a multi pad drilling rig is
Ask any blond California women where electricity comes from.
You'll be in for a surprise!!
An outlet in the wall, right? Pretty simple stuff.
I was going to say a battery....like the one in her shiny little toy in her purse.
In Manila, every fucking major outsourcing corporation that is onshoring manufacturing,back from China, whether from US or Europe is just as fast outsourcing back office to be transmitted by wire, instead of goods by ship, just as fast as they can hire or sign contracts with outsourcers.
Why the fuck do you think Manila is booming with fastest growth in Asia, because they export coconuts?